An additional fee has begun to be levied this week on New York businesses, as part of an effort to repay the billions of dollars owed to the federal government for unemployment insurance costs incurred during the COVID-19 pandemic.
The state currently has a debt of approximately $6.5 billion, a result of borrowing from the federal government to deal with job losses when public spaces and businesses were closed at the pandemic’s onset.
Business advocates warns that this debt repayment scheme will result in a significant increase in costs for businesses.
Unique among states that borrowed to cover unemployment costs, New York has chosen to repay its debt via additional monthly fees and interest payments from businesses, on top of regular unemployment insurance costs.
Experts say every other state utilized federal COVID relief funds to repay their borrowings and cover interest expenses. The surcharge has been defended by state officials, including Governor Kathy Hochul’s administration, who assert that it is the federal government’s responsibility to forgive the debt.
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