State Senators gave tentative approval Tuesday to a bill that involves cuts to unemployment benefits and also reforms the current unemployment insurance (UI) system.
If passed, the bill, called UI Fund Solvency & Program Changes, will make many changes to the current unemployment benefits systems.
According to the North Carolina Department of Commerce, in December 2012, Richmond County had more than 19,000 people in its labor force and more than 2,000 of those people were unemployed. This makes Richmond County’s unemployment rate more than 12 percent.
A legislative summary of the bill said that it will reduce the maximum duration of regular benefits from 26 weeks to 20 weeks, will cut the maximum benefit amount by one-third, from $535 to $350 a week, and shut down federally-funded Emergency Unemployment Compensation extension benefits which will cut off federal jobless aid to 80,000 unemployed North Carolina workers and their families.
The changes proposed will be phased in from July 2013 through January 2014, the summary showed.
The summary said, “Effective July 1, 2013, the bill would make the following programmatic changes: require a waiting week for each new benefit claim; repeal substantial fault; eliminate most good cause provisions for leaving work; and redefine suitable work as any work paying 120 percent of weekly benefit amount after 10 weeks of benefits.”
The bill also plans to quickly eliminate the $2.5 billion North Carolina owes to the federal government for unemployment benefits, said the summary.
Unemployment benefits come from the UI Trust Fund. Funding for the UI Trust Funds comes from employer taxes and interest earned on balances, said the summary.
“During economic downturns, the Fund is forced to borrow from the Federal Treasury to pay benefits if the balance in the Fund is not sufficient to pay unemployment benefits. Because of the high levels of unemployment experienced during the Great Recession, the Fund was forced to borrow, resulting in a current debt of $2.5 billion,” the summary said.
State Senator Gene McLaurin, for District 25, voted for the bill and said that as a businessman it was obvious to him the changes that were needed in the unemployment insurance program.
“I was concerned about the impact of this bill on the unemployed people of our state — who are unemployed through no fault of their own. Today I spoke up for our rural communities on the Senate floor and offered an amendment to improve this bill by insuring unemployed workers for 20 weeks (state funded portion), because I realize that finding a job in rural NC is more difficult than in the larger cities. Unfortunately my amendment failed,” McLaurin said.
He said he voted for the bill because he realizes the need to repay the $2.5 billion debt, “the need to focus more on reemployment and retraining our workforce, and to do everything in our power to attract more business and industry to our district.”
McLaurin also said that, “This was a difficult bill for me because it will mean higher taxes on employers and less benefits to unemployed workers after July 1, 2013, but offered a balanced approach that I felt was needed as a step toward economic recovery.”
State Senator Dan Blue, for District 14, voted against the bill and said he did so because the bill is “grossly imbalanced.”
“Once the debt is paid off, workers will still have their benefits substantially reduced,” Blue said. He said that the people who receive unemployment benefits will be “permanently punished and that’s unfair.”
The bill passed by a vote of 36-13, with all of the Republican senators voting for the bill. A final Senate vote will likely happen on Wednesday before the bill goes to Gov. Pat McCrory.
McCrory, who said that he supports the bill, is expected to sign the bill when it crosses his desk.
— Staff Writer Laura Edington can be reached at 910-997-3111, ext. 18, or by email at firstname.lastname@example.org.