'Catastrophic' insurance rise ahead without New York legislative assistance

More than 50 chambers of commerce and other business organizations are calling on New York legislators to set aside billions of dollars in the state’s unemployment trust fund.

Without it, businesses of all sizes could face “catastrophic” increases in unemployment insurance premiums for years to come.

Two years ago, at the onset of the COVID-19 pandemic, the state’s lockdown policies impacted scores of businesses across the state, with nonessential businesses forced to lay off workers due to closings and other restrictions. In a letter to Assembly Speaker Carl Heastie, Senate Majority Leader Andrea Stewart-Cousins, Assembly Minority Leader Will Barclay and Senate Minority Leader Rob Ortt, said businesses shed 1.7 million jobs two years ago.

With such a large amount of people becoming jobless, New York blew through its unemployment trust fund and needed to borrow $11 billion from the federal government to cover payments to eligible out-of-work individuals.

Now, some two years later, the business groups say their members are paying premiums at the highest rate New York allows, and the state still owes about $9.3 billion to the federal government.

In the letter, the business groups want lawmakers to put at least $2 billion to $3 billion in the trust fund to help take some of the burden from the businesses.

“New York’s economy remains fragile, and any progress towards recovery from the pandemic will only be further delayed until the State addresses Unemployment Insurance taxes and the solvency of the Trust Fund,” the letter states.

In addition, the state’s business community called on lawmakers to “devote unspent federal and/or surplus state revenues” to the unemployment program. Specifically, that would include the state paying the interest due on the federal loans and mitigating increases in the federal unemployment taxes businesses pay.

The business groups also cited a report from State Comptroller Thomas DiNapoli that determined businesses that paid the lowest rates in 2020 would see their premiums jump 182 percent this year and by nearly 254 percent in 2025.

“This would be catastrophic for our state’s job creators,” the groups wrote.

Budget negotiations will continue through the month in Albany as lawmakers are supposed to get a budget approved by March 31. The new fiscal year starts on April 1.

In a tweet last week, Barclay agreed that New York must take some action. He noted that 32 states have already started to provide relief.