By Nyamekye Daniel
(The Center Square) – North Carolina’s unemployment trust fund still is in good standing after weeks of unprecedented unemployment benefit claims caused by the state’s response to the COVID-19 pandemic.
Like most states, North Carolina’s unemployment rate spiked after businesses were forced to close and residents were ordered to shelter in place to reduce the spread of the coronavirus.
The fund had a $3.9 billion balance March 1 before the pandemic started. As of Wednesday, July 22, the fund had $2.9 billion, the North Carolina Department of Commerce said.
North Carolina’s unemployment trust fund is supported by taxes on employers.
“Each year, a prorated share of the interest earned on this trust fund is added back to the account of each North Carolina employer having a credit experience rating balance,” according to the Department of Commerce.
If a state trust fund runs low, the state would have to ask the federal government to bail them out.
Since March 15, the Division of Employment Security has paid $1.5 billion in state benefits to more than 820,000 North Carolinians.
An April 9 report by the Tax Foundation predicted North Carolina’s unemployment trust fund could last up to 29 weeks (16th among all states) based on the number of initial claims the state received and its solvency or debt ratio.
The state has been able to keep its unemployment trust fund solvency level low by cutting the amount and duration of the benefits available to unemployed workers. The national standard for unemployment benefits is 26 weeks. North Carolina pays workers up to 12 weeks and up to $300 weekly.
Representatives for the Department of Commerce said it could not comment on how the Tax Foundation arrived at its predicted date.
At the current rate, North Carolina has been paying about $12 million a day in state benefits for the past 129 days.
Gov. Roy Cooper relaxed some of the COVID-19 restrictions in May, which allowed some North Carolinians to return to work.
The state’s June unemployment rate of 7.6% was 5.2 percentage points lower than May’s rate, according to the state’s latest report.
The number of people employed increased by 227,498 from May to June, raising the total to 4.4 million. The number of people on unemployment also dropped by 252,047 people over the month to 363,465.
Cooper has been pressuring the federal government to issue additional unemployment benefits to North Carolinians, as one of the supplemental aid programs is scheduled to expire Saturday.
Cooper sent a letter to state Congressional leaders Friday requesting an extension of the Federal Pandemic Unemployment Compensation Program, which, as of Wednesday, issued $4.25 billion in benefits to North Carolinians.
The program gave unemployed workers receiving benefits an additional $600 a week for 13 weeks.