General assembly
Business tax hike renounced by House
INDIANAPOLIS – The Indiana House on Tuesday moved to repeal a tax increase on businesses to aid Indiana’s unemployment insurance trust fund while also passing a number of tax incentives and programs that could create jobs.
Republicans in the House and Senate had been seeking a one-year delay of the tax increase, which was expected to cost Hoosier companies more than $300 million this year.
But in a surprising move, House Democrats proposed rejecting the increase altogether and going back to the drawing board.
The legislature last year passed a bipartisan package of tax increases aimed at bringing Indiana’s bankrupt fund back to solvency. The state so far has borrowed $1.6 billion from the federal government to continue covering claims from unemployed workers.
House Speaker Patrick Bauer, D-South Bend, declined to call the move a political maneuver but said his caucus is tired of being demonized by House Republicans for having helped pass the bill last year with Republicans in the Senate. House GOP members never supported the measure in the first place, claiming it would cause employers to lay off more employees to cover their increased taxes.
“This is the first step. We repeal this, we can start over,” said House Republican Leader Brian Bosma of Indianapolis.
The repeal measure, which passed 90-5, takes the form of an amendment to Senate Bill 23. But Bosma warned that his members will not vote for the bill as a whole because of pro-labor provisions that remain in the legislation.
One of them, sought by Democrats, addresses worker misclassification. Bauer said part of the purpose of the repeal amendment was to draw attention to the fact that some businesses inaccurately classify their employees as independent contractors to avoid paying into the unemployment insurance trust fund.
“They are cheating,” Bauer said, noting that it would help the balance of the fund for all businesses to pay their proper share.
Bosma conceded that some employers are unscrupulous but said the provision the Democrats seek goes too far.
House Democrats also offered a number of amendments to Senate Bill 396 in an effort to spur job creation in the state. Republicans accepted most of the proposals.
Two of the more significant amendments create tax credits for businesses: One aids small businesses that hire new employees, and the other helps new businesses or those that relocate to Indiana and employ Hoosiers.
Rep. Randy Borror, R-Fort Wayne, said it is ironic that the Democrats unveiled a jobs plan with just a few days left in the legislative session and with many basic questions unanswered.
“I find it really curious in comments made on this House floor more than once about how important jobs are that we are in the final hours throwing something against the wall and hoping it sticks,” he said. “That’s all this is.”
Both bills are up for a final vote in the chamber this week. If they pass, they will head to conference committee for final negotiations with the Senate.
Two governors seen as potential 2012 presidential candidates appeared together Thursday night at a fundraiser for the Mississippi Republican Party.