by Rick Henderson
Editor-in-Chief, Carolina Journal
If you needed any more evidence that the state of North Carolina, rather than every business in the state, ultimately will be held accountable for North Carolina’s $2.5 billion debt to the federal unemployment insurance trust fund, be sure to check out the update to today’s lead Carolina Journal Online lead story.
[A]ccording to the State of North Carolina’s official financial statements, published each year by the Office of State Controller, the borrower legally liable for federal unemployment-insurance debt is not in dispute. The report lists the Unemployment Compensation Fund as one of state government’s largest enterprise funds. Its inflows, outflows, and net assets are included in the state’s income statement and balance sheet.
“In February 2009, because of depleted cash balances,” the 2012 edition of North Carolina’s Comprehensive Annual Financial Report states, “the State began borrowing from the U.S. Treasury to ensure the uninterrupted payment of State unemployment benefits” (p. 40). The 2012 report was issued by David McCoy, the state controller serving under former Gov. Beverly Perdue. A PDF of the 304-page statement is available here.
Earlier media reports stating that the debt was not a state obligation were incorrect. A couple of phone calls or a few minutes on the Internet by reporters could have cleared all this up.