April 18, 2010 -- Sen. Vince Illuzzi, R-Essex/Orleans Counties, and Rep. Dave Sharpe, D-Bristol, join Kristin Carlson and Darren Perron to discuss Vermont's Unemployment Insurance Trust Fund.
Gentlemen thanks so much for being here.
>> Thank you.
>> I want to start first with from Vermont's most trusted news source.
WCAX brings you your news makers, your neighbors.
This is "you can quote me."
>> Good morning everyone.
I'm Darren Perron.
>> I'm Kristin Carlson.
Our news makers today are Republican senator Vince Illuzzi and David sharp.
Will talk to them about an unemployment insurance plan that is stalled and what the impact could be on businesses and taxpayers
>> Plus your neighbors in the news.
Biologists race to save bats.
A volunteer goals the extra mile using food to solve engineering problems and toasting a top beer that's made in Vermont.
>> But first our news maker senator Illuzzi and David sharp, been working on some kind of a plan to bail out the unemployment insurance trust fund which is really in the red at this point.
Thanks so much for being here I want to start first with representative sharp.
You just came from a meeting with the governor's staff.
What's the latest?
>> Well, we are still in conversations.
I think we have been working on this for over a year now.
The big difficulty is that the solutions that are on the table take 100 million dollars out of our economy.
And any economist would say that that is not a very smart thing to do when you are trying to come out of a recession.
So, that makes the conversation very difficult.
I am heartened by the fact that we are still at the table and we are still trying to come to an agreement to get it done sooner rather than later.
>> Yes it taking so long?
this was something that lawmakers looked at, said they would study and come back with a solution and right now we are having to borrow money from the federal government as much as 300, 350 million dollars.
>> The latest projections fortunately aren't that big but you are right.
And it ‑‑ but it has taken a while because it is ‑‑ everybody loses.
And so it ‑‑ moving any legislation forward where businesses have to pay more taxes, where unemployed workers get fewer benefits, and we have to borrow money that we have to pay interest on out of the general fund, there is no easy answer.
>> Senator Illuzzi your committee and you took a stab at it, passed out a bill that was controversial but took a balanced approach.
You hit employers, you hit workers, you ‑‑ you know what do you make of the fact that this hasn't really gone anywhere?
>> Last year we essentially did nothing.
We slightly raised the taxable wage base and what we are doing is compounding the problem.
Kicking the can down the road and simply allowing the fund to go greater into the red or a greater deficit only will increase the financial burden on businesses who are the golden goose if you that keep our economy moving forward.
Our position was we've got to get the funds back into the black so that employers will not pay a federal tax penalty as well as the general fund incurring additional expenses to pay interest on the borrowed money.
So a compound problem for people who say don't cut the budget, state workers, the solution is to not borrow money so you don't have to pay interest on it.
To employers, it is get the fund in the black as soon as possible so that they don't get hit with that federal tax payroll penalty.
>> You were at a press conference this week where you and were also joined by several business groups calling for some kind of action to take place.
Do you think teas going to move things along or think this isn't going to happen this year?
>> I think the press conference in part helped to bring people to the table with an open mind.
This was not a press conference that I did on my own.
I had every major business organization standing with me and these are groups that often times are at the forefront of arguing against any increases in fees or taxes.
But they have done the math and they understand that if we don't act and act this year, that the burden will be greater, the penalties will be greater, and the economy will suffer as a result there of.
Now comments that we are not going to do anything this year will, will come back next year and study it, the bills community as well as myself and other senators have concluded that that would be damaging for the Vermont economy and for the businesses that make it
>> Listen in, I interviewed senator Shap about this issue and one of my colleagues talked to him and this is sort of what he had to same he was saying that a solution at this point seems illusive.
Let's see what he had to say and get your reaction.
>> Do I think that it is something that we have to deal with.
The question is whether it can wait until next year.
And depending on what is proposed on both sides, I think will depend on whether we move something this year
>> And representative Shap Smith said he hopes to know by next week, this coming week, whether or not there will be a solution.
