Georgia owes the Federal Unemployment Account about $620 million in loans taken out to pay unemployment benefits during the economic downturn. Under current regulations, states will be required to repay these federal loans, plus 4% interest. With double-digit unemployment figures, expectations are that Georgia borrowing will accelerate through the first quarter of this year. Labor Commissioner Mark Butler predicted it could reach $820 million in April. Georgia has the 16th highest loan balance nationally and the fifth highest among southern states behind North Carolina, Florida, South Carolina and Kentucky.

Where will the money come from to repay this debt? Higher unemployment taxes? Fewer unemployment benefits? Cuts to social services? An amount of this magnitude combined with Georgia’s existing and significant revenue burden would most likely affect children in struggling families.

President Obama is proposing to give states a two-year delay before automatic unemployment tax increases would hit employers, and before states would have to start paying interest on the loans. Perhaps by then, more people will be working and more families will be functioning at an economically stable level.

Learn more about the President’s Proposal by clicking here.

Advertisements