INDIANAPOLIS – Senate Republicans announced Tuesday they will seek a one-year delay in unemployment insurance tax increases that they passed into law just six months ago.

The increases – needed because the state’s unemployment insurance trust fund is bankrupt – were set to go into effect in January, costing Indiana businesses $315 million in the first year.

But Senate President Pro Tem David Long, R-Fort Wayne, said the economy hasn’t rebounded like legislators had anticipated and his caucus no longer believes the tax increases are appropriate.

"This will give us time to catch our breath," he said, noting that the federal government could decide to bail states out.

Although the fund is insolvent, the federal government has loaned the state $1.3 billion so far to continue paying unemployment claims.

Regardless of any delay in the state tax increases, Hoosier businesses will see an increase in their federal unemployment tax in 2011 because the state owes so much money.

For more on this story, see Wednesday’s print editions of The Journal Gazette or return to www.journalgazette.net after 4 a.m. Wednesday.

nkelly@jg.net