Governor Deval Patrick today signed a supplemental budget that freezes Unemployment Insurance tax rates for 2012 and heads off an automatic 31 percent tax increase for employers.
It marks the fourth consecutive year that state policymakers have intervened to avoid automatic increases in the assessments paid by employers to the fund used to provide unemployment benefits to jobless residents. The rate freeze will keep $335 million in the private sector and still leave the Unemployment Insurance Trust Fund with a $400 million at the end of 2012.
“The Unemployment Insurance rate freeze will accelerate the economic recovery in Massachusetts by giving employers additional resources to invest in growing their businesses and hiring people. AIM is pleased that policymakers have again stopped this unnecessary increase in the unemployment tax burden,” said Richard C. Lord, President and Chief Executive Officer of Associated Industries of Massachusetts.
“We greatly appreciate the support of Governor Patrick and the Legislature on this important matter and look forward to working with all parties to improve the long-term competitiveness and sustainability of the UI system.”
The UI rate freeze was part of a $130.7 million supplemental budget that will also 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 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.
The Unemployment Insurance provision will keep UI 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.