Yesterday was interim committee day at the Utah Legislature, the final committee day for this year and before the 2012 General Session. Several bills of interest to UMA were presented to interim committees for their review and approval as “committee bills” to be introduced in the next general session in January 2012. The following dialogue is a review of those bills we expect to address in January.
PANEL ENDORSES CUTS TO JOBLESS PREMIUMS
By TONY SEMERAD - The Salt Lake Tribune
November 16, 2011
Hoping to help Utah employers, lawmakers endorsed a proposal Wednesday that would cut the state’s top unemployment-insurance premium rates starting in 2012.
A measure to slash the rate from 9 percent to 7 percent — or about $590 yearly per employee — passed in a state committee hearing Wednesday and will be considered when the Utah Legislature convenes in January.
The cut is being proposed in tandem with a cap on the minimum rate paid by all employers. Both come in reaction to premiums spiking earlier this year and a widespread outcry from private-sector business owners who saw their insurance costs surge just as a fragile economic recovery began to take hold.
The rate reduction ``is a big help for us,’’ said Richard Thorn, president of the Association of General Contractors, representing nearly 500 Utah companies in the commercial construction sector. ``Is it a big deal? Yeah, we think it is.’’
Thorn predicted the lowered costs could lead to additional hiring by small- and mid-sized construction companies and other industries particularly hard hit by the Great Recession. That view is shared by leaders from some of the state’s largest labor unions as well.
Utah’s jobless insurance system is among the nation’s most aggressive in charging employers for unemployment benefits paid to workers they lay off. The rate reduction advanced Wednesday essentially eases back on that approach by spreading millions of dollars into higher bills for all employers instead of taxing only those who fired workers in the downturn.
Shifting the costs of top ratepayers is expected to push up what all business owners pay, so the plan endorsed Wednesday also would cap those pooled costs, at 0.4 percent.
Between the two rate changes, lawmakers would effectively be slashing up to $30 million annually from revenues coming into the Unemployment Trust Fund, at least through 2013. Only a year ago state managers were warning the fund was headed to bankruptcy under the pressure of record jobless claims.
``We feel much more solid about it now’’ Utah Unemployment Insurance Director Bill Starks said Wednesday of the trust fund. ``We foresee very little danger of going insolvent, especially if the economy keeps chugging along at the pace it is now.’’
Premiums shot up in 2011 through Utah’s automatic formula for rebuilding the trust fund, which sustained heavy losses from historic unemployment starting in August 2008. The state-managed cash reserve fund fell from $855 million to below $310 million in less than two years, leading fund administrators to plan for it going broke, as similar funds have in 32 other states.
The trust fund now holds $388 million, replenished by revenues from higher premiums and a more positive economic picture. Senior fund managers and an advisory committee made up of labor, business and community representatives are both backing the rate caps, partly to make Utah more comparable with those in surrounding states and to remove incentives for employers to dodge the taxes.
The rate cut received unanimous backing by members of the Legislature’s Workforce Services and Community and Economic Development Interim Committee on Wednesday. A draft bill enacting the cut also picked up a House sponsor, Rep. Jeremy Peterson, R-Ogden.
NOTE: UMA President Tom Bingham is an employer representative on the Unemployment Advisory Committee. He said regarding these measures: “We have worked very hard to ensure solvency in the UI Trust Fund and avoid catastrophic adjustments in the UI premiums employers pay. A year ago, we told the interim committee that was suggesting drastic adjustments to the formula that we were prepared to make drastic changes if necessary but we were convinced the trigger mechanisms added many years ago would work and would allow us to avoid insolvency.”
“It now appears we have turned the corner and are rebuilding the trust fund. I am pleased we have been prudent in the past and resisted programs from the Federal Government that would weaken our overall position going forward. Other states, 32 in all have taken the federal bait and are now having to borrow from the Feds to pay claims with no way to repay the loans. Utah is in an enviable position.”
