Colony – New York businesses continue to emerge from the height of the COVID-19 pandemic two years ago, with ongoing supply chain disruptions, rising costs and difficulty retaining employees.
And now they’re being hit by what might be called the state COVID tax.
Businesses statewide recently learned that they must pay an interest assessment surcharge of $27.60 per employee by September 30th.
This money will be sent to state labor departments and used to pay interest on the approximately $8 billion the state still owes to the U.S. Treasury Department.
At the worst of the pandemic, New York had to borrow a total of $9.9 billion at an interest rate of 2.27% to pay unemployment benefits to the thousands who lost their jobs due to COVID and the shutdowns that followed. .
A charge of $27.60 per person won’t break the bank. But businessmen and advocates say New York will use none of the millions of COVID relief money from Washington, D.C., to pay back this interest, even though the more than 30 states that borrowed the money have I point out that I have not.
“By using billions of dollars in federal pandemic assistance to pay off the state’s unemployment insurance debt and interest on the debt, New York state’s elected leaders want these additional fees to go to corporate emails. We had an opportunity to prevent it from reaching the box,” state spokeswoman Ashley Lanslow said at the National Federation of Independent Business Offices. “Instead, the state sidesteps responsibility and places the burden on hard-working small business owners.”
According to them, the valuation was an insult to injury, another cost that New York operators had to bear, and operators in other states avoided.
“You might say $27.60 isn’t a big deal, but unemployment insurance taxes have already gone up significantly,” said Ken Pokalski, vice president of the New York State Business Council. “It’s also on top of other things that have gone up significantly.”
“They thought they paid taxes and now they owe more,” said Pokharski, adding that unemployment insurance taxes are likely to go up next year as they did this year.
Peter Elitzer, who runs a Peter Harris discount clothing store in the metropolitan area and label shopper stores in several other states, said, “I feel like companies are going to swallow it up, so I’m not sure. “No problem,” he said.
Elitzer has clothing stores in many other states, including Vermont, Indiana, West Virginia, North Carolina, Michigan, and Ohio, and only New York charges interest rates.
His company employs about 250 out of a total of 600 people in New York.
“Their budgets are flooded with extra cash and they’re trying to get another back-end way to get more tax money out of their business,” Elitzer added, adding federal funding for pandemic relief. mentioned the state’s ballooning $220 billion budget this year.
“We are disappointed that New York State did not use its COVID relief funds, especially in the face of high inflation and the possibility of a recession. I’m afraid it could,” added Erica Komoroske, a spokesperson for Stewart Shops convenience stores, which employs about 5,000 people in New York.
At $27.60 each, the interest valuation bill is $138,000.
Tracy Snell, who runs Snell Septic Service with her husband in Greenwich, Washington County, has five employees, so the interest assessment surcharge is only $138.
But it comes amid a surge in worker compensation and regular unemployment insurance taxes of over $7,000 a year.
Additionally, Snell’s company did not shut down during the pandemic. They are considered essential workers, and the bankruptcy of the town’s septic tank company will obviously cause many problems for the people.
“We were still working, so we didn’t get anything,” she said of the various federal dollars to keep people working.
“pay interest”
New York borrowed money from the US Treasury to meet its unemployment benefit debt, including in the years following the 9/11 attacks and the 2008 financial crisis. Loans from 2008 onwards were not fully repaid until 2015.
Lawmakers offer different approaches, but they’re paying attention.
Minority Republicans in the state Senate recently called on Gov. Kathy Hochul to stop collecting assessment fees.
West New York Senator Pat Gallivan, an influential member of the Labor Committee, said, “Putting this financial burden on New York businesses … at a time when many businesses are already facing increased operating costs. to be unconscionable.
North Country Democrat Billy Jones also called on the state to intervene.
“What we are advocating here is for New York State to at least come up with some money to pay the interest on this debt and not pass it along to our small business owners.” he said.
Hochul spokesman Justin Henry said, “Our office is closely monitoring unemployment insurance debt, working closely with the Department of Labor.” Henry said the state is funding his COVID recovery program more than $1 billion. Much of it is federal money.
However, some believe federal COVID relief funds should be used for other purposes, such as rehiring local government employees who have been laid off over the past decade.
“Using[America’s Relief Plan]funds to pay off past Unemployment Insurance Trust Fund debt also takes away money that could be used today to support public employment and enhance public goods and services. ,” concluded the Institute for Progressive Economic Policy. A study on this issue last year.
The American Rescue Plan is a federal law passed in 2021 to help communities, local and state governments, and people and businesses pay for some of the costs of the pandemic. Business advocates believe some of that money should have been used to pay interest.
Congressional Speaker Carl Heastie said he believes interest costs should be borne by the federal government, not the states.
Democrats recently said not all states have reached the “crisis level” of New York, which has gone into lockdown.
“I believe the federal government should bear this cost,” Heastie said.
Either way, it was and still is a big expense.
New York State owes the federal government $162 million in interest in 2022 alone, according to the State Department of Labor.
rkarlin@timesunion.com 518 454 5758 @RickKarlinTU
