The Indiana General Assembly resumes this week. Among the many tasks facing lawmakers is fixing the state’s Unemployment Insurance Trust Fund, which has been depending on federal loans since last year to remain solvent.
Governor Mitch Daniels says this is not a problem that just popped up during the economic downturn.
“Everybody knows the seeds of this were sown many years ago when somebody created a system with the fourth highest benefits in america and relatively low taxes. It’s been leaking money even when very few people were unemployed,” Daniels said.
Daniels says he’s been speaking with legislators about possible solutions, including a restructuring of benefits and business taxes.
Indiana has been borrowing hundreds of millions of dollars from the federal government to continue paying unemployment benefits.
Kentucky has also prepared a line of credit with Washington to shore up its fund, which is expected to run out of money this month.