Kentucky has paid off a $972 million federal loan it borrowed to shore up the state’s unemployment insurance program during the recession that began in 2008. The loan was scheduled to be paid off in 2022.
As a result, employers will pay $165 million less in federal unemployment taxes, or $105 less per employee, according to Gov. Steve Beshear’s office.
“The paying off of our UI debt to the federal government is an undeniable sign that Kentucky is back and back with a vengeance,” Beshear said Monday.
The trust fund had been losing money since before the recession, with payouts to unemployed Kentuckians exceeding contributions from employers since 1999.
The state took out the loan in January 2009. During that year’s legislative session, lawmakers also increased the amount employers pay into the unemployment insurance fund.
Kentucky was one of 30 states to borrow money to pay off unemployment insurance expenses. Four states and the Virgin Islands still owe money to the federal government, according to the National Conference of State Legislatures.