Massachusetts should pay the federal authorities $2.1 billion over the subsequent 10 years to resolve a debt after the state below former GOP Gov. Charlie Baker’s administration mistakenly used federal pandemic funds to cowl unemployment advantages.
In 2023, Healey introduced that her administration uncovered that the prior administration improperly used about $2.5 billion in federal pandemic aid funds to cowl unemployment advantages that ought to have been funded by the state.
The whole legal responsibility exceeded $3 billion, together with charges and curiosity, based on Healey’s workplace. Negotiations with the U.S. Division of Labor dropped the overall owed to $2.1 billion over the subsequent decade.
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Maura Healey, governor of Massachusetts, speaks at Roxbury Neighborhood School in Boston, Massachusetts, on Wednesday, Jan. 10, 2024. (Adam Glanzman/Bloomberg by way of Getty Photos)
“We were dismayed to uncover early on in our term that the previous administration misspent billions of dollars in federal relief funds and that our state was facing what could have been a more than $3 billion tab to pay it back,” Healey stated in a press release on Monday.
“For the past year and a half, we have engaged in extensive negotiations with the U.S. Department of Labor to minimize the impact on Massachusetts residents, businesses and our economy,” she continued. “Today, we have reduced our potential liability by over $1 billion and negotiated a decade-long payment window to mitigate the impact.”
The governor added that it’s “incredibly frustrating that the prior administration allowed this to happen” however that the present administration is “going to use this as a moment to come together with the business and labor community to make meaningful reforms to the Unemployment Insurance system.”
Former Massachusetts Gov. Charlie Baker speaks throughout a Juneteenth commemoration in Boston’s Nubian Sq., June 18, 2021. (AP Photograph/Elise Amendola, File)
Funds will start Dec. 1 and proceed annually for the subsequent decade.
Healey’s workplace stated companies is not going to face greater charges on their unemployment insurance coverage funds by a minimum of the top of subsequent yr, at which level charges will depend upon system reforms.
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Healey directed state Labor Secretary Lauren Jones and Administration and Finance Secretary Matthew Gorzkowicz to “conduct a comprehensive review of the solvency of UI and assess potential reforms.”
The Healey administration projected the UI Belief Fund can be a whole lot of thousands and thousands of {dollars} in debt by the top of 2028, even earlier than considering the $2.1 billion in further funds.
