RALEIGH -- After paying off a $2.8 billion debt to the federal government in May 2015, the state’s unemployment trust fund reserve has reached $1 billion. It’s the first time that the trust fund has exceeded $1 billion since May 2001.

By reaching this mark, the 20 percent state unemployment insurance tax surcharge that N.C. employers have been paying for ten years will be discontinued, according to information from Gov. Pat McCrory’s office.  These savings, along with receiving the full Federal Unemployment Tax Act (FUTA) credit will save employers more than $600 million in taxes during 2015-2016.

As part of the plan to eliminate the debt owed to the federal government the maximum number of weeks someone could receive benefits was lowered as was the maximum benefit amount. The move drew criticism from liberals and social advocates, who said the debt was being reduced on the backs on those who needed the help the most.

“This money can be used to hire more workers, which will ultimately add more money to the trust fund so we don’t get into another borrowing situation,” said Governor Pat McCrory. In a press release “We have paid off the debt five years early and reached an important balance in our trust fund at the right time to bring certainty to North Carolina businesses.”

From 2011 to 2014, North Carolina businesses paid $1 billion in penalties and interest due to this debt to the federal government.

“No Governor or General Assembly in North Carolina history has ever inherited such a broke and broken unemployment system,” said Department of Employment Security Assistant Secretary Dale Folwell. “The trust fund has gone from bankruptcy to solvency in 30 months. Thanks to changes in policy, process and the innovative ideas from DES employees, I’m certain that North Carolina will never have to deal with this again.”

Commerce Secretary John Skvarla said reforms in North Carolina’s unemployment insurance program sets the stage for more robust economic growth.

“We care about the success of all business across North Carolina,” said N.C. Commerce Secretary John E. Skvarla III. “This tax relief is an important milestone that could lead to more jobs and  business growth in our great state.”

Under changes signed by the Governor, someone make at least five job contacts each week to stay eligible for benefits. Previously, the applicant was only required to make two contacts a week.