Raleigh, NC The unemployment insurance debt owed to the federal government by North Carolina has dropped by nearly $2 billion under the reforms implemented by Governor Pat McCrory.
After recent tax collections, that debt now stands at $597 million, down from the $2.5 billion owed by North Carolina when Governor McCrory took office in January 2013.
"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 Governor Pat McCrory. "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. While this is great news, we must continue to pursue policies that will help attract jobs and new investment to North Carolina,"
The debt was incurred when the state's unemployment trust fund ran out of funds in February 2009. North Carolina had to borrow from the federal government to pay for regular unemployment benefits and racked up a debt as high as $2.8 billion. Since 2011, North Carolina has had to pay interest on this debt. With a projected interest payment of $37 million on September 30 of this year, North Carolina's employers will have paid nearly $262 million in interest payments alone over the past four years.
Initial estimates had the debt being paid off by November 2015. Now the state looks to have it paid off by August of that year.
"It's not enough to pay it off. We need to build a surplus and keep the trust fund solvent,"
said Assistant Secretary Folwell. "This will give employers certainty about the cost of doing business in North Carolina. With the debt paid off, our state will be more attractive to employers who want to move here and create jobs."
- Contact: Crystal Feldman