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October 8, 2008
COLUMBUS, Ohio - Ohio's unemployment rate is unfortunately steadily rising, while the nation's unemployment rate hovers near 6 percent.
The state's rate has risen to 7.4 percent and Columbus has seen an increase over the past few months from 4.9 percent in May to 6.2 percent in August.
But cities like Cleveland are facing even tougher times.
Cleveland has 9.7 percent of its residents unemployed.
With rising rates, it's no surprise that unemployment funding could run out by the end of the year, NBC 4's Lauren Diedrich reported.
"Ohio is fast approaching insolvency, which basically means our unemployment compensation fund is going broke," said Sara Hall Phillips, a labor policy analyst with the Ohio Department of Job and Family Services (ODJFS).
And experts said it doesn't look like the money will be flowing in anytime soon.
The fund is holding a little more than $326 million. Last year at this time, it had nearly twice that amount at $560 million.
ODJFS said all those millions could be gone by the end of the year, if not 2009.
Phillips said there are some major causes attributed to the cash crunch, including an increase of claims by 50 percent compared to 2007, the department not bouncing back from the 2001 recession and trying to compensate new clients with the same amount of money it has collected for years.
"We will be going to the federal government to borrow, so we're able to pay the benefits," Phillips said.
This means that recipients will still receive their benefits, but it will come at a cost which may eventually affect the way businesses are taxed.
In the meantime, the department's advisory council is coming up with ways to solve the crisis.
A decision on the recommendations could come as early as November.
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