Tami Luhby reports on CNNMoney.com - “Companies have yet another reason not to boost hiring: rising unemployment taxes.

Employers around the nation are getting socked with higher state unemployment tax bills as states are forced to shell out more than $1 billion in interest payments this month. More than 30 states have had to borrow billions from a federal fund to cover unemployment benefits for their jobless residents in recent years.

And this is only the first of two tax spikes employers are contending with, on both the state and federal level. Come January, companies in 24 states could have to shell out between $21 and $63 more per employee in federal unemployment taxes.”

To read more click here.

“A sudden, unexpected bill of $1,000 can be a disaster for a household. It can be a burden on a small company as well.” writes Matthew Daneman in the Democrat and Chronicle.

“A new $1,000 bill American Aerogel Corp. owes for unemployment insurance-related costs is emblematic of the regulatory headaches of running a business, founder Robert Mendenhall said Tuesday.

“Dealing with these changes requires a significant amount of time, effort and money, and this work does not contribute to the bottom line or creating jobs,” Mendenhall said. “Minimize change or uncertainty and we will create the jobs.”

To read more click here.

Jon Campbell writes on pressconnects.com - “The state’s tenuous fiscal situation prevents it from picking up a $95 million interest tab that is being billed to private employers, Gov. Andrew Cuomo said Thursday.

Employers across the state were issued a surcharge of up to $21.25 per employee to cover interest on a federal loan to New York’sunemployment insurance fund, which has dwindled as claims have outpaced unemployment tax collections in recent years.

Wednesday, Assembly Minority Leader Brian Kolb, R-Canandaigua, penned an open letter to Cuomo, asking him to use money from the state’s better-than-expected tax receipts to cover the costs. State Comptroller Thomas DiNapoli issued a report earlier this month that the state collected nearly $800 million more in income and sales taxes during the first quarter of this year than it had projected, but warned that the state’s finances are still unsettled.”

To read more click here.

In a statement released this morning Assembly Minority Leader Brian Kolb states - today sent a letter to Governor Andrew M. Cuomo urging him to rescind the New York State Department of Labor’s recent Unemployment Insurance (UI) Interest Assessment Surcharge imposed on all businesses and refund any businesses that have paid this assessment to date.

“Our small business owners are doing their best to create jobs and bring New York out of this recession. If the United States Congress does not enact legislation to make Federal loans to state UI trust funds interest free, New York must take action to ensure that the men and women that create new jobs do not bear the burden of this onerous assessment. I suggest using a portion of the nearly $800 million in surplus first quarter tax receipts from the current fiscal year to cover the $95 million interest payment of the Federal loans, instead of nickel and diming New York businesses with another costly assessment,” Leader Kolb said.

The surcharge is to cover a $95 million interest payment on Federal loans to the State’s UI Trust Fund to pay UI benefits to multitudes of unemployed workers.

“With the enactment of a Real Property Tax Cap this year and the launch of Regional Economic Development Councils today, our State is in position to craft a true economic development plan that creates jobs and puts hundreds of thousands of unemployed New Yorkers back to work,” Leader Kolb said.

“This UI Interest Assessment Surcharge will be another burden placed on the backs of businesses and is detrimental to recent strides to improve New York’s business climate. Our focus now needs to be Jobs, Jobs, Jobs! That is why I urge Governor Cuomo to stop the UI Interest Assessment Surcharge and send a clear message to business owners across the State that New York is once again Open For Business!” Leader Kolb concluded.

Brian Kolb’s letter that was hand-delivered to Governor Cuomo today.

To read the letter click here.

Although not unexpected, the UI Interest Assessment Surcharge bills have hit employers for the first payment on the interest owed on the $3.2 billion federal borrowing to maintain the state fund’s ability to continue benefit payments.  Averaging about $21 per worker, the $95 million interest payment is due before the end of the federal fiscal year, September 30, 2011.  The interest on any borrowing was waived in 2009 and 2010, pursuant to language in the federal stimulus bill.  Interest on all outstanding balances started to accrue at the beginning of 2011, and repayment of the principal will commence at the end of this calendar year for all tax-rated employers.  Given Congressional inaction on the President’s FY 2012 budget proposal to waive two more years of interest on outstanding UI loans, interest has resurfaced in whether the business community (which is statutorily obligated to repay both the interest and the principal) is interested in pursuing revenue bonds to repay the debt at a potentially lower overall repayment cost.  More on the unemployment insurance issue can be found in an article published earlier this year.

