Compensation Fund Needs Help

Ohio was among many states in which enormous increases in the number of unemployed people during the past several years placed stresses on programs intended to help them. During the height of the recession, the Buckeye State had about 300,000 more unemployed men and women than it did in 2008.

One result of that was a jump in claims for unemployment compensation. Like many states, Ohio had to borrow money from the federal government to keep paying the claims.

More people are working in the state now, with the unemployment rate back down to near pre-recession levels. Still, the Unemployment Compensation Trust Fund had to pay out about $1.8 billion to more than 350,000 claimants last year.

At that rate, it will be difficult for the state to repay the $1.6 billion it had to borrow to keep the fund afloat during the bad years.

Unemployment benefits are funded primarily by taxes on employers. It has been suggested that to pay off the debt and get the program back on an even keel, rates charged employers may have to be nearly doubled. Reportedly, that would take the average annual payment per worker from about $105 now to $200.

The last thing Ohio job providers need now, even as many struggle in an up-and-down economy, is to have to send more money to Columbus.

State policymakers should take a hard look at what reforms can be made in the program to hold costs down. Curbing fraud is an obvious first step but, though such a move clearly is desirable, the millions of dollars a year such action would save are a drop in the bucket compared to what the program needs.

Still, the sooner reforms are implemented, the better. Holding down costs to employers while stabilizing the compensation fund should be a priority.