New York is among a small group of states that still owes billions of dollars to the federal unemployment trust fund, an analysis released Friday by state Comptroller Tom DiNapoli found.
The debt for New York stands at $8.1 billion, second only to California.
“New York’s unemployment insurance debt has remained stubbornly high despite steady employment gains and state tax rates that have already increased to maximum permissible levels,” DiNapoli said. “Absent any significant federal or state action, repaying the loan and replenishing the unemployment fund will require federal tax increases that may be burdensome to small businesses and could hinder the state’s economic recovery.”
Business organizations have decried the outstanding debt and have urged the state government to take action. The cost of paying down the debt has been placed on businesses through unemployment insurance taxes.
New York's economy was hit early and hard by the COVID-19 pandemic, which led to a record number of unemployment claims. That required the state to borrow from the federal government starting in May 2020. If interest is not fully repaid by a Nov. 10 deadline, the cost of interest will increase, leading to a tax increase on the federal portion of employers' tax bills.