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Remove Burden From Businesses

July 10, 2013
By THE INTELLIGENCER , The Intelligencer / Wheeling News-Register

Enormous progress has been made during the past few years in getting Ohio state government out of the fiscal wilderness. For several years during the administration of former Gov. Ted Strickland, he and many legislators pursued a philosophy of hiding their heads in the sand, pretending the state was not in trouble.

It was, and current Gov. John Kasich and a more realistic group of lawmakers have worked hard to get the state budget in balance. At the same time they have enacted modest tax reforms.

Unfortunately, there is still work to be done - and vestiges of the old practice of failing to face up to challenges remain.

One major task yet unaddressed involves about $1.5 billion the state borrowed from the federal government during the depths of the recession, in order to keep providing unemployment compensation benefits to Ohioans. At the time, it seemed state officials had no choice but to take Uncle Sam up on his offer.

But the aid was not a bailout with no strings attached. It was in the form of an interest-bearing loan.

Now, businesses are paying more than necessary to the state unemployment compensation system in order to cover interest payments on the loan. According to a published report, that cost Buckeye State businesses $272 million during the past 18 months.

Another interest payment of $48.5 million comes due in September. That, too, will come out of the pockets of businesses.

That still leaves the $1.5 billion in principal to repay.

But no one in state government seems to be discussing how to accomplish that. No schedule for paying down the debt has been established. No source of funding has been identified.

That means Ohio businesses will continue paying higher unemployment compensation premiums than necessary.

Again, gigantic budget problems have been faced and overcome under Kasich and the current General Assembly. But failure to come up with a repayment plan for the $1.5 billion loan is a serious lapse.

A state Unemployment Compensation Advisory Council, with representatives of business, labor and the General Assembly, is supposed to address basic issues such as the federal loan. But the council has not met in three years.

Kasich and legislators should insist that it do so and propose a repayment plan. If that cannot be accomplished, lawmakers and the governor should devise a plan on their own.

 
 

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