Businesses shouldn’t pay for state incompetence | News, Sports, Jobs

The New York business community has every right to be unhappy with the state right now.

Jobless claims surged after the government announced job losses. During the COVID-19 pandemic, Andrew Cuomo used executive powers granted by the Legislature to order the shutdown of entire sectors of the state’s economy. There have been many claims that the state had to secure a $10 billion loan from the federal government to meet these demands and help those whose jobs and livelihoods were taken away by Cuomo. Of course, the rise in jobless claims has led to higher unemployment costs for businesses, and now there are additional payments to help repay federal loans.

As if that wasn’t enough, last week Comptroller Thomas DiNapoli released an audit report estimating unemployment insurance fraud at $11 billion, as the state’s dilapidated unemployment system couldn’t handle the flood of claims, leading state workers to try to circumvent it limitations and approve claims that are either too high or should not have been given in the first place.

True, more money was stolen due to state negligence than was originally borrowed from the federal government.

At a time when many businesses are worried about a possible recession and what that means for their businesses, they are using already thin operating margins to pay the state higher unemployment costs.

Sadly the whole mess was avoidable. The state could have updated its unemployment insurance system in the early 2010s when DiNapoli warned that the system was poor. The state could have implemented a fraud protection system, as DiNapoli warned in the mid-2010s. When the state had ample federal stimulus money, it could have repaid most of its federal unemployment insurance loans, so the burden wouldn’t fall on businesses.

Of course, none of this happened.

But perhaps the most infuriating part of the story is the constant obstruction by state Labor Commissioner Roberta Reardon. Not only did she refuse to answer questions from state lawmakers about pandemic-related unemployment fraud, she also erected roadblocks and delayed answering DiNapoli’s questions. That means DiNapoli’s audit has been delayed until after the election — a close race in which such disclosures could have implications. The Democrats hold all the cards here. Those who have failed so miserably at their jobs for over a decade to allow this to happen should lose their positions. That’s not going to happen, though, because it means that every Democratic official who approves frivolous spending at the expense of updating the state’s unemployment system will take to the streets hoping that a broken system they’ve neglected for more than a decade will work for them.

At the very least, the state should reprogram some of its rainy-day surplus to soften the blow the state has wrought on business. It’s bad enough for employers to be stranded by Cuomo’s COVID-19 shutdown. Even worse, handing over bills to businesses because of the utter incompetence of the government in managing the country.

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