President Obama's budget will include a proposal to help states with big debts on account of unemployment benefit payouts. Arkansas is in that number.
The Obama plan would suspend interest payments on the debt and suspend a requirement to tax employers to begin payback. But in 2014, the government would begin assessing the unemployment insurance tax on twice as much income as now required to get the money to repay the debts.
At one point, the Arkansas Chamber of Commerce was behind a plan to increase the tax to pay off the debt, but wanted labor to accept a reduction in benefits, too. Those negotiations eventually foundered. Arkansas owes more than $300 million. The Obama proposal would increase the required tax be paid in Arkansas from $12,000 to $15,000.
The governor's office says labor-management talks are still not dead in the water here. Matt DeCample notes that, even with a temporary stop to interest payments, a long-term solution still must be reached.