State officials are celebrating a $1 billion surplus in the North Carolina unemployment trust fund. The Wednesday announcement represents a significant swing from just two and a half years ago when the state owed the federal government $2.8 billion. This past May, the state paid down its debt a year before the due date. The savings have continued.
Because the state is out of the red, businesses no longer face a 20-percent penalty. Combine that with the effects of a full federal tax credit and employers will save employers an estimated $600 million this fiscal year.
This major tax cut is the latest news of North Carolina’s 2013 Unemployment Insurance reforms bearing fruit. A $600 million tax cut on employers will provide a significant boost to job creation in NC.
I wrote about this last month, highlighting the fact that the UI tax changes have already saved employers half a billion dollars and that these tax cuts may amount to be more significant than the historic income tax cuts also passed in 2013.
These reforms over the last few years are the main reasons North Carolina’s business tax climate ranking has climbed from 7th worst in the nation to be on pace to be the 13th best by 2017.