On Monday, Governor Charlie Baker signed into law legislation approved by the House and Senate that allocates $500 million in federal aid for the Massachusetts Unemployment Insurance Trust Fund. This amount is half of what Gov. Baker originally proposed in earlier legislation.
The Massachusetts UI Trust Fund was depleted in 2020 as a result of layoffs that occurred when the state ordered businesses shutdown and to operate under restrictions. The state borrowed $2.3 billion from the federal government to pay for the excessively high number of UI claims, and that debt must be repaid by November of 2022. Earlier this year, the Legislature authorized the Department of Unemployment Assistance to bond up to $7 billion to replenish the trust fund, money that will be paid back by employers over the next 20 years. It is still uncertain as to how much of that $7 billion will be needed, but what we do know is that Massachusetts employers will be responsible for paying it back through UI taxes.
Many other states used federal CARES and ARPA funds to wipe clean COVID-related unemployment debt, but Massachusetts lawmakers have opted to use a fraction of what is necessary to provide employers relief. NFIB will continue to urge policymakers to use remaining federal funds to shore-up the trust fund in 2022. It is patently unfair to demand small businesses shoulder the burden for COVID-related layoffs when it was the state that ordered businesses closed.