The state’s Revenue Laws Study Committee met again this morning, primarily to discuss the state’s unemployment insurance debt to the federal government.
As most of you already know, many states (including NC) had to borrow billions of dollars from the federal government to cover expanding unemployment insurance benefits during the great recession. During a presentation to the committee, a member of the legislature’s fiscal research staff discussed the current state of NC’s UI fund. The findings included:
- NC still owes $2.5 B to the federal government, along with an estimated $500 million in interest payments
- Under the current repayment plan, the debt will be paid off in 2019, and will be financed by increasing UI insurance rates on employers
- The repayment plan already cost employers an additional $80 million last year, another additional $160 million this year (above and beyond previous UI insurance tax rates)
- If no changes are made to the repayment plan or UI benefits, it is projected the extra cost to employers would rise to $718 million in 2019 alone
- There is also the concern of ensuring an adequate amount of reserves in the UI trust fund, even after the federal debt is paid off. For instance, if NC would want to be eligible for interest free borrowing from the Feds in the future, it would have to establish a reserve of $2.4 B in the UI fund – no easy task
Fiscal policies will certainly be front and center for the incoming governor and legislature – the unemployment insurance program needs to be among them.
What are you people thinking?! You knew the money for Unemployment benefits would have to be paid back to the federal government! So if you knew it would put us in a bind later why did you take the money!? And I just heard on the news you want to lower the Unemployment benefits! So what does this mean for those of us who did not face unemployment but may be facing unemployment in the near future? While all of the unemployed people were getting extended benefits during the recession the rest of us who face it in the near future will not draw enough to pay our bills or keep our homes! I think you should think about all of of the future displaced workers who will not have the same benefits as the previous ones. How is it going to help the state pay off the debt faster if future displaced workers become homeless because they can not make ends meet? The state will be paying with other funds which will still leave NC short on funds. This is ridiculous! You people are paid to make wise decisions and to serve the people of this state. Instead none of you think about the consequences that some of us will have to face when you cut our unemployment benefits! We deserve the same amount of money the previous displaced workers got. It was not much then but now you want to cut it down below poverty level! How are WE going to make it while YOU are sitting in your big fine warm houses sipping your wine or what ever you drink and having your holiday parties while those of us without jobs are out on the streets because we could not make our house payments! What a slap in the face! We put you in office and you step all over us! You need to leave the already measley amount of unemployment benefits alone and plan to pay the debt to the federal government by 2019 with the current repayment plan! Don’t hurt the rest of us! You would rather save the employers a few dollars and make the workers suffer! Without workers there are no companies! Without companies there are no taxes paid by the companies and certainly not by the displaced workers! If there are no taxes paid there are no funds to pay your BIG FAT CHECKS!!! Your proposed changes to the unemployment insurance program will hurt those of us who work & pay taxes! We are going to be hurting financially and it bothers me that you don’t even care about us! We can’t pay taxes with no money! It will come down to ‘Do I feed my family? or Do I pay my bills and taxes?’ What do you think I would choose? What would you choose? If you people would not misappropriate funds our state would have the money it needs. I should not have to receive less unemployment benefits because the ones before me got to draw more! I realize my voice does not count and does not matter to you! But don’t you think it should? – Diana Minter