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Gregg: State "Cheating" Small Businesses Needing Refunds

By Network Indiana

Posted May 15, 2012

Democratic gubernatorial nominee John Gregg charges the state is "cheating" businesses who overpaid their taxes to fund unemployment benefits.

Legislators voted in 2009 to raise the payroll tax on businesses to close a deficit in the unemployment fund. But lawmakers moved a year later to delay the increase, days before it would have taken effect. A televised report says businesses who had already paid the higher rate by then aren‘t receiving refunds unless they apply for them on their own initiative – a move Gregg says he opposes.

"It‘s a significant amount of money to a small business," Gregg says. "Again, it may not be much by Washington, D.C. standards, but it‘s a lot by Indiana standards."

The Department of Workforce Development maintains businesses were notified of the move to postpone the hike, and were notified if they overpaid. Spokesman Joe Frank says it‘s common for businesses to leave overpayments on the books to lower their rates.

"This is a normal occurrence. If they‘ve overpaid, they have the option of receiving a refund from us, or actually, what a lot of employers do is they choose to leave the money in the system, because that gets them a lower rate," Frank says.

Gregg says it‘s wrong for the state not to issue refunds. He lumps in the failure to do so with three miscalculations of tax collections in the last six months, totaling half a billion dollars. Gregg is demanding the immediate start of an audit of all state agencies, and says he would push as governor for a toughened whistleblower protection law. He says the existing law has been rated the nation‘s second-weakest.

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