State may cut jobless benefits, raise employer insurance premiums

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State may cut jobless benefits, raise employer insurance premiums

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State may cut jobless benefits, raise employer insurance premiums

Jobless benefits may be cut and employer insurance premiums hiked under a new plan to shore up Ohio’s broken unemployment compensation fund.

State Rep. Kirk Schuring, R-Canton, said his bill would split the burden nearly evenly between workers and employers. It would freeze the maximum weekly benefit paid to workers at $443 for 10 years, change benefits paid for dependents, charge workers a 10 percent co-insurance fee and limit benefits to up to 24 to 26 weeks, depending on the industry. Employers would pay taxes on the first $11,000 that workers make, up from the current $9,000.

“This is just to start but it’s a reflection of some of the suggestions that were made in our working group,” Schuring said.

Labor, business and political leaders have been working on a long-term fix for more than 10 months.

The goal is to improve the solvency of the Unemployment Compensation Insurance Fund, which receives premiums from employers and pays out benefits to laid off workers. Roughly 200,000 Ohio workers rely on unemployment checks over the course of a year.

The fund went broke in 2009 during the Great Recession, forcing Ohio to borrow $3.39 billion from the federal government from 2009 to 2014. The loan cost the state $257.7 million in interest.

Zach Schiller, of Policy Matters Ohio, said Schuring’s proposal isn’t a true solvency plan, the numbers need more analysis, and some of the elements seem to create an administrative burden for the state. While it’s an improvement over previous proposals, Schuring’s proposal doesn’t fix the underlying problem that employer taxes have been too low for most of the past two decades, he said.

“You have to look at the entire thing as a combination of proposals,” Schiller said. “We don’t really know that it’s a 50-50 split (between workers and employers). I think we need more analysis on this.”

Schuring is also proposing that Ohio set up a bond fund for times when the insurance fund is drained. This would allow the state to avoid borrowing from the federal government, he said. The bond would require voter approval.

If there are no changes, the fund is expected to be insolvent again by 2021 — possibly by 2020 if there is a moderate recession, according to the Legislative Service Commission.

By the numbers

The proposal would raise about $370 million a year from 2019 to 2030 by:

  • Raising the taxable wage base paid by employers to $11,000 per employee, up from $9,500.
  • Charging employees a new co-insurance payment of 10 percent of the amount paid by his employer.
  • Freezing the amount of weekly benefits for 10 years.
  • Reducing the maximum number of weeks benefits can be received to 24, down from 26.
  • Limiting additional payments for dependents under certain circumstances.

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