Baker keeps lawmakers in the dark on unemployment metrics

Photo | State House News Service Gov. Charlie Baker

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By State House News Service

The Baker administration still does not know when it will announce how much money it will borrow to bolster the state's unemployment insurance fund or provide an updated estimate of the account's current balance, an uncertain outlook that has left businesses itching for information and could further delay recommendations for overhauling the joblessness aid system.

At a virtual meeting on Monday, members of a panel studying the unemployment system indicated that they want to gain a clearer understanding of the fund's financial outlook before they iron out a report about improving its long-term stability.

The group's work has been marked recently by co-chair Sen. Patricia Jehlen questioning if the state still needs to borrow any money to buoy the UI fund now that employment rates have rebounded.

"In terms of the chamber's vote, that would be a really important piece of information to have, and I don't know that I'd feel comfortable voting without a little bit more information than we have on that," said Carolyn Ryan, a member of the commission and vice president for policy and research at the Greater Boston Chamber of Commerce.

Facing inquiries from the panel about the trust fund's current balance and the administration's plans for bonding, Labor and Workforce Development Secretary Rosalin Acosta said Monday she hopes "to have a more concrete timeline in the near future."

Asked if she would have an estimate about the trust fund's balance by January, Acosta replied, "I'm hoping so, chair. As soon as I hear from the team, I will confirm."

Baker in April signed a law authorizing up to $7 billion in bonding to stabilize the unemployment insurance fund after a surge of claims during the pandemic depleted the account, which Massachusetts businesses fund via taxes, and forced the state to borrow money from the federal government.

Officials still have not triggered any of that bonding yet, and Jehlen raised eyebrows this month when she suggested during Senate debate that it may no longer be necessary with federal reports indicating the account has about $2.9 billion on hand.

The Baker administration typically publishes a summary of the unemployment fund's status every month, but has not posted an update since June, when it reported that the account had a balance $1.77 billion in the red.

Richard Marlin, the legislative director for the Massachusetts Building Trades Council, said during Monday's meeting that his group also wants to know the administration's plan for that borrowing.

"Quite frankly, I think $7 billion, if they bonded it, they could make us whole," Marlin said. "Getting a sense of where they want to have the trust fund balance start and if whatever we're going to do is going to add to that might be somewhat helpful."

The House and Senate both agreed to steer $500 million in federal relief and surplus tax dollars into the unemployment system to reduce the burden on businesses, half as much as Baker sought, but that proposal remains stalled in conference committee talks about the broader spending bill.

Administration officials have contended that the bulk of the existing unemployment fund's balance is money owed to the federal government, warning that the state cannot pay back those advances and keep benefits flowing without additional borrowing.

The commission studying the unemployment trust fund, created in the same springtime law that authorized the $7 billion in bonding, will not meet its Dec. 15 deadline to file a report and recommendations for keeping the unemployment system solvent.

Instead, members on Monday unanimously approved a new plan. Jehlen and fellow co-chair Rep. Josh Cutler will file a status update on Dec. 15 summarizing the commission's meetings so far, then craft a "skeleton report" including their personal recommendations. Panelists will get two weeks to review the draft before deliberating and voting at their next meeting, whose date is uncertain.

Justifying the delay, Jehlen pointed to Republican Rep. David Vieira's quote in a Boston Globe story published Sunday about a commission studying the state seal.

"I just read in the paper today that Rep. Vieira said he has never been on a commission that met its deadline, so I don't feel that we are out of line," Jehlen said.

The commission's scope includes potential changes to the experience rating system, taxable wage base and use of federal credits, but members -- who range across the spectrum from organized labor representatives to business group leaders -- so far appear distant from consensus.

After agreeing that the trust fund should maintain a sufficient reserve, members on Monday spent much of the meeting unsuccessfully deliberating if the panel should declare that improving "equity for small businesses" is one of its guiding principles.

Jehlen and Cutler proposed that language, but it failed to earn sufficient support with seven of the 21 members voting in opposition and three abstaining.

Several panelists who voted against the motion said they felt the language was too "subjective" and that decisions about how to prioritize small business equity should fall to lawmakers weighing specific legislation, not the commission studying the system.