CINCINNATI (WXIX) – New legislation will allow Ohio to use COVID-19 aid funds to repay a loan it received from the federal government. for the payment of unemployment benefits.
“Paying off your debt is a good first step,” said Steve Stivers, president and chief executive officer of the Ohio Chamber of Commerce.
If no action is taken, the state will have 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.”
FOX19 Now Investigates has been researching the foundation and struggling to fix it for over a year.
The money for the fund comes from employers.
There have been several options on the table over the years.
These include increases in taxation for business owners and a decrease in 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 deliver them earlier so they spend less time for unemployment, ”Stivers said.
Below are the details of HB 168:
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