Ohio unlikely to get $176M for jobless benefits

ANDY BROWNFIELD

Asso­ci­ated Press

COLUMBUS — As Ohio faced Monday’s dead­line to expand unem­ploy­ment ben­e­fits and receive $176 mil­lion in fed­eral stim­u­lus money, state offi­cials had not applied for the money and the Gen­eral Assem­bly had not sched­uled any ses­sions to take any action.

The fed­eral gov­ern­ment set aside $7 bil­lion for unem­ploy­ment com­pen­sa­tion for states that broaden their unem­ploy­ment pro­grams. The pro­vi­sion is part of the Amer­i­can Recov­ery and Rein­vest­ment Act.

“The idea was to reward states who update laws to increase access to ben­e­fits,” said Wayne Vro­man, an unem­ploy­ment com­pen­sa­tion expert under con­tract with the Ohio Depart­ment of Jobs and Fam­ily Services.

But Gov. John Kasich says it makes no sense for the state to make long-term changes to a fiscally-damaged sys­tem for a one-time pay­ment, spokesman Rob Nichols said. And the jobs depart­ment, which admin­is­ters the state’s unem­ploy­ment com­pen­sa­tion sys­tem, is not seek­ing any changes, depart­ment spokesman Ben John­son said.

“We don’t feel it’s wise to expand ben­e­fits at a time when the trust fund is already $2.6 bil­lion in debt,” John­son said.

Sen. Joe Schi­avoni, D-Canfield, intro­duced a bill that would allow Ohio to receive the money by pro­vid­ing ben­e­fits to work­ers who leave their jobs for fam­ily rea­sons and by extend­ing ben­e­fits to peo­ple in approved job train­ing. But his bill never came to a vote.

Sen­ate Pres­i­dent Tom Niehaus, R-New Rich­mond, who deter­mines which bills are called in the Sen­ate, was con­cerned that costs of the long-term changes could out­weigh the ben­e­fits of one-time fund­ing, spokesman John McClel­land said.

Ohio’s unem­ploy­ment com­pen­sa­tion pro­gram pro­vides short-term income to unem­ployed work­ers who lose their jobs through no fault of their own. The weekly ben­e­fit is typ­i­cally half the worker’s pre­vi­ous wages up to a set max­i­mum, based on the num­ber of eli­gi­ble depen­dents. Ben­e­fits may be paid for up to 26 weeks — longer for those who lose their jobs before Dec. 31.

Tamara Chavis, 43, of Colum­bus relies on unem­ploy­ment com­pen­sa­tion to sup­port her four chil­dren. She said she thinks the state should “def­i­nitely” take action to expand ben­e­fits and net the fed­eral dollars.

“We’re going to need the ben­e­fits to be extended until we get back on our feet,” Chavis said. “It’s just a no-brainer.”

Chavis worked in prop­erty man­age­ment and leas­ing for seven years until the real estate mar­ket col­lapsed and left her unem­ployed last year. Now she spends time updat­ing her resume and look­ing for job open­ings at the Cen­tral Ohio Work­force Invest­ment Cor­po­ra­tion, a non­profit that works to pair employ­ers with the unem­ployed. Expanded ben­e­fits could allow her to receive more money to care for her children.

So far, 40 states have changed their unem­ploy­ment com­pen­sa­tion sys­tems to receive the fed­eral money, accord­ing to the U.S. Depart­ment of Labor. Of those, Ohio and five oth­ers applied for only one-third of their share of the $7 bil­lion. Ohio received its third — $88.2 mil­lion — after chang­ing how it cal­cu­lates ben­e­fits by incor­po­rat­ing a worker’s most recent earnings.

To receive the remain­ing two-thirds, the state would have to choose two options from among sev­eral: Allow peo­ple seek­ing part-time work to qual­ify for ben­e­fits, extend ben­e­fits to those in approved job train­ing pro­grams, increase the allowance for depen­dents, and pro­vide ben­e­fits to peo­ple who leave work for cer­tain fam­ily rea­sons, such as domes­tic vio­lence or trans­fer of a spouse.

Pro­po­nents say the changes are nec­es­sary so more Ohioans have access to ben­e­fits while they get back on their feet.

Zach Schiller, research direc­tor for the think tank Pol­icy Mat­ters Ohio, said the changes would mod­ern­ize the sys­tem for today’s economy.

“One-fifth of Ohio work­ers are part-time. It’s becom­ing more reg­u­lar, with the bulk of part-time work­ers being women,” Schiller said. “Work­ers also need more retrain­ing nowadays.”

Schiller said the $176 mil­lion would help Ohio pay back money the state has bor­rowed from the fed­eral gov­ern­ment since 2009 to keep ben­e­fits flow­ing dur­ing tough eco­nomic times. He said the funds could reduce the state’s inter­est pay­ments by $7 mil­lion annu­ally. As for the argu­ment that Ohio would be stuck pay­ing more in the long term, he doesn’t buy that.

“Con­gress didn’t want states to grab the money and run, so it didn’t allow them to sun­set ben­e­fits,” Schiller said. “But it also didn’t require a spe­cific time period for those to be maintained.”

Schiller said Ohio’s Gen­eral Assem­bly could review the changes after a few years and decide to keep, mod­ify or repeal them if they were too expensive.

Taxes on employ­ers pay for unem­ploy­ment com­pen­sa­tion. Last year, employ­ers paid $1.16 bil­lion to the state, Vro­man said. Esti­mates for an expanded sys­tem are uncer­tain, but it could cost busi­nesses up to $30 mil­lion annu­ally, he said.

Ohio Cham­ber of Com­merce Pres­i­dent Andy Doehrel said busi­nesses aren’t nec­es­sar­ily opposed to expand­ing ben­e­fits. He said the cham­ber is in favor of cer­tain pro­vi­sions, such as pro­vid­ing more money for unem­ployed peo­ple with dependents.

But, he said, “We would want to be very, very aware of the long-term impact on the sys­tem. Some of these (changes) could run bil­lions of dol­lars a year.”

Mean­while, Ohio’s unem­ploy­ment rate has been ris­ing. It was 9 per­cent in July, up from 8.8 per­cent in June — the sec­ond monthly increase after a two-year decline. In the week end­ing Aug. 13, Ohio had 529,000 unem­ployed work­ers and 213,000 of them get­ting unem­ploy­ment benefits.

Posted by AP News on Aug 21 2011. You can follow any responses to this entry through the RSS Feed. Comments can be made below.