Ohio pays off $271M debt to government

Associated Press

COLUMBUS

Ohio paid off the remaining $271 million on its recession-era debt to the federal government last week, a move officials say will save employers hundreds of millions of dollars in tax penalties.

The debt came from a loan needed to cover benefits to jobless workers and was paid off prior to last week’s deadline to avoid additional interest payments from the state, The Columbus Dispatch reported. It also means the state dodged another tax hike on the state’s businesses ahead of a November deadline.

The payoff will help employers, who have been paying higher federal unemployment taxes under a mandatory repayment system. Employers will save about $351 million next year, said Bruce Madson, assistant director of the state Department of Job and Family Services.

Under the repayment system, businesses in the state have paid higher unemployment taxes since 2012 to pay down the loan’s principal, and the state has paid interest on it. The debt reached $3.4 billion at one point.