State pays off near $7B UI trust fund debt

ALBANY | On Monday, Gov. Kathy Hochul rallied with the Hotel and Gaming Trades Council, AFL-CIO, to announce New York State has paid off the nearly $7 billion federal Unemployment Insurance (UI) Trust Fund loan — a move that will bring the fund to solvency, increase benefits for unemployed New Yorkers and cut costs to businesses. The Governor announced this action back in May as part of the Fiscal Year 2026 Enacted Budget. Gov. Hochul first introduced "By paying off this unprecedented Unemployment Insurance Trust Fund debt, we are delivering long-overdue relief to New York's workers and businesses," Gov. Hochul said. "This is about doing what's right — raising benefits for unemployed New Yorkers who need support, cutting costs for businesses that are driving our economy forward, and putting money back into New Yorkers' pockets. I'm proud to stand with our labor partners in making this progress possible." Assembly Speaker Carl Heastie said, "By paying off the Unemployment Trust Fund debt we're securing relief to our local businesses – especially our small businesses – and ensuring that the UI benefits can keep up with inflation," said Speaker Carl Heastie. "The Assembly Majority and especially Assembly Labor Chair Harry Bronson fought hard for this inclusion in the budget as we understand the vital support this provides to businesses and hardworking families as they get back on their feet." Before the COVID-19 pandemic, the UI Trust Fund had a positive balance of nearly $2.5 billion. However, due to the economic downturn caused by the pandemic, the balance was paid out to New Yorkers, requiring the State to borrow from the federal government to continue paying eligible claims. Paying off the debt and making the fund solvent allows the state to increase the maximum UI benefit rate so that it better aligns with other states and changes the taxable wage base to help build up reserves and stabilize the UI Trust Fund for the future. The maximum weekly benefit to unemployed workers, which has been frozen because of the debt, will increase from $504 to $869 in October. By paying off the debt, the State is also putting money back in the pockets of business owners, whose contribution rates had continued to climb while the debt was paid down. Employers are projected to save an average of $100 per employee in 2026 and $250 in 2027. Additionally, the taxable wage base will increase in 2026, strengthening the trust fund over time and helping to maintain affordable tax rates for New York's employers in the long term. The North Country Chamber of Commerce is applauding the official payoff of New York State's unemployment insurance debt to the federal government of nearly $7 billion. "We thank the Governor and legislative leaders for coming together in the budget process to finally lift this pandemic-related cost burden from the backs of our employers, including small business," says Garry Douglas, Chamber President. "This was a legislative priority for our Chamber and its partners this year and now the debt has been settled, relieving state employers from continued surcharges on their unemployment insurance taxes. We thank all who supported the payoff including our North Country state legislators." For more information on the Unemployment Insurance Trust Fund, please visit the New York State Department of Labor's webpage.

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State pays off near $7B UI trust fund debt

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