Unemployment benefits would increase $50 a week in NC under budget proposed by Senate Republicans

North Carolinians receiving unemployment benefit assistance would gain an additional $50 per week — reaching a maximum of $400 — as part of the Senate Republican state 2025-26 budget. Pending the budget becoming law, the increase is scheduled to go into effect July 6. According to a legislative staff presentation, the current average weekly benefit is $302.

The $50 increase, representing a 14.3% hike, is the first supported by Senate Republicans since the legislature lowered the weekly maximum from $535 to $350 in July 2013. Democratic Gov.



Josh Stein could veto Senate Bill 257 given the insertion of several cultural war and controversial health care and economic legislation. Meanwhile, House Republican budget writers are preparing to disclose their budget legislation. The state House cleared on Feb.

25 by as 114-1 vote House Bill 48 that would raise the benefit by $100, or by 28.6%, to $450. That increase would go into effect when the bill becomes law.

Republican leadership in both chambers remain opposed to raising the maximum number of weeks from 12 — among the lowest in the country. Rep. Julia Howard, R-Davie, the bill’s primary sponsor, has said she filed HB48 for two primary reasons; “inflation and our (unemployment insurance) trust fund is very stable to support an increase.

” “It’s a very reasonable increase given we have a very healthy trust fund. It’s past time,” Howard said during a committee hearing. The state’s Unemployment insurance Trust Fund contained $4.

95 billion as of April 15. It is on a current projection to reach $6.9 billion by July 2029.

Howard, the House Finance committee’s senior chairwoman, said the $50 increase was what her Senate Finance counterparts signaled they would support during preliminary discussions on HB48. HB48 also provides employers with a tax credit equal to the amount of their unemployment insurance contributions for the fourth quarter of 2024. Employers must file a report with the N.

C. Revenue Department to receive the credit. The UI trust fund is paid primarily by taxes on employers on the wages paid to employees.

The fund is used to pay regular state unemployment benefits to eligible claimants. The U.S.

Treasury Department manages the operational functions of every state’s trust fund. House Democratic supporters of the $100 increase that it would be better for North Carolina for the extra amount to go to the unemployed and be spent rather than just sitting with the U.S.

Treasury. Employers’ tax rate can increase or decrease based on their number of job cuts or layoffs over a certain time period. North Carolina is one of 19 states whose trust fund is considered as meeting minimum solvency standards.

Consumer advocacy groups claim the trust fund has grown in large part on the backs of the unemployed. By not paying a higher maximum weekly benefit, more of employers’ contributions ends up building the fund. House Bill 4, signed into law in February 2013, represented one of the first actions taken by Republican legislative leadership following the election of Republican Gov.

Pat McCrory in the 2012 general election. HB4 also reduced the maximum number of unemployment weeks from 26 to an initial sliding scale of six to 20 that’s dependent on a higher unemployment rate to reach the maximum. Although the legislature increased the minimum number of weeks to 12, still only eight states have a lower weekly maximum unemployment amount than North Carolina.

Republicans’ goal with HB4 was to accelerate the pace of the state paying off a $2.52 billion debt to the U.S.

Labor Department. North Carolina, as did most states, borrowed to pay federal extended unemployment benefits during the Great Recession of 2008-11. The debt to U.

S. Labor was created in part because employers received a series of unemployment insurance tax cuts in the 1990s when the state jobless rate was well under the 5% level that economists consider full employment. That insurance tax rate was not raised, thus replenishing the state reserves for benefit payments, until 2011 despite the state going through two recessions.

The repaying of the U.S. Labor debt was completed in May 2015, rather than a projected 2019 if the benefits hadn’t been cut.

The unemployment benefits strategy drew sharp criticism from Democratic legislators and consumer advocates for being short-sighted in terms of potential future economic downturns. During the early months of the COVID-19 pandemic, the state’s jobless rate rose to a 44-year high of 14.6% in May 2020 as the state’s economy ground to a near halt.

Yet, the legislature did not increase either benefit category. [email protected] 336-727-7376 @rcraverWSJ Stay up-to-date on the latest in local and national government and political topics with our newsletter.

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