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New York Asks Feds for $4 Billion Loan for Unemployment Benefits

April 20, 2020, 10:45 PM

New York state has asked the federal government for a $4 billion no-interest loan to help cover unemployment benefits for the over 1 million people jobless as a result of the coronavirus pandemic.

The state labor department has paid out about $2.2 billion in unemployment insurance benefits to 1.1 million New Yorkers since the beginning of the pandemic in March, the department announced Monday.

The department had been working with Alphabet Inc.‘s Google to upgrade its filing system after an influx of unemployment calls had caused the system to crash. The state launched a new, streamlined application Monday and has additional staff and extended hours to handle the deluge.

With the filing process being addressed, the state must now figure out how to pay the unemployment benefits while struggling with decreased revenue.

“All benefits, including enhanced benefits, are being paid, and to help ensure it remains that way the state has applied for an up to $4 billion, no interest federal loan,” labor department spokeswoman Deanna Cohen said in an emailed statement.

The state is projecting a revenue shortfall of between $10 billion and $15 billion due to the virus and a delayed tax filing deadline. The state’s tax filing deadline was pushed to July 15, in line with the revised federal due date.

The state’s $177 billion budget for the fiscal year, which began April 1, gave the governor and state budget office permission to adjust allocations throughout the year to cope with reduced cash flows. It also allowed for $11 billion in borrowing, not including the federal ask.

Gov. Andrew Cuomo at his virus briefing Monday once again called on the federal government to provide funding for the state.

“I’m telling you, New Yorkers need funding for this budget because we can’t do it otherwise,” he said.

To contact the reporter on this story: Keshia Clukey in Albany, N.Y. at kclukey@bloomberglaw.com

To contact the editor responsible for this story: Karl Hardy at khardy@bloomberglaw.com

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