08/08/04 — ESC money comes from General Assembly

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ESC money comes from General Assembly

By Sam Atkins
Published in News on August 8, 2004 2:13 AM

North Carolina's Employ-ment Security Commission officials say they are relieved that the General Assembly allocated $6 million in this year's budget to keep them operating as normal.

The money is being appropriated from the Special Employment Security Administration Fund to the commission for the operation and support of local offices, which were facing a severe lack of funding and layoffs of some of its employees.

"It certainly has relieved a lot of stress," said Bill Pate, manager of the Goldsboro office.

The money in the administration fund came from charges that businesses were penalized for not paying their taxes on time, he said. The $6 million will be divided among the 96 service offices across the state.

The offices were expecting a funding shortfall beginning with the new fiscal year on July 1, and officials had estimated that the ESC could cut 188 full-time workers statewide, most coming from the state's service offices. The offices help people find jobs and training and also handle applications for unemployment benefits.

Pate was preparing for a worst-case situation of four people being laid off between the Goldsboro and Mount Olive offices. There are a total of 12 employees combined in the two offices. Some employees had already been out looking for work, he said.

The ESC has not been receiving money from the state because there is no interest available in the unemployment insurance trust and reserve fund. The state established the $200 million reserve fund in the mid-1980s, and the commission decided in April 2003 to divert the entire fund to pay off unemployment benefits.

About $1.3 billion in unemployment benefits was given out in the state in 2003, and around $12 million was given out last year in Wayne County alone, said Pate.

For the first time in the ESC's history, it has borrowed money from the federal government to pay out unemployment benefit checks. It stopped receiving money from the federal government in April and the offices were using money from the federal food stamp program and other programs to operate.

Pate said all of the state's offices laid off their part-time employees in October and he had been working hard to save resources to avoid any potential layoffs when the new fiscal year began. They were saving resources by not hiring new staff and filling vacant positions through transfers and promotions of existing permanent employees.

Managers are still developing a method to provide the same services with fewer employees. The offices will soon become more automated, and unemployment claims will be filed through the Internet and through call centers in Raleigh using voice recognition.

Pate said Sen. John Kerr and Rep. Louis Pate, whose districts include Wayne County, were instrumental in getting the money passed through the General Assembly. The offices will now be able to provide the same services and avoid any immediate financial stress.

It could face a similar financial situation looking towards next fiscal year, but Pate hopes the ESC's trust and reserve fund will be built back up and it will be able to pay off the federal government as soon as possible.