Indiana Republicans are asking Gov. Eric Holcomb to use federal CARES Act funds to begin paying back money the state borrowed for the unemployment trust fund. They worry businesses across the state could get stuck with higher federal taxes.
When Indiana depleted a trust fund that pays unemployment benefits earlier this year, it started getting advances from the federal government to continue payments. Many other states have done the same throughout the pandemic.
But federal guidelines say that if the advance isn’t paid off in two years, employers could start seeing higher federal taxes on each of their employees.
Rep. Dan Leonard (R-Huntington) said it would unfairly place a burden on businesses that had no control over the pandemic or government restrictions attempting to curb it.
“I want to make sure that unemployed Hoosiers get their benefits, but I don’t want to put employers out of business by, you know, overcharging them and making those premiums too high,” he said.
Leonard said the appropriation of CARES Act money can only be done by the governor, not the legislature.
Typically, businesses can also be forced to pay higher state payroll taxes if they lay off workers. But one of the first state executive orders in the pandemic froze those penalties as long as there is a declared public health emergency.