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A big bill for your boss
Labor Department to charge businesses per-worker fee to repay feds
By RICK KARLIN Capitol bureau
Published 12:02 a.m., Wednesday, July 20, 2011


ALBANY -- Gov. Andrew Cuomo on Tuesday rolled out a sweeping plan to help revitalize the state's economy, complete with an ad campaign and competitive grant program designed to spark innovation.

But businesses have a more immediate concern: The bill is coming due for New York's unemployment insurance.

Citing the need to borrow more than $3 billion from the federal government to prop up its chronically empty account, the state faces a whopping $95 million interest payment on loans for the fund due Sept. 30.

As a result, the state Department of Labor is assessing businesses up to $21.25 per employee to cover the cost. That payment is due Aug. 15.

Complaints about what businesses describe as a hidden tax were rolling in Tuesday after numerous employers received the notices and as Cuomo expounded on his plans for the economy.

"This is something that could -- depending on the number of employees -- be a pretty hefty cost in this economy," said Mike Durant, New York state director for the National Federation of Independent Businesses.

When asked about the surcharge during a news conference outlining his revitalization plans, Cuomo stressed that the bill for interest is ultimately coming from Washington, D.C.

"It's a federal decision whether or not they'll waive the interest payments. I hope that they do," he said, adding that his office was pushing the state's congressional delegation on the issue.

The hefty tab illustrates what can happen as the federal stimulus program, enacted shortly after the recession started in 2008, runs out.

The Department of Labor noted that the stimulus program provided no-interest loans to the states in 2009 and 2010, but not this year.

It seems doubtful the interest payments would be waived this year. With the Republican-led Congress currently embroiled in a debate with the Obama administration over the nation's debt ceiling, the unemployment insurance loan debate has received no attention so far.

"This hasn't come up, and we're not expecting it to," said Beau Duffy, spokesman for 21st Congressional District Rep. Paul Tonko, a Democrat.

Moreover, some Republicans say this is an example of why at least some of the stimulus plan was a bad idea to begin with.

"It shows when you pass laws that you can't pay for, you are ultimately just kicking the can down the road," said Stephanie Valle, spokeswoman for 20th District Rep. Chris Gibson, a Republican.

The $700 billion stimulus plan is often identified with road-building and other infrastructure projects. But much of the money also went to shore up the states' unemployment insurance programs, as well as for tax breaks and welfare payments. Last year, school districts pointed out that the expiration of stimulus money for education would create large budget holes in that area.

The state Department of Labor notice pointed out that if the interest charges are waived by Congress, employers would get a refund.

New York, like other states, has been looking to the federal government to help cover its unemployment payments for several years now -- borrowing money as the state fund runs dry and paying it back later in the year or soon after...........................>>>>..................>>>>....................Read more: http://www.timesunion.com/local/article/A-big-bill-for-your-boss-1472786.php#ixzz1SdtnEISn

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Unemployment rates remained largely unchanged in May 2011 from the month before, with moderate improvements over the past year.
In May 2011, the states in CSG’s Eastern region had an average unemployment rate of 7.7 percent, lower than the national rate of 9.1 percent. Rates ranged from a low of 4.8 percent in New Hampshire to a high of 10.9 percent in Rhode Island.
The region experienced a negligible improvement in the average unemployment rate in May over the previous month. The average unemployment rate dropped a little over half a percentage point since May 2010.
Connecticut was the only state to not experience a drop in the year-over-year unemployment rate, remaining unchanged.


States continue to borrow funds to cover unemployment accounts.
Seven out of 11 states in the region are borrowing from the Federal Unemployment Account, with a total amount borrowed of $9.08 billion.
Delaware is currently borrowing the smallest amount at a total of $63 million, with Pennsylvania borrowing the most at $3.76 billion.
In the region, New York has been borrowing the longest, since January 2009, while Connecticut has been borrowing the least amount of time, taking out its first loan in October 2009.
Average per capita loans for states borrowing in the East are $174.22. Delaware has borrowed the least per capita—$69.63, while Pennsylvania has borrowed the most—$296.15.

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1 The shift in long-term unemployment is so unprecedented that the Bureau of Labor Statistics and the Census Bureau have modified the way they collect information about the unemployed. Before this year, these agencies only collected data for unemployment duration of two years or less, with those unemployed more than two years reporting “two years or more”. Beginning January 2011, that measure has been extended to capture those that have been unemployed up to five years or more. It should be noted that this affects the accuracy of year-over-year comparisons of the average duration of unemployment.