A North Carolina law going into effect today cuts statewide unemployment benefits for new applicants immediately and thus jettisons the federal supplement that continues those benefits once the state portion expires.
The federal Emergency Unemployment Compensation (EUC) program is lost once a state cuts its benefits, but North Carolina chose to go that route — and to raise unemployment taxes on businesses as well — in hopes of paying back some $2.5 billion already owed to the feds for past EUC payments.
Under the law taking effect today, unemployment benefits drop from $535 a week to $350 a week on average, and they last from three to five months depending on the state unemployment rate.
State legislators asked Congress to exempt North Carolina from the EUC benefits trigger, as it had done previously for Pennsylvania, Indiana, Rhode Island and Arkansas, but Congress never acted upon the request.
Overall, the changes will mean $3.6 billion in total benefit cuts and higher costs to employers through 2017, according to the General Assembly’s fiscal research office. Benefit cuts on the jobless make up 74 percent of that figure. The accelerated target for repaying the federal debt, which fell to $2.1 billion in June, is sometime in 2015 rather than 2018.