Good news for Hoosiers: Governor Mike Pence has decided to use Indiana’s budget surplus to pay off the unemployment-benefits loan his state owes Washington.
The revenue became available because Indiana’s economy is on a tear. Unemployment has plunged to 4.5 percent, after reaching a staggering 10.9 percent in February 2010. (Even New Mexico’s joblessness didn’t get that bad during the Great Recession.) In the Foundation’s ongoing analysis of job creation in right-to-work states, Indiana, which repealed compulsory unionism in 2012, is a consistent performer.
As explained by the Indianapolis Star, “Pence had to make a decision by early November to pay off the loan, or businesses would have faced another year of increasing penalties to the tune of $126 per employee for 2016. State data show the average penalty employers paid was about $2,700 per year. More than 70 percent of businesses in the state employ fewer than 10 people.”
Unemployment in New Mexico, as Errors of Enchantment recently noted, is headed in the wrong direction. Job losses from the decline in the price of oil are taking a heavy toll. ConocoPhillips announced 65 layoffs in San Juan County earlier this month. And “green” power remains a persistent disappointment. DPW Solar is relocating its factory to right-to-work North Carolina, a decision that will eliminate 60 jobs in Albuquerque.
The Land of Enchantment doesn’t have an outstanding federal loan for unemployment benefits, but that’s not much of an achievement — only California, Connecticut, and Ohio still owe Washington for their bailouts. In August, the New Mexico UI trust fund’s balance stood at $233 million, far below its pre-downturn peak of $557 million. With the state’s economy stuck in stagnation, if not falling behind, pressure on the fund is sure to grow.
Update: The New Mexico Department of Workforce Solutions informs Errors of Enchantment that as of October 20, the Unemployment Insurance trust fund balance is $216 million.