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State To Pay $1.4B Unemployment Debt With Relief Funds

Daniel Konik

Ohio leaders say they plan on paying off the state's debt to the federal government by using funds from the latest COVID relief package. The debt was incurred when Ohio had to borrow money for its unemployment compensation system.

Ohio wants to pay off the $1.4 billion it borrowed from the feds by using a portion of the more than $10 billion coming to the state and local government from the "American Rescue Plan."

This would prevent employers from paying interest on future unemployment costs.

But DeWine says the state needs to make its unemployment insurance fund stable so it can withstand a future recession.

"So we're recommending we pay off the debt but we still are left with a structural problem and this is something that the legislature should tackle," says DeWine.

Over the years, proposals to fix the system have consistently fallen apart. The debate comes down to finding a balance between increased employer fees and reduced employee benefits.

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