Under the Dome

Jobless benefits overhaul takes effect July 1

Gov. Pat McCrory has signed into law a bill that addresses the state's $2.5 billion debt to the federal government by overhauling the state's unemployment system, including significantly cutting benefits for the jobless.

"I will not outsource these tough decisions," McCrory said in a prepared statement. "This bipartisan solution will protect our small businesses from continued over-taxation, ensure our citizens' unemployment safety net is secure and financially sound for future generations, and help provide an economic climate that allows job creators to start hiring again."

Although McCrory called it a bipartisan measure, the Republican-backed bill won just four votes from Democrats in the Senate and just three in the House. Democrats who opposed the measure were frustrated by their inability to gain majority support for numerous amendments that would have softened the impact on the jobless.

The new law, which takes effect July 1, cuts maximum benefits paid to unemployed workers by roughly one-third, reduces the maximum weeks of benefits and cuts off extra federal benefits for unemployed workers. It also raises state unemployment taxes slightly for most businesses.

The stated aim of the bill is to accelerate the repayment of money the state borrowed from the federal government to pay the first 26 weeks of jobless benefits as the unemployment rate soared. The state is continuing to borrow about $25 million a week from the federal government.

As long as the state owes the federal government, unemployment taxes paid by businesses will increase $21 per employee each year. The powerful N.C. Chamber calls that a "jobs tax" that is hurting industry's ability to create new jobs.

Major bills are typically signed into law by the state's governors at a public ceremony -- as McCrory did on Monday when his signing of an education bill was open to the press. But on Tuesday he signed the unemployment bill behind closed doors.

Staff writer David Ranii

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