>> I think it is fair to say that lots of people have been working on this.
And I have to give senator Illuzzi credit for his committee operating in a way that they felt would move the ball forward.
Other people have been working both in public and in the study committee last sum early and in private.
And conversations in the hallways.
And in the governor's office to move this difficult problem forward.
I think we all believe as senator Illuzzi pointed out, that it is better solved now sooner rather than later.
coming up with the solution is not an easy act of ‑‑ to put into place.
>> But this has been a year full of challenges.
You know the budget crisis, $154 million deficit.
This is this challenges for change bill to make state government more efficient.
Too much on the legislature's plate or why is this issue proving so troublesome, do you think?
>> Well, I ‑‑ I like I said before, I think it is because there is no winners.
Everybody loses and it is ‑‑ you take 100 million dollars out of the economy, and that is not good for growing businesses or restoring economic health to our state.
And so we have to be very careful how we go about this.
It is a three ‑‑ there are three pieces to this.
increasing the payments that businesses make, decreasing the benefits that unemployed workers get, and borrowing money.
None of those things are ‑‑ are wails that people want to go, directions people want to go in.
To finding the right balance and getting to agreement is ‑‑ has proven very difficult.
>> On the senate side we believe we found that balance by essentially combining increases with benefit cuts as well as increased revenue.
So I don't think it is that difficult.
In fact when we voted to ‑‑ voted a bill out of our committee we have enjoyed the support of the business community who are essentially the persons, the entities that fund the program and we also did add a controversial position, the .2% payroll tax and it is a move that other states have taken when they have been in crisis with ar unemployment insurance trust funds.
And surprisingly the organized labor community said we can live with that because you never know when you and I will be on the unemployment line and may need to rely on the payments that come from that under this ‑‑ fund.
So we thought we had buyin clearly from the business community, clearly from organized labor.
And the issues have been the reluctance of some to essentially make the cuts that are necessary.
And we are making cuts across the government but some have suggested that we should leave the unemployment benefits untouched.
And if you listen to the average person on the street, which we had an opportunity to do because we went out and held public hearings here in Burlington and in Rutland, the public says look, everyone is going to ride this recession out together and no one should be left harmless.
And that is why we felt that a balanced, a shared responsibility was what would sell and we think we have sold that but as with any other piece of legislation we have to move that bill forward in support of the house an the senate and right now that support is not out there and I'm hoping that in the next 2, 3 weeks we can get that bill across the finish line.
If we don't, I'm going to urge the governor to call a special session to bring us back to Montpelier and in fact deal with this issue.
It would be irresponsible to not do so.
If the general fund was in the red to the tune of projected 300 million dollars, there would be alarm bells going off all over the place, there would be a crisis mentality that would set in at the statehouse but it seems as though when we are talking about the unemployment insurance trust fund which is a state program, administered for are the federal government, it seems like this ho hum attitude, we can wait until next year and don't want to take money out of of the economy.
I have very strong feels that we need to move forward now in a responsible way and in a balanced way.
We can't put the burden entirely on the backs of the 23,000 employers that now pay into the system.
>> It is obviously you feel passionate about this, but I think that the system as designed, is a self‑correct being system.
It allows a period of time in the first year or two for businesses to recover.
And then it uses a combination of federal taxes and state interest payments to replenish the fund.
It is not a crisis situation.
It is not blood flowing in the streets.
It is a self‑correcting fund.
Could we do better than the federal government plan?
we hope so.
But it is not something that is ‑‑ has to be taken immediately.
>> You mean self correcting as in no changes need to be made and you just think eventually if the economy improves the fund will get into balance?
>> A combination of the economy improving and every time they have come back with unemployment, those numbers have not been as severe.
Right now they say 7% unemployment in 2010.
I don't think we will get there.
we are at about 6.6 now and 7.4 in 2011.
I don't think we will get there because we are seeing signs of recovery already.
So each time they come back, the curves look better.
