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Coalition Urges Bold Action on Unemployment Insurance Trust Fund  

The Business Council of Westchester was among 37 leading business organizations that represent thousands of businesses statewide calling on Gov. Kathy Hochul to allocate resources in the Fiscal Year 2023 budget to address the state’s outstanding federal Unemployment Insurance advance that is leading to the highest possible state UI taxes, an Interest Assessment Surcharge, and increased federal UI taxes.

The letter noted that nearly three years after the pandemic, employers, particularly small businesses, continue to face unprecedented challenges. “According to NFIB’s Small Business Economic Trends (SBET) report, 30 percent of small business owners reported that inflation was the single most important problem in operating their business, 62% are experiencing significant supply chain issues, and nearly half of small businesses report job openings that cannot be filled.”

“Applications for unemployment benefits surged as non-essential businesses were shut down by New York State due to COVID, resulting in massive layoffs. The UI system became quickly overwhelmed by the unparalleled spike in claims and extraordinary amounts of money poured out of New York’s UI Trust Fund, depleting it. To continue to satisfy claims, New York was driven to borrow funds from the federal government, like many other states; however, New York is now one of only four states that still owe money to the federal government and did not use any of the billions in federal COVID relief to help pay off its federal UI advance,” read the letter.

And in July, the letter noted, businesses were notified they would shoulder the state’s interest debt payment in the form of an annual Interest Assessment Surcharge (IAS) of $27.60 per employee. Businesses will pay the IAS until the interest and the multibillion-dollar debt has been satisfied.

With the preparation of the Fiscal Year 2023 budget underway, the letter called on the State to allocate two to three billion to the UI system to fund the following employer tax relief measures:

  • Pay any interest payments due on New York State’s federal UI program advance for calendar years 2023 and 2024
  • Offset any increase in net FUTA taxes applicable to New York employers for calendar years 2023 and 2024,
  • Make a substantial down payment towards the state’s UI federal advance,
  • Recoup fraudulent UI payments and dedicate those funds to paying down New York’s debt and providing much-needed UI tax relief to employers.

The letter concluded, “Businesses cannot and should not be compelled to bear the weight of replenishing the UI trust fund and repaying the federal government alone, nor should businesses be liable for the mismanagement of the state’s UI system which resulted in $11 billion of fraudulent payments. We must do more as a State to avert this looming crisis, our long-term economic recovery depends on bold action”.

To read the complete letter, please click here.

 

 

 

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