Governor asks Congress to cover unemployment fund

Governor asks Congress to cover unemployment fund

COLUMBUS (AP) — Gov. Ted Strickland is pushing for federal aid to cover the state’s dwindling unemployment compensation fund, which could be empty next month.

The move comes as Ohio’s unemployment rate is 7.2 percent, higher than the national average, and the state is bracing for more job losses in the auto industry and air-express industry.

Strickland is asking Congress for aid to replenish Ohio’s Unemployment Compensation Trust Fund so the state won’t have to borrow the money from the federal government. If Ohio were to have trouble paying back the loan within two years, it could face high interest rates and, by law, automatic tax increases on the state’s employers.

“It’s bad,” said Andrew E. Doehrel, president of the Ohio Chamber of Commerce and co-chairman of the state’s Unemployment Compensation Advisory Council.

“We may have to begin to borrow as soon as December, because unemployment has continued to rise and we’re in worse shape than we were a few months ago.”

Unemployment compensation is financed through a tax paid by employers.

A recent report from the National Employment Law Project said Ohio was one of five states that could run out of unemployment money within three months. The other states are Michigan, Indiana, New York and South Carolina.

The advisory council, which is made up of representatives of business and labor, has been unable to reach consensus on what should be done, Doehrel said.

The council will present options to elected leaders that include a combination of tax increases to businesses that contribute to the fund, and benefit reductions for those who lose their jobs.