Schumer seeks to extend no-interest loans

Sen. Charles Schumer is attempting to extend an interest-free federal loan for state unemployment funds that may also help businesses across New York and the nation.

Last month, New York business owners found themselves picking up the interest tab for the state after Congress, in the midst of the debt-ceiling crisis, did not extend a measure that guaranteed interest-free federal loans to cover unemployment payments.

Employers had to make a one-time payment of up to $21.50 per employee in surcharges -- due Monday -- so New York State could pay back the $95 million in interest it owed the federal government as of last year from money borrowed to fund unemployment benefits in 2009 and 2010.

The termination of interest-free unemployment loans affects states nationwide, said Schumer's spokesman Mike Morey.

According to the state Department of Labor's website, New York is required by state law to charge employers to pay the interest on money borrowed from the federal government.

The payment has had its share of opponents on Long Island.

Paula Altiere, the human resources director for Nationwide Court Service in Holbrook, said she was surprised and unhappy when she received the bill from the labor department, and began reaching out to local businesses to see if they felt the same way about the tax.

"The fact is every little bit matters to the bottom line when you're a small company, so we couldn't do all the plans we had," Altiere said.

Schumer said he will introduce legislation when Congress reconvenes in September to retroactively extend the interest-free loan period -- which would guarantee that business owners who paid the fee will be refunded or credited if the measure passes.

He spoke out against the interest assessment surcharge at a news conference Monday in Farmingdale, held at the offices of Telephonics, a transportation communications company.