State To Borrow From Feds To Keep Making Unemployment Payments
Ohio's unemployment compensation fund is officially broke, and the state has asked to borrow more than 3 billion dollars from the feds so benefit payments may continue.
Ohio Public Radio's Karen Kasler reports.
There was only about 88 million dollars in the unemployment compensation fund on Tuesday – so the state has asked for a 3.1 billion dollar line of credit from the federal government. Ohio Department of Job and Family Services Director Kim Hall says the feds will waive interest on what’s borrowed through the end of the year, but the interest rate will go to 2.4 percent on January 1.
“If the state doesn't pay in full by November 2022, then employers will see a gradual increase in their unemployment taxes. That will be due in January of 2023.”
And the interest rate ticks up by .3 percent every year after that. State lawmakers are considering options such as asking voters for permission to issue bonds to pay back the loan sooner. It took seven years to pay off the state’s 3.4 billion dollar loan when the fund went broke in 2008.