Monthly Column: Unemployment surcharge hurts future job growth


By: Michael H. Ranzenhofer, State Senator - 61st District

Last Friday, the Buffalo News reported that the Buffalo-Niagara region gained 5,500 private-sector jobs over the past twelve months. 

In July, M&T Bank announced an investment of $51.2 million over five years in a data center in Amherst, along with the creation of 124 jobs.

A few weeks ago, UnitedHealth Group announced it will hire 75 more workers, after creating 125 positions earlier this year, at its facility in Tonawanda.

Now unfortunately, the private sector’s ability and efforts to create jobs in the future for the unemployed will be negatively impacted, as New York businesses have had to fork over $95 million in taxes, or $21.50 per employee, to the federal government for an “interest assessment surcharge” to cover unemployment costs.

The latest national recession has led to record numbers of workers receiving unemployment benefits and, as a result, since 2009, the State has borrowed over $3 billion from the federal unemployment trust fund. When the fund runs a deficit, the State must pay interest on money borrowed from the federal government.

The interest payments have been waived for the last two years, until Congress failed to act on an extension after December 31, 2010.  U.S. Senator Charles Schumer has announced that he will introduce legislation that would extend the waiver of interest retroactively to the beginning of 2011.  I support this legislation to extend the waiver of interest, and am urging our local members of Congress to do whatever they can to pass it.

That is why I have written to our Western New York members of Congress – U.S. Senators Schumer and Gillibrand and Represenatives Slaughter, Higgins and Hochul – so that these dollars can serve a better purpose, for reinvestment in small business and the creation of jobs. 

The letter stated: “Western New York businesses continue to struggle to survive, and the payment that they are now being required to pay as a result of reinstituted interest by the federal government is yet another impediment to their survival, and the survival of the jobs they provide.”

Since being elected to the New York State Senate in 2008, one of the most important issues raised by many of my constituents, some of whom are still unemployed due to the economy, is the scarcity of jobs.

It is my hope that the federal government will quickly enact legislation to repeal the unemployment surcharge which hurts our small businesses. This will allow companies to use their monies to grow and expand, which will in turn help those still looking for jobs. This investment in their business is an investment in our community’s economy.


Senator Ranzenhofer's Monthly Column appeared in the Amherst, Clarence and Ken-Ton Bees on September 21, 2011.