It began this week: An additional fee charged to New York employers who are shouldering the burden of the billions of dollars owed to the federal government. Ken Pokalsky of the Business Council says the money for businesses will add up in the form of a higher monthly cost.
Businesses in New York are once again being hit with a surcharge to help pay down billions of dollars in debt left over from the COVID-19 pandemic.
"People may forget about it and call this the summer surprise, but this is part of the process and part of the problem," Pokalsky said.
New York currently owes about $6.5 billion in unemployment insurance costs to the federal government. When the state closed businesses and public gathering spaces in the initial weeks of the pandemic, 2 million jobs were lost. The federal government loaned New York money to help with the sharp rise in joblessness.
"Taken together over until the day this loan is repaid, this is at least $10 billion or more increase in New York state unemployment insurance taxes paid by New York businesses," Pokalsky said.
But unlike other states that accrued unemployment insurance debt during the pandemic, New York is having employers pay down what's owed. That's meant an additional monthly fee and interest payments for businesses on top of their unemployment insurance costs.
"Every other state dipped into their federal COVID relief funds and paid down borrowing, paid interest expense with one notable exception: the state of New York," Pokalsky said.
State officials, including Gov. Kathy Hochul's administration, have defended the surcharge on businesses. State lawmakers have said it's the federal government's job to forgive the debt. But Pokalsky says lawmakers could have addressed the issue themselves last year.
"We'll be repaying this debt probably for the better part of this decade, which means we'll have an interest assessment every year for a decade as well," Pokalsky said.