Jobless fund broke, Ohio borrows from feds to pay 1.3M Ohioans out of work

Ohio Statehouse

The state’s unemployment compensation fund went broke Tuesday, forcing Ohio to open a $3.1 billion line of credit with the federal government to keep jobless checks flowing to 1.3 million Ohioans who are out of work.

“That total exceeds what we think we’ll have to pay out in benefits. It is essentially a line of credit,” Gov. Mike DeWine said Tuesday. Other states including California and Texas have begun borrowing money from the U.S. Department of Labor for the same purpose.

During the last economic downturn in 2009, Ohio borrowed $3.39 billion from the federal government and repaid it over several years, along with more than $257 million in interest charges.

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Ohio’s unemployment compensation system has been in big trouble for several years as the taxes paid by employers weren’t enough to keep up with benefits paid out. State leaders have failed to agree on a fix for years.

“We’ve known for a number of years that this is a problem that has to be addressed. It’s a lot easier to address it when the economy is going up,” DeWine said. “We’ve got a long term structural problem that needs to be fixed and needed to be fixed prior to the coronavirus additional problem and the economy going down.”

The Ohio Department of Health on Tuesday reported 38,911 confirmed cases, plus 3,099 probable cases; 7,007 hospitalizations; and 2,362 confirmed deaths, plus 235 deaths attributed to probable cases.

DeWine announced the death of a corrections officer at Lake Erie Correctional Institute, a privately owned and run prison for state inmates. Terry Loomis, 62, had been a corrections officer for 18 years. Roughly 12% of all coronavirus cases in Ohio are in state prisons.

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The average number over the past 21 days of new cases is 429 and hospitalizations is 68. There hasn’t been a rise since Ohio began reopening businesses and thousands of people have demonstrated against racism.

“These numbers are pretty flat and that’s been the situation for over a month now,” DeWine said.

The “R-naught” — the rate at which the virus spreads — is just below 1.0. That means each infected person will infect one other. The higher the rate, the bigger the problem to contain the virus.

Now there’s increased testing supplies in the state, more lab capacity, wait times on results have decreased, and options have been added for anyone who wants a test even if they don’t have a provider’s order. But inside nursing homes, it’s a different story.

While DeWine announced in May that the Ohio National Guard would coordinate test collection for long-term care facilities, officials have yet to sort out who will pay for regular testing and how to work out the logistics.

RELATED: COVID-19 testing for long-term care still lacking

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