The people’s money

Coincidence or not, having Labor Day selected as the expiration date of a trio of COVID federal aid programs for the jobless was cruel and unusual. Gone was assistance for Americans out of work for longer than six months. Dried up was the special fund for the self-employed and freelancers who lost their incomes. And vanished was the $300 weekly supplemental unemployment compensation from Washington.

If the intent of picking Labor Day was to inspire folks to land that new job, the inspiration was lost on millions. President Biden offering states the option of underwriting this pricey aid themselves doesn’t mean much when not one of the 50 has that kind of bucks sitting around, New York included. Gov. Hochul demurred the opportunity.

But there is something that Hochul and the Legislature can do — and must do — to help the jobless slammed by COVID: forgive the tax imposed on their unemployment compensation. And for this, ample funds are in the state treasury.

There were 3.9 million New Yorkers (which is a whole lot of voters) who collected unemployment during 2020, and all of them were liable for income taxes on the benefits. Congress recognized this foolishness and exempted $10,200 for that year. But the Legislature never matched it, so while that amount was free from federal taxes, Albany still imposed taxes of $1.4 billion on the jobless. While returns for the 2020 tax year are long done, the easy fix is applying a credit for the 2021 returns.

As we mentioned, there’s enough money in the coffers. State Comptroller Tom DiNapoli’s monthly cash report shows that tax collections are exceeding projected revenues by $5.2 billion, a number that has been climbing since the fiscal year began April 1. (Maybe cut some other taxes while they’re at it?)

A bill to exempt $10,200 for 2020 had 56 out of 63 state senators as sponsors before Thursday. That dropped to 55 sponsors when Brian Benjamin became lieutenant governor. He should urge Hochul to push for the fix.