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NC’s UI System Continues on Path to Solvency

| Tax Policy & Competitiveness

At the beginning of 2013, North Carolina employers were facing a $2.6 billion debt to the federal government for North Carolina’s unemployment insurance system. Since the enactment of NC Chamber-supported House Bill 4 in 2013, North Carolina has made significant progress to restore solvency, affordability and integrity to its broke and broken unemployment insurance system. As a result, the state’s UI debt has been drastically reduced to under $1 billion.

Continuing the positive momentum from House Bill 4, North Carolina was granted a waiver by the U.S. Department of Labor that will lower employers’ UI tax increase for the coming year by approximately $56 per employee. According to the state this will save employers $180 million collectively. As Jake Cashion, NC Chamber director of government affairs, told The News & Observer, “We have seen a drastic reduction in debt, and we have seen positive reforms to the system, which is really a huge success nationwide. We’re really insuring that the business community is not faced with continued tax increases.” Dale Folwell, who heads the state Division of Employment Security, noted that the U.S. Department of Labor granted this waiver because they recognized the significant progress North Carolina has made in paying down the debt. Read the full article here.

The NC Chamber championed House Bill 4, which gives employers greater certainty by putting a plan in place to repay the debt in three years. We are already seeing success. The North Carolina Chamber commends the legislature, Governor McCrory and Asst. Sec. Dale Folwell for taking action and their continued leadership on this issue.

Gary J. Salamido
Vice President, Government Affairs
North Carolina Chamber