Raleigh, N.C. — Gov. Pat McCrory says he will sign an unemployment overhaul that will cut off emergency benefits for some 80,000 jobless North Carolinians.

"I will not support the extension of unemployment beyond July of this year," McCrory told a meeting of the Tobacco Growers Association of North Carolina. "I think we need to now draw the line." 

The proposal would change North Carolina's unemployment system in order to pay down a debt of $2.5 billion, racked up during the recession when state unemployment taxes didn't keep up with jobless claims. It would raise taxes slightly on employers, while making steep cuts to the amount, duration and access to benefits for laid-off workers.

If the bill takes effect July 1 as written, it will trigger a provision in the "fiscal cliff" bill that governs federal emergency extended unemployment benefits.

Because North Carolina's quarterly unemployment rate is still higher than 9 percent, long-term unemployed workers here are eligible for the federally-funded benefits.

At present, about 81,000 people are receiving those benefits, which bring about $100 million into the state's economy every month.

But if lawmakers cut the state's unemployment benefits, jobless workers here will lose their eligibility for federal assistance. Their checks will stop when the state overhaul takes effect.

Despite that impact, House and Senate leaders say they won't delay the overhaul. McCrory said he won't delay it, either.

"I refuse to let us continue to live off of a credit card. We're going to pay off the credit card. We're going to change the rules and policies," he said.

"The current status quo of how we've done unemployment has not put more people on the payroll of private-sector jobs. It's put more people on the government payrolls of unemployment," he said. "We can no longer afford to do that in North Carolina. We are changing our policy now, and that will be one of the first bills I sign." 

House Speaker Thom Tillis says he expects the overhaul bill will win final House approval Tuesday. It then goes to the Senate, where President Pro Tem Phil Berger says it has strong support. It could be on the governor's desk by next weekend.