Good Morning
Good Morning

Unemployment insurance fund back in the black: Cuomo

Gov. Andrew M. Cuomo at the Knights of

Gov. Andrew M. Cuomo at the Knights of Columbus in Seaford, on Wednesday, June 3, 2015. Credit: Howard Schnapp

New York's Unemployment Insurance Trust Fund, which pays benefits to eligible laid-off workers, is in the black for the first time in six years, Gov. Andrew M. Cuomo's office announced Tuesday.

Soaring benefit claims during the recession and the slow economic recovery had produced a fund deficit as high as $3.5 billion.

The governor's office didn't say what the fund's current balance is.

"Achieving a positive balance marks an important milestone for the Unemployment Insurance Trust Fund," acting Labor Commissioner Mario J. Musolino said in the state's news release. "The combination of an improving economy and much needed reforms means that we are well on track to achieve permanent solvency in the UI trust fund next year."

In 2013, Cuomo announced reforms aimed at replenishing the fund.

Those changes made it more difficult for laid-off workers to qualify for benefits while receiving severance payments. Previously, severance wasn't a factor in determining eligibility.

The reforms also increased the taxes employers must pay into the fund. They now pay taxes on the first $10,300 of each employee's wages, up from $8,500. That wage base will rise every year until topping out at $13,000 on Jan. 1, 2026.

The state estimates the reforms will save employers $400 million statewide over 10 years, including $60 million on Long Island, in part because of the more restrictive benefit standard.

Kenneth J. Pokalsky, vice president of government affairs of The Business Council of New York State, praised the fund's turnaround.

"This milestone is a direct result of the 2013 reform package championed by Gov. Cuomo, and passed by the Legislature, with strong support from the state's business community," said Pokalsky, whose remarks were included in the news release.

Mario Cilento, president of the New York State AFL-CIO, said, "The health of the trust fund will ensure future generations of an increased benefit they can rely on during times of crisis."

Under the reforms, the maximum unemployment benefit rose in October by $15 to $420 a week, the first hike in 14 years. Workers can collect up to 26 weeks of benefits.

More news