A decent amount of rain was falling across New York state on Tuesday, and according to Gov. Kathy Hochul, it was also a rainy day to use some of the state’s reserve funds.

The governor said on Monday that the state budget will now pay off all of the $6.2 billion in unemployment insurance debt that ballooned in New York during the COVID-19 pandemic. The funding for that will come from the state’s reserves, which Hochul at the beginning of her tenure as governor labeled the state’s rainy day fund.

“I said we’d use them for a rainy day,” Hochul told reporters Tuesday.

“Yes, it is raining,” she said when asked if Tuesday was that day.

After initially declaring the state would only pay off the interest on the unemployment insurance debt this year, Hochul said she met with business leaders in Long Island and Buffalo over the last few days and reasoned this payout would help businesses should an economic downturn take place.

“I can see down the road — and it’s not that far — where we’re going to have layoffs in businesses. We’re going to have businesses that are struggling to make payroll themselves,” Hochul said. “And I found that this was an opportunity for me to really lift a major burden off these businesses. They’ve been asking for this a while. Call this my counter to the tariffs.”

The burden of the debt since the outbreak of the pandemic has been carried by businesses through increased taxes and has led to unemployment payments being cut until the debt is paid off. New York is one of two states that still has COVID-related federal unemployment insurance debt after the state failed to use $25 billion in federal stimulus aid for unemployment tax relief.

“I’m doing this to help the businesses prepare to weather the storm that we are entering. I think we’re in for a recession,” Hochul said.

Last week, a U.S. Consumer Confidence Index poll found consumers expect the economy to worsen over the next six months. Consumer mentions of tariffs hit an all-time high in the Conference Board's April survey, with many respondents specifically mentioning their concerns that tariffs will increase prices and negatively impact the economy.

“I have to do this to protect my businesses, our businesses, but also to protect the people who, if there’s a recession, will be losing their jobs. That’s the nature of a recession, people lose their jobs,” Hochul said. “So yes, I’ve been preparing for the rainy day, and sadly because of what’s been occurring over the last 100-plus days, the rainy day has arrived.”

Eliminating the unemployment insurance debt was a primary push this budget season from state Assembly Speaker Carl Heastie.