Comptroller Thomas P. DiNapoli reports that the State of New York currently owes $8.1 billion dollars to the US Federal Unemployment Trust Fund.
Even with the state making continued payments to the fund, New York is one of seven states with an unemployment insurance fund in debt to the federal government.
“New York’s unemployment insurance debt has remained stubbornly high despite steady employment gains and state tax rates that have already increased to maximum permissible levels,” DiNapoli said. “Absent any significant federal or state action, repaying the loan and replenishing the unemployment fund will require federal tax increases that may be burdensome to small businesses and could hinder the state’s economic recovery.”
The high level of debt has been reportedly caused by the COVID-19 pandemic which led to a record number of unemployment insurance claims throughout the state, and then forced New York to borrow from the federal government.
The report states that if New York cannot pay its outstanding balance by November 10th of this year interest costs will begin to mount against the state.