Kemp to spend $1.5B in aid to bail out unemployment system
ATLANTA — Gov. Brian Kemp announced Wednesday that he will use $1.5 billion that Georgia got from the federal COVID-19 relief to bail out the state’s indebted unemployment system, deciding against passing the money to local governments that could have then used it to give grants to businesses and train workers.
The Republican governor said Wednesday that using the biggest remaining chunk of federal relief money this way would shield businesses from a possible increase in state unemployment taxes to repay the debt.
“Today’s announcement will save Georgia employers millions of dollars in state and federal unemployment taxes, prevent significant layoffs, and save the state millions of dollars in interest payments,” Kemp said in a statement.
A number of other states have also used shares of their federal relief to bail out their unemployment systems, including Alabama, Tennessee, South Carolina, Arkansas, Iowa and Montana. But some local officials were angered, having expected more grants
in addition to the hundreds of millions that local governments have already received to repay direct expenses.
Savannah Mayor Van Johnson proclaimed himself “disgusted!” in a Facebook post, saying he had believed Kemp had promised local governments more money.
“I am more than disappointed at this absolute reversal at the expense of local governments and local needs,” wrote Johnson, a prominent Democrat.
Business groups applauded the move, though.
“It relieves the financial pressure on the General Assembly to raise taxes on small businesses in order to support the Georgia Unemployment Trust Fund,” National Federation of Independent Business
state Director Nathan Humphrey said in a statement.
The governor said he was reserving $ 400 million in remaining federal aid for other coronavirus expenses, including possibly a smaller amount for local governments.
Georgia has already borrowed $600 million from the U.S. Treasury and is taking on new debt at the rate of more than $350 million a month. In March, Georgia had $2.5 billion in its unemployment trust fund, but that money ran out in September. Georgia workers have gotten roughly $15 billion in state and extra federal assistance since March. In the week that ended Sept. 26, almost 450,000 laid off Georgia workers were being paid regular state unemployment benefits.