Congress Gives States More Money; Indiana’s Share Estimated at $434 Million

Just before heading home for its August recess, the U.S. Senate passed a $26 billion mini-stimulus that it struggled with for months. And House leadership decided to call its members back from recess to act on the legislation, which has two main components: (1) $16.1 billion to extend increased Medicaid funding for states (what is referred to as FMAP or Federal Medical Assistance Percentages); and (2) another $10 billion said to be needed to prevent teacher layoffs.

The debate involved both fiscal prudence and the perceived benefit of these state subsidies, as well as the specifics of how to pay for them. Proponents say $9 billion is to be generated from a "provision that closes corporate tax breaks on income earned overseas." Proponents think this ends an incentive to "export jobs overseas." A different – and more accurate – description would be that this is nothing more than a tax increase for businesses that happen to employ workers both in the U.S. and overseas.

The debate took its own politically charged form in Indiana this week, as efforts were made to characterize Gov. Daniels as inconsistent on the FMAP funding issue. He and 42 other governors sought the funding in a joint letter from the National Governors Association, with some qualifying statements, back in February, but Gov. Daniels has consistently pointed out the detrimental effects of the federal government continuing to spend money it doesn’t have while putting this particular legislation in that category.

The federal package would provide an estimated total of $434 million to Indiana: $227 million for six months of additional FMAP funding (an extension of provisions in the American Recovery and Reinvestment Act, aka the stimulus bill) and another $207 million under the teacher funding element. A $227 million subsidy to our state finances would be helpful as the General Assembly prepares for what all agree will be a brutal budget session in 2011. And school districts no doubt would welcome the money as they grapple with their budgets. But, the situation seems to pit practicality against principle. Regardless of your philosophy or political affiliation, the question remains: Why shouldn’t Indiana citizens and businesses who pay federal taxes receive the benefit of money that the federal government insists on distributing?

OSHA Ramping Up Efforts to Crack Down on Businesses

Chamber member Frost Brown Todd tells you what you need to know about the Occupational Safety and Health Administration (OSHA) and how it’s heightening efforts to bust businesses who aren’t complying with safety regulations. What’s been allowed to slide in the past may get your company in trouble by today’s standards:

Employers should be aware that the Occupational Safety and Health Administration (OSHA) has been loudly broadcasting to everyone who will listen that it is stepping up its enforcement efforts. As the assistant secretary of labor for OSHA, David Michaels, proudly announced in a recent speech, OSHA cited almost twice as many employers for egregious violations in the first quarter of 2010 than it had in all of the previous fiscal year, and OSHA also issued the largest fine in its history to British Petroleum.

Recent developments indicate that, if anything, Michaels understated the current trend at OSHA. Not only is OSHA more stringently enforcing its existing standards, it is also expanding its enforcement efforts under the general duty clause, and maximizing penalties for employers charged with safety violations.

If you need information on safety and ergonomic information (federal and state), I’d advise you to look into acquiring our popular Safety & Health Guide, authored by attorneys at Ice Miller.

Feds See Increase in Six-Figure Salaries During Recession

So your business may very well be feeling the pinch these days. In the federal government, however, it seems business, and salaries, are booming. USA Today recently examined the situation that has one Utah Congressman up in arms, saying "There’s no way to justify this to the American people. It’s ridiculous." The USA Today writes:

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession’s first 18 months — and that’s before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector…

Key reasons for the boom in six-figure salaries:

Pay hikes. Then-president Bush recommended — and Congress approved — across-the-board raises of 3% in January 2008 and 3.9% in January 2009. President Obama has recommended 2% pay raises in January 2010, the smallest since 1975. Most federal workers also get longevity pay hikes — called steps — that average 1.5% per year.

New pay system. Congress created a new National Security Pay Scale for the Defense Department to reward merit, in addition to the across-the-board increases. The merit raises, which started in January 2008, were larger than expected and rewarded high-ranking employees. In October, Congress voted to end the new pay scale by 2012.

Paycaps eased. Many top civil servants are prohibited from making more than an agency’s leader. But if Congress lifts the boss’ salary, others get raises, too. When the Federal Aviation Administration chief’s salary rose, nearly 1,700 employees’ had their salaries lifted above $170,000, too.

In the article a government affairs director for the Federal Managers Association contends, "the federal workforce is highly paid because the government employs skilled people such as scientists, physicians and lawyers," adding that federal employees make 26% less than private workers for comparable jobs.

What do you think? Is this government spending careening out of control, or are these salary increases just?

