States' Bills for Unemployment Due
States must begin repaying the federal government for loans they took to pay unemployment benefits.
States will soon have to start repaying more than $1 billion in interest payments on loans they took from the federal government to pay unemployment benefits, ProPublica reports, and those loans are being called at a time when states are already facing budget struggles.
According to the website, 30 states have had to borrow more than $40 billion from the federal government so that they can continue unemployment benefits to their residents. Initially, the federal stimulus legislation made loans interest-free and created a grace period.
But the grace period, now over, wasn't extended in the tax cut extension passed late last year. Now, 14 states will have to start paying interest on the loans before then end of 2011.
(View the handy application constructed by ProPublica to see the status of each state’s unemployment fund.)
Federal rules prohibit states from paying those loans with unemployment insurance, so they'll be forced to pay from their general budgets -- at the expense of things like roads and schools, according to ProPublica.
Meanwhile, states reportedly face a collective $82 billion shortfall for 2012, which will pose a challenge when it’s time to make those payments. And some states are still continuing to borrow the federal funds, even as they are struggling to figure out how to make interest payments, ProPublica reported.
Join the Discussion
After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.
University of California May Limit Out-of-State Enrollment12 hours ago
South Carolina House Speaker Resigns after Admitting Misconduct in Office12 hours ago
How Denver's Attracting Top Private-Sector Talent from Places Like Chipotle13 hours ago
Texas Agency Responsible for Protecting State from Pollution Is Fighting Tougher Ozone Standards15 hours ago
Georgia Towns Are Getting Rich off Speeding Tickets15 hours ago
North Dakota Fights over How to Spend Huge Oil Revenues16 hours ago