Unemployment Insurance Debt Clock Reaches 1,095 Days, Three Years of No Action Taken by New York State
Fiscal Burden on State’s Employers Growing
ALBANY – One thousand ninety-five days, three full years, have passed without New York State officials addressing the state’s Unemployment Insurance (UI) debt bill. The state borrowed federal funds to pay unemployment benefits following mandated business shutdowns during the COVID pandemic, and the state’s outstanding debt still totals more than $7 billion.
The debt is directly financed by increased federal and state payroll taxes on employers, and while New York businesses continue to pay record-high UI taxes to pay down the debt, they have already paid more than $3 billion in debt service and interest.
The Business Council of New York State unveiled a clock in 2023 to monitor how many days have passed without New York lawmakers taking action. The clock currently sits at 1,095 days, the time since the first proposed state budget was introduced with knowledge of a massive UI fund deficit.
“The Business Council began warning state lawmakers shortly after the pandemic began that, if not addressed, this multi-billion dollar deficit would have a severe impact on the state’s employers, particularly small businesses,” said Heather Mulligan, President & CEO of The Business Council. “The current $7.2 billion debt, driven by state-mandated shutdowns, is expected to take up to a decade to pay back through elevated payroll taxes on New York employers. Sadly, this deficit is on top of the already increasing costs of doing business in New York state.”
More than 30 states borrowed money from the federal government to fund their UI programs throughout the pandemic, and all but one state, New York, has used federal funds to help refinance their UI trust funds.
Unless the state acts, the entirety of the federal advances will continue to be repaid through increased payroll taxes on New York employers.