NATURAL RESOURCES, ENERGY AND ENVIORNMENT COMMITTEE APPROVES TWO UMA SPONSORED BILLS AS COMMITTEE BILLS
Two bills, the product of more than a year’s work for the UMA Air Quality Subcommittee of the Environment Committee, the Department of Environmental Quality and Senator Margaret Dayton, were heard in the Natural Resource, Energy and Environment Committee yesterday afternoon and adopted as “Committee Bills” by the committee with just one dissenting vote.
The following is a brief outline of what the bills do and is what was presented to the legislative committee by members of the UMA Air Quality Committee.
ENVIRONMENTAL BOARDS AMENDMENTS
ENVIRONMENTAL BOARDS AMENDMENTS
Air Quality, Water Quality, Solid & Hazardous Waste, Radiation Control and Drinking Water
This is a nearly 200 page bill that restructures the five environmental boards within DEQ. Here is the synopsis of the bill as presented by Jim Holtkamp, chairman of the UMA Air Quality Advisory Committee:
1. The adjudicative function of the various environmental boards, such as permit appeals, would be eliminated. The boards would retain rulemaking, policy and advisory responsibilities. The boards would also retain various certification and grant approval authorities, as applicable.
2. The recommended decision of an administrative law judge who hears a permit appeal or appeal of an administrative enforcement action would be made to the executive director of the Department of Environmental Quality and not to the applicable board. The executive director would be able to call on the Attorney General’s office and other resources to aid her in making a decision. The executive director’s decision would then be appealable to the court of appeals.
3. The number of board members on each of the five boards would be reduced to nine, one of whom would be the executive director (as under current law) and the other eight would be nominated by the executive director and appointed by the governor with the consent of the Senate. The eight appointed members on each board would include one individual who by training and experience is an expert in the subject matters handled by the board; two non-federal government representatives; two representatives from the applicable regulated industry; one representative of a non-governmental organization; one public health representative; and one attorney with expertise in the particular subject matter.
4. Board members would be subject to requirements regarding knowledge and experience, attendance at board meetings, compliance with conflict of interest rules set by the executive director, and residency in the State of Utah.
5. The head of each division is now called the “executive secretary.” That term would be replaced with “director” to reflect better the role of the each of the division directors. Many of the statutory board authorities would be transferred to the directors, especially those that are purely administrative in nature, such as contracting with third parties, etc
6. The boards would no longer have any direct role in permitting. A permit would be issued (or amended, renewed or revoked) by the director.
7. Similarly, the boards would not have anything to do with inspections or enforcement, except that the director would need to get board approval for a settlement of an enforcement action that involves $25,000 or more in civil penalties. Also, the boards would not have independent authority to commence litigation to enforce rules, assess penalties, etc.
The following is the synopsis of the Environmental Permit Review bill proposed by UMA and approved by the committee yesterday. This and the foregoing bill on board structure are a product of the application of Lean/Six Sigma principles to the Department of Environmental Quality and its Divisions.
MANUFACTURERS CALLS ON SUPERCOMMITTEE TO REACH DEAL.
In a press release, the National Association of Manufacturers (11/17) Senior Vice President for Policy and Government Relations Aric Newhouse issued a statement calling on members of the Joint Select Committee on Deficit Reduction to come together before next week's deadline to ensure our nation's economic stability and promote growth by addressing its fiscal woes. "As the November 23 deadline draws near, manufacturers across the country continue to be deeply concerned with our nation's fiscal house and the ramifications of our growing debt on jobs and economic growth. Policymakers have an opportunity to restore confidence and stability to our economy by reforming entitlement programs and creating a tax code that is pro-growth and pro-jobs." Newhouse concluded, "For the sake of jobs and our nation's competitiveness, manufacturers are urging lawmakers on both sides of the aisle to seize this opportunity as the committee enters its final week of negotiations."
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JAY TIMMONS QUOTE CHOSEN AS THE ATLANTIC'S "EXPERT QUOTE OF THE WEEK."
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