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Across the country, many states are dealing with federal debt related to their unemployment insurance trusts, stemming from when they had to borrow money to help cover benefits to out-of-work residents. Now in the middle of paying that off, many employers are facing higher tax rates to cover those expenses.

Naturally, the sooner this debt goes away, the quicker these taxes will begin to decline. In North Carolina, a particularly significant unemployment insurance debt – at $2.5 billion at the start of 2013 – has been shrinking faster than expected, leading some to believe that it will be totally dissolved earlier than the previous timeline.

Governor optimistic about debt
North Carolina Gov. Pat McCrory is optimistic that the unemployment insurance debt will be dealt with on a much shorter schedule than anticipated only a few months ago. Where once the estimate was for the state to pay off the federal government by Nov. 2015, now it could happen by August of that year.

“I am proud of the hard work that Department of Commerce Assistant Secretary of Employment Security Dale Folwell and his team have done to lower this burdensome debt,” said McCrory in a statement. “By paying off this debt early, North Carolina businesses will see lower taxes, making it easier for them to hire more workers and boost our state’s economy.”

Folwell added that the state hopes to build on this momentum, increasing solvency and ensuring that funds don’t run out again.

Unemployment rate holds steady
While the declining UI debt is certainly good news for North Carolina’s businesses, the current employment situation hasn’t been as hot. According to the state’s Department of Commerce Labor and Economic Analysis Division, the jobless rate ticked up 0.1 percent from June to July.

Now, the rate is at 6.5 percent, slightly above the national average. In addition, the number of people employed in North Carolina dropped by nearly 20,000 on a monthly basis, but climbed by more than 59,000 year-over-year. The number of unemployed residents increased from June to July.

Even with these monthly trends, North Carolina is in the middle of improvement. In July 2013, the jobless rate was 8.1 percent. Since then, it has maintained a steady downward trajectory, indicating that gains are being made in the state.

At Corporate Cost Control, we work closely with employers across the country to better manage the nuances of unemployment insurance. Legislation changes on the state level could impact you today, and we welcome any questions or concerns you may have on a wide range of topics.


Contact CCC to see how we can save your organization time and money.
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(800) 207-6926

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