Governor McCrory Announces $1 Billion Reserve in Unemployment Trust Fund
After paying off a $2.8 billion debt to the federal government in May 2015, Governor Pat McCrory and the Division of Employment Security (DES) announced that the unemployment trust fund reserve has reached $1 billion. It’s the first time that the trust fund has exceeded $1 billion since May 2001.
By reaching this mark, the 20 percent state unemployment insurance tax surcharge that N.C. employers have been paying for ten years will be discontinued. These savings, along with receiving the full Federal Unemployment Tax Act (FUTA) credit will save employers more than $600 million in taxes during 2015-2016.
“This money can be used to hire more workers, which will ultimately add more money to the trust fund so we don’t get into another borrowing situation,” said Governor Pat McCrory. “We have paid off the debt five years early and reached an important balance in our trust fund at the right time to bring certainty to North Carolina businesses.”
From 2011 to 2014, North Carolina businesses paid $1 billion in penalties and interest due to this debt to the federal government.
“No Governor or General Assembly in North Carolina history has ever inherited such a broke and broken unemployment system,” said DES Assistant Secretary Dale Folwell. “The trust fund has gone from bankruptcy to solvency in 30 months. Thanks to changes in policy, process and the innovative ideas from DES employees, I’m certain that North Carolina will never have to deal with this again.”
Commerce Secretary John Skvarla said reforms in North Carolina’s unemployment insurance program sets the stage for more robust economic growth.
“We care about the success of all business across North Carolina,” said N.C. Commerce Secretary John E. Skvarla III. “This tax relief is an important milestone that could lead to more jobs and business growth in our great state.”