Massachusetts businesses could see a modicum of relief during the coronavirus pandemic if a bill filed by Gov. Charlie Baker is approved.
The Republican governor said Friday he plans to file an unemployment insurance bill, three weeks before the end of the legislative session. The bill would freeze the unemployment insurance contribution rate that employers owe the state and would enable the state to start paying back money it borrowed from the federal government to cover UI costs during the pandemic, Baker said on Friday during a news conference.
“This just ends up being a much less expensive way for the commonwealth collecting unemployment payments from employers to continue to finance our unemployment insurance system on a go-forward basis,” Baker said. ”The fact that it’s so much less expensive means people get their benefits that they’re entitled to and employers, in the midst of a terrible, terrible time for so many of them, continue to pay and don’t get a big monthly increase.”
Massachusetts saw unprecedented increases in unemployment claims after the coronavirus pandemic was declared in mid-March. At its height, more than 1 million people had filed for unemployment benefits through the Department of Unemployment Assistance and thousands of independent contractors had filed for benefits through the Pandemic Unemployment Assistance program.
The Massachusetts Unemployment Insurance Trust Fund was in the red by $1.8 billion as of Oct. 31, according to a November report from the The Executive Office of Labor and Workforce Development.
The state faces a projected $2.4 billion deficit by the end of the year, according to the DUA. That gap could swell to $4.8 billion by the end of 2021.
The looming increase in unemployment insurance comes as employers are expecting to pay for increases for health insurance, minimum wage and the Paid Family and Medical Leave Act.
“There are some increases for employers generally that are coming in January, though the PFML piece comes with a benefit for workers that most people were anxious to see us put in place to the commonwealth going forward,” Baker said.
Jon Hurst, president of the Retailers Association of Massachusetts, said the bill benefits businesses that have suffered through a pandemic, a series of business closures and increased costs for protective gear and marketing.
“To some extent, this may be the tip of the iceberg of a perfect storm,” Hurst said.
Some businesses will have to speed up when they said tax revenue to the state. The governor approved provisions in the fiscal 2021 budget to accelerate tax collections for what he described as the largest 5% of the state’s businesses that collect the largest number of tax revenue.
Under the budget, businesses that fall under the category would have to send their tax revenue for the first three weeks of a month to the state by the 25th of each month rather, instead of by the third week of the next month.
Some business leaders have criticized the move, including Hurst, saying it only adds another burden on an already battered business community during the pandemic.
But Baker says it should be feasible in the 21st century.
“This is not 1965. It’s 2020,” Baker said. “More and more transactions that take place between consumers and businesses, and businesses and businesses, take place electronically, online and instantaneously.”
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