Employers are facing huge increases in unemployment insurance premiums – unless the government does something

Employers face a $21-per-employee increase in annual unemployment insurance premiums on Nov. 10, unless the unemployment government pays the $8.1 billion debt to the federal government before that time.

Interest has started to rise on the debt that the government took to pay for the amount of fixed and extended benefits during the COVID-19 pandemic.

“Now we’re at a tipping point,” said Assemblywoman Carrie Woerner, D-Round Lake, who is leading a coalition of 22 Democratic Assembly members urging the state to pay more taxes to reduce unemployment. debt.

“We agree with other New York leaders who want to reduce or eliminate UTF debt as soon as possible,” Woerner and his Democratic colleagues wrote in a July 11 letter to Gov. Kathy Hochul.

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On its own, an increase of $21 a year may not sound like much, but it is on top of a significant increase of $250 a year that has already been used and other increases in business expenses, said Ken. Pokarsky, vice president for government affairs at the New York State Business Council.

Fees will continue to increase until the loan is paid off, according to Pokarsky.

“It will only be every year, unless the debt is paid off,” he said.

State taxes on sports betting, sales taxes, and personal income tax collections are moving ahead of the state budget, so it makes sense to pay back the debt and avoid higher costs for employers, Woerner said in a telephone interview Tuesday.

To do this before Nov. 20, Hochul had to call the Parliament for a special session to change the state budget for this year, according to Pokarsky, of the Business Council.

Woerner has bipartisan support from congressional Republicans.

“The government has money right now, and it has to pay this debt,” said Sen. Dan Stec, R-Queenbury.

State Assemblyman Matt Simpson, R-Horicon, said local business owners have been contacting his office about the issue.

“I’ve talked to a lot of people — I can’t say every day — but not a week goes by that small business owners don’t call me about this,” he said.

“We have to do this,” Simpson said, referring to using more tax dollars to pay unemployment benefits. “It’s the right thing to do.”

Stec said increasing unemployment benefits, rather than paying down the debt, would hurt the economy, which is beginning to recover.

Some have argued that the government should be careful to spend more taxes at the beginning of the fiscal year, which runs from April 1 to March 31, 2023.

Stec said New York is one of several states that borrowed from the government to stay out of business during the pandemic, but many other states have begun repaying those loans.

Woerner said New York was hit harder than other states. He and others, along with the Business Council, recommended in March that Hochul and the state Legislature provide money in the state budget to pay off the unemployment loan.

“We haven’t done very well to get attention on this issue,” he said. “There were some things that many felt were more important.”

Woerner said he also boosted his advice after Gov. Thomas DiNapoli recently warned about the impact on businesses if the loan is not repaid.

DiNapoli said employers face another increase in fees in January if the loan is not paid.

The point of contention is that the state’s unemployment system has been used by employers, said Pokarsky, of the Business Council.

“This is funded 100% by taxes on employers,” he said.

Some are hesitant to establish a precedent for providing government funding to the system, but business leaders say this is a one-time event due to an emergency that was not initiated by businesses, Pokarsky said.

Another 34 states have used public funds to pay or pay debt related to unemployment due to the pandemic, he said.

“New York is the only state with a large UI (unemployment insurance) debt that hasn’t been dealt with.”

Maury Thompson covered local government and politics for The Post-Star for 21 years before retiring in 2017. He continues to follow local politics as a freelance writer.