State Senator Larry Obhof (R-Medina) today announced that Ohio has finally repaid its lingering unemployment-compensation debts amassed during the recession. The debt – owed to the federal government – led to substantial penalties that stifled Ohio’s employers. 

“Paying off this debt is a major milestone in Ohio's turnaround," said Obhof. “This allows Ohio’s employers to reinvest in their businesses, instead of sending hundreds of millions of dollars in penalties to the federal government.” 

During the recession, Ohio and 35 other states borrowed from a federal trust fund to continue paying jobless benefits. Ohio borrowed nearly $2 billion in 2009 alone. As a result, Ohio’s employers began paying federal penalties in 2012, with the amount of the penalty growing each year. 

Senator Obhof co-sponsored House Bill 390, which authorized the State of Ohio to pay the remainder of the debt this fall, before additional federal penalties would apply. The bill passed the Senate in May. Pursuant to House Bill 390, this week the Kasich administration paid the remaining balance of $271 million.

Because of these changes, the federal unemployment tax rate on Ohio businesses will revert to normal levels, with employers paying a smaller surcharge in the first half of 2017 to repay the State of Ohio. Under the repayment plan, instead of paying $168 per employee in a 12-month period, employers will pay $87 for the first year. In the second year, the amount will return to its pre-recession level of $42.  

“These changes will save Ohio employers more than $350 million,” said Senator Obhof. “This frees up Ohio’s job creators to grow their businesses and hire more people.”

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