Governor Kathy Hochul stood with the Hotel and Gaming Trades Council, AFL-CIO to announce New York State has paid off the nearly $7 billion federal Unemployment Insurance (UI) Trust Fund loan — a move Hochul says will bring the fund to solvency, increase benefits for unemployed New Yorkers and cut costs to businesses.
The bank for the UI Trust Fund was broken by costs associated with the COVID-19 pandemic coupled with a downturn in the economy. Funds for this bailout are a part of the Fiscal Year 2026 Enacted Budget.
Before the COVID-19 pandemic, the UI Trust Fund had a positive balance of nearly $2.5 billion. However, due to the economic downturn caused by the pandemic, the balance was paid out to New Yorkers, requiring the State to borrow from the federal government to continue paying eligible claims.
“By paying off this unprecedented Unemployment Insurance Trust Fund debt, we are delivering long-overdue relief to New York’s workers and businesses,” Governor Hochul said. “This is about doing what’s right — raising benefits for unemployed New Yorkers who need support, cutting costs for businesses that are driving our economy forward, and putting money back into New Yorkers’ pockets. I’m proud to stand with our labor partners in making this progress possible.”
Paying off the debt and making the fund solvent allows the state to increase the maximum UI benefit rate so that it better aligns with other states and changes the taxable wage base to help build up reserves and stabilize the UI Trust Fund for the future. The maximum weekly benefit to unemployed workers, which has been frozen because of the debt, will increase from $504 to $869 in October.
By paying off the debt, the State is also putting money back in the pockets of business owners, whose contribution rates had continued to climb while the debt was paid down. Employers are projected to save an average of $100 per employee in 2026 and $250 in 2027. Additionally, the taxable wage base will increase in 2026, strengthening the trust fund over time and helping to maintain affordable tax rates for New York’s employers in the long term.
New York State Department of Labor Commissioner Roberta Reardon said, “Paying off New York’s Unemployment Insurance Trust Fund debt is a win for workers and businesses. It will put more money in the pockets of unemployed New Yorkers at a time when they need it most and will also cut costs for our businesses. I thank Governor Hochul for stabilizing this critical safety net for our workforce and making the state more affordable for all.”