RALEIGH (December 5, 2012) – Policymakers unveiled a proposal this morning that will cause extreme harm to unemployed families and North Carolina's economy for years to come by severely cutting unemployment benefits, eligibility, and the duration of benefits, all while doing nothing to address the long-term financial footing of the unemployment insurance system.
North Carolina’s unemployment insurance system has had to borrow $2.5 billion from the federal government in order to pay benefits – a debt caused by a whopping series of tax cuts given to employers in the 1990s and the historic levels of unemployment from two successive recessions in the 2000s.
The unemployment insurance tax cuts for businesses occurred in robust economic times, but this proposal, if enacted, will require unemployed workers and their families to pay for them at a time when they have lost their job through no fault of their own and are struggling to make ends meet.
The proposal is the most extreme reduction of benefit amounts, duration, and eligibility that any state has enacted or seriously considered. It puts North Carolina out of line with other states and disconnects the unemployment insurance system from the economy that it is meant to protect in a downturn. It is a proposal that is neither effective reform, balanced, or fair.
NC does need real reform of its unemployment insurance financing system, but such reforms must be informed by the lessons of the past and the needs of the future. The hope is more thoughtful deliberation and an opportunity for public input will be allowed when the measure is taken up by the legislature in 2013. Too much is at stake for the thousands of unemployed North Carolinians for whom unemployment benefits provide a stopgap against financial ruin while they look for work and too much is at stake for North Carolina’s economy.