N.C. lawmakers quietly work on plan for N.C. unemployment insurance

A group of state lawmakers has been meeting behind closed doors to find a fix for North Carolina’s $2.4-billion unemployment insurance problem, money the state borrowed from the federal government in the height of the economic crisis.

A trio of Republican lawmakers – state Reps. Julia Howard, Edgar Starnes and Harry Warren – have been meeting weekly with legislative staff for the past 10 weeks to roll out a plan, Howard said. They plan on bringing their proposal to light on Wednesday at the N.C. Revenue Laws Committee which has the option of voting immediately on the mystery plan without holding any public discussion.

The result could be a massive overhaul of the state’s unemployment system, with a very real possibility that lawmakers side with business interests looking to cut back on how much and for how long the unemployed can collect. Advocates for the poor (like the N.C. Justice Center) say that option would cause further harm for families in crisis.

The money was borrowed at the height of the economic crisis, and went to pay for the first 26 weeks of unemployment for thousands of North Carolinians who lost their jobs as the state grappled with the fall-out from the collapse of the housing industry.  A series of tax breaks businesses received on unemployment insurance in the 1990s had left the state without enough money to weather the drastic increase of jobless workers during the Great Recession.

The state’s Open Meetings Act makes most of what happens at the N.C. state legislature open to public inspection, and requires that public notice is given about meetings, hearings and other official actions.

But the law doesn’t cover unofficial groups of lawmakers that gather to iron out policy, only meetings and gatherings of official committees, said Amanda Martin, a Raleigh-based lawyer that specialize in open meetings and public records issues.

That means groups like Howard’s can meet without having to extend notice to the larger public.

Howard, who has spearheaded the effort to overhaul the complicated system, said the discussions about unemployment insurance weren’t being held in secret in order to thwart public exposure, but only to tackle a complex issue.

“Nobody’s trying to hide anything,” she said. “It’s just been pulling people with staff and trying to put some kind of logical solution together.”

Howard also said any lawmaker could join the group if they wanted, though she said no invitations to join were sent out to Democrats.

Nor did Howard want to share the details of her plan when asked, other than to say she thinks the solution will leave no one interest (corporations, Republican lawmakers, advocates for the poor) completely satisfied.

“I know there will be objections,” she said. “But we need to fix it.”

Alexandra Forter Sirota, the head of the Budget and Tax Center, wrote about this earlier this week at N.C. Policy Watch about the harms that could come out of having workers bear the brunt of the crisis by cutting back on benefits. (Note: The Budget and Tax Center, as well as N.C. Policy Watch, is a project of the N.C. Justice Center, an anti-poverty non-profit.)

From  Sirota:

When workers lose their jobs the financial strain is intense and the modest payment of unemployment insurance is what can keep families from falling into more dire situations. These modest payments pay utility bills, rent or mortgages and meet the most basic needs of their families and children for food and doctor’s visits. And in so doing support local businesses and contain broader negative financial outcomes like foreclosure and increased poverty rates.

Unemployment insurance payments are quite modest, just $290 a week, which for a family of three leaves $1100 in unmet needs each month. This partial replacement of wages puts North Carolina squarely in the middle of states in terms of average unemployment insurance payments.

For those who want to hear what Howard’s plan entails, the Revenue Laws Committee will meet at 9:30 a.m. Wednesday (Dec. 5) in Room 544 at the Legislative Office Building in Raleigh.



  1. HunterC

    November 29, 2012 at 2:25 pm

    What does NC’s federal delegation say about getting the feds to forgive the existing debt?

    Or what do state legislators say about getting the feds to forgive it?

    The feds have bailed out everyone and everything else.

    $2.4B is peanuts compared to the trillions they’ve shoveled elsewhere — and are getting ready to shovel out in a couple of months.

  2. Alex

    November 30, 2012 at 6:13 pm

    The day will come when the feds can’t bail anyone out not even themselves !

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