A plan to eradicate North Carolina’s massive unemployment-benefits debt would mandate that businesses pay higher taxes and reduce payments that unemployed workers may receive.
The plan was released Wednesday by the Revenue Laws Committee of the N.C. General Assembly. The plan was cobbled by the Legislature’s leadership, business organizations and others.
Under the proposal, the nearly $2.5 billion the state owes the federal government because business-tax contributions have not kept up with unemployment-insurance claims would be eliminated by 2015. Plan supporters said that without the recommended changes, it would take three to four years longer to get rid of that debt.
Under the proposal, the maximum weekly benefit for jobless workers would be $350, down from the current $525. The maximum number of weeks to receive benefits would decrease from 26 to 20.
The proposal would raise slightly the minimum and maximum tax rates businesses must pay.
The proposal has opposition.
“The changes to the unemployment insurance system being pursued by Revenue Laws Committee members will significantly reduce benefit amounts and the duration of benefits while doing nothing to address the long-term financial footing of the unemployment insurance system,” said Bill Rowe, director of advocacy at the North Carolina Justice Center.
“The lack of opportunity for public comment or the ability of workers to provide input into the process is of serious concern to the policy design,” said MaryBe McMillan, N.C. State AFL-CIO secretary-treasurer. “The failure to hear from and account for the impact of benefit cuts to workers, their families and communities will have a significant and negative effect on the state’s economic recovery.”
On Tuesday, a petition with more than 575 signatures from North Carolinians was delivered to members of the General Assembly’s Revenue Laws Committee, according to a news release from the North Carolina Justice Center. The North Carolina Justice Center and a coalition of partners along with the 575 petition signers called on the committee to give greater opportunity for public input and delay a vote at its Wednesday meeting, but that did not happen.
The Associated Press contributed to this article.