First, Stop the Bleeding: Getting North Carolina Out of Its Unemployment Insurance Crisis

from The John Locke Foundation:

Budget & Taxation

First, Stop the Bleeding: Getting North Carolina Out of Its Unemployment Insurance Crisis

by Fergus Hodgson

John Locke Foundation

January 18, 2012

Given the current desperation of North Carolina’s UI trust fund deficit, one might be surprised to learn that it is poised to get worse. Currently, the federal government is financing the entire EB program for the 80-to-99-week period. That complete funding runs out on March 6, 2012, however, and it remains precarious. Typically, states shoulder half of the cost—in North Carolina that would translate to another $212 million of annual UI payments. The 1935 UI program, in the middle of the Great Depression, began with benefits at only 16 weeks. Since then the period of total eligibility, given North Carolina’s level of unemployment, has grown by 519 percent to 99 weeks. That level of coverage is simply unaffordable in the present context, particularly given that elected officials set aside nowhere near enough money to justify it.

URL: johnlocke.org/acrobat/spotlights/Spotlight418UnemploymentInsurance.pdf