The fact that they press is now such an obvious player in the game of politics on the side of the Left is part of the reason that the old media is dying. Alternatives to the old media are now so easily reached that lies of commission as well as lies of omission can easily be exposed.
With that in mind, I saw something on the Virginian Pilot editorial page that struck me as wrong. I just could not put my finger on it. The numbers did not add up. The editorial was entitled Questions, answers on Virginia's jobless benefits and pretended to be a series of questions and answers designed to inform readers about the issue of the Virginia legislature’s decision to reject the Administration’s offer of $125 million in unemployment benefits if the state would permanently change its unemployment benefit laws.
Other states have objected to this intrusion into what have traditionally been state laws. Different states tax things at different rates; this is the essence of federalism. Virginia has a proud history of fiscal prudence. It has generally been business friendly which has resulted in low unemployment as businesses move from high tax and regulatory states to states with a lower cost of doing business, like Virginia. Exhibit A for a state with an oppressive tax and regulatory climate is California, a state that has managed to destroy all the benefits of a great climate, magnificent natural resources and a skilled work force into a business hell leading to the nation’s second highest unemployment after Michigan. Like GM and Chrysler it is bankrupt unless it can get a federal bailout.
But I digress.
The editorial made some interesting assertions about current and projected unemployment as well as the cost of implementing the laws demanded by the Obama administration. Some of the projections were sourced and some were not, which roused my suspicions. The sourced statistics came from Governor Kaine’s Virginia Employment Commission (VEC). Keep in mind that Kaine is Obama's choice to head the DNC and his official cheer-leader. He is paid to promote Obama's policies.
How many new people would get benefits with those changes, and what would it cost?The Virginia Employment Commission identified 6,867 part-time workers and 1,043 people in training who would be added, at a cost of less than $20 million a year.
Keep in mind that the Federal Government is promising to give Virginia $120 million dollars to pay for benefits that – according to the VEC – would only cost $20 million a year. So VEC is claiming that the Federal Government is willing to pay SIX YEARS of extra benefits if the state signs on the bottom line. Now if you bought a home with an interest-only variable mortgage at the peak of the housing bubble you may want to buy into this pipe dream, but when somebody offers me a deal like that I put my hand on my wallet and walk away … quickly.
But later on we find out that
Aren't unemployment insurance taxes going up already?Yes. Businesses pay taxes into a special fund that pays for unemployment benefits. When that fund runs low, taxes automatically increase to replenish it. Businesses currently pay an average of $98 per worker each year, but that tax is forecast to rise to $155 next year and $218 in 2012. The exact amounts will depend on the number of people needing benefits in future months. Any future tax increases tied to expanded eligibility would be on top of those increases.
So let me get this right: businesses are going to see their unemployment benefits taxes more than double over the next three years due to higher unemployment rates and higher benefits despite the fact that the Feds are giving the state enough money to fund six years worth of expanded benefits. Does this seem odd to you?
It appears that the aforementioned data comes from the VEC. Now here’s a tidbit that the Virginian Pilot’s editors don’t source.
Will businesses pay higher taxes if eligibility is expanded?
If the state legislature leaves the expanded benefits in place, businesses will see an average tax increase of $1.71 per employee annually in 2011. The amount would peak at $4.73 per employee per year in 2012 before declining.
Where did this estimate come from? I spent more than an hour trying to find the source for these numbers and finally gave up. Then I had a bright idea. Why not ask our legislators if they had ever seen these statistics. Sure enough they had.
Here is the e-mail I received from Speaker William Howell. I will let his reply speak for itself.
Thank you for your inquiry regarding the figures recently cited by a recent Virginian-Pilot editorial on unemployment insurance. We read the same editorial and, sadly, were not surprised by the lack of citation or fact-checking by the Pilot editorial board as they and their news coverage have consistently accepted information from Governor Kaine's Administration without question or substantiation.
Last month, when the General Assembly meet to deal with Governor Kaine's last-minute proposal to permanently expand eligibility criteria for Virginia's unemployment insurance in order to meet the strings associated with federal stimulus funding, the Kaine Administration and the Virginia Employment Commission (VEC), the agency responsible for the program, were less than forthcoming with their calculations on how many Virginians would become eligible and the corresponding cost that would Virginia businesses would be saddled with when the federal funds end. From what we were able to ascertain from the VEC, several points struck us as problematic.
First, the VEC used a static, backwards-looking analysis that appears to be based on prior fiscal years -- when the number of unemployed in Virginia was far lower and the health of the unemployment trust fund was much greater. According the VEC, adding workers seeking part-time work to eligibility was estimated to cost an extra 2.13% in benefits. This was based on not VEC calculations, but an analysis done by an outside group called the “National Employment Law Project” that estimated paying this group would have added 6,867 claimants and cost $8.1 million in 2007. The average weekly benefit for this group is less than $100. The average duration is about 12 weeks. Similar prior year data was used to calculate the cost of expanding the benefit time for those enrolled in training programs. By using old data, prior to the economic recession and rising unemployment roles, the Kaine Administration and its allies are clearly ignoring the true costs of these expansions.
Also disturbing to many of us was the Kaine Administration's reliance on data supplied by the National Employment Law Project (NELP). The NELP describes itself as “a national advocacy organization for employment rights of lower-wage workers.” A check of their website shows that their Board of Directors includes the General Counsel of the AFL-CIO, three “community activists,” and is chaired by a contributor on the Huffington Post. Obviously this group supports expanding eligibility for unemployment insurance and any "analysis" by the group would be slanted to show a minimized cost assumption for businesses. It is disappointing that the Kaine Administration would use a clearly biased organization to develop the rationale for their proposal without proper disclosure to the public and the media. It is also disappointing that the media chooses not to challenge those figures or their sources.
Relying on static, backwards-looking data from clearly biased sources considerably under-estimates the potential long-term cost burden to Virginia businesses struggling to retain and create jobs. On April 23, we were joined by several small business owners from across the Commonwealth who discussed the negative impact Governor Kaine's proposal would have on Virginia businesses. I recommend you visit the House Republican Caucus's website to view their statements on the issue - http://www.vahousegop.com/?p=289
We would like to note that while we believe House Republicans made the correct decision in rejecting this tax on businesses, House Republicans did take significant and positive action to assist unemployed Virginians. During the 2009 legislative session, for example, Delegate Nixon had a bill that ensured hundreds of unemployed Virginians would not lose their benefits as well as extending benefits from 26 to 59 weeks for those currently eligible through the use of federal funding. We also provided an opportunity for works laid off from small businesses to continue receiving affordable health insurance coverage. Finally, we did accept $62.5 million in federal stimulus funding for Virginia's unemployment insurance program to pay for benefits to those already eligible. That money had no strings attached.
Hopefully this helps to clarify that the figures being used –misused really -- by Virginia Democrats and echoed in the media are questionable on their face. Please let us know if there is any other questions we might be able to answer.
Sincerely,
Speaker William J. Howell
It is inevitable, the projections and costs of projects championed by the Virginian Pilot never come in on time or on budget. The light rail system that drew the support of the Pilot has seen costs escalate from $232 million to $288 million in just a year and completion has been pushed back from early 2010 to late 2010. There is no doubt at all that as construction proceeds the cost will escalate to over $300 million and completion be delayed until 2011. Incidentally, light rail will have no measurable impact on traffic congestion.
Bottom line, if you want facts, skip the Virginian Pilot. For fantasy read the editorials.
No comments:
Post a Comment