As the economy tanked, Kentucky's unemployment rolls ballooned in 2009 to an average of 128,000 a month.
The state borrowed $963 million from the federal government to pay unemployment insurance benefits. Governor Steve Beshear signed legislation Wednesday which provides a fix for paying the interest on the massive loan.
Without the solution, Kentucky's businesses would have been hit later this year with $600 million in tax penalties. Employers pay $63.00 per employee in unemployment insurance taxes.
The threat of a seven-fold increase in that tax was enough to get labor and business together in the negotiating room with state lawmakers. The number of Kentuckians on unemployment last month in Kentucky was less than 89,000.