Lawmakers consider reducing number of weeks Ohioans can receive unemployment compensation
Posted December 06, 2015 in Selected Press
A bill in the Ohio House that would overhaul Ohio's unemployment compensation system wouldn’t make the system truly solvent even while it would impose barriers to benefits that go beyond what any other state has done.
That was the gist of testimony prepared for delivery this week at the Ohio House Insurance Committee by Policy Matters Ohio Research Director Zach Schiller.
State Rep. Terry Boose (R-Norwalk) said Friday it’s too soon to make any concrete predictions about House Bill 394.
“The first thing, as the way I understand it, is I talked to the person who sponsored the bill and she said not to get too excited,” Boose said.
“She told me this bill will likely go through many changes, though she couldn’t tell me exactly what those changes would be,” he added.
One of the parts of the bill, according to an analysis on ohio.gov, is, if adopted, it would reduce the the number of unemployment weeks available to a person from 26 to 12 to 20 weeks, depending on the state’s unemployment rate at the time the application is filed.
“It does reduce the number of weeks,” Boose said, adding those weeks were expanded back in 2008 and the proposed reduction “puts it back a little bit.”
“The thinking behind this is, once a person gets on unemployment, people won’t get a job until their time is up,” Boose said. “This is a mild reaction to that.”
Boose said the bill also addresses paying back the federal government for unemployment funding.
“Ohio is one of just five states that still owes the federal government,” he said. “It was about $1.8 billion and we’ve got that down to about $800 million. Some have said we should use money from the rainy-day fund to pay that back, but the governor and administration have said, absolutely not.”
Boose said the bill is complicated, but in the end, the business owners through unemployment payments are the ones who pay back the majority of this federal debt.
“This bill is currently in the House committee,” Boose added.
Schiller spoke against the bill.
House Bill 394 is not a balanced package, Schiller noted. Unemployed workers will shoulder the entire cost of the bill. According Ohio Department of Job & Family Services estimates, the bill would cut nearly $4.3 billion in benefits from unemployed workers between 2017 and 2025. But most of this — $2.5 billion — would provide tax cuts to employers, not an improvement in solvency (see chart). Schiller also said that:
• It isn’t a true solvency package. According to information provided by the bill sponsor, the system will remain more than $1.3 billion short of the new minimum safe level in 2025 — and that relies on the unrealistic assumption that there will be no recession for another 10 years.
• It misdiagnoses the reasons for Ohio's solvency problem. The key reason why our fund went broke is that it was underfunded for many years. Employer taxes in Ohio have been below the national average. Yet the bill wouldn’t produce more revenue, but less — considerably less.
• The bill's reductions in benefits, and access to benefits, would take Ohio well outside the mainstream. They would make our UC program among the most restrictive in the country. No other state has imposed the barriers to access contained in the bill. These changes would disproportionately impact regions with higher levels of unemployment and slower job growth, such as our Appalachian counties and many of our cities.
“Ohio needs to come up with a solution to adequately finance its unemployment compensation (UC) system. Unfortunately, House Bill 394 is not the right solution,” Schiller said.
Original Article: http://www.norwalkreflector.com/Politics/2015/12/0...