Magic Act

Emerson Lynn's (typically) insightful essay on the looming crackup in the state's unemployment trust fund gets to the nub of the problem.  Which is  ... that without an increase in the tax on employers or a reduction in benefits to the unemployed – or some combination of both – the fund goes broke and the state goes deeply into debt.  And to delay action makes the problem worse.

One can almost lose track of the state's various financial crises.  General fund deficit.  Pension fund tsunami.  Unemployment insurance bankruptcy.  You almost need a scorecard.  But one theme, common to all these challenges, is the insouciance with which our legislative leaders react when asked how they will deal with them. 

Last session, the legislature performed a little late show hocus pocus and announced it had balanced the budget.  A month later, the state was trying to fill a nearly $30 million hole.  The legislature, as constituted, simply does not have it in its DNA to make cuts in programs or to eliminate them entirely where possible and necessary.  Nor does it have the nerve to face up to its lack.

So we get this, on the unemployment fund crisis, from Senator Peter Shumlin, president pro tem of the Senate and certain candidate for governor:

But Shumlin said the fund imbalance should be corrected without drastic changes to either employer taxes or worker benefits.

"We made some changes last session, we will make more changes this session," Shumlin said. "A measured, thoughtful approach is called for."

Soothing language that almost works.  Until you read Emerson Lynn's column again. 

So here is the choice: Keep the present benefits package intact. Raise the taxable wage level from $8,000 to $21,500. Borrow $343 million. Get the trust fund back to about even in 2018 and pray for 15 years of continual economic expansion. Or, trim benefits modestly [still offer more than the national average], borrow $123 million, raise the taxable wage level modestly, and end up with a $200 million surplus in 2018.

At which point you want to shout,  "Come on, Man."

Comments

[Glenn Eno]

Rest assured: There will never be a reduction in benefits. They will raise employer UI payroll taxes. Then they will blame Douglas, blame Bush, blame "gold" towns and do nothing to reduce the liabilities.

We must do something as well. We must break government's addiction to our money.