Unemployment insurance debt fix passed by NC House

Published 12:00 am Wednesday, February 6, 2013

RALEIGH — An overhaul of North Carolina’s unemployment insurance system has cleared one chamber at the General Assembly and may quickly be heading to the other.
The House voted Tuesday in favor of the bill that eliminates more quickly nearly $2.6 billion the state owes the federal government for jobless claims and generates a $2 billion cushion for the next recession. The margin was similar to Monday night’s preliminary vote on the House floor.
Last week one of the bill’s co-sponsors, N.C. Rep. Harry Warren, of Rowan County, told the Post the action wasn’t “a pretty bill,” but took a step in the right direction for the state’s economy.
“It will cause North Carolina to repay the debt to the federal government back in about six years less time,” Warren said.
Employers who have terminated employees will continue to pay more each year until the debt is paid, Warren said, burdening small business owners and possibly hindering economic development.
Warren said critics and some media outlets have focused on the drop from $550 to $350 a week. But most claimants won’t be affected, Warren said.
“Approximately 16 percent will actually be affected,” Warren said, noting that the average claimant is awarded around $297 a week.
The bill would require higher taxes for businesses but reduce maximum benefits for unemployed workers and eliminate most “good cause” exceptions to receive benefits.
N.C. Rep. Carl Ford, also of Rowan County, said last week he thought the bill would pass, but said some legislators who focused on the short term wouldn’t like it.
“It feels like pulling the band-aid off real fast, but in the long run we’ll all be better off — all of us,” Ford said.
Warren and other Republicans who crafted the bill again turned back more Democratic amendments Tuesday and sent the proposal on to the Senate, where the chamber’s finance committee was set to consider similar legislation Wednesday afternoon.
Bill supporters said the benefit reductions will bring them more in line with other Southeast states and will apply to workers who lose their jobs starting July 1. But the enactment date also means federal emergency extended job benefits approved last month by Congress will end six months early, cutting off those benefits to 80,000 workers receiving a total of $25 million a week, bill opponents say.
During the two-hour debate, House members on both sides of the issue sought to persuade colleagues that they empathize with the jobless and understand what it’s like to be unemployed.
First-term Rep. Carla Cunningham, D-Mecklenburg, said she’s a registered nurse who’s been unemployed three times in recent years. And Rep. Sarah Stevens, R-Surry, said her husband has been long-term unemployed twice in the past 12 years.
Worker advocates have tried — unsuccessfully to date — to slow down the pace of the bill at the Legislative Building and get legislators to place more of the burden of repaying the debt upon businesses and less on the jobless that will receive less.

The Associated Press contributed to this report.