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70,000 jobless will soon lose unemployment benefits

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The state Division of Employment Security is trying to get out the word that the end of extended unemployment benefits is fast approaching for tens of thousands of jobless workers across the state.

As of last week, unemployed workers who file their weekly claims online or by phone are being alerted that extended federal benefits that kick in after the initial 26 weeks of unemployment benefits will cease at the end of June, said Commerce Department spokesman Josh Ellis.

An estimated 70,000 jobless workers who started receiving benefits prior to Jan. 1 will no longer receive weekly unemployment checks beginning in July. The halt in benefits comes at a time when the state's unemployment rate is 8.9 percent, fifth-highest in the nation.

The state alerts don't mention that a new state law that goes into effect July 1 is the catalyst that will prevent them from collecting extended federal benefits. Those federal benefits have been providing up to an additional 73 weeks of unemployment checks for those unable to find a job -- for a total of 99 weeks when you add in the 26 weeks funded by the state.

Federal law requires states to maintain their weekly benefit amounts in order to receive the federal money. But the major overhaul of the state's unemployment system that Gov. Pat McCrory signed into law in February cuts maximum benefits paid to unemployed workers by roughly one-third as well as reducing the maximum weeks of benefits funded by the state from 26 weeks to a sliding scale of between 12 and 20 weeks.

Workers who are already receiving state-funded unemployment benefits won't see any changes in their weekly benefits, and will continue to receive benefits for the full 26 weeks. The new state law only applies to claims filed after June 30.

"We want folks to understand our workforce offices (commonly referred to as unemployment offices) are gearing up to help people" whose benefits are ending, Ellis said. "We want them to know we are here to assist them in looking for a job."

Services offered by the workforce centers include preparing resumes, job-search assistance, career guidance and information on training and education, among others.

The new law was a response to the more than $2 billion the state owes the federal government, money that was borrowed to cover state-funded unemployment benefits when unemployment soared. Scaling back the benefits will accelerate paying off the debt, which triggered higher federal taxes for businesses -- an increase of $21 per employee per year until the debt is erased.

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About the blogger

David Ranii has been a business reporter at The News & Observer since 1993. Over the years he has covered information technology, banking, insurance, the pharmaceutical and biotechnology industries, media businesses and real estate. Contact him at 919-829-4877 or e-mail him.