Policy Matters Ohio Weighs in on Unemployment Compensation Solvency
Posted September 09, 2014 in Press ReleasesDownload press release (1pg) Read testimony
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.