N.C. borrowing billions for jobless
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.
For purposes of comparison, the state budget for the current fiscal year is $19 billion.
"It's way beyond precedent," Clegg said. During the last recession, the state borrowed a piddling-by-comparison $270 million for its unemployment insurance trust fund.
No plan for paying debt
Right now North Carolina doesn't have a definite plan for paying off the debt. What's most important today, state officials say, is that the state is continuing to pay unemployment benefits.
…The deep recession has made it impossible for North Carolina to forecast how much unemployment tax funds the state will receive from employers next year, Clegg said.
"Not to be maudlin, but I don't know who will be paying taxes in the first quarter of 2010 because I don't know what businesses will survive," he said.