Massachusetts must pay the federal government $2.1 billion over the next 10 years to resolve debt after the state under the administration of former Republican Gov. Charlie Baker mistakenly used federal pandemic funds to cover unemployment benefits.
Current Gov. Maura Healey, a Democrat, and her deputies released details Monday of a deal they reached with the outgoing Biden administration last week in which the state will refund most of the money it owes because of the error, the House of Representatives News Service reported.
In 2023, Healey announced that his administration discovered that the previous administration improperly used about $2.5 billion in federal pandemic relief funds to cover unemployment benefits that should have been funded by the state.
The total liability exceeded $3 billion, including fees and interest, according to Healey’s office. Negotiations with the U.S. Department of Labor reduced the total owed to $2.1 billion over the next decade.
MASSACHUSETTS DEM NOW WANTS TO LIMIT ILLEGALS IN CRIME MIGRANT SHELTERS
Maura Healey, Governor of Massachusetts, speaks at Roxbury Group Faculty in Boston, Massachusetts, on Wednesday, January 10, 2024. (Adam Glanzman/Bloomberg via Getty Photos)
“We were dismayed to discover early in our term that the previous administration had wasted billions of dollars in federal relief funds and that our state was facing what could have been a bill of more than $3 billion to pay it back.” Healey said in a statement. on Mondays.
“Over 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,” he continued. “Today, we have reduced our potential liability by more than $1 billion and negotiated a decade-long payment window to mitigate the impact.”
The governor added that it is “incredibly frustrating that the previous administration allowed this to happen,” but that the administration is “going to use this as a time to come together with the business and labor community to make meaningful reforms to the unemployment insurance system.” . “.
Former Massachusetts Governor Charlie Baker speaks during a Juneteenth commemoration at Nubian Sq. in Boston, June 18, 2021. (AP Photo/Elise Amendola, File)
Payments will begin December 1 and continue each year for the next decade.
The agreement states that principal payments must come from the Unemployment Insurance (UI) Trust Fund, which is funded by a tax on employers and also used to cover benefits, according to the State Home Information Service. Interest payments will come from the state’s Basic Fund.
Healey’s office said businesses will not face higher rates on their unemployment insurance payments until at least the end of next year, at which point rates will depend on reforms to the system.
BLUE STATE GOVERNMENT CHANGES TONE AFTER PROMISING TO FIGHT TRUMP’S DEPORTATION EFFORTS, NOW EXPECTING HIM TO FIX THE BORDER
Massachusetts Gov. Maura Healey answers questions from reporters on Jan. 31, 2024, during a news conference in Boston. (Stuart Cahill/MediaNews Group/Boston Herald)
CLICK HERE TO GET THE FOX NEWS APP
The governor promised to implement changes to ease the burden on employers, who are already facing higher costs to support a surge in claims during the pandemic, according to the State House News Service.
Healey directed state Labor Secretary Lauren Jones and Finance and Administration Secretary Matthew Gorzkowicz to “conduct a comprehensive review of the UI’s solvency and evaluate potential reforms.”
The Healey administration projected that the UI Trust Fund would be hundreds of millions of dollars in debt by the end of 2028, even before taking into account the $2.1 billion in additional payments.
