As Ohio’s budget deadline looms, the Ohio Senate yesterday advanced important legislation in support of the state’s business community. The legislation – House Bill 168 (HB 168) uses American Rescue Plan dollars to eliminate Ohio’s federal unemployment loan that has grown to nearly $1.5 billion.
This move will prevent employers of every size and across the Buckeye State from facing a fifty percent increase in their unemployment payroll tax beginning in 2022. In all, paying down the federal unemployment loan will save employers more than $100 million in added taxes next year and over a three year period will result in an estimated savings of approximately $658 million.
The Ohio Chamber of Commerce made HB 168 a key vote that is recorded in our Free Enterprise Index because of the significant positive impact it will have on Ohio’s business climate. Eliminating the federal unemployment loan brings more stability and predictability for employer payroll costs at a time it is needed since many companies are feeling the impact of the coronavirus pandemic on their revenues and workforce. Likewise, enacting HB 168 will also prevent a repeat of what occurred following the 2008 recession when it took more than eight years to pay off Ohio’s unemployment loan that totaled $3.39 billion and accrued more than $250 million in interest.
HB 168 now awaits a concurrence vote in the Ohio House and the Ohio Chamber has urged representatives to bring it to a floor vote quickly. Waiting to pass HB 168 only jeopardizes Ohio’s post-pandemic recovery because the loan’s first interest payment will be due in a little more than three months and should a loan balance remain on January 1, 2022, then Ohio’s employers will be saddled with a fifty percent increase in their federal unemployment tax. Ohio employers cannot afford legislative inaction with the statehouse’s summer break likely to begin next week, so the Ohio Chamber will continue advocating in the final days of June for the Ohio House to concur with the Senate amendments to HB 168.