When labor and employers find common ground in the struggle over benefits and taxes, it should be cause for rejoicing. But when both sides agree on raiding the piggy-bank of the unemployment insurance trust fund, it's time for alarm.
So when the House of Delegates approved cutting in half the payroll surtax, while raising maximum weekly benefits by 19 percent, it was a politically popular but not necessarily a prudent decision. If enacted into law, it would be effective for a year while legislators study changes to the overall unemployment insurance system between sessions.
The cause for this largess was a Maryland unemployment rate of 4.5 percent in December -- the lowest in nearly five years -- and $400 million in the trust fund. That is certainly good news, especially when the national umemployment rate shot up to 5.7 percent last month.
The state's unemployment tax-benefits system has for too long been driven by a feast-or-famine mentality. Emergency tax surcharges are slapped on businesses when times are tough, precisely when these employers most need to cut costs. Then when the fund builds up a hefty surplus, when unemployment levels are low and fewer people need them, the demand is to use these reserves to increase weekly jobless benefits.
And in periods of persistent high jobless levels, there is the repeated cry to extend the number of weeks of benefits and further burden the system.
That's why the General Assembly voted three years ago to set a goal of $658 million for the trust fund, providing a reasonable cushion in hard times and eliminating the yo-yo, diet-binge cycle.
There are indications that this year's House measure will not win the three-fifths majority of both chambers needed for enactment as an emergency law. The state employment development department warns that the act would slow the buildup of the trust fund, and perhaps influence decisions of the summer legislative study panels.
A smaller surtax cut, to 1.3 percent (from 1.7 percent), and a modest increase in maximum weekly benefits (which were last raised four years ago to $223) would be more assuring for the health of the fund and the health of the state economy. It would also emphasize to legislators the need for a serious review of the overall unemployment insurance program in Maryland.