Idaho should issue bonds to repay the state’s debt to the federal government for insurance funds, Gov. Butch Otter said Monday in his state of the state address.
Idaho’s unemployment trust fund was forced to borrow more than $200 million from Washington to keep paying unemployment benefits.
With the expiration of a federal stimulus program that waived interest on the unemployment fund borrowing, Idaho is faced with $9 million of annual interest payments that would be passed on to employers who pay into the fund.
Otter says the state can save employers money by issuing tax-exempt bonds to repay its debt to the federal government over four years.
“Our plan will save Idaho employers an estimated $110 million over the next three years,” the Republican governor said.
In November, the Texas Public Financing Authority priced a $1.1 billion unemployment compensation obligation-assessment revenue bond sale, similar to what Otter has proposed in Idaho.