Ohio borrows $3.1 billion from fed to cover unemployment benefits

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COLUMBUS (WCMH) – Tuesday marked the first day Ohio has had to borrow money to cover unemployment benefits.

Gov. Mike DeWine said during a statehouse briefing that the state has requested a line of credit for $3.1 billion from the U.S. Department of Labor.

“That total exceeds what we think we will need to pay out in benefits,” the governor said.

DeWine said the state is asking for more than it thinks it will need to cover the benefits so it will have the money in case Ohio needs it.

“Ohio is certainly not alone,” he said. “Other states have been forced to do this. So far during the COVID-19 crisis, states such as California and Texas have also had to borrow money for their unemployment insurance obligations.”

As of June 6, the number of initial jobless claims filed in Ohio over the last 12 weeks stands at 1,327,843, which is more than the combined total of those filed during the last three years. 

According to DeWine, Ohio was one of 30 states that borrowed from the federal government during the last recession. At that time, the state borrowed $3.3 billion.

Beginning in 2009, Ohio began repaying what it borrowed, making the last payment in 2016.

Later in the briefing, DeWine called the unemployment system in Ohio a “longterm structural problem,” saying it was something that has needed to be fixed for years, long before the COVID-19 pandemic.

“That structural problem remains out there, it’s obviously not gone away,” he said. “It has to be fixed in the long run.”

The COVID-19 economic hit still would have prompted the state to borrow from the federal government, with or without the structural problem, DeWine added, saying it’s easier to fix when the economy is moving up than when it is flat.

DeWine said that, as of now, the federal government is not charging Ohio interest on the borrowed principle.

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