South Carolina’s Republican Gov. Nikki Haley
unveiled a plan Thursday to refinance huge federal loans the state needed to pay unemployment benefits in a move to lower taxes for some businesses.
The governor’s top aide said her proposal would issue revenue bonds to pay to help pay $972 million the state took in federal loans, which were used to help pay benefits to the state’s jobless, Forbes reported Friday. As part of the proposal, unemployment benefits would be reduced to 20 weeks, instead of 26.
The debt restructuring would also soften the blow to businesses, some of who saw taxes go up by hundreds of dollars last year to help pay for unemployment benefits.
Tim Pearson, Haley’s top aide, said the state’s not looking to borrow more.
"We're not borrowing any more money. It's just a shift in who the repayments go to," Pearson said.
The bonds would be paid back by employers in the state’s worst unemployment tax rate classifications over the next seven years.
"The governor will not support any scenario where the taxpayers or other businesses are on the hook to give relief to these businesses because it's a well-structured program," Pearson said.
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