The new year has brought a greater sense of urgency to address Ohio’s Unemployment Insurance (UI) Trust Fund. Employers may be surprised to see their state unemployment tax obligations increase by 0.5%. This increase is part of the state Mutualized Tax that is automatically triggered when the UI mutual account has a negative balance.
After borrowing nearly $1.3 billion from the federal government last year to pay unemployment benefits, Ohio will now be charged interest if no new interest waivers are granted by the federal government starting in March 2021. Ohio manufacturers may ultimately be subject to an increase in Federal Unemployment Tax for 2022 if Ohio’s loan amount remains outstanding as of Jan. 1, 2022 and is not repaid in full by November 2022. (Ohio’s UI fund was last deemed solvent in 1974.)
The Tax Foundation has published this comparison of all 50 states’ UI trust fund balances, as well as each state’s number of current beneficiaries and average weekly benefit. At last check, Ohio was borrowing an average of nearly $7 million a day to pay its UI benefits, according to a report by Fox19 in Cincinnati.
An OMA-supported and Senate-approved measure — Senate Joint Resolution 4 — to allow Ohio to issue bonds to offset the federal loan died in the House at the conclusion of the 133rd General Assembly last month. 1/4/2021