Howard: Time to push ahead with unemployment reform

Posted January 24, 2013

— A key lawmaker says the state House will push ahead with plans to remake North Carolina's unemployment insurance system, even if it means thousands of North Carolinians will lose federal benefits. 

"I’m saying that we have to find jobs for people, This is becoming a welfare program. We have got to get jobs in North Carolina. We have got to stop the extra taxation of businesses," said Rep. Julia Howard, R-Davie. "They (businesses) could be hiring people and creating new jobs."

North Carolina currently offers unemployed workers 26 weeks of state-funded benefits. During the recent recession, the state had to borrow $2.4 billion to pay its share of first-time unemployment claims. As a result, federal unemployment taxes on employers will climb by $21 per worker every year until the debt is paid off. 

Business groups have lobbied lawmakers to head off those tax increases, and Howard is one of the authors of a plan to do just that. Under the proposal, the state would lower the maximum value of weekly unemployment benefits from $535 to $350 and limit state-funded benefits to a sliding scale of up to 12 to 20 weeks.

That plan would run afoul of part of the recent "fiscal cliff" deal. That deal included a one-year extension of federal unemployment benefits for long-term jobless workers in states with high unemployment rates.

Under that law, the federal government will not extend benefits in states that make cuts to their own unemployment benefits. The federal government uses such "maintenance of effort" provisions to ensure states don't shift tax burdens onto federal programs.

So, any cut North Carolina makes to  its own benefits would trigger an end to federally-funded payments for workers who have been unemployed longer than 26 weeks. 

"We have a bill drafted, ready to roll. The federal extended benefits stopped on Dec. 29. We tied everything on that assumption. We didn’t know they were going to extend the benefits a year," Howard said.

Asked what she would say to jobless workers whose federal checks will stop July 1, Howard said, "I'd tell them they got 26 more weeks."

"It's a policy decision," she added. "It is what it is. We have tried to fix the system. This is the best deal we can come up with."

The move has drawn criticism from liberal advocacy groups, who said that Howard's plan already helps cut business taxes at the expense of the unemployed. This further exasperates that disparity, said Harry Payne, an advocate at the N.C. Justice Center.

"This chops it off cold at the start of July," Payne said. "It's horrendous."

Roughly half of the workers who receive unemployment benefits in the state receive those long-term, federally funded benefits. According to the state Division of Employment Security, more than 85,000 were on long-term benefits in December. 

"It's critical to remember that we got into this mess not because of too much benefits, but because in the 1990's, the state cut taxes and cut taxes to the point where it was like having an insurance program without enough money to pay the premiums," Payne said. 

It's unclear if the bill will stand as is. When Sen. Phil Berger, R-Rockingham, the top leader in the Senate, spoke to reporters earlier this month, he said that changes to federal law may force lawmakers to rewrite, or at least delay, plans to rewrite the unemployment insurance system. 

Howard, however, said that it was critical to move ahead.

"It will cost the business community about $500 million to go another year to pay that extra (federal unemployment) tax. We need to get this debt paid. We need to get the trust fund solvent. The longer we wait, the longer it’s going to be," she said.


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  • pijackson4 Jan 28, 2013

    I am losing my job at the end of January. It is being deployed to India. I am lucky though as i will be given a generous severance package and I have a husband will provide for us solely until I find other employment. There are some on unemployment not because of choice but because they were forced. I feel for those who truly need the extra money until they find a job, which by the way is not that easy.

  • skipp2 Jan 28, 2013

    Being from Michigan, guess what happens when benefit deadlines are imposed? People will either do everthing in their power to find work here, or move out of State to find employment."Discontent is the first step in the progress of a man or nation."

  • Terkel Jan 27, 2013

    BeenHere, I agree both parties are to blame for the illegals. But only one party is affiliated with the NAACP and ACLU, and those rabble-rousers are fighting like mad to keep all illegals here and hand the country to them. Surely you saw the one demanding her drivers license, and the wave of stories all summer with illegals getting in front of cameras, identifying themselves, and making demands of us...then walking away undeported. Blame the racemongers. I don't see them protecting the illegal Poles and Lithuanians who are ruining the construction market up North.

  • Terkel Jan 27, 2013

    This plan gives people 5 months' notice that their benes are stopping. That's a lot more notice than workers get when they're about to lose their income.

    I wish the article had also mentioned how short NC is of UE funds because the diversity in charge of ESC gave away half a billion, and she and Bev chose not to attempt to recoup it. No one lost their job over that. The PC appointee was allowed to "step down" two years later and the agency was put under Dept of Commerce. It may have been shortsighted to reduce business taxes, but that was twenty years ago. Let's be fair. Tell the WHOLE story.

  • rosannedisney Jan 25, 2013

    The unemployment $ helps people not have to foreclose on their homes/default on their car payment etc.while looking for new work. Without a place to live (address) and a mode of transportation it is much more difficult succeed in a job search.

  • Progressor Jan 25, 2013

    Cut taxes for the business community, and when the chickens come home to roost, take it out of those unemployed through no fault of their own, not the job destroyer who benefitted from the tax cut to begin with.
    Sounds fair, by republican standards.

  • BeenHereSince67 Jan 25, 2013

    "This chops it off cold at the start of July," Payne said. "It's horrendous."

    Howard, however, said that it was critical to move ahead.

    No doubt, Ms Howard and her rich right-wing buddies in the Legislature will be able to move ahead. They're Rich. What the Repubs don't seem to get is that these poor people who are barely getting by on assistance aren't simply going to go curl up and quietly died somewhere when they run out of everything they need. Both Dems and Repubs in NC have contributed to the unemployment problem by NOT dealing with the Illegal Alien problem. Our Blue collar workers are hardest hit by this crime which is committed by those same Small Business Owners that the Repubs worship so much! The Right is fomenting an actual class war in America. You can only show off the arrogant, "Let them eat cake" attitude for so long before something bad will happen.

  • lolly Jan 24, 2013

    NC has one of the 5 highest unemployment rates in the US.

    Manufacturing, textiles, furnitures making - the pain of NAFTA, WTO treaties, and other Free Trade agreements has decimated NC employment.

    Howard's version of unemployment reform should be renamed as "The race to be poorer than Mississippi".

    When my fellow North Carolinians are slammed to the wayside, through no wrong choice of their own, other than being born in NC, while elitists like Howard blame them for the effects of globalization, it makes me angry.

    Move to Mississippi Julia, and take Art Pope with you!!! NC does not need your "business cures", your meanness, nor your kick them when they are down mean spiritedness.

    If Republicans only want to rule NC once every 100 years, you are on the right track, Julia.