Unemployment tax tsunami hits state

By By Bob Martin, The Alabama Scene
Last February Gov. Bob Riley refused to support expanding Alabama’s unemployment compensation program so the state could qualify for an extra $66 million in federal economic stimulus funds.
That decision meant that thousands of out-of-work Alabamians who may have qualified for the expanded benefits, such as people who worked part-time, would continue to be blocked from collecting unemployment in the state.
Fast forward a year later. The unemployment rate in Alabama has risen to 11 percent and in January businesses across the state were hit with an unemployment tax rate increase of three to five times what they had been paying. My company’s rate jumped from .64 percent to 2.09 percent even though we have had no one to draw unemployment compensation in more than three decades.
The governor, obviously too busy tilting at windmills over bingo, has ignored the problem and the media has barely mentioned it. The State Department of Industrial Relations (DIR) has been forced to increase the tax because Alabama is in debt to the Federal Government for its share of unemployment compensation to the tune of about $170 million and the debt continues rising every week.
Since September the state has not had the funds to pay its portion of unemployment benefits. I am told it is the first time since the early 1980’s, when unemployment rose to 14.5 percent, that the state has needed federal financial help for unemployment compensation payments. The debt is on track to double and maybe even triple over the next year and in September 2011 the feds are expected to start adding interest.
State officials have no clue as to how the money will be repaid. Some have speculated the possibility of another federal stimulus dropping in our laps or perhaps that the feds might forgive the loan.
With the increased tax rates DIR projects it will collect close to $500 million this year, an increase from the $218 million last year. However, they expect to pay out about $700 million in benefits.
Fired Anti-gambling czar still being paid
Retired Jefferson County District Attorney David Barber, who Gov. Riley put on the state payroll at $125,000 per year to command his Anti-gambling Task Force, said he would resign last week after being caught with thousands of dollars in slot machine winnings at The Golden Moon, a Mississippi Choctaw Indian Casino.
So far Barber remains on the payroll. My sources tell me he was seen gambling more than once at the Mississippi casinos accused in a U. S. Senate Committee of funneling over $2 million into Alabama to help Riley win the 2002 gubernatorial election.
He has since been “uninvited” by Houston County District Attorney Doug Valeska to return there, where he was recently thwarted from raiding Country Crossing, a new Southeast Alabama entertainment destination with 1,700 electronic bingo machines.
Meanwhile, over in Mississippi the casinos there are gearing up for an advertising campaign to support Riley’s attempted shutdown of any type of gaming in Alabama.
Just moments before Riley addressed the Alabama Legislature on the evening of Jan. 12, an email, obtained by The Montgomery Independent and The Dothan Eagle from former Mississippi State Sen. Gloria Williamson, a lobbyist for the Choctaw Indian Casinos, was forwarded to Mississippi casino owners and operators, inquiring about interest in joint advertising campaigns designed to support Riley’s efforts.
In the email, Williamson asked that any casino operators interested in an ad campaign in regard to gaming in Alabama,” to meet Friday, Jan. 15, at Mary Mahoney’s. The casino owners met that day at the restaurant in Biloxi to discuss assisting Riley in his anti-bingo campaign. “We feel that we must all come together to help each other combat this problem for Mississippi gaming,” she wrote.
Riley didn’t announce Barber’s firing until Friday
Although Gov. Riley knew about Barber’s “gambling experience” he delivered the State of the State address to the legislature, lectured us against the evils of bingo, then left for Costa Rica to an undisclosed location. It was the following Friday just before 5 p.m., after the meeting of the Mississippi casino bosses in Biloxi, that Riley’s press office announced Barber’s gambling excursion to the Choctaw Indian Casino and said the governor would replace him.
We are told this is not Mr. Barber’s only trip to Mississippi casinos. I hope he also won big on that trip and will share his winnings with the governor…or perhaps the people of Alabama.
Bob Martin is editor and publisher of The Montgomery Independent. E-mail him at: bob@montgomeryindependent.com