In an effort to help North Carolina's sluggish economy, Gov. Jim Martin last week asked legislators to cut about $50 million in unemployment taxes paid by the state's businesses.
Gov. Martin said he is proposing the cuts to help small businesses and "give a little extra stimulus to the economy." The state can afford to cut the taxes, the governor said, because an unemployment-tax reserve fund, which is separate from the North Carolina general fund, is flush with more than a $1 billion in cash.
Each business in the Tarheel State currently pays a jobless tax ranging from less than 1% of payroll to 6.84%, depending on how often it trims its work force. New businesses pay 3.24%. The tax cut, in addition, would eliminate a 20% surcharge that the legislature added to businesses' unemployment taxes in 1987.
The governor's proposal could speed up enactment of legislation sponsored by Sen. Howard Bryan, R-Iredell, that would roll back the surcharge. Currently, the earliest Sen. Bryan's bill could go into effect would be Jan. 1, 1993. Gov. Martin, however, hopes to make it July 1, 1992, by pushing for passage during next month's special session of the state's General Assembly or during its regular session in 1992, which begins in May.