Virginia Can’t Afford Higher Taxes on Jobs

House Republicans, especially a 29-year businessman like myself, clearly understand -- and are experiencing -- how tough the economy is. If you are one of the thousands of Virginians who are unemployed, the pain caused by this recession is real and imme diate. We know "it's the economy, stupid"! We are very focused on implementing good public policy that will stimulate Virginia's economy and create good-paying jobs.

That is why Republicans in the House of Delegates have done so much recently to help the unemployed in Virginia -- and made the right business decision during the April 8 reconvened session to reject Gov. Kaine's jobs-killing and prohibitively expensive expansion of unemployment benefits.

In February 2009, according to the Virginia Employment Commission (VEC), Virginia's unemployment rate jumped to 7 percent, or approximately 250,000 persons. Furthermore, in February 2009 some 98,000 persons collected unemployment insurance benefits in Virginia.

Here is what House Republicans have done to help these persons: First, on April 8, House Republicans passed Del. Sam Nixon's House Bill 1889. This bill extended unemployment benefits, for the second time, for an additional 13 weeks. Unemployed persons are now collecting benefits for 59 weeks instead of the typical 26 weeks.

Second, during the reconvened session, as a result of Del. Danny Marshall's House Bill 2024, Virginia's unemployed, from businesses with 20 or fewer employees, will now have 65 percent of their COBRA health benefits paid for nine months.

Third, some of the lowest income unemployed persons will not lose their benefits, thanks to Del. Nixon's bill. Fourth, Virginia will receive $62.5 million in federal stimulus money for the Unemployment Trust Fund due to past changes in our unemployment insurance laws. All four of these public policy initiatives were passed by House Republicans. Additionally, all four are temporary and paid for by the federal government's stimulus package.

What has received almost all the media attention since the April 8 session was the House Republicans' rejection of Gov. Kaine's amendments to Senate Bill 1495 that would have allowed Virginia to receive an additional $125.5 million for the unemployment trust fund, but would have cost -- and would have meant a tax increase of -- $20.1 million per year (according to the VEC) on Virginia's employers and employees.

However, not one unemployed person in Virginia who is eligible for benefits today will lose a penny because SB 1495 did not pass. In fact, it's likely many will receive an additional $25 per week, a federal tax deduction on the first $2,400 of benefits, and an additional 13 weeks after the passage of HB 1889, all courtesy of the federal stimulus package.

SB 1495, as amended, would have expanded, for the first time, Virginia's unemployment benefits to include approximately 7,900 unemployed workers who are formerly part-time workers and are only looking for part-time work or to workers who have exhausted their 59 weeks of benefits but are enrolled in a state-approved job-training program.

While on the surface both seem to be laudable goals, in fact the resulting tax increase on all of Virginia's employers and employees would have cost far more jobs than it would have helped, and it would have been prohibitively expensive. Why would you want to increase the unemployment "jobs tax" on all Virginia jobs during the worst recession since the Great Depression? This would have been a very poor business decision and it would have cost far more jobs than it would have helped.

Furthermore, the $125.5 million in additional federal stimulus money -- again, at an annual cost of $20.1 million to Virginians -- would have been prohibitively expensive.

Think of it like a mortgage: If Virginia had taken a $125.5 million, one-time trust fund payment (i.e., "unemployment mortgage money") from the federal government and then had to make $20.1 million in annual payments thereafter, then the actual cost of funds -- the interest rate -- is 18.94 percent. (And that assumes only 30 years of level payments and that the VEC's current $20.1 million annual cost estimate is correct.) Who in their right mind thinks Virginia should take out an 18.94 percent "unemployment insurance mortgage"?

House Republicans are all feeling the economic pain, and we are very focused on public policy that will help all Virginians by stimulating Virginia's economy and creating good-paying jobs -- especially for the unemployed. That is why we made a great business decision on April 8 to reject Gov. Kaine's jobs-killing and prohibitively expensive expansion of unemployment benefits.

Finally, who is the most qualified to make the best unemployment insurance business decisions for all Virginians -- including the unemployed who need a job? Business-oriented House Republicans and the vast majority of Virginia's business persons who support our decision? Or a lawyer, Gov. Kaine, who has no -- as in zero -- business education, training, or experience?

James P. "Jimmie" Massie III, a Republican, represents the 72nd District in the Virginia House of Delegates. His district includes part of Henrico. Contact him at .