Jobless Fund Proposal Promises Relief To Ohio.

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As state governments struggle to balance budgets, they are looking to Washington for some help. Case in point: An Obama Administration proposal to give relief to states like Ohio which carry unemployment insurance debt. WOSU’s Tom Borgerding reports

Ohio’s unemployment insurance fund, the fund used to pay jobless benefits is $3,200,000,000 in the red. That’s how much the state has borrowed from the federal government to make payments to the unemployed. The first interest payment on Ohio’s debt comes due in September. But a new proposal would delay interest payments states would have to make. Ohio Northern University professor Robert Alexander says this proposal is a bid to help states.

“This was part of the stimulus funding in the first part, and as these things are looking to expire, this kind of forgiveness, then you’re kind of opening the box again to say well look we need not to straddle the states with more things they have to take care of.” Says Alexander

But, Alexander adds that if the results of last November’s election are indicative of what the electorate wants there would be no delay on the interest payments.

“Then we’d say well, federal government, you know, take your payments from Ohio and California, Michigan and Pennsylvania and let the states figure out how they’re going to balance their budgets.”

At a recent appearance in Columbus, Republican congressman Steve Stivers says there might be some wiggle room on interest Ohio owes Washington, but he does not support total forgiveness of Ohio’s unemployment debt.

“I don’t know that we can forgive the money that was borrowed, because again we want to encourage states to be responsible and if you actually forgive money like that it encourages people to be irresponsible. But there might be something we can do on the interest.” Says Stivers.

One option for states looking to retire the debt is to increase unemployment taxes paid by businesses. And with the state’s job-less rate still above 9 percent, Ohio’s unemployment compensation debt likely will grow. ..

Tom Borgerding WOSU News