I believe that the repayment of the "loan" will not take place as fast as this law claims it will be. Why?
Simply put - employer's reaction to Obama Care.
Many employers are cutting hours so as to get their employees below the 30 hour threshold by which the employer has to provide healthcare coverage. (The administration anticipated this I believe).
OK - NC Unemployment law states that employees contribute to a fund for UI Bennys (their account). Their formula is complicated by you take the highest 3 quarters, multiply by 8........and you come up with an amount. Lets assume for ease of thought that the amount is 26 weeks at $500 or $13,000.
My daughter works in an industry that is cutting back hours on thousands of NC managers to avoid paying for healthcare. The employees are taking a 25% pay cut.
Under NC GS 96-12 those employees are entitled to partial unemployment bennys of say $150/week. How long do they collect? NOT 26 weeks - they collect until their account is drained. $1300/$150 = 86 weeks.
They collect for 86 weeks.
But here's the BEST part. They are still working so they are contributing to the their UI fund account rebuilding it as they drain it.
See the problem here?
We are subsidizing salaries and continuously draining the NC UI Trust fund.
My daughter has had to "attend" 15 phone hearings about this and the company has lost all 15 cases spread over 3 counties. They are no longer contesting the hourly cutbacks eligibility for UI cases.
So the argument that we will pay this back in 18 months is wrong. The "loan" itself keeps the NC Trust fund solvent (When NC drained their account the Feds guaranteed the money for the first 26 weeks. ALL EXTENSIONS ARE PAID BY THE FEDS, IN TOTAL.)
So McCrory will cut off bennys for full time unemployed in an attempt to pay back a loan AHEAD of time (unnecessarily) and NC will continuously be borrowing from the FEDs.
Now - what happens IF - my crystal ball is right and the NC economy shrinks? Full time Unemployment rises,part time Unemployment rises - the trust fund gets depleted, again and again. Deeper and deeper.
McCrory HAS to create jobs so that more people pay into the NC UI Trust Fund. That reduces borrowing.
Folks Obamacare and the medicaid expansion are thinly veiled efforts to get more people on government healthcare. The business reaction to Obamacare was EXACTLY what was expected - but was unexpected from a UI standpoint. Businesses said "OH good there's a way NOT to have to offer medical insurance."
Nationalized health care is DESIRED by businesses - it would be a huge break for businesses.
But in cutting back hours we saw businesses TRUE feelings about health care coverage and we now can see why the efforts of the legislature may be misguided.
McCrory couldn't control this - but if he knew he wouldn't be able to pay off this "debt" he may have been better off to keep this money in our economy.
More information about formatting options