Today’s N&O discusses North Carolina’s growing debt – to the Federal Government for unemployment benefits.
North Carolina’s high unemployment rate has stuck the state with $1.4 billion in debt – money that officials don’t know how they’ll pay back.
It gets worse. The debt is still rising.
The problem is that with about one-half million people out of work, the state has more unemployment claims than it can pay. So it has been borrowing from the federal government since February, sometimes as much as $20 million a day.
The tally will rise to at least $2 billion by the end of the year, said David Clegg, deputy chairman and chief operating officer of the N.C. Employment Security Commission. Next year, depending on the economy, could add another $2 billion to the tab, he said.
I wrote recently about North Carolina state and local governments’ debt problems. In that report, the latest reported unemployment benefit debt owed to the federal government totalled $925 million as of September. Based on today’s article, that total has risen half a billion in just a couple of months.
What is even more discouraging is that the state appears to have no plan how to pay back the Feds. Officials seem to be hoping that the federal government forgives at least part of the loan, but they fail to comment where they believe the federal government will come up with the money.