New York's senior U.S. Senator, Charles Schumer, calls it a job killing tax: A new fee that every employer could face unless the Congress takes quick action. YNN's Bill Carey says Schumer blames inaction during the federal debt ceiling debate for creating a new threat to jobs.
SYRACUSE, N.Y. -- It's a success story.
Bitzer Scroll produces compressors for refrigeration and air conditioning units. Since opening its doors in 2009, employment at the plant in Salina has climbed to 79 workers. The people in charge admit it's sometimes tough selling owners in Germany on staying and growing in New York State.
"Those expenses and the difference in costs are certainly visible. That's a concern here for how we manage that and keep those costs down in New York State," Bitzer Scroll General Manager Mike McKee said.
Then, a few weeks ago, letters arrived carrying startling news for this company and every workplace.
The shock for employers here in New York State came when they received bills that explained some new charges that they hadn't expected.
The companies already pay annual unemployment insurance costs. But now, they could be facing a big jump, up to $21.25 per employee. The reason? Two years ago, with states facing rising joblessness, Washington offered loans to help cover increased unemployment costs. The loans were interest free for the past two years, but that grace period is about to end. That means New York and 30 other states need to collect additional monies to pay interest charges.
Visiting Bitzer Scroll, Senator Charles Schumer says that makes no sense.
"It's per job. The more people you employ, the more you pay. We want to encourage people to employ people," Schumer said.
Schumer is calling on a new congressional super committee, reviewing federal spending, to renew the interest-free provision of the loans. He says lawmakers should respond to the message they're being sent by voters.
Schumer said, "They're not hearing, get in your corner and continue to fight. They're saying come together. Come together in the middle and come up with things that will employ people. Get people back to work."
Schumer says the special panel is made up of what he calls "mature" lawmakers who have not been, in his words, bomb throwers. He's optimistic they will act.
Federal loans to cover New York's unemployment insurance costs totaled about $3 billion. The state still owes $2.7 billion of that loan. The charge for interest, per year, totals $95 million.