SYRACUSE -- Senator Charles Schumer (D, New York) was in Syracuse Tuesday to announce a fight to end what he calls a "job-killing tax".
Schumer appeared at Bitzer Scroll, Inc. on General Motors Drive in Syracuse. He says small businesses like Bitzer Scroll have to pay interest to the State's Unemployment Insurance Fund because Congress failed to include an extension in the debt ceiling compromise negotiated two weeks ago.
As part of the American Recovery and Reinvestment Act, states were allowed to borrow money, interest free, from the Federal Unemployment Trust Fund (FUTF) through 2011, to help finance the state's increasing unemployment burden during the recession.
New York State borrowed $3 billion, but because Congress didn't extend the interest-free provision, New York State now owes the federal government $95 million in interest that's being passed onto businesses like Bitzer Scroll in the form of a tax of up to over $20 per employee.
Senator Schumer plans to announce legislation to retroactively extend the interest-free lending program from the FUTF, refunding fees already paid by local businesses and ending the tax.
