ODJFS director warns Ohio unemployment trust fund could go negative by 2032 without policy changes; proposes IT replacement and lists solvency levers

Matt Damschroder, director of the Ohio Department of Job and Family Services, briefed the House Public Insurance and Pensions Committee on May 20 about the structure, funding and projected solvency of Ohio’s unemployment insurance trust fund, and described tools lawmakers can use to shore up the fund.

Damschroder said the trust fund balance is about $1,700,000,000 and that, on current assumptions and assuming no recession, the fund is projected to go negative in 2032. “It is projected to go negative or insolvent by 2032, and that assumes that we do not experience a recession,” he told members. He emphasized projections vary with different economic scenarios and that a recession would accelerate insolvency.

Damschroder reviewed how unemployment insurance is financed and administered in Ohio. He explained two federal-state tax streams: the Federal Unemployment Tax Act (FUTA), a federal tax on employers that funds administration through the U.S. Treasury, and state-level SUTA taxes that pay benefits. He described two employer categories: contributory employers (most private-sector employers, which pay experience-rated taxes) and reimbursing employers (typically government and nonprofits that reimburse benefits dollar-for-dollar).

Key numbers presented to the committee included: - Trust fund balance: about $1.7 billion (current). - Projected negative…