32cd6ea5d9cee3d1-landmarklabor1Rep. John Tuttle, chair of the labor committee, brought people together to make LD1884 come together. Photo Ramona du Houx

LD 1884 Landmark Law:

—Reduces business tax

—Retrains laid-off workers

—Gives senior citizens full unemployment benefits

August/September 2007

By Ramona du Houx

With a new law that was enacted during the closing days of the session, Maine’s businesses will get a tax reduction, while workers will receive targeted career counseling for scholarships, and senior citizens will finally obtain funds that have been withheld.

LD 1884, An Act to Create the Competitiveness Training Fund and Improve Maine Employment Security Programs, is a landmark law.

The measure was an unprecedented collaboration between Maine’s business community, worker advocates, and state government.

“It took three years of work,” said Commissioner Laura Fortman who led the effort. The House and Senate passed LD 1884 unanimously.

“This provides substantial tax relief to Maine businesses,” said Governor Baldacci. “It also makes some very important changes that benefit our seniors and our workers. I really want to thank Commissioner Fortman for all the work she has put into this bill, bringing countless people and agencies together.”

Each of the three main pillars of the law is a breakthrough in its own right, and these components all work together to make Maine workers and businesses more prepared for the jobs that are available in the new high-tech global economy.

Business Tax Reduction—

Last year the governor repealed a tax on business equipment that held businesses back from investing in their futures. In a continuing effort to improve Maine’s business climate, LD 1884 reduces unemployment taxes for Maine businesses for the next two years by $33.7 million in 2008 and $35 million in 2009.

“This is real, tangible savings for Maine businesses, and goes a long way to increasing Maine’s competitiveness,” said Governor Baldacci.

Businesses will see an average tax rate reduction per employee of $74 to $77 each year. This is accomplished by reducing the benefit reserve cap of the Unemployment Insurance Trust Fund from 21 months to 18 months, starting January 1, 2008.

It is hoped that by cutting unemployment taxes for business, they will be encouraged to reinvest in their companies and workers.

“These are important funds that return to the economy, helping grow the economy,” said Peter Gore, a lobbyist hired by the Maine Chamber of Commerce. “Employers can expand their business, hire new employees, and provide them with better benefits and wages.”

Targeted Career Counseling—

More and more jobs in this new global economy demand a high level of specialized training. “The Competitiveness Skills Scholarship helps Maine workers and businesses succeed in a changing economy, which has been a top priority for the Governor and Maine Department of Labor,” said Fortman. “For workers that lose their jobs, there is very little federal money available for retraining, unless you are part of a large plant closing or you’ve been part of a trade impact and your company has gone overseas. What this new law does is make $3 million available for retraining in a Competitive Skills Scholarship program.”

The scholarship allows Career Center customers earning below 200 % of the poverty level to obtain a degree or certificate in a training program for high-wage jobs in growth industry areas which need skilled workers.

“It’s meant to partner the worker with a job skill that is needed in their community. So Career Centers will work with employers to find out what skills they need workers to have, then workers that may have been unexpectedly laid off can apply for a scholarship and get retrained for a specific job,” said Fortman. “It’s matching the worker to the job skill that is needed in their community.”

The fund is paid for by employers and fills a huge need in local job training efforts.

Eliminating the Pension Offset Penalty—

“This is an important day for Maine’s seniors and for Maine’s workforce,” said Nancy Kelleher, advocacy director for AARP Maine. “Eliminating the Social Security pension offset is a measure that has been needed for a long time. It simply wasn’t fair to seniors who work just as hard as their younger counterparts.”

Now Maine no longer offsets unemployment benefits for seniors by 50 cents for every dollar of Social Security.

“Seniors are getting the respect and money long due them,” said Fortman. “To have lost unemployment benefits because they worked all their lives and are able to collect social security was a miscarriage of justice. I’m happy to say that we’ve put things right.”

Older workers, who have been laid off, can take advantage of the scholarship program if they so desire.

Another provision in the law is that it allocates $5.2 million in federal funds to upgrade and improve the unemployment insurance and employment computer systems at the Maine Department of Labor.

The law also continues the current unemployment benefits for people who are able and available for part-time work.

“This legislation is the result of a lot of hard work by a lot people. It really was a team effort,” said Fortman. “There are so many people to thank for their hard work.”

“I’m proud of this important initiative for Maine’s future, and of the strong bipartisan support behind it,” said the governor in thanking those who worked for passage of the bill.