Ohio’s jobless benefit fund has been lifeline for many
Borrowing from feds keeps paychecks flowing
Ohio’s unemployment compensation system began in the depths of the Great Depression to help workers out of jobs and it’s been a lifeline in the decades since then.
But after economic shockwaves hit the system in the 1980s, late 2000s and last year during the global pandemic, Ohio had to borrow from the federal government to keep jobless checks flowing.
Here is a look at key dates in the history of the system:
April 9, 1931: state lawmakers created the Ohio Unemployment Insurance Commission to study whether the state should set up a jobless insurance fund.
1935: The Social Security Act provides the framework for states to set up unemployment insurance funds.
December 16, 1936: Ohio enacted the Ohio Unemployment Compensation Law.
January 1950: Jobless benefits hit an all-time high. The Ohio General Assembly raised the maximum payments to $25 for 26 weeks, up from $21 for 22 weeks.
July 1963: Ohio increased employer contributions to the fund, which dwindled from $686 million in 1956 to $108 million. The changes also required workers to work more weeks to qualify for benefits and women who lost their jobs because of pregnancy wouldn’t be eligible until they gave birth and only if their old jobs were no longer available.
1980s: The unemployment trust fund went broke, forcing the state to borrow money from the federal government for eight straight years. Ohio borrowed $3.8 billion.
1982: The legislature raised taxes, tightened eligibility rules and froze benefits.
1989: The Ohio Bureau of Employment Services releases a study that warns the fund will be insolvent by 1998 if changes to tax rates or benefits aren’t made.
1995: Ohio bumped up the taxable base wage to $9,000. That was the last time it was increased.
July 1, 2000: Ohio merged the department of human services and bureau of unemployment services to create the Ohio Department of Job and Family Services.
July 2008: An economic study commissioned by the state recommends steps to bolster fund solvency, including raising the taxable wage base and indexing future increase to inflation.
Jan. 12, 2009: Ohio’s unemployment fund ran out of money, forcing the state to borrow cash from the federal government to keep jobless benefits flowing during the Great Recession. Ohio borrowed $2.6 billion.
December 2016: Business, labor and legislative leaders pledge to find a fix to the chronic insolvency problems by April 1. No fix was announced.
June 2020: Ohio’s unemployment fund ran out of money, forcing the state to again borrow from the feds.
May 2021: The Dewine administration disclosed that fraud and overpayments in the system topped $2.1 billion between March 2020 and March 2021.
September 2021: Ohio uses federal grant money to pay back a $1.5 billion federal loan. Gov. Mike Dewine pledges to work with lawmakers to fix the chronic insolvency of the fund.
Sources: Ohio History, Policy Matters Ohio, Columbus Dispatch, Columbus Citizen Journal, USA TODAY Network reporting.
Laura Bischoff is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.