The federal tax that senator Illuzzi refers to replenishes the fund.
It doesn't go into the federal abyss.
It actually ‑‑ those taxes replenish the fund just as if we instituted state changes to replenish the fund.
The ‑‑ the difficulty can be argued that it does move it out a couple more years.
But that may be a good thing.
It may be that allowing our economy to recover, keeping these dollars in the hands of our businesses and our workers, who find themselves unemployed, and unable to make their car payments and their rent payments, maybe it is a good idea to allow them to keep that money during these tough economic times.
When things improve.
That's when we raise taxes and replenish the fund.
So I don't think it is as dire as some people would like to make you think it is.
>> The response I have is I also serve on at preparationings committee and the estimates are clear just like when you don't pay a debt back or a credit card, the interest continues to accumulate.
You continue to borrow.
There is more interest and you know we have figures that suggest that it is going to require either tax increases for the general fund or it is going to require cutting social service programs, state employees, and other general fund obligations until such time as we get this fund back in the plaque.
Because somebody has got to pay the interest on the borrowed money.
Right now it is about 4.6% that we would have to pay back the federal government on the money that we borrow and that is ‑‑ I think bad news for advocates of the state continuing to do more in this recessionary period.
So we've got the bills community ready to step up to the plate saying we understand that we need to act now and we need to act in a substantive way, not you know minor adjustments here and minor adjustments there.
We have got some people in the ‑‑ on the labor side of the equation saying we understand this is a significant problem and we understand to the point where they were even willing to support a .2% payroll tox.
>> They sent a letter recently that the labor groups were concerned about this idea about changing the weekly maximum benefit for laidoff worker.
It is 4.25.
>> We left in our bill 4.25 remains.
That was a standard that the organized labor folks said that they wanted to remain.
So 4.25 is relatively generous U it is not overly generous but relatively generous.
Points they were complaining about is folks who work seasonal employment.
If you work three or four months you can qualify for unemployment essentially for the balance of the year.
And the ‑‑ the ‑‑ some employers particularly people who employ people 52 weeks a year say that is unfair because the employers are called negative balance employers.
They never pay enough into the fund to cover the benefits paid out to their employees.
So we attempted to address that by saying that benefits are calculated over a four quarter period instead of a two‑quarter merely and we also addressed it with other adjustments of that nature.
You know we had testimony of a situation where somebody said I want next week off and the employer said I can't let you go next week the person operated a truck, commercial truck.
And so the next day the guy comes in and says it was Friday, he says well I blew the engine in the truck so I guess I'm not working next week.
Applied unemployment and received it an the employer came into our committee and said how can that be?
it was clear that this person did not want to work next week, comes in on a Friday after none and said I blew the engine in my truck.
So we made adjustments that says that kind of conduct does not qualify you for unemployment benefit.
Those are the examples that are addressed in our bill that resonate with the average taxpayer who says look we should not be condoning that kind of activity.
We should take into consideration that you only worked two quarters or only ‑‑ you are only a seasonal worker and your benefits should be based on that.
we should take into consideration that your are a negative balance employer.
You never pay in enough so that you have paid in enough to cover the benefits paid by ‑‑ by your ‑‑ your business.
And those are the so‑called benefit cuts or adjustments that are contained in the bill.
We think they are responsible.
We think they are sound.
And we think it is necessary to bring this fund into the black in a reasonable amount of time to avoid adverse consequences to our business community which we need to nurture and help and work with during this recessionary period.
>> Representative sharp, we are pretty much out of time on this.
but any predictions on where we go now?
>> we will continue talking.
People on all sides of this are open to solve the problem this year.
I'm heartened by the meeting we had today.
The ‑‑ the discussions are going to continue.
I think in response to just a one thing that senator Illuzzi said, I think it is important to recognize that this support that ‑‑ of businesses have for increasing their payments is conditional on cuts to workers.
And that is where the sticky parts are.
>> All right.
We will keep following this. Thank you both for coming in and for your time.
