RALEIGH (AP) Gov. Pat McCrory signed into law Tuesday changes to North Carolina’s unemployment insurance system that supporters say puts the plan on firmer footing and gives businesses more certainty. Critics say it will devastate the jobless with decreased benefits or none at all.
McCrory signed the bill in his state Capitol building office, a governor’s spokeswoman said. The media wasn’t invited to the signing, which was attended by several legislators who shepherded the bill quickly through the General Assembly in the first two weeks of this year’s work session.
The unemployment plan repays $2.5 billion owed the federal government for jobless benefits paid since the Great Recession by cutting maximum weekly jobless payments from $535 to $350 and the maximum number of weeks from 26 weeks to 12 to 20 weeks, depending on the state unemployment rate.
The bill also raises state unemployment taxes, partially through the elimination of a zero-percent rate that about 30,000 businesses have been paying. Federal taxes will continue to rise by $21 per employee per year until the debt is repaid and a 20 percent state surcharge will continue a little while longer.
McCrory, a Republican, announced during Monday night’s State of the State address he would sign the bill, saying the state is going to stop borrowing money from the federal government without knowing how to pay it off.
“This bipartisan solution will protect our small businesses from continued over-taxation, ensure our citizens’ unemployment safety net is secure and financially sound for future generations, and help provide an economic climate that allows job creators to start hiring again,” McCrory said Tuesday in a statement.
Federal emergency jobless benefits also will stop July 1, when the law takes effect and applies to people making jobless claims. The U.S. Department of Labor said the decision by North Carolina to refuse the extra year of benefits after six months will affect 170,000 people and hold back $780 million in weekly benefits.
All told, the changes will repay the debt by late 2015 about three years earlier than if nothing had been done and will put more than $2 billion in reserve by the end of the decade to pay future claims in the next economic downturn.
Critics accused McCrory and Republicans of supporting an imbalanced solution to the debt, whose origins go back 20 years after a series of employer tax cuts began but were never restored when benefit reserves ebbed. Unemployed workers will be hurt permanently with benefit cuts while many of the taxes will expire, Democrats and their labor allies argue.
The Republican-led Legislature also has pushed legislation early in the session that would refuse federal money to expand Medicaid to an estimated 500,000 uninsured residents through the federal health care overhaul.
“What we’ve seen in a matter of weeks is an all-out assault on our uninsured, the unemployed and the poor,” state Democratic Party Chairman Randy Voller said earlier this week.
McCrory’s bill signing is his second as governor. He signed his first bill Monday on high school diplomas and vocational education in a public event in Asheboro.