Louisiana to take on millions in debt to keep its unemployment fund from going bankrupt – By Sam Karlin (NOLA) / Oct 6 2020
Louisiana is expected to take on hundreds of millions in debt from the federal government to stave off bankruptcy for its dissipating unemployment fund, and lawmakers acknowledged Tuesday they don’t yet have a plan on how to pay the money back.
The borrowing by the Louisiana Workforce Commission from the U.S. Treasury comes as the fund that pays unemployment benefits to jobless workers was set to run out of money imminently.
Legislators started advancing several resolutions, sponsored by Senate President Page Cortez, to suspend tax hikes and benefit cuts that would otherwise automatically go into effect because the unemployment trust fund has been depleted so much.
That means workers and businesses roiled by the recession won’t suffer more by seeing smaller checks or higher taxes, at least for now. It also means the state will need to find another way to pay back the debt it will incur from the feds.
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