Given Ohio's chronically high jobless rate and its fragile fiscal condition, state government needs all the help it can get to keep its unemployment compensation system solvent. Yet the state's failure to modernize the system could cost it $176.3 million in federal aid next month.
That loss not only could deprive out-of-work Ohioans of needed benefits, it also could mean higher taxes on employers to insure their workers against unemployment. If Gov. John Kasich and lawmakers are indifferent to the former prospect, they surely will care about the latter.
Because of the recession, Ohio's unemployment trust fund has had to borrow $2.6 billion from the federal government; that money will have to be paid back. But stimulus legislation has made $265.5 million in federal incentives available to Ohio to improve its jobless compensation program. So far, the state has collected one-third of that amount.
It can receive the rest if it takes two of these four steps: provide benefits to unemployed workers who seek part-time work; pay extended benefits to jobless workers who are enrolled in approved training programs; provide benefits to workers who quit their jobs because of compelling family conditions, such as domestic violence; and pay allowances for dependents of lower-income jobless workers, up to a total of $50 a week.
The deadline for Ohio to act on these policies is Aug. 22. After that, the federal money goes away and the unemployment trust fund's debt will grow further.
The advocacy group Policy Matters Ohio cites data that suggest the state could adopt two of the four options -- benefits for trainees and dependents -- and comply with the federal mandate for less than $20 million a year. The additional federal aid would cover that cost for at least nine years.
At the same time, workers and their families would get more help to cope with the costs of unemployment. Policy Matters notes that fewer than one-fourth of unemployed Ohioans collect regular state jobless benefits -- the 38th lowest rate among states.
Lawmakers did not include any of the options in the new state budget. As long as they enact the new benefits and apply for the federal aid by next month, the benefit changes need not take effect until September 2012.
The Ohio Department of Job and Family Services says the state has "an extraordinary opportunity to draw down a significant sum of money for comparably little program eligibility change." There simply is no reason for the state to forfeit this opportunity.
Two-thirds of other state governments, with various combinations of partisan control, have updated their unemployment compensation systems to qualify for federal aid. It would be shameful if Ohio failed to join them promptly.