The State Insurance Department approved late last week a modified loss cost rate filing for workers’ compensation premiums, effective October 1, 2011, for products offered in the commercial market.  Loss costs are the actual claim expenses, for workers’ compensation coverage, established by the New York’s Insurance Department, upon recommendation from the Compensation Insurance Rating Board. Based upon New York State employers’ experience and future projections, the CIRB recommends a percentage increase or decrease in the loss costs to the Insurance Department each year.  The approved rate for the new plan year is 9.1%, exclusive of any assessment surcharges.  The Department’s decision can be found here.

Rick Karlin of the Times Union points out that the New York State Department of Labor is assessing businesses up to $21.25 per employee to cover the cost of the state’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.”

Earlier this year The Business Council pointed out this issue in its bimonthly newsletter and asked member organizations for feedback. Federal Affairs Director Maggie Moree, in a story titled The bill has come due: What’s next for unemployment taxes?, writes:

“The Business Council will continue to reach out to our members to understand their concerns about any solutions or suggestions on how to return New York’s Trust Fund to solvency while meeting the obligation to repay what has been borrowed from the federal government. Please feel free to contact me with your thoughts at margaret.moree@bcnys.org.”

Click here to read Maggie Moree’s full story on unemployment insurance.

Click here for the rest of the Times Union article.

Cathleen Crowley of the New York Times writes - “As persistently high unemployment has drained the funds that are used to pay jobless benefits, more than two-thirds of the states expect to raise taxes on businesses this year to replenish them, according to a survey of labor agencies released Wednesday.

Unemployment taxes remain low by historical standards: the survey, by the National Association of State Workforce Agencies (NASWA), found that states have effectively cut the unemployment tax rate on businesses by 64 percent since the unemployment program began collecting taxes from employers in 1938.

The stubbornly high unemployment that has upended the lives of millions of Americans has also depleted the unemployment trust funds of most states: 32 of them owe the federal government more than $48.3 billion that they borrowed to continue paying jobless benefits.”

To read more of the New Time’s Story click here.

To read the NASWA survey click here.

The Associated Press reports in the New York Times - “The Obama administration is proposing short-term relief to states saddled with unemployment insurance debt, coupled with a delayed increase in the income level used to tax employers for the aid to the jobless.

The administration plans to include the proposal in its budget plan next week. The plan was described late Monday by a person familiar with the discussions on the condition of anonymity because the budget plan is still being completed.”

To read more click here.

Tom Tobin writes in the Democrat and Chronicle about new changes that New York employers must begin making on interest payments for a debt the state rang up by borrowing from the federal unemployment insurance trust fund.

“The surcharge amounts to $24 per employee, on average, meaning larger companies will have to make payments of thousands — even tens of thousands — of dollars.

“We knew this was coming down the pike,” said Eastman Kodak Co. spokesman Christopher Veronda. Kodak is one of the largest employers in the region with more than 7,000 local workers. “We haven’t crunched the numbers yet,” Veronda added, “but obviously this is something we wish we didn’t have to do.”

Small businesses aren’t happy about the extra payment, either. For them, every dollar counts in a tight economy.

“Small business hasn’t been laying people off and yet has to pay this additional cost,” said Pam Bauer, CEO and president of Abacus and Co., a Rochester accounting firm. “This problem of a depleted unemployment benefits fund has been clear for years. Yet nothing was done.”

The new payment is in addition to contributions that employers ordinarily make to the state and federal unemployment insurance funds. Notices of the surcharge are going out now, according to state Labor Department spokesman Leo Rosales.

Revenue from the surcharge will help the state meet an interest obligation of $115 million on $3.2 billion it has borrowed to pay unemployment benefits.”

To read more click here.

The Lower Hudson Valley unemployment rate remains stuck around 7 percent, which, despite consistently falling below state or national levels, still means 60,500 jobs have been lost in Westchester, Rockland and Putnam counties since jobs peaked in July 2008. And few industries have survived unscathed. In a special report over the next 11 weeks, The Journal News will explore the interconnected web of business, government and personal influences that are at the root of the unemployment crisis.

To read the first part of the series click here.