These states owe the Treasury Department $45 billion, at an interest rate of 2.28%, after missing the Sept. 6 deadline to pay back jobless benefit loans.
Ten states now need to repay the federal government with interest for money borrowed to pay unemployment benefits during the pandemic downturn. The states, shown on the map above, missed the Sept. 6 deadline to pay back jobless benefit loans, and owe the Treasury Department $45 billion, at an interest rate of 2.28%.
States fund their unemployment insurance trust funds through employer taxes and borrow from Treasury when they’ve run out of money to pay benefits. During the coronavirus recession, Congress extended the grace period before states would start to owe interest on those loans. “This idea that tweaking that tax up to a more responsible rate would be the factor in location decisions, or would hold back hiring, has never held much water,” Stettner said. “No one has ever been able to produce any evidence that states with lower taxes have better employment. States like New York and California generally have pretty good economies.”
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