Raleigh, N.C. — The Republican majority of the House Finance Committee beat back efforts Thursday morning to soften legislation slashing jobless benefits as part of an overhaul of the state unemployment system.
After a 23-13 party line vote, House Bill 4 is expected to go to a floor vote Monday night.
The bill cuts the maximum weekly unemployment benefit from $535 to $350 and replaces 26 weeks of state-paid benefits with a sliding cap of 12 to 20 weeks, based on the health of North Carolina's economy. It also slightly raises unemployment insurance taxes on employers.
Analysts said the changes would help the state repay $2.5 billion to the federal government three years faster than leaving the system unchanged. North Carolina borrowed the money to pay jobless benefits during the recession.
"This is going to cost us jobs if we don't act," said Rep. Harry Warren, R-Rowan. "It's not an easy solution."
Other Republicans voiced similar regrets about cutting jobless benefits but said the state needs to get its unemployment insurance system on sound financial footing.
"We need to emphasize putting people back to work rather than compensating them for being unemployed," said Rep. Jeff Collins, R-Nash.
Proposed amendments by Rep. Paul Tine, D-Dare, to set the maximum benefit at $425 a week and raise taxes on employers a bit more and by Rep. Deborah Ross, D-Wake, to use a 1993 formula for calculating benefits were defeated by party-line votes. The GOP didn't even allow votes on two other amendments, calling them out of order.
Rep. Paul Luebke, D-Durham, pleaded with the committee for more balance to the bill. He noted that the benefit cuts amount to about $225 million taken out of the pockets of unemployed people statewide, while the tax increases on employers would total only $20 million.
"The unemployed were not at the table when this deal was cut. Don't let anyone tell you otherwise," Luebke said, calling the benefit cuts "reprehensible."
If approved, the changes would take effect July 1, ending federal unemployment benefits received by thousands of North Carolina residents who have been out of work for months. The benefits would have continued through the end of 2013 under a bill Congress passed on New Year's Day to avert the so-called "fiscal cliff," but changing the state unemployment benefits voids that provision of the federal law.
The committee debated the bill for more than 90 minutes before allowing four minutes of public comment by representatives of the N.C. Justice Center and the AFL-CIO.
"It's not balanced," Bill Rowe, general counsel and director of advocacy for the Justice Center, said of the bill. "Employees will be paying more than 70 percent of this debt in reduced benefits."
Rowe urged lawmakers to let the bill sit in committee for at least a week to give their constituents a chance to voice their opinion on the proposal.