Stimulus to benefit Hoosiers collecting unemployment funds

Hoosiers collecting unemployment benefits will soon have a little extra help in making ends meet. 

Gov. Mitch Daniels announced last week in a press release that there will be a $25 increase in benefits for those collecting unemployment. The increase raises the maximum amount to $390 per week.

The money is part of the economic stimulus package passed Feb. 13.
The U.S. Department of Labor will reimburse participating states with money from the stimulus package. Indiana could receive up to $185 million.

Marc Lotter, a spokesperson for the Indiana Department of Work Development, said the money is needed. 

“Many Hoosiers are still unemployed and need assistance,” Lotter said.

Lotter added that unemployment claims have doubled in Indiana this year. He said while the unemployment fund was at a $1.6 billion surplus, it shrunk after 2001 when taxes on employers were lowered. 

“They lowered taxes and increased benefits,” said Lotter. “This action drained the fund, and it is now at a deficit.”

Lotter said those qualifying for benefits will continue to receive them despite the deficit.
Danny Lopez, communications director for Bloomington Mayor Mark Kruzan, said Bloomington does not have specific programs to deal with unemployment, but it works to keep the economy diverse.

“We are always looking to employ talent here in Bloomington,” Lopez said.  
Lopez said the city is not suffering financially and is working on projects to help expand businesses.

“Downtown is as vibrant as ever, despite what is going on in the state and in the nation,” Lopez said.

Professor Barry Rubin from the School of Public and Environmental Affairs researches the Bloomington economy and said the $25 increase will help but might not have a huge economic impact. 

According to the Department of Labor, Bloomington’s unemployment rate is 4.5 percent, almost half the state average of 8.2 percent.

Rubin said Bloomington fares better than other regions in the state because it has a university. Most people who work for IU spend their salaries in Bloomington and keep the unemployment rate down. He said IU’s endowment could be hit hard in the recession, but it is still well-funded. 

“It is not as serious because we are insulated by the University,” Rubin said.  
Professor Mark Crouch from the Department of Labor Studies at IU-Purdue University Fort Wayne said unemployment is only a partial replacement for a person’s normal salary. 

Federal law mandates that benefits must be paid within three weeks of approval, but Crouch said the system is slow and does not always meet the deadline.

“There are thousands of people in limbo,” Crouch said. “Indiana is one of the worst places for getting unemployment.”

Crouch said because of the high volume of demand for unemployment, it is difficult to correct mistakes on rejected applications, forcing unemployed workers to wait long periods of time before receiving any money. 

“Very few people can go weeks or months without money coming in,” Crouch said. “It is a complete disaster.”