A bill that started out in February to increase attendance at outdoor school-athletics events has pivoted since Governor Roy Cooper lifted Covid-19 restrictions and capacity limits last month. Now, the Republican-sponsored Senate Bill 116 aims to end additional federal unemployment payments on top of state benefits, in an effort to get more North Carolinians back to work.
Thursday, in a 71-36 vote, the N.C. House passed the rewrite of the bill, now titled “Putting North Carolina Back to Work Act,” which would cancel the Federal Pandemic Unemployment Compensation (FPUC) in the Tar Heel State. Currently, 25 states have ended additional federal payments through its employment divisions.
FPUC initially went into effect in March 2020, as Covid-19 caused many businesses to shutter, in essence leading to layoffs and furloughs nationwide. North Carolina’s 3.9% unemployment rate then ballooned to 13.5% in April and May 2020. FPUC paid out $600 per week on top of state unemployment benefits until July 26, 2020, when Congress allowed it to sunset.
As part of the CARES Act, signed into law by then-President Donald Trump in December, FPUC was picked up again in January. It decreased federal payments to $300 a week on top of state benefits, retroactive to Dec. 27, 2020. When President Joe Biden signed the American Rescue Plan in March, FPUC was extended to Sept. 6, 2021.
To date, over $6.5 billion has been paid in North Carolina’s FPUC claims since March 2020.
Senate Bill 116 sponsors — including its three Republican primary sponsors, senators Todd Johnson (Union County), Vickie Sawyer (Iredell, Yadkin), and Danny Early Britt Jr. (Columbus, Robeson) — want to cut off the extra funds within 30 days of the bill’s passing, should it be signed into law. Right now, the extra $300-a-week in federal benefits continues to pay claimants even after they exhaust their state unemployment funds. North Carolina pays up to $350 a week in unemployment benefits for up to 13 weeks. Each claimant’s pay-scale formula is determined “on the last two completed quarters in [the] base period divided by 52 and rounded down to the next whole dollar,” according to the North Carolina security commission website.
Two North Carolina senators, Thom Tillis and Richard Burr, argued in a letter sent to Cooper that FPUC is preventing the full rebound of North Carolina’s economy, as industries continue to report worker shortages.
“Over the last several weeks, we’ve heard from countless small, mid, and large-sized business owners across North Carolina struggling to hire enough workers to reopen this summer,” the senators noted. “Employers, particularly in hard-hit industries like tourism, service, and hospitality, are finding they can’t compete with excessive federal benefits. Time is running out for industries that rely on the summer season for a large portion of their business.”
According to the News & Observer, Cooper’s spokesperson, Fred Porter, wrote in response: “North Carolina has among the stingiest and shortest unemployment benefits in the country and many families are dealing with issues such as lack of affordable child care and finding jobs with livable wages.”
Senate Bill 116 is addressing childcare funding by rerouting $250 million from the American Rescue Plan’s childcare block-grant funding into the N.C. Division of Child Development and Early Education. It will help single parents who may be burdened by financial constraints to afford childcare so they can get back to work.
Also included in the bill: excluding state taxes on unemployment payments. Individuals whose gross income is less than $150,000 will be relieved of paying state taxes on benefits up to $10,200 per individual.
As well, businesses will be able to file PPP loans as a business expense.
New Hanover County representative Deborah Butler (D) spoke on the House floor last week, taking umbrage with passing a bill that she said recognizes a need to help businesses while overlooking its citizens.
“It seems as though we have gotten to the point where we understand that the breadth and the magnitude of this pandemic warrants non-taxability of Paycheck Protection plans, and the deductibility of the expenses associated with those for business . . . then surely it is the same for the employees that work for those companies,” she said. “Why would we take away a federal benefit from 240,000 North Carolinians, so some companies get the double dip and the employees get no dip at all? That’s just patently unfair.”
On May 19, House Speaker Tim Moore told a group at the NFIB’s North Carolina Virtual Small Business Day that the state is in “an absolutely ridiculous situation,” with “some people earning more with unemployment by staying at home and doing nothing than by entering the workforce.”
Butler addressed a living wage as primary concern for which the House should be addressing. She was met with objection and dissenting voices saying she wasn’t sticking to the content of Senate Bill 116.
“Mr. Speaker, we’re deviating from the bill at hand,” John Richard Bell IV, R-Wayne, interjected.
“Each and every year a living wage bill is filed in this chamber, and each and every year it is summarily sent to the rules committee,” Butler continued. “If we refuse to allow the exploitation of our citizens just for skyrocketing corporate profits, they would more easily return to the workplace because everyone wants the dignity of work.”
If the Senate approves the bill, it will then head to Cooper’s desk.
As of April 2021, North Carolina ranked 25 in the United States for its 5% unemployment rate, according to the U.S Bureau of Labor Statistics. By comparison, New Hanover County’s unemployment rate was 3.9%, Brunswick was 5.4% and Pender was 3.8% in April.
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