N.C. unemployment tax could go up for businesses

CHARLOTTE, NC (WBTV) - North Carolina has one of the lowest tax rates on employers in the country, and that's a fact a lot of people used to take pride in.

But then the recession hit, and now we're in trouble.

The state's unemployment fund is broke - $2.7 billion in the red.

We borrowed federal cash to pay an army of people who lost their jobs, now the feds want their money back.

And State Senator Bob Rucho from Mecklenburg County wants to give it to them as quickly as possible.

"What we have is the worst deficit we've gotten in employment security commission ever," Rucho says. "We've never had it this bad."

Republicans like Rucho says businesses are going to have to pay more. In fact, they're working on big changes at the state level.

"We want to make sure it isn't just a matter of throwing more money down into a rat hole, we want this money to go back into a secure and efficiently run operation," Rucho says.

He thinks we've got three major problems, really.

First, ESC makes mistakes - it gives checks to people who don't deserve them. And the organization admitted as much when it recently tried to get the unemployed to pay back hundreds of thousands it had already given them.

Second, 12% of state businesses don't pay anything at all into unemployment - 25,000 of them, exempt for a whole host of reasons.

And third, those that did pay last year averaged about $280 bucks per employee, far below the national average of $360 per worker.