Employers face an estimated $21 per employee increase in annual unemployment insurance premiums on Nov. 10 unless the state unemployment system pays off an $8.1 billion debt to the government federal by then.
Interest is starting to accrue on the debt the state took on to pay the high volume of regular and extended benefits during the COVID-19 pandemic.
“We have now reached this stage of interest accumulation,” said D-Round Lake Rep. Carrie Woerner, who leads a 22-member coalition of the Northern and Suburban Democratic Assembly that is urging the state to allocate tax surpluses to pay unemployment. debt.
“We agree with other New York leaders who support reducing or eliminating the UTF loan balance as soon as possible,” Woerner and his fellow Democrats wrote in a July 11 letter to the governor. Kathy Hochul.
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On its own, a $21 per year increase may not seem like a lot, but it comes on top of steep increases of up to $250 in annual unemployment bonuses already implemented and other increases in the cost of making of business, said Ken Pokarsky, vice president for government affairs for the New York State Business Council.
Premiums will continue to steadily increase until the debt is paid off, according to Pokarsky.
“It will just be every year unless that debt is paid off,” he said.
The state’s sports betting excise tax, sales tax, and personal income tax collection are all ahead of the state’s budget projections, so it makes sense to refund the debt and avoid increased costs for employers, Woerner said in a phone interview Tuesday.
To do so by Nov. 20, Hochul would have to recall the Legislative Assembly in special session to amend this year’s state budget, according to Pokarsky of the Business Council.
Woerner has bipartisan agreement from local Republican lawmakers.
“The state has money right now, and it should pay off that debt,” said Sen. Dan Stec, R-Queenbury.
State Assemblyman Matt Simpson, R-Horicon, said local business owners regularly contact his office about the matter.
“I’ve spoken to a lot — I wouldn’t say every day — but not a week goes by that I don’t get a small business owner calling me about it,” he said.
“We definitely should,” Simpson said, referring to using excess tax revenue to pay down unemployment debt. “That’s what you should do.”
Stec said raising unemployment bonuses, instead of paying down debt, would dampen the economy, just as it begins to recover from the pandemic.
Others said the state should be careful about spending excess tax revenue at the start of the fiscal year, which began April 1 and will run through March 31, 2023.
Stec said New York was among a number of states that borrowed from the federal government to keep unemployment systems afloat during the pandemic, but many other states have started repaying the loans.
Woerner said New York was more affected than other states. She and others, along with the Business Council, advocated in March for Hochul and the state legislature to allocate money from the state budget to pay down unemployment system debt.
“We haven’t been able to bring attention to the issue at this point,” she said. “There were other things that the majority saw as higher priorities.”
Woerner said she renewed her plea after State Comptroller Thomas DiNapoli recently warned of the impact on businesses if the loan is not repaid.
DiNapoli said employers would face a further premium increase in January if the debt was not repaid.
The crux of the debate is that the state unemployment system has long been an employer-funded system, said Pokarsky of the Business Council.
“This is 100% funded by taxes on employers,” he said.
Some are reluctant to set a precedent to help publicly fund the system, but business leaders say this is a one-time exception due to a public health emergency that was not caused by the businesses, Pokarsky said.
Some 34 other states have used public money to pay off or pay off pandemic-related unemployment system debt, he said.
“New York is really the only state with a large unemployment insurance debt that has done nothing.”
Maury Thompson covered local government and politics for The Post-Star for 21 years before retiring in 2017. He continues to follow regional politics as a freelance writer.