NYS Faces Continued Challenges to Repay Federal Loans that Supported Pandemic Unemployment Claims
While many states turned to the federal government for loans to support unemployment insurance (UI) claims that reached record numbers due to the devastating job losses due to the COVID-19 pandemic, New York State is one of only seven states or territories with UI funds that continue to be in debt to the federal government, despite steady employment gains and state tax rates that have already increased to maximum permissible levels. According to the June 10, 2022 report by the New York State Comptroller’s Office, NYS’ outstanding balance of $8.1 billion as of May 31, 2022 is second only to California; and if “not fully paid by November 10, 2022, interest costs will mount, as will the federal portion of employers’ 2022 tax bills” — potentially impeding the State’s employment recovery amid growing economic uncertainty. Moving forward, NYS Comptroller DiNapoli and others “have advocated for additional federal support in the form of extended interest waivers;” as well as suggesting that state policy makers “should consider whether available fiscal relief funds could be used to support the state’s UI fund.”