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NC Unemployment Debt Fix Backed By House Panel

North Carolina businesses would continue to see their federal unemployment insurance taxes go up by $21 per employee â¿¿ it's currently $84 â¿¿ with every year the debt isn't been paid off. The companies also would continue to pay a state unemployment tax surcharge until the trust fund exceeded $1 billion. Minimum and maximum state contribution rates go up slightly â¿¿ eliminating the zero rate as many as 30,000 top-rated companies now receive.

Still, Democrats said the proposal was being rushed and placed too much of the burden on the unemployed. Reductions in the duration of benefits and their amounts would comprise nearly three-quarters of the $3.6 billion in the cumulative changes required by the bill through 2017, the General Assembly's fiscal research office estimated in a document.

Enacting the changes July 1 also would mean ending an extra year of emergency jobless benefits approved by Congress in January after six months, possibly cutting off about 80,000 workers receiving $25 million a week, the liberal-leaning North Carolina Budget & Tax Center said. The center said it's the worst possible time to make changes as the state unemployment rate is among the nation's highest at 9.2 percent.

"It is a hit on the unemployed with no sense of fairness, so that one could infer the problem is being used as a way to hurt the unemployed," said Rep. Paul Luebke, D-Durham.

Committee co-chairman Rep. Robert Brawley, R-Iredell, said the plan, which also includes administrative changes to the system, will put the unemployed in a better position to get a job. "I don't feel mean-spirited," he said.

Workers would receive $225 million in fewer benefits during the first six months in which the plan takes effect, fiscal research analyst Rodney Bizzell told the committee. That means less money for the unemployed to pay their mortgage, their health insurance and their children's college bills, said Rep. Deborah Ross, D-Wake. Someone needs an annual salary of $55,640 to receive the current maximum benefit.

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