On January 8th at the meeting of the Joint Legislative Oversight Committee on Unemployment Insurance I plainly saw something I have been anticipating for a long time -- a legislative committee explored, in real time, the direct relationship between federal funds and state funds. Well done.

Last session the Legislature undertook a radical reform of Unemployment Insurance with a reduction of benefits and an accelerated plan to pay off the state's debt to the federal government. The prevailing argument was that our benefit was rich enough, and lasted long enough, that we had unwittingly created a culture of unemployment as a short term career option for some. And we were using our federal government credit card to underwrite it. The new law was a bitter pill for all, and even Governor McCrory described it as a tough one when addressing the crowd at the NC Bankers' Association meeting this week.

Because of last year's reforms our debt to the federal government, currently at $1.85 billion, is $100 million ahead of the payoff projection. November 1st is the day the feds peer into our trust fund to assess its health, and we live with that diagnosis until the next November 1st. Current plans are to repay our debt in time for our November of 2015 check-up.

The "a ha" moment came when the committee heard a status report on federal emergency unemployment insurance legislation from Doug Holmes (an expert in Washington, DC) by phone about the result of the US Senate's cloture vote, and the talks between Senate and House Leadership about the possibility of enacting federal emergency unemployment insurance, and how the bill would be paid for, and who might support it. The committee (a ha!!) asked how receiving additional weeks of benefits for NC's unemployed would affect our state-run program and our repayment plan. It turns out the Congressional Budget Office presumes that some jobseekers in NC may delay their job hunt if a federal benefit was expecting to kick in in the near future and so the CBO predicts there would be a small impact to NC's program based on an individual's behavior. But aside from the unemployed taking full advantage of NC's existing benefit there would be no other additional state funds needed.