BTC BRIEF: Financing Unemployment Insurance - Fiscally Responsible Steps to Trust Fund Solvency for Policymakers

By Alexandra Forter Sirota
BTC Director
October 2011

KEY FINDINGS:

  • Unemployment benefit payments have generated an estimated $23.3 billion in economic activity in North Carolina communities.1 At a time when consumer spending remains low, these payments not only sustain local businesses but provide a modest support for working families who have experienced job loss through no fault of their own.
  • North Carolina’s unemployment insurance trust fund was below safe levels before the Great Recession hit and put tens of thousands of North Carolinians out of work. A series of tax changes in the 1990s reduced how much employers were required to contribute to the trust fund and took $1.5 billion out of the unemployment insurance system.
  • North Carolina can make two key policy changes to make an unemployment insurance system that is sustainable, equitable and sets the Trust Fund on the path to solvency. These include expanding the taxable wage base and reforming the experience‐based rating system.
     
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BTC Brief - Financing UI.pdf409.5 KB
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