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North Country Assemblyman and business owners call on state to end unemployment insurance interest assessment surcharge

From right: Assemblyman D. Billy Jones, North Country Chamber President Garry Douglas, West Side Ballroom Executive Director Robin Pierce and Rulfs Orchard Business Manager Shannon Wilkins discuss NYS Unemployment Insurance surcharge
Pat Bradley
/
WAMC
From right: Assemblyman D. Billy Jones, North Country Chamber President Garry Douglas, West Side Ballroom Executive Director Robin Pierce and Rulfs Orchard Business Manager Shannon Wilkins discuss NYS Unemployment Insurance surcharge

New York state faces a bill to pay off a loan to the federal government to fund its Unemployment Insurance Fund during the pandemic. A North Country Assemblyman is calling on the state to allocate higher-than-expected revenues to pay the bill rather than levying a surcharge on businesses, municipalities and non-profits.

In June, New York Comptroller Thomas DiNapoli issued an “Update on New York’s Unemployment Insurance Trust Fund.” The Democrat’s report notes that job losses during the COVID-19 pandemic led to record unemployment insurance claims and because New York did not have sufficient funds, it had to borrow from the federal government. The state has paid $1.2 billion of the loan but there is still an $8.1 billion balance that must be paid by November 10, 2022.

Assemblyman D. Billy Jones, a Democrat representing the 115th District, says the state needs to act.

“Businesses are getting hit with an interest assessment surcharge,” Jones said at a press conference Aug. 8. “So what we are here advocating for is for New York state to come up with some money to at least pay the interest on this debt so it’s not passed on down to our small business owners and organizations here in the North Country and throughout New York State.”

Jones says even if a business did not lay off anyone during the pandemic, the surcharge must still be paid.

“New York State, already we are at the max of what we charge our small businesses and then we’re putting this assessment onto this. So we need to help our small businesses here. They of course are coming out of this pandemic. They are still struggling and then on top of this here we are putting an interest assessment surcharge.”

The comptroller’s report notes that the state Unemployment Insurance tax rates vary based on an employer’s payroll and they face an additional $21 federal tax per employee if the November bill is not paid.

The West Side Ballroom is a wedding and conference venue on the former Plattsburgh Air Force Base. Executive Director Robin Pierce said they nearly closed permanently during the pandemic and are only now beginning to see business return to normal.

“New York State is now imposing the surcharge to pay back the interest for the unemployment claims,” Pierce said. “But that wasn’t due to the action of the employers. That was due to the action of the government. We should not be responsible for paying for the shortfall created by the government’s action. I’m asking that New York state not impose this surcharge but to look deep and to try to find the revenue to cover this interest.”

New York’s 2022-23 budget did not include state or federal funds to pay the federal loan, according to Jones. He says there are several revenue sources the state could tap into to pay down the debt.

“We have seen revenues come in higher than expected from state sales tax, other tax revenue that’s coming in. We legalized gambling in some sense and form in the past year and those revenues are coming in well above what was expected," noted Jones. "So we do have some money that could pay for and offset this interest that’s coming due.”

North Country Chamber President Garry Douglas notes another source of funding the state could access.

“At least 32 states have used a portion of their federal COVID relief funding to pay down this debt. New York has not yet chosen to do that. But it still has substantial amounts of those funds available," said Douglas. "The state mandated the layoffs. The state mandates layoffs and then gets federal aid to help address the impacts of those layoffs and of the shutdown, then isn’t it appropriate more than ever for the state to step in and use those available resources to address what it did particularly when it continues to talk about the need to foster recovery and growth going forward.”

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