The financial fallout from the COVID-era shutdowns continues to burden New Yorkers, as Governor Kathy Hochul is looking to pass a $6.2 billion unemployment insurance liability onto the shoulders of business owners.
The debt stems from the state borrowing heavily from the federal government to cover unemployment claims following government-mandated economic closures during the pandemic.
“This debt is not the fault of business owners,” said Senator Dean Murray, Ranking Member of the Senate Commerce, Economic Development, and Small Business Committee. “They shouldn’t be forced to shoulder the burden of a crisis caused by state-imposed shutdowns.”
The Unemployment Insurance Assessment Surcharge (UIAS), currently imposed on employers to help repay the debt, has added hundreds of millions of dollars in annual costs to businesses statewide. Murray noted that while Governor Hochul has proposed allocating $165 million to cover interest payments in the upcoming budget, she has refused to commit state funds toward paying down the debt’s principal.
Business leaders and fiscal watchdogs have criticized the governor’s stance. Heather Mulligan, President and CEO of the Business Council of New York State, called the UIAS a disproportionate burden on small businesses, describing it as “a direct tax on employers” that ultimately inflates consumer prices.
Murray echoed those concerns, arguing that eliminating the surcharge would allow businesses to lower prices, benefiting consumers and supporting economic growth. “This isn’t just about helping business owners—it’s about lowering the cost of goods and services for everyday New Yorkers,” Murray said. “Paying off this debt now would offer long-term, sustainable relief.”
The surcharge impacts a wide range of employers, including hospitals, local governments, and nonprofits. Interest payments alone are projected to reach $250 million in the 2025 budget.
Murray stressed that resolving the UI debt crisis would not only support employers but also demonstrate a meaningful commitment to long-term fiscal responsibility. “I urge our leaders to act now,” he said. “This is about fairness, economic recovery, and ensuring a more stable future for New York’s businesses and workers.”
Assemblyman Joseph DeStefano agreed. “Instead of giving businesses a break—which would ultimately benefit consumers—the Democrats want to hand out $200 tax rebate checks,” he said. “It would be far better to get this debt off the backs of New Yorkers than to go through with these paltry election-year gimmicks.”
Governor Hochul, whose approval ratings have recently declined, is up for reelection next year.