Interest surcharge another burden on business

Death and taxes. Many a scribe ”“ Ben Franklin, of course ”“ has noted that nothing is as certain as the two.

And in terms of the latter, that”™s certainly the case in New York state.

Taxes are a given here. Death? Well, one could argue the two go hand in hand ”“ what business owner or resident taxpayer out there hasn”™t winced and bewailed feeling “taxed to death”?

So it was refreshing when Gov. Andrew Cuomo released a $132.5-billion budget ”“ the first on-time spending plan in five years ”“ that closes the state”™s $10 billion deficit with no new taxes.

Still, we know taxes are like mosquitoes ”“ despite the best efforts to screen them out, one or two manage to find a tiny hole and work their way in.

And that”™s regardless of who is running the show, politically speaking. Pesky surcharges are nonpartisan creatures, despite what the dueling parties charge.

The latest tax to wend its way into these parts comes in the form of an interest surcharge. New York state is essentially billing employers here for a $95-million interest payment due on borrowed federal unemployment funds.

The state has until Sept. 30 to pay some $95 million in interest due on more than $3 billion that it has borrowed from the federal Unemployment Insurance Trust Fund since 2009, reporter John Golden explains in a story this week: “The American Recovery and Reinvestment Act made the loans interest-free in 2009 and 2010 for New York and other states whose unemployment funds were drained to insolvency in the recession.”

But Congress did not extend the interest-free loan provisions into 2011.

So it”™s not really a new tax. It”™s just that employers were given short notice that they must pay up some $21.25 per employee by Aug. 15.

“Who said ”˜No new taxes?”™” one business owner wrote on a copy of the letter, which made its way onto the news desk here.

We”™re not placing the blame on the governor. The recession was creeping along like an unhurried snail when he came into office and the jobless situation was on its leash.

We”™re just lamenting the timing of another tax. It only serves to chip away at the bottom line.

We asked Marsha Gordon, president and CEO of The Business Council of Westchester, for her take.

“I think it”™s something that certainly we can expect in a time of high unemployment. So it shouldn”™t be a surprise,” Gordon said in a phone conversation. “While it”™s not a huge amount, it still is an extra cost to business.”

We caught up with Gordon later that day at a council event at the Ridge Hill development in Yonkers. In remarks about the project”™s economic potential and the economy in general, Gordon said, “It”™s all about jobs.”

And that”™s one thing the city, county and region could use right now ”“ more jobs. Westchester”™s unemployment rate stands at 6.8 percent, up from 6.4 percent in May. (See related story on page 9.)

But businesses, particularly smaller ones, are watching economic indicators ”“ and the debt-ceiling showdown in Washington ”“ with a wary eye.

And they”™re watching those pennies. Many are on the fence when it comes to hiring.

William Mooney, president of the Westchester County Association, said such taxes send a mixed message to business.

“On the one hand we”™re talking about economic development,” Mooney said, referring to the governor”™s 10 regional economic development councils being launched statewide. “And then on the other hand, we”™re pushing people out the door. It”™s putting another nail in the coffin.”

While the surcharge is only expected to amount to one-fourth of 1 percent of an employer”™s total taxable wages, Mooney said “it

doesn”™t matter what the amount is, it”™s more symbolic.”

“Look, the state is not helping us with the unemployment issue and yet they”™re hurting us and making us pay for it,” Mooney said. “If you”™re a large employer, you”™ve got to be thinking, What”™s next? It”™s one more thing to make you say, ”˜I should get out of here.”™”

The insurance surcharge simply adds another burdensome layer to the costs of doing business.

Or, as one small-business owner remarked, “How many pennies do we have to look forward to?”