News Summary

A lot of people agree that this is the wrong time to even be thinking about raising anybody's taxes. Not individuals' taxes, not businesses'. When the economy is in the tank, that's the last moment that politicians want to be taking money out of people's paychecks or making it harder for businesses to stay afloat.

But when it comes to Ohio's insolvent unemployment compensation fund, Congress and President-elect Barack Obama have a legitimate complaint about what this state and others were not doing when times were better.

Ohio's fund has been underfunded for years. The economic meltdown is not the sole explanation behind this state's request for a bailout to ensure that checks can be sent to workers who've lost their jobs. In fact, in the last decade, Ohio has paid out more in unemployment benefits than it has taken in every year but one. A reckoning was coming, and that fact has been widely known.

The plan apparently has been to spend down the fund and pray for a miracle. If prayers didn't get answered, that problem would belong to successor politicians and administrators.

When advocates for business insist today that companies can't possibly afford a hike in their unemployment taxes, the rebuttal should be, "Is there ever a time that companies will say is the right time to ensure the trust fund is funded?"

The state's unemployment insurance pool is totally supported by employers. Businesses' premiums are based on their unemployment experience. They are taxed on the first $9,000 of each worker's wages, a threshold that varies by state. But, in Ohio, that rate hasn't changed since 1995. That means that employers have paid taxes on a smaller portion of workers' wages, while the costs of the program have continued to go up because benefits are tied to average weekly pay.

Besides the safety-net function that unemployment benefits serve, most economists believe that these benefits are an important stimulus to the economy. People receiving unemployment tend to spend their checks precisely because they're not working. That helps explain why Washington is typically willing to extend the normal 26-week benefit period during a recession; besides helping people, the politicians want money circulating.

But that argument won't convince Ohio businesses that it's in their interest to pay more to ensure that the unemployment fund is made structurally sound. They're going to have to be dragged kicking and screaming to the realization that they will have to pony up to get the fund on track, and that the burden for doing that can't be put off on laid-off workers through reduced benefits and tougher eligibility standards.

Thirty states are expected to ask Washington for a loan for their unemployment funds. That's in addition to Michigan and Indiana, which already are borrowing. The fact that Ohio has so much company is a statement about the times.

But plenty of people here also know our dirty little secret: We knew this day was coming, and we sat on our hands.