Governor Hochul Visits Local Business Owner to Highlight the Impacts of Paying Off New York's Multi-Billion Dollar Unemployment Insurance Debt

Governor Kathy Hochul and Heather Mulligan, President and CEO of the Business Council of New York State, visited local business owner, Eli Smith, to discuss the impacts of using nearly $7 billion to pay off the federal Unemployment Insurance (UI) Trust Fund loan and replenish the Fund — a move that will bring the Fund to solvency, increase benefits for unemployed New Yorkers and cut costs to businesses. The Governor reached agreement to take this action back in May as part of the FY26 Enacted Budget.

“With the Unemployment Insurance Trust Fund loan paid off, businesses and workers across the state will feel and see the financial relief that they deserve during a time when inflation is just so high,” Governor Hochul said. “New York State continues to work to put money back into the pockets of New Yorkers, cut costs for our businesses and uplift the state’s economy.”

The Business Council of New York State President and CEO Heather Mulligan said, “On behalf of businesses across New York State, we are grateful that Governor Hochul found the UI debt to be a priority and agreed to fully pay off the remaining balance that had been a strain on all businesses, especially smaller employers across the state. This multi-billion-dollar burden served as an added tax on our employers for the past four years, restricting them from reinvesting in their businesses or local economies. We appreciate the willingness of the Assembly leadership to work with Governor Hochul and the business community to make the UI fund solvent.”

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 unemployed 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 for unemployed New Yorkers so that it better aligns with other states. 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 per employee 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.

E. Smith Contractors President Eli Smith said, “By paying off the unemployment debt I will save more than $300 per employee, and with about 50 workers in New York, that savings adds up. I can take that savings and invest in new equipment, workforce development or other ways to improve my business. I appreciate the Governor and the Legislature taking this step and also the advocacy of the Business Council of New York State.”

New York State Department of Labor Commissioner Roberta Reardon said, “I thank Governor Hochul and the Legislature for paying off New York’s Unemployment Insurance Trust Fund debt, which is a win for both businesses and workers statewide. This action will cut costs for our businesses and increase benefits for unemployed New Yorkers when they need it most. By stabilizing this critical safety net for our workforce, we’re ensuring New York State is more affordable for all.”

Empire State Development President, CEO and Commissioner Hope Knight said, “The need for increased Unemployment Insurance contributions was a piece of New York's greater post-COVID economic recovery challenge. By paying off the remaining federal Unemployment Insurance debt through the State Budget, Governor Hochul and the State Legislature are improving New York's business climate and offering a direct, tangible benefit to businesses of all sizes across the state.”

Assembly Speaker Carl Heastie said, “Our small businesses have been clear – paying off the unemployment insurance debt has been a huge relief. Now they can shift that cost towards growing and thriving within our communities and we can provide better coverage for our unemployed families as they get back on their feet. The Assembly Majority fought hard for this inclusion in the budget as we understood the critical benefit this would have to small businesses and New York’s hardworking families as they continue to make our state a place we’re all proud to call home.”

State Senator Jessica Ramos said, “Paying off the Unemployment Insurance debt was long overdue and it’s a win for both workers and small businesses across New York. During the pandemic, our UI system was a lifeline, but for too long the burden of repayment fell unfairly on businesses while workers were stuck with frozen benefits. With this year’s budget, we finally turned the page. We’re raising benefits to meet the realities of today’s economy and easing the load on employers who kept our communities going. I’m grateful to Governor Hochul for working with us to get this done. This is what responsible, pro-worker, pro-business policy looks like.”

Assemblymember Harry B. Bronson said, “Paying off this debt was critical for all New Yorkers and our job creators. We secured relief for employers — especially small businesses, while ensuring unemployed New Yorkers receive substantially increased benefits that help them afford housing, groceries, and basic necessities during their job search. With today's cost of living, these enhanced benefits make the difference between families staying afloat or falling behind. This action supports both workers facing hardship and creates an environment where businesses can grow and hire.”

