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AIM Urges Governor to Sign Unemployment Rate Freeze

Posted by John Regan on Feb 10, 2012 12:38:00 PM

Associated Industries of Massachusetts urged Governor Deval Patrick today to sign a supplemental budget that would freeze Unemployment Insurance tax rates for 2012 and head off an automatic 31 percent tax increase for employers.

Unemployment InsuranceIn a letter to Patrick, AIM maintained that a rate freeze will still leave the fund used to pay benefits to unemployed workers with a $400 surplus at the end of the year.

“Massachusetts has managed its UI tax rates and trust fund balances well during this recession and is among the few states whose trust fund balance is positive.  On behalf of our thousands of member companies, we thank you for your continued support in managing this cost of doing business and applaud the General Court for working with us to ensure both rate stability and trust fund solvency,” AIM President and Chief Executive Officer Richard C. Lord wrote in the letter.

Lord also asked Patrick to sign provisions of the $130.7 million budget measure that would eliminate a sunset provision ending the popular Workforce Training Fund Program on December 31, and require state officials to post online the full cost-benefit analysis of new regulations.

The Massachusetts House and Senate gave final approval to the supplemental budget this week after several weeks of debate.

The rate freeze will leave keep Unemployment Insurance tax rates paid by employers at the current Schedule E, avoiding an automatic jump in UI costs from $715 per employee to $935 per employee. Employers may still see some increase in their UI taxes once their experience ratings and other factors are calculated.

The rate increase took effect at the beginning of the year, but there is still time to implement a freeze because employers don’t have to start paying the tax until the end of the first quarter.

AIM maintains that the Unemployment Insurance increase is unnecessary since the fund used to pay jobless benefits in Massachusetts posted a balance of nearly $100 million at the beginning of the year.

AIM is also pleased that policymakers are looking to lift the sunset provision on the commonwealth’s flagship program for improving the skills of Massachusetts residents. The Workforce Training Fund Program has provided $193.2 million in grants since its inception to some 2,500 Massachusetts employers to train 277,351 workers.

Topics: Unemployment insurance, Issues, Deval Patrick

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