Relief from the cost of interest on unemployment insurance payments for small businesses is being urged for Gov. Kathy Hochul ahead of her presentation of the spending plan on Wednesday. 

The money has been sought over the last year as employers in New York are hit with the additional surcharge to help pay down New York's unemployment insurance debt to the federal government that sharply rose as joblessness increased in the initial months of the COVID pandemic. 

Republicans in the state Senate on Monday urged Hochul to consider money to help offset those costs attached to the monthly unemployment insurance fund payments as well as additional measures meant to relieve small businesses of their overhead costs. 

"The Covid-19 pandemic caused a great deal of harm to small businesses which are the backbone of our economy," Senate Minority Leader Robert Ortt said. "Small business owners and their employees should not be held as bargaining chips to be traded behind closed doors. They must have the unequivocal support of Albany."

New York owes billions of dollars in unemployment insurance debt to the federal government. To help pay down the debt, employers pay a per-employee interest surcharge each month. 

Republicans on Monday proposed using a portion of New York's $10 billion discretionary funds to offset the costs of the payments for small employers. Republicans also proposed a fixed contribution for employers to the unemployment insurance fund as a way of reducing costs. 

Small business organizations as well as the New York Farm Bureau have called for relief from the payments. Those calls grew louder over the summer when an audit released by Comptroller Tom DiNapoli's office found scammers made off with $11 billion in fraudulent unemployment claims in the initial phase of the pandemic. 

The proposal comes amid deepening questions over the economy. While employment has partially rebounded, higher interest rates and inflation have slammed consumers' wallets as well as made the cost of doing business more expensive. 

“There is no doubt that small business is the backbone of our state's economy, yet it's the combination of taxes, fees and unfunded mandates that are breaking the backs of those same small businesses," said state Sen. Dean Murray. "The state's handling of unemployment during Covid and the imposition of the ‘Unemployment Insurance Assessment Surcharge’ on businesses is the perfect example of the state working against the business community by punishing them for something they had absolutely no control over."