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Vote Sets Up House Debate on Unemployment Insurance Rate Freeze

Posted by Brad MacDougall on Feb 15, 2011 1:47:00 PM

The Massachusetts House of Representatives today reported an Unemployment Insurance rate freeze bill from the Ways and Means Committee, paving the way for expected final approval during a formal session Wednesday.

Unemployment Insurance rate freezeA handful of representatives agreed without discussion this morning to send to third reading a bill that would reduce the automatic UI tax increase that took effect January 1 from $228 to $61 per employee.  The freeze is similar to one approved on Thursday in the state Senate.

Legislative leaders have signaled that they may send the UI legislation with an emergency preamble to Governor Patrick’s desk on Wednesday. The governor also supports freezing UI rates at the current Schedule E.

“Given the current state of the Commonwealth’s economic circumstances and our collective desire for the private sector to create jobs, AIM believes that moderation of the current statutory tax rate is financially, politically, and economically prudent,” AIM Executive Vice President John R. Regan wrote in a letter to House members urging them to support the freeze.

A UI rate freeze would still leave Massachusetts employers paying approximately 10 percent more in unemployment taxes in 2011 than they did last year because of weakened experience ratings. But the jump is far less than the 40 percent increase that employers would suffer if the automatic move in UI rates to Schedule G was allowed to stand.

A rate increase is unnecessary and excessive now that the financial position of the UI Trust Fund is improving after two years of heavy demand caused by more than 8 percent unemployment. A significant decrease in the number of claims for unemployment prompted state officials in December to revise their estimate of the Trust Fund balance from a negative $302 million to a positive $12.7 million.

 

Topics: Associated Industries of Massachusetts, AIM, Unemployment insurance, Massachusetts Unemployment Insurance, Massachusetts House of Representatives

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