Gregoire wants relief for jobless, employers

OLYMPIA -- Gov. Chris Gregoire on Wednesday proposed tapping the state's $4 billion unemployment trust fund to give a temporary tax cut for businesses, as well as a temporary boost in benefits to laid-off workers.

The governor mentioned the proposal during her inaugural address after being sworn in as governor for her second term. Details will be released today on that idea and others in a jobs package that Gregoire says could create 20,000 jobs over two years.

The proposal calls for taking $400 million from the trust fund and using half the money to beef up benefits for unemployed workers. The other half would aid businesses by reducing the amount of money they pay into the fund.

The governor told lawmakers that there's a financial storm over Washington state, "and it's raining buckets of hardship for families and businesses."

The state's job, she said, "is to help families and businesses survive at a time when they are forced to juggle bills and cut back spending."

The Association of Washington Business (AWB), however, was quick to oppose the idea.

"Our state is very fortunate right now to have this flush unemployment trust fund," said Don Brunell, president of the AWB. "Just because the fund is full, we can't keep looking at nibbling away at it. We don't want to see it get to the point where there is not only a lot more people unemployed but that the employer has to pay more for unemployment taxes."

He said the AWB opposes Gregoire's proposal because if lawmakers keep pulling money out of the fund, businesses might have to pay more taxes down the road to fill the account back up.

Under the proposal, workers would receive a $45-a-week boost in benefits on average. The average person last year received a $350 unemployment check each week. The largest check someone could receive currently is $541 a week. Workers must earn $4,700 or more per month to qualify for the maximum amount.

The fund can afford to provide relief to workers and business, according to Gregoire, adding that the state "has the healthiest unemployment trust fund in the country."

Nearly three dozen states are scrambling for federal money to compensate for their depleted, or nearly empty, unemployment-insurance systems, said Sheryl Hutchison, spokeswoman for the Washington employment-security department.

Hutchinson said Washington has the nation's largest unemployment-benefits fund and could safely be drawn down. She said the federal government recommends that states only have 12 months of benefits stored in the case of a "significant recession." Washington has enough to pay for 20 months of unemployment assistance.

"It's not an invulnerable fund, (but) we do believe we can draw it down a bit without damaging our ability to pay benefits," Hutchinson said, adding that her agency had been working with Gregoire's office on the stimulus plan.

Gregoire isn't the only lawmaker eyeing the unemployment trust fund. On Tuesday, Senate Democrats revealed their proposed economic-stimulus package, which would tap the fund to pay for the retraining of unemployed or underemployed workers.

In her speech to lawmakers, Gregoire also said she would provide details later on a "proposal to keep families in their homes. ... I'm asking you to approve legislation to help struggling homeowners work out ways to avoid foreclosure."

In addition to those proposals, Gregoire talked of reforming state government.

"State government has evolved -- layer upon layer -- ... but too much of what served the people well in 1940 or 1960 or 1990 does not serve the people well in the 21st century," she said. "Let's step up to the challenge for the people who sent us here."

For example, she said, "almost 40 percent of license tabs are renewed online, saving hassles and gas. We can close 26 licensing offices across the state while extending hours at the 10 most popular locations."

Democrats approved of her speech.

"You know she's offered specific ideas and she's offered the Legislature a challenge to ... help our neighbors one at a time and do whatever we can, because I just don't think I've ever seen anything quite like this," said House Majority Leader Lynn Kessler, D-Hoquiam.

However, Senate Republican Leader Mike Hewitt, R-Walla Walla, criticized Gregoire for not focusing on ways to keep small businesses afloat during the economic crisis.

Sen. Joe Zarelli, R-Ridgefield, Clark County, said he disagreed with the proposal to take money from the unemployment trust fund to pay for relief programs.

"A lot of what we're trying to do is spend money," Zarelli said. "Anytime we take one-time money is pushing forward and growing the inevitable."

Andrew Garber: 360-236-8268 or agarber@seattletimes.

Jennifer Sullivan: 360-236-8267 or jensullivan@seattletimes.com

Seattle Times reporter Chantal Anderson contributed to this story.