Unemployment Comp: Will the Feds Save Ohio?

Staff Writer
Columbus CEO

Ohio employers have seen a 0.2 percent bump in the mutualized tax, one of three taxes that fund Ohio's Unemployment Compensation Insurance Trust Fund. But don't blame Gov. John Kasich.

The increase is "not something that the state did actively," says Ben Johnson, a spokesman for the Ohio Department of Job and Family Services. "That's something that happened by statute."

The mutualized tax covers the cost of unemployment compensation benefits that can't be charged to a specific company for one reason or another, such as a firm going out of business.

The mandatory increase (from 2.74 percent of payroll in 2009 to 2.92 percent in 2010, on average) won't come close to covering Ohio's unemployment comp debt to the feds--some $2.5 billion borrowed, plus $193 million in unpaid interest ("Busted Flat," October 2010).

It's up to the Unemployment Compensation Advisory Council to recommend a get-out-of-debt solution, but Kasich seems in no hurry to light that fuse by filling three empty council seats. In early April, Kasich spokesman Rob Nichols said appointments would be made when the guv finds the right people.

Meanwhile, President Barack Obama has proposed federal relief for Ohio and 30 other "under water" states. That could mean $500 million for Ohio, including a two-year suspension of interest on the debt.

"For the short-term, we think this is good news for the state of Ohio," says Nichols.

Reprinted from the May 2011 issue of Columbus C.E.O. Copyright © Columbus C.E.O.