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Complete coverage of Ohio politics - The Daily Briefing
The Dispatch’s public affairs team sates the appetites of political junkies with bite-sized portions of the news and what's behind it. - Buckeye Forum
Veteran political reporters examine Ohio politics in this weekly podcast.
Today's political news
- Failed attack may slam door on detainees
- Obama blames failed plot on 'systemic failure' in security
- David Levine, artist who caricatured politicians, dies at 83
- Obama issues directive aimed at curbing secrecy
- Studies fault FDA approval process
- In-home elder-care proposal survives
- State wants do-gooder to pay costs
- Columbia Gas wins line-repair case
- Donations sought to keep Marysville pool open
- The Hot Issue: Would you participate in a long-term-care insurance plan run by the government?
- EPA pushes refinery for leak details
- Mount Vernon science teacher's survey addressed faith
- Ellen Weibel commentary: Casino District elsewhere might satisfy residents
- Cal Thomas commentary: Don't treat terrorists as criminals
- Michael Barone commentary: Democrats' strongholds seem to be leaking voters
Ohio has borrowed nearly $1.7 billion from the federal government to keep issuing checks to the jobless since the state's unemployment-compensation fund went broke a year ago.
Absent action at the Statehouse, the debt is expected to surpass $3 billion by the end of 2010.
Buffeted by rising unemployment, which hit 10.6 percent in November, Ohio's fund was among the first to go broke, but the state is not alone.
Twenty-five states and the Virgin Islands have drained their unemployment-compensation funds and borrowed a total of $24.4 billion from the federal loan fund. The U.S. Department of Labor projects that 40 states will have emptied their unemployment coffers by 2011.
Despite the growing debt, Gov. Ted Strickland and leaders in the Ohio House and Senate have mostly ignored the issue.
"I've been trying to get legislators' attention about this issue for months," said Sen. Karen Gillmor, a Tiffin Republican who sits on the Unemployment Compensation Advisory Council.
She said her colleagues are concerned about a projected deficit in the 2012-13 state budget of more than $5 billion, but "because of the unemployment-compensation fund, it's a much worse situation."
Not only will Ohio leaders have to deal with replacing one-time federal stimulus money that is propping up the current budget, but the state also must repay the federal government for the loan to its unemployment-compensation fund. Interest, which was deferred by Congress, begins to accrue in 2011.
"There is not a penchant for looking down the road," Gillmor said of the legislature, noting that term limits prevent serving more than eight years.
"If it were the olden days, somebody would have done something before."
Strickland's spokeswoman, Amanda Wurst, said the governor is concerned about the growing unemployment debt, and how the loan is repaid is likely to be addressed in the context of the next state budget.
"But obviously, decisions will have to be made to deal with the long-term solvency issues, and the governor is hopeful the unemployment-compensation advisory council will continue working" to reach a compromise solution, Wurst said.
Since 2001, Ohio's unemployment-compensation fund has collected less than it paid out in every year but one. If funds are depleted, states must borrow from the federal fund to ensure that unemployment checks continue being paid.
State unemployment-compensation funds are financed through a tax paid by employers. States set their tax rate and benefit amounts.
In Ohio, employers pay on the first $9,000 earned by each employee, an amount unchanged since 1995. Jobless workers receive about $300 a week in benefits.
Shoring up the fund will require an increase in the business tax rate or a reduction in benefits, or both.
The solution is the problem, according to William A. Burga, retired president of the Ohio AFL-CIO and co-chairman of the Unemployment Compensation Advisory Council.
"Nobody wants to raise taxes, and nobody wants to reduce benefits," Burga said.
"The governor doesn't want to tax anyone right now, and the legislature has never shown any leadership. Everybody, including the advisory council, is at fault because no one has made a proposal to correct it."
The 12-member advisory council includes representatives of business, labor and the General Assembly. In 2006, the council agreed to a compromise to help shore up the fund: increasing the taxable wage base to $9,500, freezing benefits paid to workers and eliminating extra compensation for dependents.
Senate Republican leaders, however, refused to approve the plan after receiving complaints from business owners.
The state began borrowing from the federal fund on Jan. 13, 2008.
Facing a much larger hole to fill last summer, the council was unable to reach a compromise and urged legislators to look into the issue.
Last week, Senate President Bill M. Harris, R-Ashland, did not offer specific solutions for addressing the growing hole.
"What we need to do is get Ohioans back to work," he said. "That will make a big difference."
Gillmor said now is not the time to impose an additional tax on Ohio businesses. "Employers can't afford to resolve this issue right now," she said.
There might be no choice. If the debt is not repaid by Jan. 1, 2012, federal guidelines require that a tax be imposed on Ohio businesses to pay off the loan.
"I agree you can't ask employers to do too much under these conditions, but they have to do something; it's their responsibility," Burga said. "Workers already have taken pay cuts and reductions.
"It's a lot worse for workers than it is for many employers right now."
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