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Daniels Says Stimulus Money Could Fund Unemployment Benefits Shortfall

January 29, 2009

With news this week that Indiana’s unemployment rate has skyrocketed past the national average of seven point one percent to eight point two percent here in Indiana, it’s an issue lawmakers at the statehouse want to make a focus of the legislative session. As those numbers increase, it puts more pressure on the Department of Workforce Development, which has already borrowed two hundred ninety two million dollars from the federal government to pay benefits, after its reserve ran dry in November. It’s widely believed business tax increases will have to be a part of the solution to return money to the unemployment insurance trust fund. But today Indiana Governor Mitch Daniels suggested part of the four to five billion dollars federal stimulus package likely to be approved by Congress in mid-February could be used to help return money to the unemployment benefits fund. Those are welcome words to Senator Dennis Kruse, chairman of the Senate Pensions and Labor Committee, one of two legislative committees working on the unemployment insurance problem.

“I think that would be great if the governor would support that effort to have part of the stimulus money go toward actually paying back the federal government or using it to replenish the fund would be wonderful. I’m excited about it.”

Kruse says the federal plan may also stipulate that states, including Indiana, who have been borrowing federal money to pay unemployment benefits, might get to pay back those loans interest free. To date, that would save the state nearly twenty five million dollars.

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