Cherry: Early Unemployment payoff to save Hoosier businesses $327M
STATEHOUSE (Oct. 16, 2015) – State Rep. Bob Cherry (R-Greenfield) today announced Indiana will pay off its federal unemployment loan early leading to significant savings for Hoosier businesses.
The State Budget Committee voted today to authorize a $250 million repayment of a federal unemployment loan prior to the Nov. 10 deadline. Cherry, who serves as vice chairman of the House Ways and Means Committee and as an alternate member on the State Budget Committee, joined House Republicans earlier this year in adding the early payoff option to the state’s budget.
“By paying off the balance of this loan before the deadline, we are able to avoid $327 million in federal unemployment tax penalties that would have been imposed on Hoosier employers,” Cherry said. “Instead, this money will now be injected into the economy and comes at no cost to Hoosier taxpayers.”
Cherry said the repayment option is available thanks to a loan from the state general fund to the Unemployment Insurance Trust Fund. He expects the general fund to be repaid in full by the first half of 2016 via state unemployment insurance tax revenues that are remitted by employers.
During the recession, Indiana’s Unemployment Insurance Trust Fund could no longer meet demand resulting in a $2 billion debt to the federal government. House Republicans took action in 2011 to put the fund on a path to solvency.
Rep. Cherry represents portions of Hancock and Madison counties. He serves as Vice Chairman of the Ways and Means Committee.