Filing Returns Doesn’t Have to be So Taxing

Despite its reputation, the Internal Revenue Service is not that evil monster waiting to take away as much of your hard-earned money as possible. It’s simply executing (maybe that’s a bad choice of words) the tax laws set into place. And it wants to help taxpayers, including a recent release titled IRS Reminds Taxpayers That Keeping Good Records Reduces Stress at Tax Time.

Not the most imaginative of titles, but certainly a good common sense message. Personally, I fail to take it into account year after year and end up scrambling to compile all the proper documents. Maybe I’ll learn my lesson this time and hopefully you will pick up a helpful pointer or two.

A few of the highlights:

Generally speaking, you should keep any and all documents that may have an impact on your federal tax return.

If you are a small business owner, you must keep all your employment tax records for at least four years after the tax becomes due or is paid, whichever is later. Examples of important documents business owners should keep Include:

  • Gross receipts: Cash register tapes, bank deposit slips, receipt books, invoices, credit card charge slips and Forms 1099-MISC
  • Proof of purchases: Canceled checks, cash register tape receipts, credit card sales slips and invoices
  • Expense documents: Canceled checks, cash register tapes, account statements, credit card sales slips, invoices and petty cash slips for small cash payments
  • Documents to verify your assets: Purchase and sales invoices, real estate closing statements and canceled checks

Individual taxpayers should usually keep the following records supporting items on their tax returns for at least three years:

  • Bills
  • Credit card and other receipts
  • Invoices
  • Mileage logs
  • Canceled, imaged or substitute checks or any other proof of payment
  • Any other records to support deductions or credits you claim on your return

 For more information about recordkeeping, check out IRS Publications:

Mandatory Poster Updates Coming! Make Sure You’re in Compliance

On May 21, 2008, the Genetic Information Nondiscrimination Act (GINA) was signed into law by President George W. Bush. On November 21, 2009, employers must begin to comply with the law and it was recently announced that a new Equal Employment Opportunity Commission posting would be required.

Here are the changes that will be made when our new poster sets are released in November:

  • EEOC poster reflects GINA information (required)
  • Updated Indiana Teen Work Hours posting
  • Updated federal and state minimum wage postings

Poster sets are $45 each, and Indiana Chamber members receive a 25% discount.

To place your pre-order, call us at (800) 824-6885; visit our web site; or e-mail publications@indianachamber.com. Another convenient option many of our customers take advantage of is to join our poster subscription list. That way, when mandatory updates are made, you simply receive the new posters and an invoice without having to call and place an order. Since we’ll only send them when MANDATORY changes are made, you won’t be expending any extra time or money on employment postings, and you have the peace of mind that you’ll always be in compliance.

Ready for the Minimum Wage Increase in July?

In July, the minimum wage will change from $6.55 to $7.25 according to federal law (as part of the three-year, stair step increase implemented in 2007). You need to make sure your company’s mandatory employment postings include those changes. Ours do.

Here are the changes we made when we published new poster sets in January:

  • FMLA notice (updated in January)
  • Indiana Minimum Wage notice (our sets feature updated overtime requirements that will still be in compliance when minimum wage increases in July)
  • Federal USERRA notice (updated October 2008)
  • Federal Equal Employment Opportunity notice (updated August 2008)
  • Poster sets are $45 each, and Indiana Chamber members receive a 25% discount.

To place your order, call us at (800) 824-6875 or visit our web site.

Please mention POSTBLOG509 when ordering.

No Money at the End of the Road

Acronyms in government are legendary. How about SAFETEA-LU? Of course, that’s the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users. You knew that, right?

Federal funding of transportation programs, by any name, is at a crossroads. Gas taxes, the traditional funding source, are not enough to meet future needs.

Kathy Ruffalo, a consultant who also has experience on the government side of the equation, lists the following transportation challenges:

·         Steady increase in congestion rates

·         Continued loss of life on our highways (43,000 deaths each year)

·         More freight tonnage moving by truck and rail

·         Global competitors with aggressive transportation policies

If that wasn’t enough, two federal commissions were created to address the growing funding gap and its consequences. Their daunting names – National Surface Transportation Policy and Revenue Study Commission and National Surface Transportation Infrastructure Financing Commission. Good luck with that.

Ruffalo says many federal officials “need convinced” about tolling and public-private partnerships. Bottom line, she adds, about the current legislation that expires on September 30, 2009. “Extensions will be painful; there is no money for extensions. Business as usual is not going to work and doing nothing is not an option.”