States are turning to tax increases on businesses this year to shore up their unemployment insurance programs and pay interest on loans they’ve borrowed from Washington.

Unprepared for such a deep economic downturn with stubbornly high unemployment, many states exhausted their unemployment insurance funds and turned to the federal government for loans. In an effort to replenish state funds and pay the interest on their government loans, states are now turning to tax increases, according to a survey from the National Association of State Workforce Agencies.

“This recession was deeper and longer than the recessions we’ve experienced in the post World War II period,” said Richard Hobbie, executive director of the association. “The system really was not designed to handle such a severe recession.”

Some 35 states said they expect their unemployment tax revenue to rise this year by about 16.5%. While part of the rising tax revenue could come from an improving economy, most states said they expect it to come from higher taxes on employers.