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Lawmakers weigh business tax cut

OLYMPIA -- While at least 30 states have emptied their unemployment insurance funds, Washington's is healthy.

As a result, legislators are talking about how to use some of the $2.5 billion the fund contains -- according to numbers updated last week by ProPublica -- and then obtain federal money as well to help unemployed workers and businesses weather the recession.

Organized labor came out in force Monday, some bringing their children, to a Senate committee to say the help has to touch more families living on the brink. The room was overflowing as the Senate Labor, Commerce & Consumer Protection Committee considered the changes. Business interests also were well represented.

The state needs to "modernize" its unemployment program to get $98 million in unemployment modernization funds from federal stimulus money. There are several things the state can do to get the money, which has to be used to help low-income and dislocated workers.

Gov. Chris Gregoire wants to modify the unemployment insurance fund temporarily to use the money to allow more workers to get into training programs and let them keep more of their unemployment insurance while in training. The bill also would extend benefits for some who have exhausted their regular and emergency compensation.

But some, including labor and poverty advocacy groups, want to use the money to add a dependent allowance to unemployment checks for people with kids. The unemployed worker would get $15 more a week for each child -- up to $50 a week.

Supporters say it will touch the lives of 170,000 families. About one-third of the unemployment recipients in the state have children, according to the Northwest Labor Council.

Wendy Radar-Konofalski of the Washington Education Association said her group favored using the additional money to help families. She said the are 21,000 homeless students in Washington, a number that's going up. She also noted teachers are out of work because of state budget cuts.

The bill also would lower a pending increase in unemployment taxes that businesses pay, which is to take effect next year. Officials said it would save businesses about $300 million in 2012. While the business community did not ask the governor to put some of the tax increase on hold, business supports it.

"Employers are still struggling," said Donna Stewart of the Association of Washington Business. "It will give some relief."

The state would recapture the money from businesses in higher taxes when the economy recovers.

The children's benefit was more controversial. While employers wouldn't have to pay a part of the changes to training programs, they would have to repay a portion of the increased benefits for children.

So several people from business groups who testified did not support that part of the benefit expansion.

Others who testified thought the cut in business taxes was balanced by giving more money for kids in unemployment checks.

"We think this is a true win-win situation," Josh Fogt of Northwest Harvest, which runs 300 food bank and food programs across the state.

More hearings are scheduled on the bill.

-- On the net: http://projects.pro publica.org/unemployment/states/WA

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