Revisions to jobless benefits fund head to vote
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.