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Pence Says State Will Pay Off Federal Unemployment Loan

By Brandon Smith

Posted October 22, 2015

Governor Mike Pence, announcing the pay off, is flanked by Sen. Luke Kenley (R-Noblesville) on his right and Rep. Dan Leonard (R-Huntington) on his left.

In the coming days, the state will pay off the remainder of a federal unemployment insurance loan. The governor says it will save employers $327 million next year.

The state's unemployment insurance trust fund ran out of money when the recession hit, forcing Indiana - like many others - to take out the loan.

As long as there's still money left to be paid back on the unemployment insurance loan, employers pay a penalty, one that would increase next year to $126 per employee.

Gov. Mike Pence says the state will temporarily shift money from its General Fund to pay off the remaining $250 million left on the loan, saving employers from paying that penalty.

"By paying this off early, we believe that we're going to free up resources for the kind of investments by business owners, large and small, that will put Hoosiers back to work."

Anne Sellers, managing principal of Sensory Technologies, where Pence made the announcement, says eliminating the penalty will save her business nearly $10,000 next year - not enough, she admits, to add new employees.

"Quite frankly, when unemployment's low everybody wants a little bit more money while they're here and so $10,000Â is going to help give some raises," she says.

Pence says the state will use money from unemployment insurance taxes collected early next year to replace the General Fund dollars used to pay off the federal loan.

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