Republicans are expected to take quick action to alleviate North Carolina’s $2.7 billion unemployment debt to the federal government by cutting benefits to jobless workers – sparking the first of many debates this legislative session about the role the state plays in protecting its most vulnerable.
A draft bill is awaiting introduction this week, and lawmakers appear willing to thwart a new federal law blocking states from altering their benefit systems.
The GOP-written measure would cut maximum weekly benefits by a third to $350, make jobless workers wait an extra week before receiving their initial checks, and reduce the weeks of benefits from 26 to a sliding scale of 12 to 20, depending on the state’s unemployment rate. The state also would raise the unemployment tax slightly on most employers.
“If you look at this bill as a whole, there’s pain for everybody,” said state Rep. Julia Howard, the bill’s sponsor. “There are no giveaways here.”
Employers pay for the benefits through federal and state taxes. The federal levy is expected to rise by $21 per worker per year until the debt is paid. The state’s jobless rate is 9.2 percent, the fifth highest in the nation.
The business community is demanding the action to reduce their burden, and the benefit cuts are backed by the powerful N.C. Chamber.
On the other side, advocates for the poor say unemployed workers can’t afford less money when they are struggling to pay bills.
A study produced by a liberal think tank showed that the state’s unemployment benefit fund didn’t have enough money because lawmakers reduced the rate businesses pay to the system from 1992 to 2000. The advocates argue the cuts would hurt the state’s jobless and the economy at a fragile time.
News & Observer staff writers John Frank and Mandy Locke