Perdue signs executive order to extend state unemployment benefits

About 25,000 North Carolinians who receive extended state unemployment benefits could get an additional four weeks of money because of an executive order signed Wednesday by Gov. Bev Perdue.

Perdue's decision affects the state's long-term unemployed — those out of work more than 26 weeks.

The extended state benefits, which can last up to 20 weeks, had been scheduled to run out Jan. 28. With the order, the benefits will now last only until Feb. 29, no matter how long a claimant has been receiving the benefits.

"Middle-class families across North Carolina are working harder than ever, but many are still having a tough time," Perdue said.

"We're able to achieve these results with no impact on the state budget because all extended benefits resulting from this order will be paid with 100 percent federal money."

Perdue did not elaborate on whether the state would eventually have to repay the money. As of Monday, North Carolina had borrowed $2.7 billion from the federal government — the fourth-highest amount among 27 participating states - to pay initial 26-week benefits.

Those benefits are available only after claimants exhaust up to 26 weeks of initial state benefits and up to 53 weeks — representing four tiers — of federal benefits. There are about 4,800 people in the Triad and Northwest N.C. at the extended state benefit level.

Sen. Peter Brunstetter, R-Forsyth, said he questions whether Perdue's executive order is constitutional, "but that doesn't seem to be slowing anyone down these days."

In June, Perdue issued an executive order authorizing extended unemployment benefits to restart for about 20,000 claimants. They were cut off from federally funded benefits after Perdue vetoed Republican-written legislation that would have allowed the extended benefits to continue, but only if Perdue accepted a double-digit budget cut.

Brunstetter said he would likely vote for extending the state benefits again if a vote were necessary "because of the huge problems being faced by folks without jobs, but not without some trepidation."

Brunstetter said he understood from the legislative Revenue Law committeee presentation by Lynn Holmes, assistant state commerce secretary for employment security, that amounts already borrowed to pay these benefits could add $100 million in taxes to N.C. businesses a year for the next seven years.

"We run a very real risk of hurting businesses to the point where they will not be able to add new jobs or hire new employees, which makes all of this a vicious circle," Brunstetter said. "I tend to think the unemployment system is busted at this point."

Before Perdue signed the executive order, Senate President Pro Tem Phil Berger, R-Rockingham, and House Speaker Thom Tillis, R-Mecklenburg, issued a statement saying "the General Assembly is ready to work with Gov. Perdue to resolve this issue."

"If Gov. Perdue believes an immediate fix is required, then we encourage her to take the appropriate action and call the General Assembly back for a special session."

Berger and Tillis could not be reached for comment about Perdue's executive order.

John Quinterno, an analyst with the Chapel Hill research firm South by North Strategies Ltd., said Perdue's executive order represents "just another round in a larger national and state policy battle about the future of unemployment insurance — a battle that has many unemployed citizens unfairly trapped in the middle."

From the governor's perspective, there doubtlessly is a benefit in standing up for unemployed workers and depicting the legislature as uninterested in the plight of the long-term unemployed.

"From the legislature's perspective, a special session could provide an opportunity to enact a temporary fix while also putting in place other cuts to eligibility criteria and benefit levels," Quinterno said. "If the legislature does act, it will be important to look at the totality of their actions."