Tuesday, September 20, 2011

Unemployment Loans Due for States

States will begin repaying more than one billion to the federal government for loans used to pay unemployment benefits. The question is, where is the money going to come from? Some will have to increase business tax bills to cover the repayment. Interest payments must begin October 1st as the interest free loan expired in December. In February, Obama asked Congress to extend the help and delay any impending tax hikes, but Republican resistance and general criticism of the $830 billion stimulus plan muted the possibility of a continuation. The impact on some states' finances will be mild as they had time to prepare for the payments. Others must find funds to cover another bill on top of other spending demands for health and social programs. California, Michigan, Pennsylvania, New York, and North Carolina have to send in the biggest interest payments. There is around 37 billion in principal outstanding.

No comments:

Post a Comment