For Immediate Release - February 18, 2011

GOVERNOR PATRICK SIGNS LEGISLATION TO FREEZE SCHEDULED UNEMPLOYMENT INSURANCE RATE INCREASES, PROVIDING RELIEF TO MASSACHUSETTS BUSINESSES

Rate schedule freeze will encourage job creation and promote economic growth in the Commonwealth

BOSTON - Friday, February 18, 2011 - Governor Deval Patrick yesterday signed legislation that will provide immediate relief to Massachusetts' businesses by freezing employer contributions to the Unemployment Insurance (UI) Trust Fund at current levels. This new law prevents a scheduled rate hike from taking effect, helping to save businesses $402 million this year.

"Without this legislation employers would have seen an average increase of $228 per employee," said Governor Patrick. "We want to encourage a positive climate for employers and by signing this bill we are helping to position the state for continued economic recovery."

"We are committed to delivering solutions that will support stability and business growth as our economy continues to recover," said Lieutenant Governor Timothy Murray. "By partnering with the Legislature, we were able to move swiftly to provide this relief for businesses across the state."

This marks the third reduction in Unemployment Insurance contributions supported by the Patrick-Murray Administration to help encourage job creation in the Commonwealth.

"This effort will help give our businesses some additional breathing room as they work to overcome this challenging economic environment. We need to continue to foster environments where jobs can grow and be created, and this is another step in that direction," said Senate President Therese Murray.

"As we struggle to survive in these challenging times, it's important to ease the burden on businesses, which fund our unemployment system," House Speaker Robert A. DeLeo said. "This rate freeze signals our commitment to stimulating business and creating jobs in the Commonwealth.

Employer contributions into the UI Trust Fund are tied to the amount of reserves in the trust fund. By law, a scheduled increase was triggered on January 1, 2011 which would have caused an increase in the average contribution per employee of $228 for 2011. In order to reduce costs for Massachusetts businesses, Governor Patrick and the Legislature agreed to freeze the contribution at a lower rate schedule (Schedule E). This measure will not impact benefit levels or eligibility for persons currently collecting unemployment benefits.

"I am pleased that the Legislature and the Governor acted so quickly to prevent UI costs from increasing significantly this year," said Joanne Goldstein, Secretary of Labor and Workforce Development. "It is our hope that this step will help employers as they make hiring decisions for this year, and that we continue to work together to improve the UI system through additional reforms."

"I thank Governor Patrick and the Legislature for freezing scheduled unemployment insurance rates for 2011," said Rick Lord, President and CEO, Associated Industries of Massachusetts. "This action heads off a scheduled 40% increase in UI taxes at a time when many businesses are continuing to struggle through a tough economy. This is the type of action AIM advocates for and will help lead to a strong economic climate in Massachusetts. We look forward to further meaningful discussions of related reforms."

"In a slow economy, small employers are looking to cut or control costs as much as possible, in order to keep their doors open," said Jon B. Hurst, President of the Retailers Association of Massachusetts. "This rate freeze helps control those mandatory costs upon employers and we truly appreciate the action taken by the Governor and the Legislature."

Creating jobs and improving the state's business climate has been at the top of the Patrick-Murray Administration's agenda since day one. In the last four years, the Administration has done more to streamline and expedite state and local development permitting than previous administrations over the last 20 years. The Administration instituted a staggered reduction in the corporate tax rate from 9.5 percent to 8 percent, saving Massachusetts companies an estimated $411 million. Last year Governor Patrick signed legislation to help businesses create jobs by providing access to capital and consolidating the state's economic development agencies to improve efficiency and effectiveness. This week, the Governor announced that his efforts over the past year to reduce skyrocketing health insurance premium increases have saved small businesses and working families $106 million. Yesterday the Governor also filed comprehensive health care payment and delivery reform legislation to control costs and improve patient care - to ensure that health care is as affordable as it is accessible in Massachusetts.

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