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The Associated Press April 2, 2012, 4:36PM ET

Benton to run NC unemployment benefits office

Gov. Beverly Perdue's administration chose a career government bureaucrat Monday to run North Carolina's unemployment insurance agency, which has been criticized for administrative mistakes and the $2.7 billion debt owed to the federal government for benefits.

Dempsey Benton, who was brought in by Perdue and preceding Gov. Mike Easley for key short-term state government positions over the past five years, will be the next assistant secretary in charge of the Division of Employment Security within the Department of Commerce.

Benton will succeed Lynn Holmes, who announced last month she was leaving the job she had held for two years. Holmes had been the subject of scrutiny by Republican legislative leaders over the past year -- and even the subject of an unusual legislative subpoena.

Benton is a former longtime Raleigh city manager and chief deputy of the state environment department who served as Health and Human Services secretary for the last 18 months of the Easley administration. Benton also led the state office that managed North Carolina's share of federal stimulus money in the first half of Perdue's administration.

Harry Payne is a former head of the predecessor organization of the Division of Employment Security for more than seven years until early 2009. He also worked with Benton at the state stimulus office and said he is a good choice because he knows how to deal with spending federal funds -- as he did at his two previous state positions.

At the same time, Payne said, Benton will bring a fresh perspective while helping the General Assembly figure out how to reduce the unemployment benefit debt the state owes Washington.

The state Unemployment Insurance Trust Fund became insolvent in early 2009 after business taxes paid to the fund failed to keep up with benefits. An outside study on the trust fund challenges is pending, but any solution likely will include higher unemployment insurance taxes for some businesses.

Lawmakers "will benefit from someone who goes in there essentially from scratch with a fair mind who has not previously been attached to the process," said Payne, who now works at the North Carolina Justice Center. Benton, he added, is "absolutely a straight shooter."

Benton will oversee an agency that distributed $119.3 million unemployment benefits to nearly 124,000 people in February, according to the Division of Employment Security. The number of weeks of unemployment benefits claimed was down 8 percent compared to a year ago. The state unemployment rate fell in February to 9.9 percent but it remains historically high.

Benton "brings the skill and experience to oversee this important division," Perdue said in a prepared statement. "His many years of strong fiscal management will be a tremendous asset as we continue to recover from the worst recession in our lifetimes."

Holmes is slated to leave April 15, about five months after the Legislature shifted the previously free-standing Employment Security Commission to an office within the Commerce Department.

Holmes took criticism for errors that resulted in overpaying by $28 million benefits to tens of thousands of displaced workers. A General Assembly committee issued a subpoena for her to testify in January when she didn't attend a meeting in December. She defended her agency over whether it reacted soon enough or strongly enough in raising concerns to lawmakers about the trust fund debt.

With Perdue leaving office in January, there are no assurances Benton will be back after a Democrat or Republican wins the Executive Mansion in November.

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