COLUMBUS (TDB) -- The chart above was released by state officials and tells the story. Ohio's fund that pays unemployment benefits to laid off workers is nearly flat broke. The timing could not be worse because many economist see a 50-50 chance that the U.S. is headed toward recession. That usually means the jobless rate increases.
Catherine Candisky of the Columbus Dispatch reports the state fund has been paying out more than it takes in for years. Officials knew there was a problem but failed to act.
"Since 1999, Ohio's Unemployment Trust Fund has paid out more in benefits than it collected in unemployment taxes all years but one. The fund's balance, as a result, has plunged from $2.3 billion in 2000 to $555.7 million at the end of November. It is projected to drop to $155 million by April, according to the Ohio Department of Jobs and Family Services.
"The agency projects that if a recession similar to one experienced from 2001 to 2004 were to begin in early 2008, the fund would be broke by the end of the year."
Companies pay taxes to support the fund. In 2000, Ohio had 232,755 employers making contributions to keep the fund solvent. Today there are 226,808 employers. Ohio's business community has shrunk, which impacts the fund.
Catherine Candisky of the Columbus Dispatch reports the state fund has been paying out more than it takes in for years. Officials knew there was a problem but failed to act.
"Since 1999, Ohio's Unemployment Trust Fund has paid out more in benefits than it collected in unemployment taxes all years but one. The fund's balance, as a result, has plunged from $2.3 billion in 2000 to $555.7 million at the end of November. It is projected to drop to $155 million by April, according to the Ohio Department of Jobs and Family Services.
"The agency projects that if a recession similar to one experienced from 2001 to 2004 were to begin in early 2008, the fund would be broke by the end of the year."
Companies pay taxes to support the fund. In 2000, Ohio had 232,755 employers making contributions to keep the fund solvent. Today there are 226,808 employers. Ohio's business community has shrunk, which impacts the fund.
This is how the state will handle it.
ReplyDeleteThey'll increase payroll taxes making it more attractive to move to another state. Then we'll have even fewer employers to support an ever growing underclass. Note, Ohio's unemployment wage base is 9,000 per employee, per year v. 8,000 for KY, 7,000 in IN, and 9,500 for MI.
You tell me. Who's economy is doing better than the others?
Hi Gordon --
ReplyDeleteOhio is doing better than Michigan. You know, the lack of jobs, or jobs growth, in Ohio is the real problem. As you note, taxes certainly figure into the state's competitiveness problems. But there are other factors, too. The eight years of the Taft Administration were hard -- he was not a good salesman for Ohio.