Upstate United Releases Fact Sheet on New York’s Unemployment Insurance Crisis

October 7th, 2021

Upstate United, a non-partisan pro-taxpayer organization, has released a new fact sheet detailing a potential $9 billion tax increase for employers across New York. Troubling Trends – New York’s $9 Billion Unemployment Insurance Crisis makes the case for state government to use untapped federal funds to provide UI relief to struggling businesses.

“The impending unemployment crisis will be a big problem for small businesses across the state. Hitting employers with $9 billion in UI-related costs right now would derail our economic recovery at a critical time,” said Justin Wilcox, executive director of Upstate United. “Providing UI relief with unused federal dollars will help employers keep their doors open and workers employed.”

At the height of the COVID-19 pandemic, nearly 2 million New Yorkers were unemployed. As a result, the state’s UI fund ran out of money and New York ultimately had to borrow $11.9 billion from the federal government to cover its UI payments. While some of that money has been repaid, New York still owes Washington $9 billion. Additionally, the state’s UI fund – which is currently insolvent – must be replenished.

According to a recent analysis from The Tax Foundation, New York has more than $11 billion in federal aid available through the American Rescue Plan Act. That analysis also found that, unlike the majority of states in the nation, New York has not spent any federal aid to address its UI shortfall. 

“Over the last 20 months, elected officials encouraged their constituents to support local businesses. Now, we’re asking those same officials to give a lifeline to employers before they go under,” said Wilcox.

New York State Comptroller also voiced concerns about New York’s UI issues in a recent report. Citing massive UI payments in 2020 and rising UI rates for employers in 2021 and beyond, Comptroller DiNapoli called for a collaborative approach to address this crisis, “Working together, New York State, participating employers and the federal government can develop solutions that restore the Trust Fund while allowing the ongoing economic recovery to continue.” View Upstate United’s Troubling Trends – New York’s $9 Billion Unemployment Insurance Crisis fact sheet here: https://upstateunited.com/wp-content/uploads/2021/10/2021_UU_UI_Factsheet.pdf