North Carolina and Unemployment Benefits

North Carolina

 

Unemployment Rate                                          11%

 

Average weekly benefit                                    $300.88

 

% of unemployed receiving benefits               44%

 

Trust Fund Balance                                            $19,034,487

 

Borrowed from the federal government           $924,768,167

 

States’ Unemployment Insurance Funds Founder After Years of Poor Planning

 

…in 1935, when the government started offering unemployment insurance, and states began to save when times were good so there was money to spend to help workers and stimulate the economy when times were bad.

 

In all but a handful of states, it no longer works that way.

 

Fourteen states have already run out of funds to pay unemployment insurance claims and taken out a total of more than $8 billion in federal loans to cover the shortfalls. At least 18 more states are in danger of exhausting their unemployment insurance trust funds.

 

States with empty unemployment insurance trust funds have pointed to the severe recession as the cause for their plight, but a closer examination of their trust funds shows underfunding and poor planning as the main culprit. Instead of building up reserves during good years, legislatures in these states yielded to political pressure for high benefits and low taxes. The result: dangerously low trust fund balances.

 

Now, states with bankrupt trust funds will have to increase taxes or cut unemployment benefits at the worst possible time -- during a recession.

Taxpayers in states that have borrowed money will have to foot the bill for tens of millions of dollars in interest charges, which must be paid out of the state's general budget because rules prohibit using unemployment insurance funds.

 

Olga Pierce

ProPublica, June 4, 2009