When the recession hit, I was a small business owner, and like many of you, I felt the financial impact of a struggling economy. The recession, and the subsequent market instability, led to layoffs and budgetary constraints at all levels. Everyone was forced to make sacrifices, even the state.
In fact, Indiana was one of 35 states that borrowed from the federal government in order to meet the increasing demand for unemployment insurance benefits. As our loan balance continued to grow, peaking at over $2 billion, Hoosier businesses began to see increases in their Federal Unemployment Insurance Tax (FUTA). Assessed annually as tax penalties, the revenue generated from the increased FUTA was applied directly to the balance of the loan.
In a win for Hoosiers and job creators, the state recently announced the early payoff of this federal loan. This will save businesses $327 million, or $126 per employee, which would have been paid in the form of tax penalties.
Indiana job creators can now repurpose that $327 million in ways which will continue to strengthen our economy. Some companies may choose to hire additional employees or provide a pay increase for current workers while others may invest in new technology, equipment or workforce development initiatives.
The early repayment of this loan was made possible by the House Republicans through the 2015 budget bill, which I strongly supported. This is a testament to our continued commitment to fiscal integrity and showcases our dedication to Indiana employers and employees.
I am proud to have helped build one of the most business-friendly environments in the nation. Recently, we have had record employment numbers and job growth unrivaled by our neighbors in the Midwest. For the first time in our state, we have been ranked eighth on Forbes’ list of best states in the nation for business. Despite these triumphs, we must continue to plan for the future and protect Hoosiers in the event of another economic downturn.
Over the past few weeks, I have traveled the district, holding town hall meetings in an effort to better understand the thoughts and concerns of my constituents. One area that almost every person asked me to focus on was economic development.
As we approach the start of another legislative session, I remain committed to fostering an environment where the private sector can grow and create jobs. If you have any questions about this important announcement or any other issues facing our community, I encourage you to contact my office by calling 317-232-9833 or emailingh75@iga.in.gov.
