Gov. Tom Corbett signed a bill into law Tuesday that will let the commonwealth pay off nearly $4 billion in federal debt.
The bill, passed by both chambers last week, allows Pennsylvania to refinance the debt it owes to the federal government’s Unemployment Trust Fund by borrowing a $4.5 billion bond, which has a lower interest rate.
The bill also includes eligibility tweaks that will save the state millions in unemployment benefits by limiting access to around 50,000 workers.
Corbett described the debt payoff as an economic stimulus, since businesses have paid extra taxes to cover the debt and associated interest. Now, Corbett said, they can put those funds toward hiring people.
“Most importantly, the bill protects our workers while taking away a burden that has slowed job growth and investment,” he said. “Unemployment compensation reform really equals jobs. It’s that simple. And that’s what I talk about all the time is creating jobs in Pennsylvania.”
The governor also lauded the bill for the cost savings associated with the new eligibility requirements, saying the state will save $276 million annually while making sure the system is supporting those workers who “are fully participating in the workforce.”
“I can tell you from the budget discussion we’ve had today, $276 million is going to be very helpful, rather than paying it to the federal government, for us to have in the budget,” Corbett said.