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NC Unemployment Plan Hits Business, Beneficiaries

By GARY D. ROBERTSON

RALEIGH, N.C. (AP) â¿¿ North Carolina legislators unveiled a long-awaited proposal Wednesday to more quickly pay off the state's nearly $2.5 billion unemployment benefit debt through higher business taxes and scaled back payments to future jobless workers.

The plan presented in a General Assembly study committee would wipe from the books the borrowing from the federal government in 2015, or three years earlier than if nothing occurs. The proposal also is designed to replenish the state's unemployment trust fund after the Great Recession cleaned it out and revealed what Republican legislative leaders called a host of troubles.

North Carolina is among nearly 20 states that still owe the federal government when unemployment insurance tax payments by businesses failed to keep up with benefits from the flood of applicants starting four years ago. North Carolina's balance is the third highest in the country behind California and New York.

Employers and those laid off in the future will share the burden of paying the debt and building up the system, a key negotiator said. The proposal would bring the state's trust fund balance to $2.5 billion by 2021, according to projections from legislative analysts.

"We have to make the system solvent. Otherwise, it will fail everyone in the state," said Sen. Bob Rucho, R-Mecklenburg, co-chairman of the Revenue Laws Study Committee. "What we're going to try to do is ... to make sure that everybody is helping provide the solvency of the system."

But activists for low-income workers told legislators reducing benefits would harm the very people for whom the system is designed to help in difficult times. Under the proposal, the maximum weekly benefit for workers would fall from the current $525 to $350, while the maximum number of weeks a jobless claimant could receive state benefits would drop from 26 weeks to 20 in periods of the highest unemployment

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