N.C. fiscal woes include $2.5 billion debt for unemployment benefits

Posted on by Nelda Holder

North Carolina must begin to deal this year with interest payments on a $2.5 billion debt to the federal government — money borrowed over time since February 2009 to provide for increased unemployment benefits as a result of the economic downturn, according to a report today in the News & Observer of Raleigh.

One of 30 states in the same borrowing predicament, according to the N&O, N.C.‘s unemployment insurance fund is otherwise solely dependent on a tax on employers for 5.7 percent of taxable payroll. The report indicates that state officials have been reluctant to raise that percentage, which could increase financial pressure on the businesses involved.

The incoming legislature must now factor in plans to start paying off the debt to the feds as well as idealing with an announced $3.7-billion budget shortfall.

by Nelda Holder, contributing editor

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One thought on “N.C. fiscal woes include $2.5 billion debt for unemployment benefits”

  1. travelah

    The new legislature will have to play hardball and when they do there should not be a lot of crying from those interest groups that have benefited from the previous legislature’s propensity to spend money they never had in the first place.

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