The state House has voted to make North Carolina the 26th state to withdraw from the Federal Pandemic Unemployment Compensation program, which provides an extra $300-a-week in jobless benefits to the unemployed because of the COVID-19 pandemic.
Senate Bill 116 passed in a largely party-line 71-36 vote on Wednesday, June 3. In addition to ending the federal jobless benefits, the measure would exempt unemployment benefits from tax income tax and make expenses incurred from Payroll Protection Plan loans tax deductible on businesses’ state taxes.
“You can leave this building and drive within a quarter mile and you can find help wanted signs everywhere,” said House Speaker Tim Moore, R-Cleveland. “Workers are needed. Right now, we have a system in place that is essentially incentivizing not working. That is not right. That is not good for people, that is not good for this state.”
The federal jobless benefits are set to expire automatically Sept. 6, but Republican members of the House urged immediate action to get North Carolinians back into jobs. They said the state’s summer tourist season is ramping up in the mountains and on the coast.
“We’ve started our tourist season, and many of our businesses cannot open because they don’t have employees,” said Rep. Ray Prickett, who represents parts of Ashe and Watauga counties in western North Carolina.
“This is killing small-town North Carolina,” said Rep. Brenden Jones, R-Columbus. “Many of you get to sit in the larger cities and you don’t see the effect of this.”
Under the bill, the unemployed would have another month to find a job before their federal benefits disappear. The state has 240,000 people on the unemployment rolls, while the state’s workforce system, NCWorks, lists more than 200,000 job openings.
Democrats used the debate as an opportunity to argue for more tax subsidies for child care and raising the minimum wage to $15 per hour. They also objected to the idea that people are remaining on the unemployment rolls due to laziness.
“Let’s not denigrate the people who are stuck and unemployed, because I promise you they don’t want to be home not working, not productive, and hearing people like us who still have employment talk about them like there is something fundamentally wrong with them character-wise and that they are somehow living off of us,” said House Minority Leader Robert Reives, D-Chatham.
“Cutting these benefits not only hurts individuals and families, it hurts our communities and our state because it will cost us $500 million in lost wage-replacement that we are receiving,” said Rep. Brandon Lofton, D-Mecklenburg. “That’s what we would give up. So, we’re taking money out of peoples’ pockets during a recovery and giving up $500 million that’s coming into our economy.”
Moore offered the amendment in hopes it would dispel objections from Democrats that many North Carolinians can’t rejoin the labor force due to lack of child care. The amendment would allocate $250 million in federal COVID-19 relief dollars for subsidized childcare for eligible children. The amendment passed in a bipartisan voice vote, but only seven Democrats ended up peeling off and voting for the full bill.
In a statement sent to WRAL-TV, a spokesman for Gov. Roy Cooper did not directly say the governor opposes the idea of stopping the federal bonus payments, but he indicated the funds should still be spent to boost the state’s economy.
The House passed S.B. 116 just two days after the Senate OK’ed a measure to convert the $300-a-week federal jobless benefits into bonuses worth up to $1,500 apiece to get the unemployed back into the workforce. Republicans in the U.S. Congress are also pushing a measure to create a $900 bonus if unemployed workers find a job again.
Former N.C. governor Pat McCrory, who is now running for the Republican nomination for the open U.S. Senate seat in 2022, waded into the debate with a statement posted on Facebook: “The liberal Nanny State first wants to pay people more not to work … now some Washington Politicians in our own party want hard-working taxpayers to pay CASH to other people to go to work! This is all debt … our debt! We’ve got to stop growing the Nanny State.”
“Unemployment compensation should only be a short-term backstop for those who genuinely can’t find work … not a slush fund! Stop adding even more government roadblocks to letting free enterprise work!”