INDIANAPOLIS (AP) _ Gov. Mike Pence says Indiana has paid off a $250 million debt owed on a recension-era federal loan that was used to pay unemployment benefits after the state depleted its own funds.

Pence said in a statement Tuesday that the payment will enable Indiana employers to avoid a $126 penalty for each worker.

The Republican governor first announced his plans to pay off the loan in October and said he would borrow $250 million from the state's budget surplus to make the payment.

Businesses pay taxes into the unemployment fund. Indiana once had a flush unemployment fund, but it was depleted after lawmakers increased benefit payments and lowered premiums. The fund at one point owed $2 billion in federal loans.