Re­vi­sions to job­less ben­e­fits fund head to vote

The Columbus Dispatch - - Business - By Cather­ine Can­disky

It’s a bit­ter bill no­body wants to swal­low.

But House GOP lead­ers say it’s time for the state to take its medicine and fix Ohio’s un­em­ploy­ment com­pen­sa­tion fund be­fore an­other re­ces­sion hits.

“We’re at a junc­ture now I’m gonna go ahead and (call) for a vote and move it out of com­mit­tee very soon,” House Speaker Cliff Rosen­berger, R-Clarksville, said Wed­nes­day.

House Bill 382 by Rep. Kirk Schur­ing, R-Can­ton, would re­duce job­less ben­e­fits, in­crease em­ployer taxes and cre­ate a new pre­mium paid by work­ers in an ef­fort to re­store sol­vency to the state’s job­less fund.

Both busi­ness and la­bor groups, which have been work­ing with Schur­ing on a com­pro­mise, say they op­pose the bill in its cur­rent form. Re­cent com­mit­tee hear­ings on the leg­is­la­tion, in­clud­ing one ear­lier Wed­nes­day, have drawn no pro­po­nent, op­po­nent or in­ter­ested par­ties to tes­tify about the pro­posal.

“No­body is go­ing to thank

me or the mem­bers of the busi­ness and la­bor com­mu­ni­ties for do­ing this be­cause there is sac­ri­fice. It’s a tough pill to swal­low, but at the end of the day, the sac­ri­fice will be much greater if we don’t do it,” Schur­ing said after the hear­ing.

State of­fi­cials and an­a­lysts have long warned that the state’s un­em­ploy­ment com­pen­sa­tion sys­tem has failed to build ad­e­quate re­serves dur­ing times of low un­em­ploy­ment to cover ben­e­fits dur­ing down­turns. After the re­ces­sion hit in 2007, Ohio was forced to bor­row from a fed­eral loan fund to keep pay­ing ben­e­fits, which led to higher taxes on busi­nesses un­til the debt was paid last year.

“If we have an­other re­ces­sion, it only could sus­tain ben­e­fits for an­other few months, then we go back into that spi­ral we went into with the Great Re­ces­sion,” in which the state is forced to bor­row money, busi­nesses pay sur­charges and Ohio com­pa­nies are less com­pet­i­tive with those from other states, Schur­ing said.

Schur­ing’s bill would raise about $370 mil­lion a year from 2019 to 2030. Ac­cord­ing to the non­par­ti­san Leg­isla­tive Ser­vice Com­mis­sion, em­ploy­ees would pay 50.5 per­cent of the cost of the bill, while em­ploy­ers pick up the rest. If there is a re­ces­sion, em­ploy­ees would pick up an es­ti­mated 51.5 per­cent of the cost.

Specif­i­cally, the bill would raise the tax­able wage base paid by em­ploy­ers to $11,000 per em­ployee, up from $9,500; charge em­ploy­ees a new co-in­surance pay­ment of 10 per­cent of the amount paid by their em­ployer; freeze the amount of weekly ben­e­fits for 10 years; re­duce the max­i­mum num­ber of weeks ben­e­fits can be re­ceived to 24, down from 26; and limit ad­di­tional pay­ments for de­pen­dents.

Crit­ics ar­gue that the busi­ness tax should be higher, while others say ben­e­fits should be lower. Schur­ing said he’s con­sid­er­ing some tweaks to the bill but in­sisted costs must be evenly shared.

Se­nate Pres­i­dent Larry Ob­hof, R-Me­d­ina, said if the House passes a bill by the end of the year, it will be a top pri­or­ity for the Se­nate come Jan­uary.

“We can’t keep kick­ing the can down the road for decades at a time,” he said.

With­out the fix, the un­em­ploy­ment com­pen­sa­tion fund is pro­jected to be­come in­sol­vent in 2021 if there’s no re­ces­sion and in 2020 with a mod­er­ate re­ces­sion.

Schur­ing also in­tro­duced a com­pan­ion res­o­lu­tion to cre­ate a state bond fund that would be avail­able if the in­surance fund is de­pleted and the state needs to bor­row money.

Schur­ing

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