New York urged to pay off federal unemployment debt
In a letter on Monday, Democratic state lawmakers urged Governor Kathy Hochul’s administration to repay the $8.1 billion owed to the federal Unemployment Trust Fund before a major cost hike. taxes will hit New York businesses later this year.
The letter, signed by 22 members of the state Assembly who represent suburban and upstate districts and released by Assembly Office Carrie Woerner, comes as New York remains largely an outlier. among States for the outstanding debt created by the economic crisis during the first months of the COVID pandemic.
“Making payments on outstanding debt is the responsible thing to do; allowing debt to grow through non-payment will jeopardize the state’s ongoing economic recovery,” the lawmakers wrote in the statement. letter. “We urge you to take immediate action to repay the loan.”
Lawmakers pointed to money from mobile sports betting in New York, as well as increased sales tax revenue, as potential sources to help pay down debt. Paying down the debt to avoid an impending tax hike for employers should be a priority, the lawmakers wrote.
The letter is the latest effort to sound the alarm about the unpaid cost of unemployment insurance debt that New York has racked up during the pandemic. A June report from Comptroller Tom DiNapoli’s office found that New York’s debt stock is second only to California in size and is among the few states that have yet to solved the problem.
Business organizations, whose members are already grappling with rising fuel prices and expenses created by inflation in recent months urged New York officials to act before leaving Albany earlier this year.
The state’s economy was hit early by the effects of the COVID-19 pandemic, and the mandatory closure of businesses and gathering spaces led to a record number of jobless claims. As a result, New York borrowed from the federal government in May 2020.
If interest is not paid by the Nov. 10 deadline, those interest charges will increase, which will actually increase the federal share of employers’ tax bills. DiNapoli’s office estimated this would lead to an annual federal tax increase of $21 per worker.
“We agree with other New York leaders who support reducing or eliminating the UTF loan balance as soon as possible,” the lawmakers wrote.