Throwback: ‘N.C. Employers Paying More In Federal Unemployment’ Because of $2.8 Billion Debt
Now: Multi-Billion Dollar Unemployment Trust Fund Built-Up Thanks to Republican Reforms
Raleigh, N.C. – In 2007 and 2008, as the state of North Carolina was staring down the recession, it was ill-prepared for the number of citizens that would lose their jobs thanks to decades of Democratic tax-and-spend policies. In 2007, the state's Unemployment Insurance Trust Fund balance was $394 million, and by the end of 2008, it had shrunk to about $191 million.
Then, in February 2009 the trust fund hit zero, and the state borrowed money from the federal government to cover unemployment payments.
Businesses paid the price for the Democrats’ debt, with an annual $84-per-worker extra tax on hiring workers at the height of the recession, to pay down the state’s debt.
When Republicans gained the majority in the General Assembly in 2011, they inherited a debt balance of more than $2.2 billion.
By May 2015, the debt was wiped out. Thanks to reforms put in place in 2013 the state paid off the debt early, saving employers in the state $282 million in Federal Unemployment Tax Act penalties.
“North Carolina was in a precarious financial position going into the last recession,” Unemployment Insurance Committee Chairman Sen. Andy Wells (R-Catawba) said. “Democrats in the General Assembly didn’t prioritize making sure the fund was solvent. Their lack of foresight meant our state had to go into debt to support our citizens when they needed us the most and put business owners on the hook to help pay it back.”
Going into the COVID-19 pandemic, the trust fund was nearly $4 billion. So far, the state has paid out nearly $560 million to assist workers that were laid off due to the pandemic.
“After seeing the devastation brought on by that recession, Republicans in the General Assembly took initiative and reformed the state’s unemployment system to ensure the state’s workers and businesses could more quickly bounce back from a recession,” Wells said. “North Carolina’s trust fund will remain solvent for months to come, while deep blue states like California are already taking on debt to pay unemployment benefits.”