Local News

Unemployment Claims May Force Higher State Taxes For Businesses

Posted November 27, 2001

— Unemployment claims are quickly depleting the state's trust fund. The fund is drying up so fast, employment security commissioners are considering higher taxes for businesses.

The company that owns Pro Tire on New Bern Avenue in Raleigh pays unemployment insurance on each of its 35 employees. If those fees go up to bolster the trust fund, small businesses warn the move could create a vicious cycle.

"Payroll is the No. 1 expense, so that's where you go to. To raise my expenses because of unemployment is just going to cause more unemployment," said business manager Mike White.

North Carolina's unemployment rate has jumped from 3.9 percent in October 2000 to 5.5 percent this past October. That same month, the state paid out a record $98 million in jobless benefits.

"We broke the record set in July of $88 million. It's drawing down the fund quite fast," said Mike Tavernise of the Employment Security Commission.

Laid-off truck driver Roderick Dunn is one of the people drawing on the fund. He is part of the growing number of unemployed people trying to get by while he looks for another job.

"It's been pretty tough, you know, because my wife recently got sick and we got a couple of mouths to feed. It's getting kind of hard sometimes," he said.

If the prospects do not pick up soon, businesses like Pro Tire will get the bill.

"I'm willing to pay my share and I'm willing to pay it if it goes up. I just don't like it," White said.

Employment Security commissioners will meet on Thursday to decide on higher taxes for businesses. They can also tap into a reserve fund to cover claims.

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