[Update: Since press, this article has been updated to include Gov. Roy Cooper’s veto of the bill and his statement about provisions made to stop increased unemployment benefits from people facing natural disasters.]
NORTH CAROLINA — A month after the governor signed an executive order increasing unemployment benefits in response to Hurricane Helene, a controversial disaster recovery bill aims to stop the governor from modifying unemployment benefits during disasters.
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However, a provision, 43 pages into SB 382 — which passed 30-19 in the Senate down party lines — could change that.
SB 382 has spurred controversy and widespread attention for including expansive provisions unrelated to Hurricane Helene recovery. The bill does not provide immediate funding; it would transfer $227 million from the state’s savings reserve to its Helene fund but notes the resources shall remain unspent until further review by the General Assembly
One provision titled “Emergency Management Act Clarification” amends the authority and responsibilities of the governor for emergency management in North Carolina. It, essentially, prohibits the governor from waiving, modifying, suspending, or failing to enforce the state’s unemployment statute.
If SB 382 becomes law, the governor’s executive order and similar directives would be prohibited on March 1, 2025. Port City Daily reached out to the governor’s office about its views on the provision but did not receive a response by press.
The bill’s passage comes as Gov. Roy Cooper signed executive order 322 on Oct. 16. “Providing Unemployment Insurance Relief for North Carolinians Impacted by Hurricane Helene” mandates a $250 temporary increase of weekly unemployment for claims made after Sept. 29.
Last week, the Department of Commerce released a preliminary analysis of Hurricane Helene’s impact on employment. The agency found the Asheville metropolitan area lost 8,200 jobs in October — 4% of all jobs in the region — although the state’s unemployment rate dropped from 3.8% in September to 3.7% the following month.
“As I’ve traveled for days around western North Carolina I’ve heard concern from many small business owners about their employees who are unemployed because their businesses are temporarily closed,” Cooper said in an October press release. “This Executive Order will increase unemployment benefits and help ease the financial burden for impacted North Carolinians as they work to recover from the storm.”
Cooper described SB 382 as a “sham” during his Tuesday veto of the bill. While three Republican representatives from western North Carolina voted against SB 382, incoming House Speaker Rep. Destin Hall said last week he believes Republican lawmakers will have enough votes to override Cooper’s veto.
“Instead of giving small business grants to disaster counties it strikes a cruel blow by blocking the extension of unemployment benefits for people who have lost jobs because of natural disasters,” Cooper’s office wrote in a press release.
The North Carolina Chamber of Commerce — the largest lobby group in the state — expressed support for the provision in a Nov. 20 blog post and described it as a response to Cooper’s October executive order.
“The NC Chamber is always vigilant about unemployment policy as we recognize it is your business that is funding this system,” the blog notes. “Any policy should be carefully considered to maintain the balance, integrity, and solvency of North Carolina’s unemployment system.”
Cooper’s executive order raises the state’s maximum $350 weekly benefit to $600 and increases the minimum $15 to $265. The temporary hike remains in effect until it is rescinded by another executive order.
Increased benefits are paid entirely from the state’s Unemployment Trust Fund reserve, primarily funded by taxes on employers. North Carolina’s unemployment reserve balance is $4.8 billion, according to the governor’s office, the second highest in the United States. The state paid out $193.4 million in unemployment benefits in 2023.
Cooper’s order mandates the Department of Commerce waive legal and regulatory constraints that could cause any increase in employers’ unemployment insurance tax rate. It also requires the Division of Employment Security to waive or flexibly interpret work search requirements in disaster-impacted areas.
The Division of Employment Security noted the executive order would likely result in increased benefits for people eligible for federally funded Disaster Unemployment Assistance. The federal weekly benefit is calculated in part by state unemployment compensation with a minimum amount set at half of the state’s average benefit. State benefits remain capped at 12 weeks, but workers are eligible for up to 26 weeks of federal assistance.
Clermont Ripley, co-director of the North Carolina Justice Center’s Workers’ Rights Project, expressed disappointment in SB 382’s provision. She argued the state should view Helene as a wake up call to reform the state’s unemployment system for greater economic stability.
“Part of why it’s really hard for communities to withstand disasters like Helene is the lack of support in place already,” she told Port City Daily. “The lack of a robust unemployment insurance program just makes people so much more vulnerable.”
The U.S. Department of Labor ranks North Carolina 42nd for maximum weekly benefits and 49th for minimum weekly benefits. The NC Justice Center’s 2024 “State of Working North Carolina Report” credited NC Chamber-backed legislation in 2013, HB 4, for the state’s low national position. HB 4 reduced maximum weekly benefits from $535 to $350, among the biggest cuts to a state unemployment program in U.S. history.
The NC Chamber argued the 2013 reforms were necessary to address over $2.5 billion unemployment debt accrued after the Great Recession, incentivize higher employment, decrease taxes on businesses, and reduce fraud, abuse, and waste.
A 2011 NC Justice Center report contended the state’s unemployment insolvency was rooted in repeated tax cuts in preceding decades and widespread job loss after the 2008 subprime mortgage crisis. North Carolina paid back its unemployment debt to the federal government in 2015.
Ripley argued reforming unemployment insurance policy is particularly important to prepare for future disasters. Despite a number of bills aimed at increasing benefits in the years following Hurricane Florence in 2018, the state’s system has remained mostly unchanged from a decade ago.
“Our unemployment system certainly wasn’t improved or reformed because of any of those hurricanes,” she said.
Cooper’s executive order stated 80% of recent unemployment claims originated from residents in counties impacted by Hurricane Helene.
“Temporarily increasing the weekly benefit amount would enable those individuals out of work due to the impacts of Helene to continue to provide for themselves and their families while western North Carolina recovers from the catastrophic damage sustained by Helene,” the executive order states.
Other wide-ranging changes to state law in the 131-page bill — which PCD also has covered — include:
- Limiting executive branch appointment authority over the Board of Elections and Utilities Commission
- Stripping a range of powers from incoming Democratic elected officials including the governor, lieutenant governor, attorney general, and superintendent of education
- Creating incentives for new hog waste biogas facilities
- Removing the seats of two superior court justices who have ruled against GOP-backed election law changes and creating two new judicial positions appointed by the General Assembly
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