>> Thank you.
>> Now here is dare Webb our neighbors in the news.
>> Thank you.
Coming up, cheers to what is on tap.
Vermont brewers come out on top in an international competition.
>>> White‑nosed syndrome continues to wipe out bat populations in our region.
What's causing it and how it is treated remains a mystery.
Keaghan harsha takes us inside the state's largest bat cave where biologists are searching for answers.
>> As the sun begins to set on mount AOLIS, wildlife biologists are making two the‑mile climb to Vermont's largest bat cave.
Fearful of what they may find.
>> Been a long time since we have seen a live one.
>> All these are really bones of dead bats because they were just all dead through here.
>> Mysterious disease known at white nosed syndrome continues to spread through the bat caves across the eastern United States.
>> I would be happy to see a few hand fulls of bats come out.
>> Mortality rates approaching 95%.
Fungus acts as an irritant that causes bats to awaken from hibernation more frequently.
Causing them to serve.
Up until fairly recently the cave was the largest bat cave in all of New England with upwards of 300,000 bats.
Today it is closer to a couple hundred.
>> You know, hi some optimism that we would find an answer to this within months.
And the reality is, it will be years.
>> Very careful.
>> Really not a lot of progress.
>> There has been one breakthrough.
>> That's a beautiful temperature, guys
>> Scientists now know the fungus is identical to one that has existed in Europe for decades.
>> A little bit of fungus on it
>> The fungus in Europe doesn't seem to be killing bats but the population there is much smaller.
>> It is possible that the fungus caused mortality several hundred years ago and wasn't documented and these are the remaining bats that developed a resistance to it.
>> Biologists on this night are trapping bats to check their condition.
>> Will fly into it and drop into in plastic bag.
>> Throws given a rating of 1 have little scarring or damage caused by the fungus.
>> This looks quite good really.
>> Those with the 3 don't have long to live.
>> This bat is lethargic, showed evidence of the fungus on its wings.
>> As the night grows darker more bats are leaving the cave.
>> But unlike two years ago when more than 200 bats were trapped, only a dozen or so were caught leaving the cave this spring.
>> Typically you would expect that there would be some resistance to any disease, but we really haven't seen much evidence of that at all.
You can see that.
>> That's troubling news for scientists trying to get to the bottom of this mystery.
Worried that this a sight future generations of Vermonters may never get to see.
>> Communities services usually done in our own community but a Kentucky woman is traveling coast to coast volunteering in each of the lower 48 states.
Kate Duffy has her story.
>> And wet washing cars at Burlington's good news garage.
>> Spent most of the morning cleaning the cars, insides, outsides getting them ready for their next owner.
>> The woman spent Thursday in Vermont.
>> The 17th state in her 6‑month effort to volunteer in each of the lower 48 states.
She's helping prepare donated cars for their new low income owners.
>> Helping people is great.
But eventually you need to do something to help themselves so I love what good news garage does.
>> She hopes helping others will teach her about herself.
>> I just lost my way in life.
My grandmother told meal the minute that happens it is your responsibility to help someone else.
Your situation is not that bad.
When you see what other people are experiencing.
So that was really the start of it.
>> The cross‑country part inspired by watching the movie for rest Gump.
>> I told my husband that I was going to run across America and he said absolutely not.
You physically cannot do that.
He is totally right.
But my Epiphany it just emerged.
>> A support of husband and personal savings are fans financing her experiences.
>> She have more volunteers than we do have staff.
So they are critical to us getting so much done.
There is no way we could do what we do without volunteers.
>> Traveling to 48 states but says you don't need to look far to find volunteer opportunities.
They are available just about everywhere.
>> I have already discovered that we need a lot more volunteers.
>> And says she's eager to see what else she will discover by the end of her journey about her country and herself.
>> I don't know what it is but I know that right now I'm living in the present.
I'm helping a handful of people but nonetheless I'm helping them and eventually hopefully I will be able to help people on a much wider scale.
