Just weeks ago, Washington’s employers faced massive increases in unemployment taxes that were required changes made by the Legislature several years ago. Even businesses that hadn’t laid off any workers faced a 42 percent hike.
It would have been a job killer at the worst possible time. But the only way to avert the tax hit was to find common ground between two very different perspectives on unemployment taxes.
Employers know these taxes will increase the costs of every job and make it harder for businesses to expand or hire new workers.
Labor sees them as the mainstay of the Unemployment Insurance (UI) Trust Fund that helps unemployed workers and their families survive hard times. Reducing support for the fund could hurt future benefits for unemployed workers in their times of greatest need.
Bridging these perspectives wasn’t easy. Gov. Gregoire’s proposal to reduce unemployment taxes met stiff resistance. So did proposals to improve benefits for unemployed workers.
But leaders for all sides kept talking and listening. Fortunately, Washington had one advantage that set us apart from other states – the healthiest UI Trust Fund in the entire country.
House leaders believed that responsible leadership could find a way to protect employers from unaffordable taxes and help unemployed workers while leaving the fund as healthy as it is today. The key was to find the right balance.
Working with business and labor, we found the balance we needed. The result was an unprecedented unanimous House vote for reforms that will save employers about $300 million a year while improving benefits for unemployed workers. These reforms:
• permanently lower unemployment tax rates to ensure long-term relief for employers;
• expand training benefits to help workers support their families as they learn new skills for new careers; and
• provide unemployed workers who are laid off between March and November 2011 with a $25 boost in weekly benefits that will be paid for with federal funds.
The final reform package was much better than earlier alternatives that had stalled in the Legislature.
The Senate had agreed to pass a temporary tax-relief bill. But temporary relief would only help to keep employers afloat. In order to give businesses the certainty they need to hire permanent workers and accelerate economic recovery, the House made the $300 million tax cut permanent.
Similarly, the effort of some lawmakers to permanently increase unemployment benefits hit a brick wall, even though an immediate increase would spur recovery by pumping more dollars into our local economies. The House bridged the gap by making the boost in benefits temporary and tying it directly to federal dollars. This compromise secured the support of business.
By taking good ideas and making them better, the House overcame deadlock and produced reforms that all sides now agree will help Washington’s businesses, workers and families recover from these hard times. Compromise worked.
The Association of Washington Businesses (AWB) makes a comparison between Washington and California that puts things into perspective.
Beneath a picture of representatives for businesses and labor, Democrats and Republicans, senators and representatives, standing together at the signing of our new reforms, the AWB noted that the recession had completely exhausted the unemployment trust funds in California and 30 other states.
While other states are borrowing money to rescue their unemployment systems from insolvency, we’re passing reforms that will help businesses and workers while ensuring that our UI Trust Fund remains healthy and strong.
The picture of everyone standing together at the bill signing proved what I said when the House passed the reforms. It showed there is not a business Washington or a worker’s Washington. There is only One Washington. And we all need to stand together to secure our vision of opportunity for all.
State Rep. Larry Springer is the Deputy Majority Leader for Jobs and Economic Development in the House of Representatives. He represents the 45th District.
