Kentucky House Endorses Loan Interest Bill
A bill designed to help pay federal interest payments is one step closer to becoming law. The measure passed the House unanimously today, although a few Republicans expressed concerns over the bill. The bill would let the state borrow money to help make federal interest payments on a loan Kentucky took out during the recession. The state borrowed more than $900 billion to help pay for unemployment insurance, but didn’t account for interest payments. If the state is late on payments, the federal government can put a higher tax on employers to recoup the funds. Representative Larry Clark, the bill’s sponsor, says the proposal would shield those businesses.
“Well I’ll tell you what this is. If you do not vote on this legislation, we will have a $600 million increase for unemployment insurance on each employer large and small,” Clark says.
Under the bill's provisions, employers would still be subjected to raised fees two years from now. But those would be at a lower rate, and paid to the state rather than the federal government. House Republican Leader Jeff Hoover says he has concerns about the measure, but says it’s clear that something needs to happen.
“We do have concerns, very serious concerns about the proposal. But there’s no other alternative out there,” Hoover says.
The bill now heads to the state Senate.