Empire State Development Board Chair Kevin Law said, “Governor Hochul’s leadership in paying off New York’s Unemployment Insurance Trust Fund debt is a major win for businesses and workers — on Long Island and across the state. This critical step delivers real financial relief to employers while strengthening benefits for those who need them most. By reducing costs and restoring stability to the fund, we’re creating the conditions for sustained growth, economic resilience, and job creation.”

Long Island Association President and CEO Matt Cohen said, “The UI debt was one of the last lingering reminders of the economic toll of the Covid pandemic and so the LIA applauds Governor Hochul and the New York State Legislature for delivering this significant relief to our business community.”

HIA-LI President and CEO Terri Alessi-Miceli said, “We are grateful to Governor Hochul and the State Legislature for eliminating this burden on New York’s employers. Business owners on Long Island and the state can see meaningful relief that lowers the cost of doing business and strengthens our economy.”

Business Council of Westchester President and CEO Marsha Gordon said, “Replenishing the State’s Unemployment Insurance (UI) Fund has been one of the Business Council of Westchester’s (BCW) top legislative priorities. For years, businesses have shouldered the burden of paying over $5 billion dollars towards this debt, which was an added tax that significantly impacted their operations. The BCW applauds the governor’s leadership and commitment to extinguishing the UI debt, which will remove the serious negative impact that businesses across the state were facing.”

Capital Region Chamber, and the Center for Economic Growth (CEG) President and CEO Mark Eagan said, “Paying off the $7 billion outstanding federal unemployment insurance trust fund loan is a huge win for businesses, large and small. By paying off this loan, the UI program's financial stability will be restored, and employers will no longer be saddled with higher UI taxes. We are grateful to Governor Hochul and the state legislature for addressing this outstanding debt in the final budget.”

Acting President and CEO of CenterState Syracuse Ben Sio said, “Across New York, small and mid-sized businesses will benefit from the important decision by Governor Hochul and the legislature to pay off New York’s nearly $7 billion unemployment insurance debt. For a small business, the thousands of dollars saved by the elimination of the mandatory UI surcharge to pay off this debt will translate into new investment into those businesses, new equipment or an added employee. Simply put, this is a win for New York’s economy.”

Greater Rochester Chamber President and CEO Bob Duffy said, “Governor Hochul's decision to use $8 billion to restore solvency to the State's unemployment insurance trust fund will have significant impacts on every business in New York State, from mom-and-pop shops to major legacy corporations. We have heard directly from our members that this decision will save them tens of thousands of dollars each year — savings that can be used to grow, create jobs, and invest in New York State. At a time of much uncertainty for businesses, these savings help stabilize the business community and ensure New York State remains competitive. We applaud the Governor's leadership on this issue, and are proud to have worked alongside her and our other partners to secure this well-deserved funding for our business and labor community.”

Greater Utica Chamber of Commerce Executive Director Kari Puleo said, “Paying off the unemployment insurance debt is a game-changer for businesses across the Mohawk Valley. It eases the financial pressure our employers have been carrying since the pandemic and frees up resources to reinvest in their operations, their workforce, and their growth. It’s a meaningful step forward that strengthens our local economy and supports a brighter future for the region.”

Greater Binghamton Chamber of Commerce President and CEO Stacey Duncan said, “Over the past four years, New York State employers have faced significant challenges due to an unpredictable business climate, coupled with significant Unemployment Insurance costs. After depleting its UI Trust Fund in 2020, the state borrowed $11 billion to cover pandemic-related claims, saddling employers with maximum UI rates and interest assessment surcharges, costing small businesses over $6 billion. We are deeply grateful to Governor Hochul and the Legislature for recognizing the urgency of this issue and taking meaningful steps to support and prioritize the needs of small businesses.”

North Country Chamber of Commerce President Garry Douglas said, “Relief from this massive UI debt to the federal government caused by the pandemic was a top priority for business and we join in thanking Governor Hochul and legislative leaders for the full payback of almost $7 billion. This huge UI debt would otherwise have fallen on employers, including small business, through higher UI costs until paid off, even though the pandemic shutdowns and impacts were not their fault. This important and needed relief is highly welcome for all employers.”