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Legislation Cancels Ohio Unemployment Loan

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CINCINNATI (WXIX) – Newly signed House Bill 168 will allow Ohio to use COVID-19 relief funds to repay a loan it received from the federal government. for the payment of unemployment benefits.

The loan amount rose to a staggering $ 1,471,807,655.46.

“Paying off your debt is a good first step,” said Steve Stivers, president and chief executive officer of the Ohio Chamber of Commerce.

“Many small businesses still have not recovered from the pandemic,” explained Lieutenant Governor John Housted. “Many of them have difficulty hiring people and many of them are paying higher wages, which is good for employees. And all this, recovery would be much more difficult if they had to bear the burden of tax for literally hiring people. “

If no action had been taken, the state would have had to start paying interest on the loan in September.

This scenario played out during the Great Recession of 2008.

Ohio had to pay more than $ 258 million in interest. This is because the benefit fund was declared insolvent before the pandemic broke out.

This meant that the state did not have enough money to pay the annual unemployment benefit if a crisis struck.

States with solvent unemployment compensation trust funds do not need to pay interest on federal government unemployment loans.

Repaying the loan does not solve the problem with the Ohio Trust Fund, which has been considered insolvent since 1974.

“I applaud the legislators,” Stivers said. “But that doesn’t mean the unemployment crisis is over.”

For over a year, FOX19 Now Investigates has been researching the foundation and the struggle to fix it.

The money for the fund comes from employers.

There have been several options on the table over the years.

These include increasing taxation of business owners and reducing the number of benefits that applicants receive.

Stivers also have an approach.

“We need to take it to the next level and create incentives for people to get back to work faster, and also create some systems to help people who may need extra help with learning and the like, and provide them earlier so they spend less time for unemployment, ”Stivers said.

Below are the details of HB 168:

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