Unemployment money running out
Published 9:49 am Thursday, November 13, 2008
COLUMBUS (AP) — Gov. Ted Strickland is pushing for federal aid to cover the state’s dwindling unemployment compensation fund, which could be empty next month.
The move comes as Ohio’s unemployment rate is 7.2 percent, higher than the national average, and the state is bracing for more job losses in the auto industry and air-express industry.
Strickland is asking Congress for aid to replenish Ohio’s Unemployment Compensation Trust Fund so the state won’t have to borrow the money from the federal government. If Ohio were to have trouble paying back the loan within two years, it could face high interest rates and, by law, automatic tax increases on the state’s employers.
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‘‘It’s bad,’’ said Andrew E. Doehrel, president of the Ohio Chamber of Commerce and co-chairman of the state’s Unemployment Compensation Advisory Council.
‘‘We may have to begin to borrow as soon as December, because unemployment has continued to rise and we’re in worse shape than we were a few months ago.’’
Unemployment compensation is financed through a tax paid by employers.
A recent report from the National Employment Law Project said Ohio was one of five states that could run out of unemployment money within three months. The other states are Michigan, Indiana, New York and South Carolina.
The advisory council, which is made up of representatives of business and labor, has been unable to reach consensus on what should be done, Doehrel said.
The council will present options to elected leaders that include a combination of tax increases to businesses that contribute to the fund, and benefit reductions for those who lose their jobs.
As of Friday, the trust fund balance was $325 million, down from $594 million a year ago and far below the state’s minimum safe level of $2.5 billion.
The state pays out more than $100 million a month in benefits.
More large layoffs are coming. General Motors Corp. plans to close a factory near Dayton in December. About 1,000 people work at the Dayton-area plant, which produces sport-utility vehicles.
And DHL Express is working on a deal to hire UPS in transporting packages by year’s end. That would move work away from DHL’s hub in Wilmington, about 30 miles southeast of Dayton, and result in the loss of about 7,400 jobs there.
Strickland has said the state is seeking a $3.8 million grant from the Department of Labor to help pay for job training for laid-off workers.
Keith Hyde, chairman of the Wilmington work force committee of a task force created to deal with job losses, estimated that more than 1,000 workers have sought help preparing resumes and searching for jobs in the past few months.