Bill to overhaul unemployment advances to NC Senate

Legislation to slash the state’s unemployment benefits zipped through the House

dranii@newsobserver.comFebruary 5, 2013 

A controversial bill that calls for a top-to-bottom overhaul of the state’s unemployment system, including a major cut in benefits to jobless workers, is taking center stage in the Senate after being approved by the House.

On Tuesday the House gave final approval to the Republican-backed bill by a 77-42 vote after rejecting two more amendments proposed by Democrats that were designed to soften the negative impact on the jobless. Tuesday’s vote, on the heels of Monday night’s preliminary approval of the bill, sends the bill to the Senate.

The bill zipped through the House a mere six days after being introduced on the first day of the legislative session, and Senate Republicans also appear eager to push it through. The Senate Finance Committee put the measure on its Wednesday afternoon agenda even before the full House took its second vote.

The bill could make it to the Senate floor as early as Thursday.

“This is a pretty big bill to us,” said Sen. Bill Rabon, sponsor of the Senate version of the bill and co-chair of the Finance Committee. “We are not going to let it languish.”

Senate Minority Leader Martin Nesbitt said he expects his fellow Democrats to try to amend the bill and is hoping that the Senate will act deliberately.

“It’s not unusual for something to blow through one (chamber) and go to the other and slow down,” Nesbitt said. “We need to be more creative and more balanced in our approach.”

But Sen. Floyd McKissick, a Durham Democrat, fears that the Republican majority could ramrod the bill through the Senate.

“Since the governor seems to be saying he doesn’t have any objections to it,” McKissick said, “I can’t imagine why it would slow down.”

Digging through the debt

The bill would help pay down the $2.57 billion that the state borrowed from the federal government in recent years – and is still borrowing – to cover the first 26 weeks of jobless benefits. That debt has triggered higher federal unemployment taxes for businesses, which are upset about the prospect of their taxes rising $21 per employee per year until the debt is erased. Employers pay both federal and state unemployment taxes; individuals don’t pay any unemployment taxes.

The bill aims to accelerate the repayment of the debt by roughly three years by slightly raising state unemployment taxes paid by most businesses and expanding the number of employers that contribute to the state unemployment trust fund, while at the same time significantly cutting unemployment benefits.

The bill cuts the maximum benefits paid to unemployed workers by roughly one-third, from $535 a week to $350. It also would reduce the maximum weeks of benefits from 26 to a sliding scale of between 12 and 20 weeks, depending on the unemployment rate.

But by cutting state benefits as of July 1, it also cuts off emergency federal benefits for unemployed workers that kick in after state benefits expire. Federal law requires states to maintain their weekly benefit amounts to receive the extra benefits.

Republicans argued Tuesday that the higher federal debt has triggered what is in effect a tax on jobs that is hurting the state’s economy and its ability to attract new industry.

When you tax something, “you’re going to get less of it,” said Rep. John Blust of Guilford.

But Democrats complained that the size of the benefits cuts is unfair and callous.

“This bill isn’t going to bring a rush of new jobs to the state,” said Rep. Verla Insko of Orange County. “Already this state is rated one of the best places to do business.”

Staff writer John Frank contributed to this story.

Ranii: 919-829-4877

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