North Carolina’s massive debt to the federal government for funds borrowed to cover unemployment insurance is on pace to be paid off by the end of 2015, according to Division of Employment Security head Dale Folwell. From the N&O:
The state’s debt to the federal government, money it borrowed to pay unemployment benefits, peaked at $2.8 billion and triggered higher federal unemployment taxes for the state’s employers.
That prompted the Republican-led legislature to revamp its unemployment system — over the protests of Democrats and advocacy groups for the poor — in order to accelerate repayment of the debt. The measures included reducing the maximum benefits a laid-off worker could receive by one-third as well as cutting the maximum weeks of benefits.
Sen. Bob Rucho, R-Mecklenburg County, embraced Folwell’s message that the debt should be paid off at the end of next year.
“Good news for everyone,” he said. “It’s good to see a plan working like we had planned.”
Without the UI reforms, the debt likely would not have been paid off until sometime in 2017, costing the state millions more in interest payments and further hiking UI taxes on employers.