It’s inevitable: The state’s Unemployment Insurance (UI) Trust Fund – once approaching a billion dollars – will be depleted before the end of the month.

The Indiana Chamber recognizes this issue is on employers’ minds. We are communicating to the Holcomb administration that the business community should not be expected to solely replenish the fund. The pandemic was unforeseen and far too many companies are barely hanging on as it is in this uncertain climate.

Raising the current contribution rates (which has to be done by the Legislature) should be a non-starter and likely would lead to more jobs going away and more Hoosiers tapping into the trust fund.

This week, the Indiana Department of Workforce Development (DWD) formally asked for a $300 million loan, or advance, from the federal government to cover the next few months of unemployment payouts. Sixty million was requested for September and $120 million each for  October and November.

There is some good news. DWD expects to see revenue in October that could offset the amount necessary for borrowing. And the federal government has waived any interest costs for loans through the end of the year.

Interest will begin to accrue on January 1, 2021. Employers would not pay any FUTA (Federal Unemployment Tax Act) credit reductions (resulting in a tax increase) until the state has borrowed for two consecutive Januarys, which could not occur until January 2022.

The Chamber believes the ideal approach – and what makes the most sense for the state and employers – is to use CARES Act dollars to meet either the loan or claims obligations. This is already being done in other states and would be an approved usage of the money.

The state could borrow the needed amount from the U.S. Treasury, incur no penalties through the end of the year and then pay back the loan with some of the remaining CARES Act money. As of mid-September, Indiana has more than $1 billion from the CARES Act still left to deploy. The Chamber is encouraging the Governor and the involved state agencies to pursue this path.

Mike Ripley is vice president of health care policy & employment law for the Indiana Chamber. He has been with the organization for 11 years and previously was a longtime state legislator in northeast Indiana.