News: CJ Exclusives

N.C. House Poised To Pass Reform In Unemployment Insurance

Final vote speeding repayment of $2.5 billion debt to feds could come today

RALEIGH – Following two hours of debate, the House gave initial approval to a bill aimed at speeding up the retirement of the state’s $2.5 billion debt owed to the federal government for unemployment benefits.

“This is a debt of all employers across the state of North Carolina,” said Rep. Julia Howard, R-Davie.

The bill aims to accelerate repayment of the debt by increasing unemployment taxes on some businesses while reducing the maximum benefits that some laid-off workers receive and the number of weeks of eligibility.

Without a change, the debt would likely be paid back in 2019.

“We can have this debt repaid by the last quarter of 2015, possibly 2016,” Howard said.

The bill passed by a largely party-line vote of 78-41, although some members of both parties did stray from their party caucus position.

Rep. Paul Luebke, D-Durham, was one of the Democrats who did not cross party lines. He took issue with an assertion made by Howard that all stakeholders involved in the issue were at the table when the bill was hammered out.

“The unemployed of this state had no advocate at the table,” Luebke said. “Please remember the unemployed are not at fault.”

Luebke said that reducing the benefits would mean that some unemployed workers would not be able to pay their mortgages and force them into foreclosure.

The bill increases taxes on businesses that currently pay no unemployment insurance taxes and those that already pay the highest rate of taxes because of their history of laying off workers.

It would reduce the maximum weekly benefit from $535 to $350 and reduce the duration of benefits from 26 weeks to 20 weeks. The duration could be lowered to 13 weeks if the unemployment rate sees significant improvement.

The approval came after supporters of the bill beat back six Democratic-sponsored amendments that would have softened the cuts in benefits. They included proposals to keep the maximum weekly benefit from following, or lowering the benefit by less than the proposed bill, changing the way weekly benefits are calculated, and keeping the duration at 26 weeks.

One proposal, sponsored by Rep. Winkie Wilkins, D-Person, sought to change the effective date of reduced benefits so that approximately 80,000 North Carolina receiving long-term unemployment benefits would be able to collect them until the end of the year.

That proposal went down also.

Democrats crossing party lines to vote for the bill were Reps. William Brisson, D-Bladen, Jean Farmer-Butterfield, D-Wilson, Ken Goodman, D-Richmond, and Paul Tine, D-Dare.
Republicans voting against the bill were Reps. Dana Bumgardner, R-Gaston, Kelly Hastings, R-Gaston, and Andy Wells, R-Catawba.

Rep. Susi Hamilton, D-New Hanover, had an excused absence.

If the bill becomes law, the benefit reductions would take effect on July 1. The tax increases would take effect Jan. 1, 2014.

A final House vote is expected today. If it passes its final House vote, it will go to the Senate.

Barry Smith is an associate editor of Carolina Journal.