State passes unemployment reform

Bill will affect 170,000 unemployed residents
By Jessi Stone | Feb 15, 2013

The North Carolina House of Representatives and Senate have now passed legislation known as the unemployment insurance reform bill, which will cut unemployment benefits by one-third.

The bill's proponents claim it will help the state repay more than $2.6 billion it owes the federal government for unemployment benefits by 2015 instead of 2019 and also will allow the state to decrease unemployment taxes on businesses. Others claim it is a drastic solution to a short-term problem that will forever harm those who lose jobs through no fault of their own.

Rep. Michele D. Presnell, R-Burnsville, said in an email correspondence that the bill would help create new jobs in the community by not having to increase employer taxes to pay back the debt. Employer taxes are the only source of funds available to the state UI program, which is currently $2.6 billion in the hole.

Rep. Julia Howard, R-Mocksville, is one of the bill’s sponsors. She stated in one of the documents that the federal debt was punishing existing businesses and deterring new businesses from opening in North Carolina.

“As long as the debt exists, North Carolina businesses will pay higher taxes on each employee for Federal Unemployment Taxes,” she wrote. “We have worked with all stakeholders to fix the problem through comprehensive reforms that are fair to businesses and individuals. Under our plan, we’ll be out of debt by 2016 — freeing up capital and providing certainty for businesses to create jobs.”

Sen. Jim Davis, R-Franklin, voted in favor of the bill.

“I am in favor of making unemployment solvent,” he said. “We (the state) owe money to the feds and the interest on that is $70 million a year. We’ve got to get the fund solvent.”

Rep. Joe Sam Queen, D-Waynesville, voted against the bill. While he said he has voted in favor of amendments to mitigate the damage, "I’ve been adamantly opposed to what they’re doing."

Queen said the legislation would deny the unemployed population of North Carolina $600 million in emergency unemployment benefits at a time when the state is still 180,000 jobs short of where it was in 2008 when the Great Recession hit.

“We’re gradually pulling out of it, but this (bill) is exacerbating our recovery – not solving it," he said. "It’s making it more painful for our stressed families.”

Acting U.S. Labor Secretary Seth Harris released a statement Feb. 11 stating that the N.C. legislation would cut off all federally funded Emergency Unemployment Compensation, which would affect 170,000 unemployed North Carolinians, including more than 360 in Haywood County.

“This cutoff is automatic under federal law. I have no discretion to stop it,” Harris warned. “As a result, families struggling to secure their place in the middle class will suffer a grievous blow, and the state’s economy will lose $780 million in federal funds that are vital to reducing North Carolina’s high unemployment rate.”

Unemployment recipients in North Carolina can currently receive up to $535 per week for a maximum of 26 weeks. The bill will limit recipients to receiving a maximum of $350 a week for 12-20 weeks. The amount and duration will be tied to the current unemployment rate.

According to the North Carolina Department of Commerce - Labor and Economic Analysis Division, the current unemployment rate in North Carolina is 9.5 percent, which is higher than the national unemployment rate of 7.8 percent. Haywood County’s unemployment rate is just below the state average at 9 percent.

Larry Parker, public information director for the Division of Employment Security, said as of Jan. 26, 365 people in Haywood County were on federal extended unemployment benefits (Emergency Unemployment Compensation).

“That doesn't mean all 365 got 26 weeks of regular unemployment — but it likely means that most of them are well over six months of benefits at this point,” Parker said in an email correspondence.

Local residents seem torn on the issue and expressed their opinions on The Mountaineer’s Facebook page.

Wende Michelle Goode said even on a budget, $1,400 doesn't go a long way, especially if a family lost a good-paying job and have a car and house payment on top of regular monthly bills.

“Rent or owning around here is $600 to $800. Heating bills run around $150 then add a car payment ($350) and gas ($80) to look for a job and continue to drive where the family needs to go,” she said.

Cody Fouts of Canton said he and his wife lived on $375 a week for a year while having to pay rent, student loans and two vehicle payments.

“We had an HD antenna for TV (only local channels). We lived simple. If people would stop wanting this and wanting that and needing this and that $350 is more than enough especially for a single person,” he said. “Like someone else said its better than $0, just gotta manage it and settle for what you can get. Life has never been fair.”

“My wife and I are self employed. If our business fails, we have no such thing as unemployment,” said Robert Mitchell. “We flip burgers, we wait tables, we do whatever it takes to survive. We are so tired of hearing how hard people on unemployment have it.”