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State Makes a $2.5 Billion UI Error

June 9, 2023 Last Edit: June 5, 2025

Massachusetts over withdrew $2.5 BILLION from the federal unemployment insurance program.

State Makes a $2.5 Billion UI Error

There is another major update in the ongoing series of tumultuous events related to UI and Massachusetts. In addition to:

A depletion of the UI fund in 2020 requiring a loan from the federal government to keep the fund solvent.
Solvency rates 1,600 times higher than normal in 2021.
Only $500 million in ARPA funds being allocated for the UI fund.
Having to bond for $2.7 Billion to repay the federal government through a COVID assessment in 2022.
Only $100 million provided by the state to pay for $300 million in waived overpayments.

The state has now learned, through an outside audit, that they over withdrew $2.5 BILLION from the federal UI program. This error occurred during the Baker administration, and while many are asking how a $2.5 billion oversight could occur, the real question is: will Massachusetts have to repay the money? One thing is certain, this mistake should not fall on the shoulders of small businesses already repaying $2.7 billion for layoffs that were a result of state-mandated shutdowns. If the federal government does not forgive the oversight, Massachusetts must find a way to fund this egregious error without further increasing UI taxes on employers. Whether that means using remaining ARPA funds, tax revenue, or rainy-day funds, policymakers cannot pass the cost along to employers. NFIB will continue to update you on this unfolding story. We are committed to working with state and federal lawmakers on a solution that does not shift this $2.5 billion mistake on to small businesses.

Topics:

Taxes

State:

Massachusetts

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State Makes a $2.5 Billion UI Error

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