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Jobless Benefits Fund Broke; Ohio Starts Borrowing From Feds

Dan Konik
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The fund by which Ohio pays jobless benefits is officially broke, and the state has asked to borrow more than $3 billion so payments can keep going out to unemployed workers.

The state has paid out $4.1billionto699,000Ohioans in the last 90 days. That's a billion more than has ever been paid out in a full year. Fewer than 6% of claims are pending - that's just over 71,000, and some go back to March. About 30% of claims have been denied.

There was only about $88 million in the unemployment compensation fund on Tuesday – so the state has asked for a $3.1 billion line of credit from the federal government and started to take funds from it.

Ohio Department of Job and Family Services Director Kim Hall said the feds will waive interest on what’s borrowed through the end of the year, but the interest rate will go to 2.4% on January 1.

“Ifthestatedoesn'tpayinfullbyNovember2022,thenemployerswillseeagradualincreaseintheirunemploymenttaxes.ThatwillbedueinJanuaryof2023," Hall said.

And the interest rate ticks up by .3 percent every year after that.

State lawmakers are considering options such as asking voters for permission to issue bonds to pay back the loan sooner.

It took seven years to pay off the state’s $3.4 billion loan when the fund went broke in 2008.

Ohio is not the only state that's borrowing money to shore up its fund. Eight other states have requested borrowing authority but haven't tapped that money yet.

Copyright 2020 The Statehouse News Bureau. To see more, visit The Statehouse News Bureau.

Karen is a lifelong Ohioan who has served as news director at WCBE-FM, assignment editor/overnight anchor at WBNS-TV, and afternoon drive anchor/assignment editor in WTAM-AM in Cleveland. In addition to her daily reporting for Ohio’s public radio stations, she’s reported for NPR, the BBC, ABC Radio News and other news outlets. She hosts and produces the Statehouse News Bureau’s weekly TV show “The State of Ohio”, which airs on PBS stations statewide. She’s also a frequent guest on WOSU TV’s “Columbus on the Record”, a regular panelist on “The Sound of Ideas” on ideastream in Cleveland, appeared on the inaugural edition of “Face the State” on WBNS-TV and occasionally reports for “PBS Newshour”. She’s often called to moderate debates, including the Columbus Metropolitan Club’s Issue 3/legal marijuana debate and its pre-primary mayoral debate, and the City Club of Cleveland’s US Senate debate in 2012.
Karen Kasler
Contact Karen at 614/578-6375 or at kkasler@statehousenews.org.