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NC legislators nearing unemployment debt proposal

Associated Press Modified: November 18, 2012 at 4:16 pm •  Published: November 18, 2012

Studies commissioned by the N.C. Chamber and the state suggested bonds were the way to go if they could be issued at a lower interest rate than the current federal borrowing rate. Even McCrory said in September he thought issuing debt to repay the federal government was a likely course. Gary Salamido, the Chamber's vice president for governmental relations, said he hoped legislators would consider other refinancing options. Repaying the debt without changes would take several years.

Rucho also said he expected the proposal would make sure "benefits will be aligned with the Southeastern states that we compete with." He didn't provide further details.

The study by the N.C. Chamber, which has been involved in the legislative proposal, recommended capping weekly benefits at $350 for future unemployed workers and reducing the maximum number of benefit weeks to 20. The maximum weekly benefit amount in North Carolina is currently $535. South Carolina, Virginia and Georgia range between $300 and $400. North Carolina's portion of unemployment benefits is capped at 26 weeks.

Salamido said expanding benefits over time has contributed to troubles.

"Our position is that we all got into this together and we all have to get out of it together," Salamido said Friday.

Alexandra Sirota with the North Carolina Budget & Tax Center, which advocates for the poor, disagrees that expanding benefits is to blame. She said reducing benefits would place only more strain upon the unemployed, causing them to rely more on credit and miss paying utility bills.

Many attribute the unemployment debt problem to a series of employer tax cuts in the 1990s. The tax cuts weren't reversed after the last recession a decade ago, and people stayed jobless longer.

"We can't arbitrarily change the benefit amounts without considering what a family needs to make ends meet," Sirota said. The center recommends keeping current benefit levels in place but raising employer taxes over time by using a greater percentage of the state's average annual wage to calculate the tax.

Both the chamber and the center agree better re-employment and worker training efforts can get more people back to work. And most agree the state's unemployment insurance system must be fixed before the next recession arrives.

"It took us 20 years to get into this situation," Sirota said. "Hopefully it won't take that long to get out."