INDIANAPOLIS – Senate Democrats offered several amendments Monday that laid out their philosophy on an unemployment insurance fix – tax businesses more and don’t take benefits away from unemployed Hoosiers.

But the Republican-controlled chamber rejected most of the changes to House Bill 1379, which will likely have a final Senate vote today.

The bill then would go to a conference committee where House and Senate leaders from both political parties must find a compromise before the end of session April 29.

The Indiana Unemployment Insurance Trust Fund has paid out more in unemployment benefits annually than it takes in from business taxes since 2001, leading Indiana to run out of money last year.

Indiana has borrowed about $580 million from the federal government to cover claims; that figure could rise to more than $1 billion by the end of the year.

This leaves lawmakers with a threefold problem – how to end the structural deficit by matching business contributions to payouts, how to pay back the federal government and how to replenish the fund’s balance to a safe level.

The Senate Republican plan increases taxes on businesses, cuts benefits by implementing a sliding scale and targets waste and abuse in the system. All these changes would take effect in 2010.

The Democratic amendments would have gutted major provisions of the bill, saving the state about $300 million while not offering any replacement solutions.

“We want to take the onerous sections out and go to conference committee with a cleaner bill,” said Senate Democratic Leader Vi Simpson, D-Bloomington.

One amendment would have removed benefit reductions in the bill, which are meant to encourage unemployed Hoosiers to find work more quickly.

The change would save the trust fund $125 million annually.

“These people need help,” said Sen. Bob Deig, D-Mount Vernon. “I’m asking you to do the right ethical and moral thing.”

Sen. Brandt Hershman, R-Wheatfield, said the Senate Republican plan “represented a balance of burden on employers and employees and reform within the system” while the Democrats’ plan focuses solely on businesses.

Simpson said there are ways for workers to contribute to fixing the problem but offered none.

And she said that even the Senate Republican plan doesn’t balance until 2011.

“It took us a long time to get into (this hole) and will take a long time to get out,” Simpson said.

The only Democratic amendment that passed was one to use money from the federal stimulus package to extend unemployment benefits an additional seven weeks after 72 weeks of state and federal benefits have been exhausted.

The additional weeks are paid for by the federal government through the end of 2009 if the state’s unemployment rate remains above 8 percent.

nkelly@jg.net