The Business Council Urges State Assistance to Address Unemployment Insurance Fund Debt
34 Other States Have Used Federal Resources to Protect Businesses
ALBANY – With just 16 legislative session days remaining, The Business Council of New York State is again calling on the New York State Legislature to provide unemployment tax relief to state employers and begin addressing the state’s massive $9.6 billion Unemployment Insurance Fund (UI) debt. Doing so would alleviate some of the increased UI tax burden adversely impacting businesses, especially small businesses.
New York is one of nine states left with an outstanding loan from the federal government, which was needed to cover the unprecedented increase in UI claims resulting from the COVID pandemic. The claims were a result of state-mandated business shutdowns during the height of the pandemic. Under existing New York law, the $9.6 billion debt and any related interest must be paid back through increased employer payroll taxes, an increase on top of the regular tax payments necessary to keep the fund whole moving forward, and in addition to increased federal UI payroll taxes.
“Minnesota was the most recent state to apply federal pandemic aid to pay down their UI debt and protect their businesses from increased taxes,” said Ken Pokalsky, Vice President of The Business Council. “While we do not expect the state to cover the entire debt, we urge state leaders to dedicate public funds while taking additional measures to provide immediate UI tax relief for employers.”
The 34 states to make payments to their UI debt have combined to use approximately $30 billion. The remaining balance owed to the federal government, from the nine remaining states, and the Virgin Islands, is approximately $38 billion.