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Archived: Speaker Backs Unemployment Rate Freeze, Reforms

Posted on January 2, 2013

Massachusetts House Speaker Robert A. DeLeo today called for freezing Unemployment Insurance rates for 2013 and examining structural changes to one of the most expensive UI systems in the nation.

Robert DeLeoUnemployment Insurance rates in Massachusetts rose automatically by 25 percent on January 1, boosting the cost paid by employers from $745 per employee to $929 per employee. Legislators may still freeze rates at the current schedule E before first-quarter UI bills go to employers, a step that lawmakers have taken in each of the past three years.

AIM believes that the current trust fund balance of approximately $400 million in the fund used to pay jobless benefits is enough to justify another freeze.

“I continue to hear from the business community about increasing unemployment insurance rates. The schedule can lead to sudden and additional burdens on employers and cost jobs. