What a House member called “one of the largest tax increases (more than $700 million over two years; a 150% hike for many employers) on Indiana businesses in the state’s history” passed during the final hours before the scheduled end of the Indiana General Assembly session. The result would be devastating for Indiana companies and their employees, ironically leading to further job losses in what is supposed to be a “solution” to the state’s unemployment insurance trust fund shortfall. We ask you to contact Gov. Mitch Daniels today to urge a veto of HEA 1379.

A special session is already taking place due to the failure to pass a state budget. This provides legislators with a second chance on the unemployment trust fund – but only if the governor requires them to act. The governor needs to hear you say: I have had enough. This bill does not solve the problems with the unemployment system, it places an excessive burden on our company and others, will very likely force more people to lose their jobs and will threaten our state’s economy for years to come.

Indiana has borrowed more than $800 million already from the federal government to shore up the trust fund shortfall. It is projected that that total could rise to nearly $2 billion by the end of the year. The deadline, however, to have a federally approved plan is not until November 2010. Having no plan right now is better than a poor plan that will put our state in a deeper financial hole. 

Under the legislation approved by the House and Senate, employers would face an immediate tax hike of at least 35% based on the increase in the taxable wage base from $7,000 to the first $9,500 of an employee’s wages. In addition, they will pay between 0.7% and 9.5% (the current range is 1.1% to 5.6%) on that $9,500 in 2010.  The range would increase to between 0.75% and 10.2% in 2011. An individual company’s rate depends on its history of layoffs. Companies on the highest rate schedule would pay $969 per worker in 2011. Rates would undoubtedly move higher for many companies based on the current economy and these tax increases producing even more layoffs.

Examples of tax increases that Indiana businesses face:

Example 1:

50 employees with a current 2.3% rate

2009 payments: $8,050

2010 payments: $10,925 (2.3% rate)

2011 payments: $11,875 (2.5% rate)

Example 2:

100 employees with a current 4.1% rate

2009 payments: $28,700

2010 payments: $45,600 (4.8% rate)

2011 payments: $49,400 (5.2% rate)

Example 3:

250 employees with a current 5.6% rate

2009 payments: $98,000

2010 payments: $204,250 (8.6% rate)

2011 payments: $219,688 (9.25% rate)

Action Needed: Call the governor’s office, send him an e-mail or show up at Room 206 of the Indiana Statehouse to express your frustration and anger. Tell him (and the legislators who voted to raise your taxes by a crippling amount) you have had enough. Call (317) 232-4567, access our letter on this page or make your way to 200 W. Washington Street in downtown Indianapolis.