Columbus Dispatch
State debt a drag for businesses 

Ohio employers have been shelling out millions in higher taxes for the state’s failure to repay a massive federal loan to cover unemployment benefits during the recession. 

While legislators just handed small businesses an annual income-tax break of roughly $550 million a year in the budget, the state’s failure to repay the $1.5 billion federal debt has saddled all Ohio employers with a $272 million tax increase over the past 18 months. 

Ohio taxpayers have paid an additional $136.5 million in interest since 2011. Another interest payment of $48.5 million is due in September. 

“Why give money back (to businesses) in one pocket and take it out of the other? It doesn’t make sense,” said Sen. Joe Schiavoni, D-Boardman. 

So what’s the plan for paying off the debt? 

Ohio doesn’t have one. 

In fact, the Unemployment Compensation Advisory Council, a panel of business, labor and legislative leaders tasked with overseeing the state’s unemployment trust fund, hasn’t met in more than three years. 

If the council were to gather, it’s unclear whether anyone would show up because it has no members. Donald E. Blatt, of the United Steel Workers, was the lone member, but his four-year term expires today. 

The 12-member board is supposed to include six representatives of business and labor appointed by the governor and six lawmakers named by House and Senate leaders, but there hasn’t been an appointment made in at least two years. 

During that time, Ohio’s federal employment tax rate has been bumped up twice, with a third increase set to kick in Jan. 1. Those increases equate to an additional cost of $63 per employee, according to the Ohio Department of Job and Family Services, which oversees the state’s unemployment-compensation program. 

“This is painful because it starts adding up,” said Andrew Doehrel, president of the Ohio Chamber of Commerce and a former member of the council. 

“What a lot of other states have done is passed bonding to pay off the debt so employers are not paying as much.” 

In addition, several states, Doehrel noted, have shored up their unemployment funds by raising taxes on employers and cutting benefits by reducing the amounts paid or the length of time benefits are paid. 

Employers pay state and federal payroll taxes to fund jobless benefits. But without sufficient reserves when the recession hit, 36 states were forced to borrow from the federal government to keep paying jobless benefits. 

According to the U.S. Department of Labor, Ohio is among 22 owing a combined $21 billion. While Ohio has repaid about $1 billion in principle the past two years, its $1.5 billion debt is bigger than every state but three: California, New York and North Carolina… 

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