Ohio unemployment fund bankrupt, borrowing as payments loom, report says

[NNN0LHI]

http://www.examiner.com/government-in-columbus/ohio-unemployment-fund-bankrupt-borrowing-as-payments-loom-report-says

January 16th, 2011 4:24 am ET.

COLUMBUS, Ohio (CGE) - Eight to $10 billion in budget shortfalls is the accepted narrative around capital square in Columbus on the degree of difficulty legislators and Gov. John Kasich will face in crafting a balanced budget come July 1, the start of the next biennium.

While the size of the next biennial budget shortfall is daunting by historical standards, Ohio leaders will have more big bills to pay this fall. The piper in this scenario is the federal government, who loaned $41 billion to 30 states to prop up their troubled or drained unemployment insurance funds. snip

After operating its trust fund at dangerously low levels for years, Ohio entered the Great Recession with less than two months of reserves. It was one of the first states to begin borrowing at the beginning of 2009, the first payment on the $2.3 billion Washington loaned it, so basic payments of about $341 per week to the 28 percent of the unemployed workers eligible to receive benefits, will be well over $100 million. That payment, due in September, marks a two year hiatus on interest payments made possible by language in the stimulus bill. Ohio employers, who pay taxes to cover the cost of unemployment benefits, could face a small tax increase from $266 to $270 per employee, on average, for 2010. Ohio workers do not pay any part of the cost of unemployment benefits.