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N.C. House bill would extend eligibility for federal unemployment pandemic program
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N.C. House bill would extend eligibility for federal unemployment pandemic program

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A state House bill introduced Wednesday would extend eligibility until Dec. 31 for a key federal unemployment insurance program.

The Republican-sponsored House Bill 107, sponsored by Rep. Julia Howard, R-Davie, makes two changes to state COVID-19 regulations.

A companion Senate Bill 114 was introduced by Sen. Chuck Edwards, R-Buncombe.

The first would affect the federal pandemic emergency unemployment compensation program, which had expired on Dec. 31, 2020.

The second would keep employers' contribution base rate at 1.9% for the state's unemployment tax for 2021. A rate increase is scheduled for this year.

Employers pay a tax into the state's UI system between 0.06% and 5.76%. Employers can pay a higher rate based on their history of job cuts and layoffs.

The state is required to choose an option for how it will manage the PEUC and regular federal unemployment programs for 2021.

HB107 selects the option that requires individuals whose 12-month benefit period has expired to file a regular initial unemployment claim for a new 12-month benefit period. The benefit period typically begins when an individual files a claim.

However, payments from the new benefit period would be deferred until the claimant's current PEUC claim "has been exhausted or the PEUC program has expired."

Payments resumed Jan. 6 for at least 11 weeks for North Carolinians with eligibility remaining for the PEUC and federal Pandemic Unemployment Assistance programs.

The $908 billion federal stimulus package signed into law by then-President Donald Trump on Dec. 27 restored benefits for PUA and PEUC through at least March 13 and payments through April 5.

As of Tuesday, the PUA and PEUC programs had paid a combined $1.84 billion in benefits to North Carolinians, including $925.4 million from PEUC.

Federal Reserve Chairman Jerome Powell on Wednesday painted a bleak picture on the state of U.S. employment.

Weekly benefits

Initial unemployment-insurance benefit claims in North Carolina dropped sharply last week even though claims rose nationally, the U.S. Labor Department reported Thursday.

The state had 8,642 claims for the week that ended Feb. 13, down from a revised 12,694 the previous week.

North Carolina ranked 24th in the number of unemployment claim filings in the nation, down one spot from the previous week.

The state’s highest weekly total for claims related to the COVID-19 pandemic is 172,745 for the week that ended March 28.

The jump in claims in North Carolina and nationally during the first two weeks of January followed the temporary expiration of two key federal benefit programs on Dec. 26.

The national unemployment insurance claims outlook continued its up-and-down nature with 861,000 initial claims filed last week, down 2.3% from a revised 848,000 the previous week.

There were 18.34 million individuals nationwide with an active claim as of Jan. 30, down from 20.43 million as of Jan. 16. About 6.59 million workers drew state benefits and 11.75 million received federal benefits, including 4.06 million with the PEUC program.

When the Federal Pandemic Unemployment Compensation (FPUC) weekly benefit was worth up to $600, unemployed and furloughed North Carolinians received just under $4.88 billion from late March through July 26.

Since the resumption with the benefit currently worth up to $300 a week, FPUC has paid about $520 million in benefits to North Carolinians. The latest federal COVID-19 relief package would increase that amount to up to $400 a week.

Gus Faucher, chief economist with PNC Financial Services Group, said Thursday that initial claims are likely to rise in the week ending Feb. 20 because of bad winter weather and power outages in much of the country.

"After peaking at almost 25 million in June, the number of claims for regular state programs has steadily declined," Faucher said.

"Some of the decline has come from people moving from unemployment to employment, but some has also come from beneficiaries using up their eligibility and moving into pandemic-related programs."

As of Tuesday, regular N.C. unemployment payments are at $1.84 billion, with only about $130 million being paid out since Oct. 1.

Most unemployed and furloughed North Carolinians began exhausting their 12 weeks of regular state unemployment benefits in June and well before Oct. 1. The maximum number of weeks was raised to 16 in January for new claimants.

The state had $3.85 billion in the state Unemployment Insurance Trust Fund in mid-March. State legislators said Sept. 2 that between $2.9 billion and $3 billion remained in the fund at that time. The third COVID-19 relief bill added $87 million.

Gov. Roy Cooper said Feb. 4 the fund contains $2.59 billion. He supports drawing down additional money from the fund.

Cooper supports offering North Carolinians 26 weeks of state unemployment benefits and raising the weekly maximum benefit from $350 to $500. He made his comments as part of unveiling his state budget proposal for 2021-22.

Faucher said Congress will need to act swiftly to prevent the expiration of several federal UI benefit programs slated to expire March 13.

"With tens of millions of people still receiving unemployment insurance, the loss of these benefits would put a huge dent in consumer spending," Faucher said.

State and federal unemployment benefit payments were at $10.05 billion in North Carolina for the COVID-19 pandemic, the N.C. Division of Employment Security reported Tuesday.

After $8.16 billion in state and federal unemployment benefits were paid from late March through Sept. 30, there had been just $1.89 billion since Oct. 1.

The federal extended benefits program is set to expire in North Carolina on Saturday because the state no longer meets federal requirements. There has been $219.7 million in payments to North Carolinians.

336-727-7376

@rcraverWSJ

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