The Real Deal: Businesses forced to pay state's interest
Updated: Friday, August 2 2013, 10:24 PM EDT
ALBANY - Uncle Sam is knocking on New York's door. The State has borrowed more than $4 billion from the Federal Unemployment Insurance Trust Fund since 2009 and now it's payback time.
New York may be handling the balance of the loan but it's passing the buck when it comes to paying the interest.
$102 million in interest on the loan is due by Sept. 30, so the State is adding a surcharge of up to $12.95 per employee to every business that pays unemployment insurance, to cover the cost.
The money is due within 30 days and no extensions will be granted to businesses that can't come up with the cash.
"The state is forecasting all the time so the state knew this was coming, could they have given businesses notice even in last quarter to say please plan on this assessment? I think if there was better open communication, the business community would have appreciated that," says Mark Eagan, the President and CEO of the Albany-Colonie Regional Chamber of Commerce.
The NYS Labor Department says State law allows this assessment and employers were previously charged for it in 2003, 2004, 2005 and 2011.
Last year, the assessment was as high as $20.95 per employee but this year, the federal government gave NYS a break.
Other states that borrowed money from the trust fund during the recession also have laws that force business owners to pay the interest on it.
"It's not just a financial issue but a philosophical issue, when the state decides to extend the benefits shouldn't the state be helping with its general coffers to pay for a portion of that? Versus just assessing the business community?" Eagan wonders.