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Lawmakers press for details on state's jobless fund

By Christian M. Wade

A bipartisan group of lawmakers is calling on the Baker administration to release more details about a deficit in the state fund that pays out jobless benefits.

In a letter to Gov. Charlie Baker, state Sen. Diana DiZoglio, D-Methuen, led several lawmakers in calling for release of a financial report on the current fiscal health of the state’s unemployment insurance trust fund.

Lawmakers pointed out that the Baker administration has not issued a report on the fund’s deficit since June, when the account was nearly $2 billion in the red.

“It remains unclear when basic information on the fund’s balance will be made public,” they wrote. “All of this is creating tremendous uncertainty for our small businesses, who need and deserve this important information.”

The lawmakers also requested details about how much of the unemployment trust fund’s deficit is attributable to fraud and overpayments.

“It is important that we know precisely how much of this deficit is due to fraud and overpayment issues which, we should add, should not be up to employers to pay for,” they wrote.

A recent report by the U.S. Department of Labor suggests Massachusetts is on the hook for more than $1.6 billion in over-payments and fraudulent claims.

Besides DiZoglio, the letter was signed by seven other lawmakers including Republicans state Rep. Lenny Mirra, R-Georgetown.

Members of a state commission looking at fixing the unemployment benefits system have also been pressing for more details from the Baker administration about how much money will need to be borrowed to make the trust fund solvent.

During a recent hearing, Labor Secretary Rosalin Acosta told the panel the administration will be releasing a report in early January on the trust fund’s deficit.

Jon Hurst, president of the Retailers Association of Massachusetts and a member of the commission, said it is crucial for the state to explain what portion of the trust fund’s deficit is related to government COVID-19 restrictions, fraud and overpayments.

“Before we determine the fair share of COVID related costs for businesses, we need to know what those numbers are,” he said. “There’s an argument to be made that employers shouldn’t be responsible for any of those categories.”

Massachusetts paid out an unprecedented $6 billion in jobless benefits last year as hundreds of thousands of workers were sidelined by government-imposed shutdowns meant to stop the spread of COVID-19.

The Baker administration has been forced to borrow more than $2.2 billion from the federal government to continue paying claims during the pandemic.

Red ink in the state’s trust fund is driving up insurance rates paid by employers. Legislation signed by Baker in April was supposed to ease the impact on businesses, but many have still been hit with higher rates.

Managers of the state trust fund currently plan to spread the cost of replenishing the fund over the next 20 years, according to the Baker administration.

Lawmakers approved a $4 billion spending plan last week that would divert $500 million in federal American Rescue Plan Act funds and surplus revenue to help reduce the fund’s deficit.

But business leaders say that won’t go far enough to help employers who’ve been saddled with paying down the massive debt.

Baker refiled a proposal in November seeking to divert $1 billion from surplus revenues and pandemic relief to help pay down the trust fund deficit.

But the bill is still sitting in a legislative committee, awaiting a hearing.


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