North Carolina’s overall debt picture has improved markedly since 2009. That’s when the Democrat-controlled General Assembly borrowed $2.75 billion from the federal government to make good on its ballooning obligation to pay unemployment benefits — benefits which Democrats extended to 99 weeks (nearly two years).
But since then, the new Republican majority has completely wiped that massive debt from the books.
The General Assembly passed significant reforms in 2013 that put the state on a path toward paying down this debt. In May of 2015, Governor Pat McCrory announced that the state’s enormous debt to the federal government had been completely retired — ahead of schedule and without raising taxes.
“With this debt paid off, our state will be more attractive to employers who want to move here and create jobs,” said North Carolina Secretary of Commerce John E. Skvarla, III. “This gives North Carolina a level playing field with 42 other states.”
In North Carolina, unemployment insurance benefits are completely funded by tax collections from businesses. The state’s fiscal health is in much better shape thanks to unemployment insurance reforms that relieved businesses of a crushing $240 million tax obligation.
North Carolina taxpayers have already made over $200 million in interest payments alone on that debt — money that could have been better spent on pay raises or other programs. Had the legislature not acted, we would now owe $4 billion to the feds. Instead, North Carolina has built up $2 billion reserve fund available to pay on unemployment insurance claims in the event of another downturn in the national economy.
“For a roadmap to UI reform, states should look no further than North Carolina,” said Brian Balfour in Forbes, “where a crackdown on fraud has saved tax dollars and early debt repayment has enabled massive savings for job creators.”
For more information on Unemployment Insurance Reform, please read the following articles on this website:
- Trust Fund Tops One BILLION Dollars
- So this is why we put Conservatives In Charge of Managing our Tax Dollars
- Unemployment Reform, Part 2
- The Results are Indisputable
- State Debt PAID IN FULL
- Cutting up the Credit Card
And click here for other posts relating to North Carolina’s thriving economy.