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Florida Pays Off Federal Unemployment Loan

May 24th, 2013 by flanews

For the first time in state history, the Great Recession forced Florida to borrow several billion dollars for unemployment payout from the Federal Government.

During the height of the recession Floridians were losing jobs at a staggering rate. The state was forced to pay out billions in unemployment. “No state system was set up to handle or accommodate the depth and breadth of the great recession as it went on,” said Florida Chamber of Commerce Executive Vice President, David Hart.

Unemployment hit its peak of 12.1-percent in August 2010. By then, the state had already used all its cash money set aside for people without a job. “Florida had to borrow money during the Great Recession,” said Hart.

In August 2009 Florida started borrowing money from the federal government, more than 3.5-billion, to keep benefits flowing to the growing unemployed.

This is the only time in state history Florida has had to borrow money from the Federal Government for unemployment. More than three years later, the debt has finally been paid off.

When joblessness numbers began increasing, the state hit businesses with a 20-percent hike in their unemployment taxes. The hike kept the state from borrowing even more. “Best way to keep trust fund strong is if people are employed,” said Hart.

Back in 2009, it was anyone’s guess on how long the downturn would last. “We don’t know the length of the recession, we don’t know how many employees will remain in the state after the recession,” said FICPA’s Vicki Meyers in August 2009.

36 states had to borrow money to pay claims. Florida is the 14th to pay its loan off.

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