Legislative Leaders & Governor Kasich Set to Address Unemployment Comp Debt this Week

This week the Ohio Senate and the Ohio House of Representatives along with the Kasich Administration are poised to address Ohio’s remaining unemployment compensation debt due to the federal government.  Ohio had to borrow over $3 billion from the feds to pay unemployment compensation between 2008-2014.  Since the debt was not addressed in a timely manner, employers in Ohio have been assessed penalties in order to help retire the debt.  Ohio still owes $225-$240 million.  As a result, dealers and other businesses are paying $147 per employee, well above the normal $42 per employee rate.  If the debt isn’t addressed, the new rate would go to $168 per employee in 2017.

Last year, Ohio dealers employed more than 55,000 people and paid more than $8.8 million in federal unemployment compensation tax.  Many dealer networks saw bills in excess of $100,000. 

Under the proposed fix, the debt will be paid using existing state funds before the next round of penalties go into effect.  This will then leave the base rate of $42 in place.  In order to repay the loan from the state, employers will be assessed a one-time fee of roughly $45 per employee for next year year’s bill, which results in a 2017 rate of $87, almost half of what dealers and other Ohio employers are expected to pay if nothing is done about the debt.  In addition, efforts will continue on separate legislation to shore up the fund going forward in order to avoid future borrowing.

OADA appreciates the efforts of the legislature and the Governor and we look forward to working with them to address this issue for dealers. 

Please CLICK HERE for our support letter and feel free to reach out to Zach Doran or Joe Cannon with questions surrounding this issue.   

Zach Doran at zdoran@oada.com or (614) 923-2234

Joe Cannon at jcanon@oada.com or (614) 923-2237

OADA will keep dealers apprised as the process to pass this proposal unfolds this week.