For Immediate Release - February 17, 2012

GOVERNOR PATRICK SIGNS BILL TO FREEZE UNEMPLOYMENT INSURANCE RATE INCREASES TO SUPPORT MASSACHUSETTS BUSINESSES

Supplemental budget also funds key investments to core safety net programs

BOSTON – Friday, February 17, 2012 – Governor Deval Patrick today signed a $127.1 million supplemental budget that will provide immediate relief to Massachusetts' businesses by freezing employer contributions to the Unemployment Insurance (UI) Trust Fund at current levels.

“Together, we are providing economic relief and assistance to our employers and because of our efforts, Massachusetts remains a top place to do business,” said Governor Patrick. “By signing this bill, we are keeping the Commonwealth and its employers at the forefront of the national economic recovery. I thank the legislature for moving quickly so we can provide this relief.

“By freezing the Unemployment Insurance rates for a third consecutive year, our Administration with the support of the state legislature, continues to provide critical relief to help Massachusetts businesses recover and strengthen the Commonwealth’s economy,” said Lieutenant Governor Timothy Murray.

This new law prevents a scheduled rate hike from taking effect, helping to save businesses $421 million this year. Including the savings associated with this change, the Patrick-Murray Administration has saved Massachusetts businesses approximately $1.2 billion in the last three years by freezing unemployment insurance rate increases. Without this legislation employers would have seen an average increase of $173 per employee. This marks the third freeze in Unemployment Insurance contributions supported by the Patrick-Murray Administration to help encourage job creation in the Commonwealth.  

"The Legislature and the Governor have once again demonstrated a commitment to employers by preventing UI costs from increasing significantly," said Secretary of Labor and Workforce Development Joanne Goldstein. "We hope these savings will prompt businesses to continue growing the economy and creating jobs in the Commonwealth.”

Employer contributions into the UI Trust Fund are tied to the amount of reserves in the fund. By law, a scheduled increase was triggered on January 1, 2012, which would have caused an increase in the average contribution per employee of $173 for 2012. In order to reduce costs for Massachusetts businesses, Governor Patrick and the Legislature agreed to freeze the contribution at a lower rate schedule. This measure will not impact benefit levels or eligibility for persons currently collecting unemployment benefits.

The supplemental bill signed today will also provide funding for core safety net programs, including $35 million for adult day health services to low-income seniors and disabled persons and $21 million for the Low Income Heating Energy Assistance Program (LIHEAP) to help offset reductions in federal home heating assistance.

“Even during hard fiscal times, the Patrick-Murray Administration is committed to protecting core safety net programs to help those most in need,” said Secretary of Administration and Finance Jay Gonzalez. “This bill will use available resources to provide critical services to seniors and families in need.”

The legislation also includes an amendment that modifies existing small and non-group health insurance laws amending the coverage available in limited or tiered networks to children or cancer patients that are currently in an active course of treatment. The amendment helps preserve coverage for those currently receiving care without sacrificing the cost savings of limited and tiered networks.

“Freezing the rate again gives Massachusetts businesses the relief, continuity and certainty they need to start hiring,” said Senate President Therese Murray. “We will continue to do all we can to foster a positive climate for businesses to create jobs.”

“I thank the Patrick-Murray Administration for supporting important piece of legislation,” said House Speaker Robert A. DeLeo. “The Governor’s signature on this bill sends the message that Beacon Hill remains committed to stimulating business expansion, creating job opportunities, and helping the Commonwealth climb out of this recession.”

“This freeze is something that makes sense right now,” said Senator Stephen M. Brewer, Chair of the Senate Committee on Ways and Means. “Our economy is showing a modest improvement and keeping the Unemployment Insurance Rate from rising will help employers and get out of work citizens back into jobs.”

“As Massachusetts continues to navigate the current global recession, we must balance our support of job growth with our commitment to provide unemployed workers with the assistance they need to transition to new employment,” said Representative Brian S. Dempsey, Chair of the House Committee on Ways and Means. “This must be done in a responsible manner as the Commonwealth deals with difficult budget constraints.”

"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."

Other funding items in the supplemental bill include:

  • $1.7 million for programs operated by the Department of Youth Services for youthful offenders in its care;
  • $1 million for Mass Legal Assistance Corporation to help partially offset projected deficiencies this fiscal year; and
  • $1.8 million for tuition waivers for foster care or adopted students attending institutions of higher education.

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