NC debt plan calls for cuts in jobless benefits, slight tax hike for businesses
A plan to payoff North Carolina’s federal unemployment benefit debt would mean a reduction in jobless benefits and a slight tax hike for businesses.
A General Assembly committee produced the proposal that would eliminated the $2.5 billion debt the
state owes the federal government in 2015. North Carolina was one of several states that borrowed federal dollars to support its unemployment benefit system during the Great Recession.
Lawmakers say the plan to repay the federal debt will recharge the state’s unemployment trust fund.
But not all are on board with this plan, however. Alex Sirota of the North Carolina Budget and Tax Policy Center says the cuts to unemployment benefits would come at a tough time for many, “A reduction in the maximum duration of benefits from 26 to 20 weeks at a time when more than half of those who have been out of work, have been out of work for 26 weeks or more, is going to create significant financial challenges for families.”
Sirota feels that better future planning for unemployment benefits is necessary to avoid a similar situation in the future.
In addition to trimming the number of weeks a person could receive unemployment benefits, lawmakers are considering reducing the maximum amount paid out in a week, which is currently at $535.