Saturday, February 5, 2011

Saturday roundup

Labor, industry back changes in unemployment insurance that make re-training an option

Bill taps millions in federal funding to help those seeking work

By Dan Neal and Sarah Gorin

Unemployed Wyoming workers who want training in skills that could open doors to other jobs will get a boost if a bill to extend long-term unemployment benefits becomes law. Both industry and labor support the bill.

Rep. Cathy Connolly (D-HD13, Laramie) sponsored HB 244 – Unemployment insurance amendments.
It will change state statutes to enable Wyoming to take advantage of the extension of long-term unemployment benefits approved by Congress in December. The extension will allow currently unemployed workers to qualify for 13 more weeks of benefits through January 12, 2012. Connolly thinks up to 7,500 unemployed workers could benefit from that extension.

The bill also allows the state to tap $14.2 million in federal funding authorized under the American Recovery and Reinvestment Act. In order to qualify, the state would change its law to allow unemployed workers in approved training programs to continue to receive their unemployment insurance checks.
It also would change the base period to allow more workers to qualify for unemployment insurance benefits.

Wyoming Contractors Association Executive Director Jonathon Downing testified in favor of the bill, calling it “a hand up, not a hand-out.” The Contractors Association offers training to people to get them into other trades. Union locals also offer training.

The training is intense, however, and unemployed workers in nearly every situation would have to forgo unemployment insurance benefits because they do not have time to look for work. The system can force a worker to choose between the benefits needed to feed and clothe his or her family or the training that could open a door to another job or career.

AFL-CIO Executive Secretary Kim Floyd said the change to allow people to receive benefits while training “is an incredible option.” He noted that while Wyoming’s overall employment rate stands at more than 6.5%, unemployment in the construction trades stands at about 21%. “We’ve got a lot of people sitting on the bench.” (Quick aside: This is one of the reasons that the unions and the contractors association have joined forces to push legislation that could mean more state work for resident contractors who hire resident workers. Most state-funded highway and capital construction contracts have gone to contractors from outside the state, Floyd says.)

Joan Evans, director of the Department of Workforce Services, noted the simple extension of benefits will help people who have not been able to find work. “There are some people in desperate situations right now,” she told the committee.

Evans noted the ARRA funds offer important help to the department because they include $1 million for reprogramming to upgrade state administrative systems to handle changes in the law, such as the change in the base period of work used to calculate benefits. When she noted the state system currently uses COBOL programming, a buzz rippled around the committee room. Downing said later it has been many years since he heard of anyone using COBOL.

Addressing committee member concerns about continuing costs to the state after the ARRA funds are used, Downing said the legislature might have to repeal the changes later. Connolly asked the committee to consider the bill as a “pilot project” that will enable the state to use federal funds to evaluate the value of the changes.

The House Minerals, Business and Economic Development Committee amended the bill to delete several pages, including a section that would have allowed payment of benefits when a worker loses a job because his or her spouse’s job requires a change in location. At the urging of Rep. Dan Zwonitzer (R-HD43, Cheyenne) the committee also approved an amendment requiring the department to report on the costs and effects of the changes in by Nov. 15.

“That way we can fix our computer system and see if we want to change the law back,” Zwonitzer said.

House leadership referred the bill to be heard by the House Appropriations Committee Monday. The bill must be heard in the House Committee of the Whole by the end of the day Monday or it dies for the year. If that happens, the state loses the opportunity to tap the ARRA funds. States have until Aug. 22, 2011 to submit their applications to the U.S. Department of Labor to certify that they comply with the specific provisions of the ARRA’s incentive funding program.

“Validity” of Marriage

HB 74 – Validity of marriage was heard by the Senate Agriculture, State and Public Lands and Cultural Resources Committee. Opponents argued that the bill violates Equal Protection rights guaranteed by the U.S. Constitution, voids legal contracts, and puts in doubt the status of legally married same-sex couples and their children.

House Majority Floor Leader Tom Lubnau pooh-poohed the criticism of the bill so loudly heard while it made its way through the House. “I don’t see this as a monumental civil rights battle,” he said.

Kiefer Partridge, a UW student and member of the WyWatch Political Action Committee, supported the bill, saying that state law should be biblically sound. According to Partridge, the concept of separation of church and state was meant to protect churches from the state, not to exclude churches from advocating for religiously-derived policy.

That’s a long stretch from the idea that separation of church and state prevents the adherents of one church or religion from using the state to impose their credo on the faithful of another belief or on people who follow no religion.

Tax on Wind Power Whirling Around
HB 191 – Wind power taxation narrowly passed Committee of the Whole, 28-24. Opponents said it takes too long – 20 years – to phase-in the $3 per megawatt hour (MWH) tax on power generated by wind farms already constructed in the state. They also claimed the bill is not ready, since sponsors said they would have to bring major amendments in subsequent readings.

The ESPC supports the existing wind tax structure, which imposes both sales tax and a MWH tax (although the MWH tax could be higher!). HB 191 “finances” sales tax via a higher MWH tax, which places some risk on the state if anticipated wind power development does not actually happen. Moreover, the sloooowwww phase-in of the MWH tax on existing projects is unjustified, as these projects never paid sales tax due to an exemption that expired at the end of 2010.

Data Not Needed

The bill extending an existing sales and use tax exemption for purchases of manufacturing equipment, HB 143 - Manufacturing tax exemption, passed the Senate Revenue Committee 4-1 last Thursday.

As in the House, economic development organizations and manufacturers lined up to say how much they like the tax exemption, and asserted that new taxes generated by development make up for the loss in sales and use tax collections: $53 million and growing since the exemption was enacted six years ago.

The ESPC, which opposed the tax exemption from the beginning and advocated successfully for the first follow-up reporting on a tax exemption, went through this year’s report on the exemption. It shows that the percentage of manufacturing jobs in Wyoming has gone down slightly since the tax exemption began, and that the absolute number of manufacturing jobs went up only slightly, but went down with the recession.

The report also shows while manufacturing wages are higher than in other economic sectors, part-time employees in manufacturing receive fewer benefits than part-time employees in other sectors.

Finally, the report notes that most of the benefit of the tax exemption has gone to a handful of manufacturers, principally the state’s two major refineries, Frontier Refining in Cheyenne and the Sinclair refinery. The ESPC collected data from the Laramie and Carbon county assessors to show that property tax data did not support the assertion that the sales tax exemption was made up for by increases in other tax revenues.

Senator Case asked most of the proponents why manufacturing should get a sales and use tax exemption but not other types of businesses. This question was raised in the ESPC’s testimony as well, a particularly pertinent one given the complete absence of any concrete documentation of the exemption’s benefits.

Chairman John Hines (R-S23, Gillette) and Senators Paul Barnard (R-S15, Evanston), Fred Emerich (R-S5, Cheyenne) and Drew Perkins (S-29, Casper) voted for the bill; Senator Cale Case (R-S25, Lander) cast the dissenting vote.

Citizens can register their opinions on specific legislation by using the “Online Hotline” or the telephone Hotline – 1-866-966-8683 or, in Cheyenne, 777-8683.