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EDITORIAL: Enough nibbling around edges of unemployment fund woes

Wisconsin’s unemployment trust fund is more than $1.5 billion shy of its $1.5 billion recommended minimum balance.

All that red ink should be all the motivation necessary to propose sweeping solutions that are long overdue. Instead, those who could initiate a bold solution consider this a perfect time to once again rely on limp excuses for ignoring the problem.

Members of a subcommittee of the Unemployment Insurance Advisory Council, which advises the Legislature on unemployment benefits, discussed the deficit during a teleconference Dec. 2. Subcommittee member Mark Reihl, executive director of the Wisconsin State Council of Carpenters, even pointed out that the council so far this year has been only “nibbling at the edges” of a problem that has lasted for more than a decade.

One of those nibbles is a recently approved policy change requiring companies that withdraw the most from the unemployment system increase their payments. Now the council might recommend strengthening that change with a surtax on companies whose withdrawals from the unemployment fund most exceed their contributions.

The surtax could raise $23 million annually, but because withdrawals from the system fluctuate from year to year, the trust fund will not necessarily grow by that amount.

It is not enough.

But “not enough” could be the council’s slogan. There is no evidence that this group of advisers has ever had an appetite for the bold proposals that would snap a complacent Legislature out of its decade-plus snooze.

The council members, rather than offering a solution, cling to excuses.

The unemployment trust fund collects money mostly through a tax on wages. Between 1986 and 2009, lawmakers capped the taxable wages at the first $10,500 employees received each year. During that same period, though, wages more than doubled.

The system pays out unemployment based on a percentage of a worker’s previous salary, so it stands to reason that more money often is going out than going in.

When the trust fund was losing money but still in the black in the early 2000s, the council commissioned a study but let the problem persist because members apparently assumed businesses would resist paying more to a still-solvent system. And lawmakers listen to businesses.

When the trust fund was hemorrhaging money during the recession, the council stayed quiet because members apparently assumed businesses would protest over paying extra when they already were struggling to stay alive. And lawmakers listen to businesses.

To the council’s credit, it has since persuaded lawmakers to raise the taxable wages to $14,000.

It is not enough.

The council exists to identify problems, develop solutions and offer sometimes unpopular advice. That might mean proposing a large increase to taxable wages if that is the only way to hit the minimum balance.

And, yes, businesses will resist, and lawmakers listen to businesses. It is a refrain that council members know by heart, but they should not be singing it.

Still, they started tuning up again Dec. 2 when they agreed it would be pointless to try to correct the entire deficit when lawmakers are preparing for 2014 re-election campaigns.

It’s true. The timing would be terrible.

But the council members are not politicians, nor should they play that role. Assuming how businesses and lawmakers will react and basing advice on that assumption only gives cover to the decision-makers, who then can say the council never told them to fix the whole problem.

Those politicians might reject the council’s unpopular advice, but it must be offered anyway, not because the timing is perfect, but because timing has nothing to do with it.

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