It’s looking like North Carolina businesses will pay off their unemployment insurance debt to the federal government three months earlier than anticipated.
According to a Division of Employment Security press release, the debt owed to the federal government to pay off borrowed unemployment benefit funds dropped from $2.6 billion to $980 million.
Officials hope the debt will be paid off as soon as August 2015, rather than the initial November 2015, the press release says.
“The quicker this debt is paid off, the quicker we can lower the taxes and level the playing field for North Carolina employers,” said Dale Folwell, Commerce assistant secretary overseeing the Division of Employment Security.
Last year, the General Assembly enacted and Gov. Pat McCrory signed into law an unemployment insurance benefits reform bill that cut the maximum benefits and the number of weeks that jobless workers could collect benefits.
The bill also increased state taxes on some employers. Meanwhile, employers across the state saw surcharges on their federal unemployment taxes until the debt is paid off.
“Our first goal is to pay off the debt, then we need to build the surplus. Both of these have an impact on taxes paid by employers. This not only gives employers certainty about the cost of doing business in North Carolina but also will help in recruiting and retaining jobs. Businesses don’t want to come to a state to help pay off a debt someone else created. By getting rid of this debt and building a surplus, employers will want to come to North Carolina and create jobs. This will drive unemployment even lower.”