Anti-fed Sentiment Driving Foes Of Jobless-fund Aid

February 03, 2010|By Jay Hancock

In Virginia they've been massing on the Capitol steps. In Massachusetts they put a Republican in a Senate seat held by Democrats since 1952.

In Maryland they're protesting the proposed alternate base period for unemployment benefits. Here in the liberal Free State, you stage your Tea Parties over whatever issue you can.

Opposition to a federal bailout of Maryland's unemployment fund is channeling the anti-government energy that gets aimed at less humdrum targets elsewhere. Gov. Martin O'Malley's plan to accept $127 million in stimulus dollars to fix the fund has assumed a symbolic importance greater than its substance.

It's hard to believe the protest is mainly about money.

Whatever happens, we're talking about a difference in business costs of a few hundred dollars per year per employee. The upgrade to unemployment coverage that O'Malley has requested in order to qualify for federal money might cost employers $20 million annually. In the $300 billion Maryland economy that's almost immaterial.

Yet debate over the unemployment fund has launched multiple hearings and countless caucuses, letters to the editor and blog posts. It might be the biggest thing going on in Annapolis.

Tom Saquella, president of the Maryland Retailers Association, touched on the issue's resonance among conservatives when he testified against O'Malley's proposal.

"One cannot underestimate the strong dislike and even anger among retailers, especially among independent merchants, directed at the federal stimulus program," he said, according to his prepared remarks. "They are alarmed by the almost $1 trillion spent and see little, if any, benefit to Main Street. ...

"Most independent retailers are skeptical of government in good times, so you can imagine how they feel still reeling from the Great Recession."

The fact that O'Malley wants Washington's $127 million to help the independent retailers and other employers may be the masochistic point. Lacking a governor like Louisiana's Bobby Jindal to reject stimulus money on principle, the businesses are rejecting it themselves.

The unemployment fund needs rescuing because it's nearly empty. Two years ago the pool, financed solely by employers, had $1 billion in cash. Then 100,000 Marylanders lost their jobs.

Accepting the federal money would mean a temporary cut in unemployment insurance taxes. Then there would be a small, permanent increase, caused mainly by tweaking the "base period" formula for who gets benefits. That's the extra $20 million a year.

With what looks like a painful "jobless recovery" on the horizon, business leaders say Maryland's unemployment fund risks another brush with insolvency if benefits are allowed to expand.

"A lot of the jobs that have been lost have been lost permanently," says Ronald Adler, president of human resources consultant Laurdan Associates and the Maryland Chamber of Commerce's point man on unemployment insurance.

Maybe. But there seems to be something bigger at stake than unemployment insurance.

Republican Scott Brown's capture of the Massachusetts Senate seat held by the late Ted Kennedy, a Democrat, has energized Maryland conservatives. They seem to be looking for a cause.

"Massachusetts is getting raised now in a lot of conversations" - about unemployment insurance and other issues, says Adler.

Much of the opposition in Queen Anne's County to a proposed $100 million State Department security center comes from the same political instinct. The facility would be built with $70 million in federal stimulus money.

Maybe it's a measure of how weak Maryland Republicans are that unemployment insurance could be their signature issue. Last month's Annapolis rally led by former Gov. Robert L. Ehrlich Jr., a Republican, attracted maybe half the people attending a similar State Capitol event in Virginia, according to news reports.

Or maybe it's the germ of something bigger. Could be an interesting election in November.

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