During COVID, New York, like many states had to borrow billions to cover pandemic unemployment programs. New York borrowed an estimated $6 billion dollars and that debt remains on the books.
Meanwhile, Governor Kathy Hochul made her first priority for 2025 a proposal for New York State’s first-ever Inflation Refund.
The refund would return about $3 billion to New York taxpayers in direct payments to around 8.6 million New York taxpayers statewide in 2025. Those eligible would receive payments of $300 to single taxpayers who make up to $150,000 per year, and a payment of $500 for joint tax filers making up to $300,000 per year.
Returning taxpayer money to taxpayers is almost always a good thing, paying off debt is a good thing too. And if the rebate goes through, the debt remains completely intact. Using the $3 billion in proposed rebate funds would cut the unemployment debt in half and relieve the taxpayer of that burden going forward. Three Republican Senators agree that the tax burden needs to be lessened and want the Governor to consider a better approach.
Republican Senators Dean Murray (R-Brookhaven), George Borrello (R,C-Jamestown), and Pam Helming (R,C, IP-Geneseo), all members of the Senate Committee on Small Business, Commerce and Economic Development, have called on Governor Kathy Hochul to take decisive action to alleviate the burdens facing New York’s small businesses.
In a joint letter, the Senators urged Governor Hochul to dedicate state funds to paying off the roughly $6 billion in Unemployment Insurance (UI) Fund debt that is still owed to the federal government, a critical step that they argue would provide a more effective and long-term solution to alleviating inflation and reducing consumer costs.
Senator Murray, the Ranking Member of the Committee, emphasized the connection between this issue and rising consumer costs.
"By eliminating a massive expense for employers and businesses, we are helping them and allowing them to lower the costs of goods and services, which in turn, helps consumers. Instead of a one-shot check, this brings long-term relief for everyone,” said Senator Dean Murray, 3rd District.
The senators highlighted that the state’s Unemployment Fund debt, accrued during the COVID-19 pandemic, has put an enormous financial burden on small businesses, forcing them to shoulder higher unemployment insurance premiums. These increased costs threaten to stifle recovery efforts for small businesses that are already grappling with inflation and other economic pressures.
"Instead of following the commonsense approach of other states and using some of the billions in federal COVID aid to pay down the unemployment debt, the governor unfairly shifted the burden to businesses and employers through the Unemployment Insurance Assessment Surcharge (UIAS),” said Senator George Borrello, 57th District. “Since the UI deficit stems from the government-mandated shutdown during the pandemic, it is only fair that employers are not left to shoulder these costs."
The legislators also underscored that addressing the UI debt would demonstrate the state’s commitment to supporting its small business community.
“The state must take full financial responsibility for its UI debt to the federal government and end this burden on our small businesses and family farms,” said Senator Pam Helming, 54th District. “If we truly want to help our employers grow and protect local jobs, we must reduce the cost of doing business in New York State. Our economic success depends on it.”
Assemblyman Joe DeStefano (R-Medford) agrees. “What we would much rather see is the Democrat leaders of the Legislature and Gov. Hochul approving the Republican bills to cut what are the highest taxes and fees in the nation and our inflation fighting measures,” said DeStefano. “These would amount to taxpayer savings well above the few hundred dollars of our own money they’re giving back to us.”