Recently, the state of Ohio was able to pay off the remainder of our unemployment compensation debt that we owed to the federal government. In doing so, we have managed to save our businesses from paying a bill they could not afford.


Many are surprised to find out that our state is still footing the bill for recession era debt. Even more surprising is that out of 35 states forced to borrow money to support its unemployment system, Ohio was one of only three remaining states with outstanding debt.


Ohio businesses have already paid $1.4 billion toward the loan, in addition to the $1.6 billion that has been paid by unemployment taxes as well as $246 million that has been paid from the state’s general revenue fund. However, significant debt still remained, and in 2012 we began incurring steep tax penalties for not having paid the debt in full.


Our small businesses have been the ones that have been bearing the brunt of these penalties. Next year, Ohio businesses would have been forced to pay $168 per employee had we not paid off the debt. Normally this rate is $42, however the tax penalties increased the payment by $126 per employee.


For small businesses throughout our community, this 300 percent increase in taxes could have crippling effects. That money is undoubtedly better spent when it remains in the pockets of our business owners, giving them the power to reinvest in their employees, their company and ultimately our community.


While this debt repayment takes a load off Ohio businesses, we also must be cognizant that we do not find ourselves in this position again given another downturn in the economy. For that reason, the Ohio legislature has created a study committee to find a way to achieve and maintain a balanced unemployment compensation system without needing to borrow again. In doing so, we will ensure that the state is able to get hardworking Ohioans their benefits should they fall on tough times.


Paying off the unemployment compensation debt is an achievement that cannot be understated; this is a huge win for our businesses, community and state as a whole. I am proud to have supported a measure that saved business $315 million, and am looking forward to seeing first-hand the positive impact that this will have on the Cincinnati region.


 

 
 
 
  
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