NYS owes $8B to Federal Government for unemployment loan
ROCHESTER, N.Y. (WHEC) – New York State owes the Federal Government about $8 billion for a loan it took to pay unemployment benefits to New Yorkers who were out of work during the pandemic. The concern is that if the state doesn’t come up with funding, the loan will fall on the backs of business owners.
“I don’t think it’s gotten the attention it should,” says NYS Comptroller Tom DiNapoli of the amount of the loan. “I mean small businesses are the backbone of the states’ economy and many of them have struggled, some of them went out of business, so certainly the ones still in business need to be supported.”
But they are the ones who will see major increases in the rates they pay for unemployment insurance unless the state finds some money to put toward the bill.
Comptroller DiNapoli says one option is to use some of the pandemic relief money New York got to pay down the bill, basically—give the feds back their own money. “Other states have used some of that money for that purpose,” he explains, “New York so far has chosen not to. The other option is we could ask our federal delegation to expand the loan or get some kind of a waiver.”
Governor Kathy Hochul said earlier this week she’s looking for additional revenue streams to help pay down the balance but those payments need to be made soon, “we don’t want to see our small businesses suffer because of this because that will only make the recovery that’s underway even harder too so, you and the impact of increased interest rates inflation unemployment tax is going up as well and creates problems,” DiNapoli says.
Adding insult to injury is the fact that billions, possibly even the full amount of the loan at this point, was paid out to fraudsters who scammed NYS’s unemployment system. Comptroller DiNapoli has an audit underway into that, “It’s not done yet, there’s a lot there and you’ll be the first to know when we get it done,” he told News10NBC Investigative Reporter Jennifer Lewke.