Early unemployment loan payoff to save Hoosier businesses $327M
STATEHOUSE (Oct. 16, 2015) – State Rep. Mike Karickhoff (R-Kokomo) and Heath VanNatter (R-Kokomo) 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. Karickhoff, who serves as chairman of the House Budget Subcommittee, and VanNatter joined House Republicans earlier this year in adding the early payoff option to the state’s budget.
“Full repayment option of this loan means we eliminate $327 million in federal unemployment tax penalties which otherwise would have been paid for by Hoosier employers,” Karickhoff said. “This means job creators can inject this money back into the economy.”
"The early repayment benefits Hoosier businesses and comes at no cost to taxpayers,” VanNatter said. “The solution is truly a win-win for Indiana, and further showcases House Republicans’ commitment to fiscal integrity.”
The repayment option is available thanks to a loan from the state general fund to the Unemployment Insurance Trust Fund. Both lawmakers expect 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.
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State Rep. Mike Karickhoff serves as Budget Subcommittee Chairman of the Ways and Means Committee and on the Natural Resources Committee. He is also the Vice Chair of the Indiana Advisory Commission on Intergovernmental Relations. Rep. Karickhoff represents portions of Howard and Grant counties, most of the city of Kokomo and the towns of Swayzee and Greentown.
Rep. VanNatter (R-Kokomo) represents portions of Carroll, Cass, Howard and Clinton Counties.
