Policy Matters Ohio Weighs in on Unemployment Compensation Solvency

- September 9, 2014
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Ohio’s trust fund for unemployment compensation (UC) went broke in 2009, and still owes to the federal government $1.38 billion that it borrowed to pay needed benefits.  Recently, an Ohio House committee began holding hearings on the issue. In testimony prepared for a committee hearing in Springfield today, Policy Matters Ohio Research Director Zach Schiller noted that, “Ohio’s unemployment compensation solvency problem was a product of poor policy, not just a poor economy.”

Schiller said that:

  • Besides helping families and keeping people out of poverty, unemployment compensation helps the economy;

  • Ohio is very stingy about who it allows to qualify for benefits, and fewer unemployed qualify here than across the country;

  • UC tax levels in Ohio are lower than average, and come to less than a penny per dollar of wages;   

  • Not all states went broke; most often, those that did had underfunded their UC programs;

  • Underfunding  was the key reason for our insolvency, as a report to the state found earlier, and

  • Most importantly, Ohio taxes just the first $9,000 of wages, a very low amount. This amounts needs to be raised and indexed.

A copy of the complete testimony is available at http://www.policymattersohio.org/uc_sept_2014. The committee is scheduled to hold additional hearings in Miamisburg on Sept. 29 and in Toledo on Oct.14.


Policy Matters Ohio is a nonprofit, nonpartisan state policy research institute

with offices in Cleveland and Columbus.

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