Temperatures outside might be going up, but Pennsylvania employers should be feeling a little less heat in the coming years thanks to a plan to settle a debt with the federal government.
Gov. Tom Corbett is expected to sign a measure this week, which will allow the state Department of Labor and Industry to sell up to $4.5 billion in bonds to cover Pennsylvania's unemployment compensation debt to the federal government, which already totals $3.9 billion.
The state unemployment fund
didn't have the money for all of the benefits being paid during the last recession. As a result, Pennsylvania has - and still is - borrowing from Uncle Sam to keep the unemployment checks flowing.
But the interest and penalties are adding up on Pennsylvania employers, who are on the hook for covering the shortfall.
Having the state issue bonds will provide some relief through lower interest payments and avoiding the federal government imposing an additional 0.3 percent penalty because of the debt.
Those costs are draining employers hundreds of millions a year on top of what they paid previously.
Employers still will face higher costs to pay off the bonds and make the unemployment compensation fund solvent. But a Senate fiscal analysis estimates the legislation Corbett will sign will produce $2.345 billion in savings between 2013 and 2019, Capitolwire reports.
That's significant.
With the still weaker economy, businesses are looking for ways to control costs. Issuing bonds to pay off the unemployment debt is a sensible way to do that, and we hope keep workers on the payrolls across the Keystone State.
Lawmakers deserve credit for stepping up to the plate to help.
