Businesses, Workers Fear They’ll Pay State’s Unemployment Debt

In 2013, Ohio employers started paying more in federal unemployment taxes because the state still owes a huge debt to the feds.(Photo: Flickr)
In 2013, Ohio employers started paying more in federal unemployment taxes because the state still owes a huge debt to the feds.(Photo: Flickr)

The recession may be over, but the state of Ohio still owes the federal government $1.4 billion for the money it borrowed to pay jobless benefits to unemployed Ohioans.

That debt is looming large over Ohio employers – and could affect people who might get jobless benefits in the future.

Last year, Ohio employers started paying more in federal unemployment taxes because the state still owes a huge debt to the feds. Ohio was among 14 states that had to borrow money to pay jobless benefits when its unemployment compensation fund went broke during the recession.

Ohio is second only to California in the money it owes, and while those increased taxes have gone back to the feds, there’s no plan in place to repay the rest. Ohio AFL-CIO president Tim Burga says that had him concerned when he heard about a new committee that House Speaker Bill Batchelder was forming to talk about the unemployment compensation debt.

Burga says he fears Republicans will only talk about the taxes businesses are paying and how to reduce them – which can only mean cutting benefits.
“And that’s just wrong. It’s wrong. It’s an insult to laid-off workers. And it’s an inappropriate way to deal with matters of jobs and the economy and unemployment.”

Burga wrote to Batchelder, asking him to urge Gov. John Kasich to appoint members to the state’s Unemployment Compensation Advisory Council to deal with the issue. That council, which was created in 2000, hasn’t met since he took office.

Burga had been on that Council along with Ohio Chamber of Commerce President Andy Doehrel.

“The problem has just kind of sat there, in part because one political party doesn’t want to talk about slashing benefits and another political party doesn’t want to talk about raising employer taxes, and those are the two things you have to do to solve the problem,” Burga says.

Doehrel says before the recession, the council that he and Burga both sat on made recommendations for an increase in business and a reduction in worker benefits to back up the fund, but the General Assembly didn’t go along.

Doehrel says the situation hasn’t reached a crisis, but he’s concerned that it will, since business taxes go up every year that the debt remains unpaid.

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