>> Kate Duffy, channel 3 news Burlington.
>> If your mother is anything like mine she probably told you not to play with your food but that's what exactly kids did to learn more about engineering at UVM's engineers day.
Photographer Scott waterman was there for the competition.
>> We all like to make stuff.
>> You are at the Vermont air national guard today who is hosting the college of engineering and mathematical sciences.
Engineers day activities.
>> We have 5 different events that are going on here.
Edible car, a car made out of totally food and go down a ramp.
The really goal of all of this is the power of engineering thought and how do we get the general public to understand that the world we are in is full of technology, full of engineering.
We do it through getting them excited about actually learning and experiencing what goes into let's say a bridge.
>> We thought it would be fun to get the kids down here today, maybe develop a love of science, a love of engineering.
>> How did you come up with your design?
>> Wanted to take them off.
When we tested it our teacher said that it was a good thing that we had it on the end so we kept it.
>> Created lift.
>> They are getting amazing times.
They are almost doubling last year's scores for lowest times.
>> Did pretty good.
I mean, meter than most.
‑‑ better than most.
>> It just twisted.
Should have drilled the hole at the bottom here.
>> Should have put a little more reinforcements in it.
>> And couldn't really find any flexible but yet strong ‑‑
>> You guys have 10.5 seconds.
>> That's really great.
In didn't expect it to do that good at all.
>> Invested about 13 hours in it.
>> This is an opportunity for the college to link with the air guard to emphasize the importance of technology for the safety of our planet.
>> Engineering is just like you said a fun hobby.
>> It is really fun.
>> You can Rae the story on‑line at WCAX.com to see a list of winners.
A Vermont beer won top honors at the world beer cup held in Chicago.
Kristin got a chance to check out the brew that was picked from thousands of entries.
>> This is what gold looks like.
>> It is a gluten free beer made at the brewery in Waterbury and just won the top prize in that category at the world beer cup.
>> Not bad for no barley.
>> John came up with the brew for his wife.
She loves beer but recently became allergic to gluten, a protein found in wheat, rye and barley this.
beer instead uses gum, a type of grass.
>> A pretty easy drinking medium bodied, crisp ALE, definitely has spiciness to it from the sorghum and from the yeast that John uses.
But it is real drinkable.
It is delicious.
>> Judges agree choosing it out of 3400 brewers that entered the challenge from more than 44 countries.
With all that competition, Vermont rose to the top.
Two other brewers also won medals at the world beer cup.
>> Don't know why Vermont does so well.
We did good this year.
We make good beer.
>> There are 21 micro breweries in Vermont.
the most per cap day of any state.
The Vermont brewers association is working to grow the beer business, trying to draw tourists here to check out and of course sample the beer just like people go to California for wine.
>> It is becoming even more diverse and we are seeing more small producers.
Popping up here and there.
And the quality will only go up.
>> They brew their own brew in small batches in the base.
Selling 9 on tap only if he Waterbury pub for a total of about 475 barrels a year.
>> Everything that we keep on tap is in this cooler.
All the tanks, beer gets carbonated.
Through the manifold system.
Straight on up to the bar.
>> Owner John is a beer purist saying it tastes best on draft.
But with this success he is possibly considering bottling it.
>> And it is a very exciting time for Vermont beer
>> A micro beer movement growing in the green mountains.
>> The other Vermont winners this year right harpoon brewery in windsor got a silver.
>> A shout out, finest liquids in Warren got a bronze for the specialty beer called maple triple.
>> Cheers to them.
Not a bad gig there.
Here is what we have coming up on the channel 3 news at 6:00.
A doctor is set to reopen his office that burned down two weeks ago.
When the old Newton academy building went up in flames.
>> On Tuesday there is going to be an advanced screening of the new fish concert and that is going to be in 3 D
>> And so then, thanks for sharing part of your Sunday with us.
I'm Kristin Carlson.
>> I'm Darren Perron.
Have a great day everyone.
>> So long.