By: Nicholas Sohr

Sen. Thomas M. “Mac” Middleton said Thursday what he thought was a workable compromise on the governor’s unemployment insurance proposal fell apart because of a small, $1 million concession sought by labor and employee advocates.

Middleton has in recent days said he believed his work group of business and labor interests was close to a deal, with only a few minor tweaks to make. The governor’s proposal includes an expansion of unemployment benefits in three ways, with an expected cost to the Unemployment Insurance Trust Fund of about $20 million per year.

The group had found offsetting benefit reductions to get business groups on board, which they were until yesterday, said Middleton, D-Charles.

“Everything that brought them back to the table was there, and they rejected it,” said the chairman of the Senate Finance Committee. “I’m really, really puzzled.”

Middleton said the concession sought would have meant about $1 million more in annual benefits paid from the trust fund, which paid as much as $24 million per week in 2009.

He suggested lawmakers may “look beyond” the legislative committees and top lobbyists of the business groups at the bargaining table.

“I’m disappointed they aren’t there,” Middleton said. “I hope they reconsider.”

The unemployment legislation is on of Gov. Martin O’Malley’s top priorities this year. The benefit expansions would qualify the state for $126.8 million from the U.S. Department of Labor. That money would be used to boost the trust fund, and, in the governor’s original proposal, cover $83 million in tax breaks for businesses.

Business groups have already fought successfully against the tax break proposal, arguing that it would hurt the fund in the long run.