A law that could have saved Nevada millions if it had passed two years ago is headed for Senate approval.
Senate Bill 515 allows the state to issue bonds to pay back the more than $600 million borrowed from the federal government to pay unemployment benefits over the past five years.
Bonding for the debt allows the state to pay a much lower interest rate than the federal government charges states that had to borrow. Some bonds are going out at less than 2 percent annual interest — less than one-third the federal rate.
The bond proceeds would be used to simply pay off the debt, eliminating further interest payments.
Treasurer Kate Marshall suggested the idea two years ago, but neither the governor’s office nor the Legislature took her up on it. As a result, Nevada had to pay federal interest on its loans totaling $46 million over the past two years.
Nevada started the recession in 2007 with some $700 million in its Unemployment trust fund.
Not only did the state with the nation’s highest unemployment rate burn through that money, it used up all receipts as they came in from employers and forced the state to borrow millions more to keep writing benefit checks.
With the economy recovering — albeit slowly — Nevada has been slowly paying down the debt which, at one point, was well over $700 million.
The bonds would be paid by the assessments imposed on employers to rebuild the state unemployment trust fund. The money also would generate enough to make that trust fund solvent again.
The Senate Finance Committee voted Monday to send the bill to the floor for action.