Updated @ 2:20 p.m.:
The House of Delegates passed an expansion of unemployment benefits Tuesday, the next-to-last step for legislation that will qualify the state’s bankrupt Unemployment Insurance Trust Fund for $126.8 million from the federal government.
The measure passed mostly along party lines (the vote was 101-33 in the chamber, but the final tally is still being calculated) without a word of debate. Next stop: Gov. Martin O’Malley’s desk for his signature.
The House of Delegates has given preliminary approval to compromise legislation that will alter unemployment benefits to secure $126.8 million for the state’s bankrupt Unemployment Insurance Trust Fund.
The bill survived a series of amendments proposed by Republican lawmakers during an often heated debate on the House floor Monday night. The House will soon take a final vote on the bill before it heads to the second floor of the State House for Gov. Martin O’Malley’s signature.
The version of SB 107 poised for passage in the House is radically different from what O’Malley originally proposed at the beginning of the legislative session. He called for an expansion of benefits to the tune of a $20 million annual liability on the trust fund, $83 million in unemployment insurance tax deferrals and payment plans and an interest rate cut on late payments to further assist businesses with the jump in tax rates this year.
The administration sold the bill as pro-business, but business groups didn’t bite. They balked at the long-term liability of the expanded benefits and the danger to the now-bankrupt trust fund posed by the tax rollback.
A group of lawmakers, administration officials and business and labor interests led by Sen. Thomas M. “Mac” Middleton, D-Charles, stitched together a compromise – read our story on the amended SB 107 here – that includes benefit reductions to offset the expansion proposed by O’Malley, but not the $83 million in tax deferrals.
The bill will make the state’s trust fund, which is already borrowing from the federal government, eligible for a $126.8 million infusion that business regulators say will keep the fund afloat later this year.
“This is one of the most heavily vetted pieces of legislation that has come through here in this session,” said Del. Herman Taylor, D-Montgomery, on the House floor. “Everybody has had a fingerprint or a thumbprint on it.”
The bill passed the Senate on March 9 with a 46-0 vote.
Republicans offered three amendments on the floor, all of which fell to the heavy Democratic majority.
The first two, both proposed by House Minority Leader Anthony J. O’Donnell, would have rolled back benefit expansions enacted in recent years, eliminating benefits for part-time workers and lowering the level of benefits paid.
“Adding more people to the roles of unemployment … is like taking more water from the river during a drought,” O’Donnell said.
Del. Ron George, R-Anne Arundel, proposed a scaled-down version of the governor’s tax deferrals, suggesting the highest tax rate for businesses with 50 or fewer employees be lowered in 2011.
“Big business was for this [deal],” George said. “It wasn’t the little guy.”
Indeed, the National Federation of Independent Business did not support the compromise. The Maryland Chamber of Commerce and Maryland Retailers Association did.
Other Republicans also questioned what, if any, benefit business owners would see, even from the much-amended compromise legislation.
Said Del. Michael Smiegel, R-Upper Shore: “To say that small businesses are in favor of this is to have somebody come up to you and say ‘I’m going to kick you in the groin.’ Then they say ‘No, maybe not, I’m going to kick you in the shin.’ And you say ‘Sure, kick me in the shin, I’ll take that.’ That’s not that you’re in favor of it, but it sure beats the alternative.”
But to Democrats, the bill represents a compromise of business and labor interests that will boost the trust fund that, as the unemployment rate has remained elevated, plummeted from a balance of more than $1 billion to having to borrow to keep making benefits payments.
The biggest of the benefit expansions – a change to the way unemployed workers report their previous unemployment called “alternate base period” – is something that will likely be required by the federal government anyways.
“I think it’s incumbent upon us … to take advantage of the money that they’re offering to us – the carrot when later on they may be offering us the stick,” Taylor said.