December 7, 2021

Business leader says legislature ‘shirking responsibility’ by not investing more in unemployment fund

The Massachusetts Senate is proposing using $500 million of federal pandemic relief and surplus funds to pay down the state’s massive unemployment insurance trust fund deficit.

But with the jobless fund’s deficit at an estimated $7 billion, business leaders consider the attempt to put $500 million into the fund to be underwhelming to say the least.

Christopher Carlozzi, National Federation of Independent Business state director, said it’s just not enough.

“It’s a massive concern,” he told The Center Square. “We’ve seen over 30 states have used either CARES Act or ARPA money to shore up UI trust funds across the country. We were hoping Massachusetts would do the same and provide an adequate amount to shore that up – that was one of the allowed uses of the federal funding.”

States whose funds are in far less of a dire situation like Maryland, Ohio and Georgia all put a billion or more dollars toward their funds, Carlozzi said.

But Massachusetts’ legislature has done nothing with Gov. Charlie Baker’s proposal to put $1 billion toward the deficit, Carlozzi noted. It is sitting in a legislative committee awaiting a hearing, the Eagle Tribune reported.

From the early days of the pandemic, small businesses have been concerned about Massachusetts’ UI trust fund, Carlozzi said.

“The UI trust fund was depleted fairly early in the pandemic,” he said. “Massachusetts experienced, I would say, a more restrictive approach to businesses reopening, shut down harder than a lot of other states, so that by the summer we were experiencing over a 17% unemployment rate and a very high utilization rate of the UI trust fund.”

Businesses were very concerned about the impact this would have on UI taxes, especially considering the layoffs resulted from state mandates and were not their fault, Carlozzi said. They communicated continuously with the state legislature about those fears, he pointed out.

“Because it’s solely the responsibility of Massachusetts employers to replenish this fund through their UI taxes,” he said.

Even while states have opened up considerably, supply chain disruptions and worker shortages are still making survival difficult for small businesses in Massachusetts, Carlozzi noted, saying businesses are by no means past the struggle.

The state legislature had no problem putting businesses through the wringer of shutdowns, he notes.

“But now they seem to be shirking the responsibility of dealing with the layoffs that resulted from all those policies that were put in place by the state,” he said.

This article was originally posted on Business leader says legislature ‘shirking responsibility’ by not investing more in unemployment fund