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Proposed Unemployment Benefit Cuts Could Impact Business Growth

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Tuesday, January 15, 2013   

LAURINBURG, N.C. - Almost 16 percent of the population of Scotland County on North Carolina's southern border is unemployed, the second-highest rate in the state, compared with the state average of 9 percent. It's reason enough for the community and others around the state to pay close attention to what's happening in Raleigh when it comes to unemployment benefits.

Currently, the state owes the federal government $2.6 billion in unemployment benefits the state couldn't afford. Now Uncle Sam says it's time to pay it back, and the state Revenue Law Study Commission is recommending the state pay back the loan by cutting benefits to the unemployed.

Guy McCook, chairman of the Scotland County Commission, says reducing benefits by even $100 a week would add up to a $800,000 a month loss in his county.

"That doesn't sound like a lot of money, but in a small community, a $800,000 a month reduction in economic benefits to our businesses in our community is a pretty significant decrease."

Under the recommendations, the maximum weekly benefit for workers would fall from the current $525 a week to $350, and the benefit period would be reduced from 26 weeks to 20.

Bill Rowe, general counsel and director of advocacy at the North Carolina Justice Center, says the state found itself in a deficit after it cut unemployment taxes to businesses and the recession hit not long after. Now, Rowe and others argue that paying back the debt on the backs of North Carolina citizens isn't fair.

"It seems to us an extremely misguided policy directive to then cut the very support that these people need. It won't help them get back to work quicker."

Advocates for a reduction in benefits say raising taxes on businesses will further slow job growth. Rowe says that under the current system some businesses pay no unemployment tax at all.

Graham County in the western part of the state currently has the highest unemployment rate in North Carolina.




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