Unemployment compensation bill needs work
Posted November 01, 2017 in Press Releases
Policy Matters points to significant flaws
House Bill 382 is an improvement over previous unemployment compensation (UC) solvency bills, but it still depends too heavily on cuts in worker benefits and needs major changes, Policy Matters Ohio Research Director Zach Schiller said in testimony to an Ohio House committee today.
Schiller said it was a positive step to reduce benefit cuts from those in previous UC solvency bills and include an employee contribution, albeit one with significant flaws. “But while the plan is a little closer to the true solvency bill that Ohio needs, it doesn’t fix the flaws in our employer tax and doesn’t get us to solvency,” he told the House Government Accountability and Oversight Committee. Among the concerns he cited were:
- It cuts benefits too much, with an additional nine-year freeze on maximum weekly benefits and reduction from the long-time national standard maximum of 26 weeks of benefits;
- It includes too many vague provisions, such as one that conditions weeks of benefits on the weather, and leaves too much up to the Ohio Department of Job & Family Services to decide;
- The employee premium it would create contains problematic provisions, such as disparate treatment of workers at public and nonprofit employers from those in the private sector;
- The constitutional amendment it proposes would make the State of Ohio responsible for paying back debt to the federal government, unlike any of the other eight states that have issued private bonds to pay off such debt since the recession. They have used revenue bonds, paid through employer taxes, not general obligation debt; and
- While the bill’s sponsor says employers and employees are splitting the cost of the plan almost 50-50, the analysis that produced that figure is incomplete and does not clearly support that conclusion.
The bill does nothing to remedy Ohio’s overly stringent earnings standard for eligibility, which prohibits many low-wage workers from receiving unemployment benefits, and employers still would only pay tax on the first $11,000 in each worker’s earnings. “The whole package, in short, it needs a lot of work,” Schiller said.