Michelle Rhee and Merit Pay in DC
This week Time Magazine featured Michelle Rhee, Chancellor of the Washington, D.C. public schools, as its cover story. If you haven't read about Rhee and the reforms she is driving in DC public schools, you should check out this article.
Rhee, a daughter of Korean immigrants and an alumni of the Teach for American program, has shaken things up in our nation's capitol. Since taking over as the city's public school boss roughly 18 months ago she has shut 21 schools, cut 100 employees at the school's central office, and fired 270 teachers and 36 principals. According to Time:
"Rhee is convinced that the answer to the U.S.'s education catastrophe is talent, in the form of outstanding teachers and principals. She wants to make Washington teachers the highest paid in the country, and in exchange she wants to get rid of the weakest teachers."
Rhee is a proponent of merit pay system and an opponent of tenure. She is battling some teachers, the teacher's union and some parents the whole way on both fronts. To read the full article, click HERE.
Salt Lake Chamber's Guest Worker Proposal
With all eyes focused on the economy you may have forgotten about immigration. Remember immigration? It was one of the top policy issues on every American's radar just last year. Well if you have forgotten don't worry, you haven't missed much.
There is still no leadership from Washington on this issue that most believe falls squarely in the federales' domain. In response to vocal anti-immigration voters, state legislators are still proposing bills (a la 2007's Oklahoma HB 1804, currently under injunction in federal court) that crack down on immigrants and put the onus on business to verify legal status.
Utah is one state with an Oklahoma-esque immigration bill pending enforcement. Utah SB 81 passed during the 2008 legislative session and was signed by Governor Huntsman. It is set to go into effect on July 1, 2009. Amid ongoing discussion about the impact of SB 81, the Salt Lake Chamber has proposed a guest worker program.
The chamber's proposed program would create a two-year, renewable guest worker authorization for illegal immigrants currently working in the state of Utah."The idea behind the guest worker program is, in most if not all respects, to take the (financial) burden from the public and put it in the private sector," says Wesley Smith, the chamber's Public Policy Director and Executive Director of the Immigration Policy Coalition.
Provisions of the Salt Lake Chamber's Guest Worker Proposal are:
Register as Worker
Applicants must register all relevant contact data including name, address, telephone number, etc. to the state. Data must be updated if any changes are made. Failure to update is grounds for revocation of worker status.
Each applicant is fingerprinted and their name run through Interagency Border Inspection System. A criminal history that includes any felony or serious offense results in ineligibility. Further review, if necessary, conducted by FBI.
Medical Exam/Health Check
Each applicant required to undergo same examination currently required for federal residence status. Utah will apply same health-related ground for inadmissibility.
Employer can only sponsor an applicant if the position to be filled has been subject to appropriate notice and no eligible domestic workers have been identified for the position. Applicants who are not Utah residents must apply from their country of origin. Applicant must be sponsored within 90 days of registering as a worker.
Applicant must provide a minimum security bond with the intent of covering any cost of future enforcement if applicant does not honor terms of guest worker program.
FICA and Medicare Equivalent Withholding
State of Utah will require employers to withhold an amount equivalent to typical FICA and Medicare withholdings (currently, about 15 percent.) Money will pay for health care and administrative costs of program.
10% Additional Withholding
This withholding will be taken out by the state and held in trust until the successful completion of the applicants guest worker status. Applicant is eligible for principle, while interest goes toward administrative costs.
All guest workers must be enrolled in a health insurance program. Employers may facilitate this requirement by providing employee insurance
Proof of valid auto insurance will be submitted to Department of Workforce Services. Expired insurance grounds for revocation of guest worker status. Waiver provided for non-drivers.
For more information click HERE to visit the Salt Lake Chamber's webpage.
Card Check Debate
Tony Iannelli, President of the Greater Lehigh Valley Chamber of Commerce, hosts a weekly business issues TV show that airs in eastern Pennsylvania and western New Jersey. Michelle Young, VP of Public Policy at the chamber and the producer of the show, sent me a link to a video clip of this weekâ€™s show when the discussion topic was Card Check.
The show featured a debate between Bill Georgeof the PA AFL-CIO's and UFCW Local 1776's Wendell Young on the pro-card check side and attorneys George Hlavac (Tallman Hudders & Sorrentino's Chairman of Labor and Employment Law Department) and Bill Adams of Adams, Nash, Haskell & Sheridan representing the business community. This is the first true debate Iâ€™ve seen about this topic, I think you all will enjoy.
Follow this link to watch video of the debate: http://www.wfmz.com/businessmatters/
The Greater Lehigh Valley Chamber also has a grea policy blog. Check it out at: http://lehighvalleychamber.blogspot.com/
Insolvent Unemployment Insurance
A looming issue for many states is the solvency of unemployment insurance trust funds. In Ohio, claims are running 40% above last year's levels and the state's trust fund is running an uncomfortably low balance. Missouri is looking at a â€™09 unemployment fund deficit of just over $100 million. California is projecting a staggering $2.4 billion shortfall next year if no action is taken.
Those states are not alone. According to the National Employment Law Project, 19 states had insolvent or nearly insolvent unemployment trust funds as of Sept 30, 2008. Their study finds that Michigan, New York, Ohio, Indiana and South Carolina are at risk of totally depleting their unemployment insurance trust funds before the end of this year.
What does this mean for business? Perhaps higher taxes.
Gov. Schwarzenegger has called a special legislative session in California to address the budget deficit in the current fiscal year and consider an economic stimulus plan. Suring up the unemployment fund is a top priority and the Governor is calling for a reduction in unemployment benefits and a tax increase on business to help stave off insolvency.
Michigan, a state that has already borrowed substantially from the federal government to maintain unemployment insurance, will implement a solvency tax starting in January. The tax will apply to all negative balance employers at a cost of up to $67.50 per employee per year. If the state hasn't paid back its federal loans in 2 years, all employers may see their unemployment tax rate increase to approximately $22 per employee per quarter. According to the Michigan Chamber's Wendy Block, "The only way around tax increases is to pass and implement cost-saving reforms like a waiting week, tightened qualification requirements, and better overpayment collection. Download Unemployment Insurance Tax - Michigan 08 to read a detailed announcement from the Michigan Chamber.
While not in the clear regarding unemployment solvency, Wisconsin has recently passed a reform bill that should help. 2007's Act 59 - Unemployment Insurance Reforms was signed into lay by Gov. Doyle this spring. The bill increases the amount of an employee's wages subject to the payroll tax, starting in January 2009, from $10,500 to $12,000â€” the first increase in since 1986. That wage base will increase to $13,000 in 2011 and $14,000 in 2013. The bill also increases the amount of time that claimants must have worked in order to qualify for unemployment insurance benefits, and freezes benefit levels through 2009.
Is your state facing an unemployment solvency crisis? Is there a potential solution? Please leave a comment and share your thoughts.