Indiana unemployment loan granted during Great Recession will be paid from state budget surplus

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By: Brian Slodysko/Associated Press

(Source: https://goo.gl/gQxaGW License: https://goo.gl/sZ7V7x)

INDIANAPOLIS (AP) — Gov. Mike Pence says Indiana will pay off a recession-era federal loan that was used to pay unemployment benefits after the state depleted its own funds.

The Republican governor said Thursday that $250 million will be borrowed from the state’s budget surplus to pay off the federal loan in November. If the loan hadn’t been repaid, employers would have had to pay a $126 penalty for each worker.

Officials expect to transfer newly received money from the state unemployment fund next spring to restore the withdrawal from the state’s $2 billion in cash reserves.

Businesses pay taxes into the unemployment fund, which has already repaid much of $2 billion in federal loans.