For immediate release:
May 14, 2012
INDIANAPOLIS - Indiana House Democratic Leader B. Patrick Bauer from South Bend and State Rep. David Niezgodski (D-South Bend) today slammed the Indiana Department of Workforce Development (DWD) for mistakenly overcharging Hoosier businesses millions of dollars in taxes and doing nothing to tell them they are due refunds.
Bauer and Niezgodski, ranking Democrat on the House Employment, Labor and Pensions Committee, said recent media investigations led by WISH-TV in Indianapolis have shown that DWD over-collected millions of dollars in payroll taxes in 2010. Payroll taxes are paid by companies to help finance unemployment insurance benefits for out-of-work Hoosiers.
“In 2010, the Indiana General Assembly chose to delay implementation of payroll tax increases that were a crucial part of the unemployment insurance reforms passed in the Legislature in 2009,” Bauer noted. “These delays were enacted because businesses felt they were being unfairly burdened during an economic recession.”
Niezgodski, who played a leading role in passage of the reforms in both 2009 and 2010, added, “However, it now appears that DWD went ahead and collected the higher level of payroll taxes from businesses across this state for a period of time. We are guessing that the error involves millions of dollars.”
However, DWD has made no effort to advise businesses of the mistake. The WISH-TV investigation showed that business owners must take it on themselves to contact the state agency to find out if they have overpaid and are due refunds.
“Perhaps it is time to remind this agency and this administration that state government is supposed to work for the people of Indiana, and not the other way around,” Bauer said. “If the administration has made a mistake, then it should make every effort to correct it, not wait until the media uncovers it before acting. Even though the media did uncover this, it seems that DWD has no interest in telling businesses that they are due money back.”
Niezgodski noted, “In addition to being a state representative, I am the owner of a small business in the South Bend area, and I can tell you that these are not small sums that were collected mistakenly from the DWD. The state of Indiana should not be hoarding money in order to make its books look good.”
Both legislators noted that this is only the latest in a series of financial mistakes committed by various agencies in the Daniels Administration. It comes on the heels of “finding” $320 million in corporate tax revenues, then shortchanging local units of government $206 million in local option income tax revenue. In addition, the Indiana State Auditor has admitted mistakes in distribution of auto excise tax revenues that involved hundreds of thousands of dollars.
“Thankfully, the administration and its Republican supporters in the Indiana General Assembly have agreed to an independent audit of the state’s books that should be starting very soon,” Bauer said.
“It cannot come too soon for the people of this state,” he continued. “Each week seems to bring new news of fiscal ineptitude that harms the lives of too many Hoosiers. How much more can the people of Indiana stand?”