North Carolina has a $2.4 billion budget shortfall. That doesn’t include what we owe Uncle Sam for federal loans used to help pay the states unemployed:
RALEIGH, N.C. - North Carolina not only has a $2.4 billion state budget gap to close this year. The state also owes the federal government $2.6 billion for borrowing over the past two years to pay its share of unemployment checks for those who lost jobs.
That means Republican legislative leaders who oppose new or temporary taxes to close the budget gap aren't taking that hardline approach to the unemployment debt. Higher taxes for employers appear likely, though they may not come immediately.
North Carolina is one of 30 states that are a combined $42 billion in the red on unemployment, partially the result of a slow recovery from recession that pushed jobless rates to 11 percent in the state.
The state collected in taxes barely half of the $1.9 billion in benefits that were disbursed in 2010, according to legislation.
What is really bad is the mismanagement of the state agency in charge of distributing unemployment checks:
"When you realize that there hasn't been a positive fund balance since (2008), you should be alerted that there are severe issues," Clary said.
The borrowing is no secret in government circles. The commission took heat in the fall after it overpaid unemployed workers by $28 million and sent letters to thousands asking for the money back. The overpayments didn't have to be repaid by recipients.
What's happened is not the fault of the current or recent agency leaders, argues Harry Payne, the commission's chairman for more than seven years until early 2009.
"It has been a political strategy in other states to somehow blame the bureaucrats," said Payne, a Democrat now with the North Carolina Justice Center.
Hey, dumbass! You overpaid $28 million to people who didn’t deserve it! And we shouldn't blame government bureaucrats? Are you kidding me?
But Mr. Payne wasn’t through with the excuses:
He said the debt problem began in 1994, when the Legislature cut unemployment tax rates in half when the Unemployment Insurance Trust Fund had at least $800 million. Tax cuts were approved four other times from 1995 to 1999. He said lawmakers were averse to raising taxes at the end of the last recession several years ago.
"We would still be owing money, no question about that, but it wouldn't be as much," Payne said.
Of course the $28 million wouldn’t have anything to do with the deficit either. I believe Mr. Payne should spend time with a different kind of North Carolina Justice Center: the state penitentiary.
Source: http://www.starnewsonline.com/article/20110227/APN/1102270969?p=3&tc=pg
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