Jobless debt drops, legal changes sought

The McCrory administration says the state's massive federal debt for unemployment benefits is dropping quickly. They're seeking some other legislative changes this summer.

Posted 11:18 p.m. May 12, 2014 — Updated 3:11 a.m. May 13, 2014

Laura Leslie

RALEIGH, N.C. — The McCrory administration announced Monday that the state’s massive federal debt for unemployment benefits is more than halfway repaid.

At a news conference at the Division of Employment Security headquarters, Assistant Commerce Secretary Dale Folwell said the $2.6 billion debt has been whittled down to just over $1 billion within the past 14 months. He said it’s on track for an early payoff, which will save money for employers who face federal tax consequences each year the state owes the money.

“Had the legislature and this governor and this team not made some of the difficult decisions regarding the extension of unemployment, that debt would now be well over $3 billion,” Gov. Pat McCrory said, referring to the 2013 decision to implement unemployment reforms on July 1, rather than waiting until Jan. 1, 2014. That decision halted federal extended benefit checks for more than 50,000 long-term unemployed North Carolinians.

“Instead, we’ve had a debt reduction of nearly $1.5 billion since we’ve been in office. That’s a pretty big improvement,” he said. “We plan to get that to zero three years ahead of time.”

McCrory and Folwell also said they’re asking state lawmakers for two pieces of legislation this session.

As WRAL News reported last year, the division now requires people applying for jobless help to produce photo identification at a face-to-face meeting within the first four weeks of benefits. That change took effect Feb. 1.

“We’re currently asking for it. We need a back-up law,” McCrory said.”We think we’re in jurisdiction now, but we want another law to back us up.”

The other piece of legislation would clarify that the state does not have to release records of contested unemployment cases to attorneys every day.

Employment attorney Monica Wilson sued the state earlier this year after Folwell announced he would end the 10-year practice of handing out upcoming case notices to lawyers every morning. That practice was a huge boon to local law firms, but Folwell said it was unfair to more distant law firms.

The issue led to a legal standoff. A Wake County judge ordered the state to continue the daily release of records, while the U.S. Department of Labor ordered the state to stop the release, saying it violates federal law.

McCrory said he's asking lawmakers to resolve the conflict.

“We’re going to be asking for permission to stop allowing what we consider confidential information on the applicants that are coming through the employment security area,” McCrory said. “That information belongs to us, belongs to the applicant. It does not belong to the lawyers who want to take advantage of that information.

“We need a law to help us with that, and by the way, the federal government is asking us to pass that law,” the governor added. “We need that law to continue funding.”

McCrory said lawmakers are already working on the records issue, and he expects the photo ID provision will have strong support, too.

Folwell agreed, pointing out that federal law has required a photo ID for employment since the terrorist attacks of 2001.

“If it’s a requirement to get a job, why shouldn’t it be a requirement for unemployment?” he asked.

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