While federal lawmakers wrestle with their debt ceiling, legislators in Kentucky have their own debt problems to worry about. A bill comes due in September that worries state officials and business leaders. Kentucky borrowed about 900 million dollars from the federal government for jobless benefits, and it must make a 28 million dollar interest payment. If the state falls short, the premiums paid by business for unemployment insurance could go up 400 dollars per employee or about 640 million dollars.
Lebanon Senator Jimmy Higdon, who’s a small businessman, says it’s a scary scenario.
“And to get that bill from Uncle Sam at a time like this or for 640 million dollars to be sucked out of the state of Kentucky to Washington D.C,” said Higdon.
State budget director Lassiter says her office is very much aware of the situation. She says public and private sector officials hope for a federal remedy, but realize other measures may be necessary.
“We’re in a very vulnerable point in the economic recovery. Unemployment continues to be high. Nine point six percent. It’s improving , but it’s still high. And the health of our Kentucky businesses, they ability to sustain, to retain and hire workers is what’s gonna bring us out of this recession. So, we are concerned
Lassiter also told the budget committee that 122 million dollars placed in the state’s rainy day fund was a record breaker. It comes after the state saw a six and a half percent increase in revenues for the fiscal year which end June 30th.