The Republican-authored plan to more quickly pay off the $2.5 billion unemployment benefit debt that North Carolina owes to the federal government sought to balance the cost burden between businesses and workers.
But the proposal approved last week by a legislative study committee asks too much of workers and too little of businesses.
The plan aims to pay off the debt three years early by 2015 and replenish the state’s unemployment trust fund that was wiped out by the Great Recession. Businesses will see their federal unemployment insurance taxes go up by $21 per employee every year until the debt is paid off.
The plan slightly increases the range of tax rates employers must pay and eliminates the zero-percent rate paid by top-rated businesses.
But it cuts the maximum weekly benefit for workers from $525 to $350 and reduces the maximum number of weeks a jobless claimant can receive benefits from 26 weeks to 20 in periods of the highest unemployment.
It also establishes a new sliding scale for minimum and maximum benefits based on the state’s unemployment rate. The benefit period would range from five to 12 weeks in periods of very low unemployment.
The N.C. General Assembly cut unemployment taxes on businesses six times between 1992 and 2000. That was at least as much of a factor as the Great Recession for the debt the state is now saddled with.
Unemployment benefits paid to displaced workers help boost local economies by paying for rent, food and other living expenses. Many working families depend on these benefits to survive and don’t deserve to see either the amount or length of benefits arbitrarily decreased just to save the state and businesses some money.
One of the proposal’s authors, N.C. Sen. Bob Rucho, R-Mecklenburg, said the plan will be debated further before it goes up for a final vote. That means there’s still time for lawmakers to adjust the burden the plan places on businesses and unemployed workers.
The state’s most vulnerable residents should not have to pay more than their fair share of the plan’s costs.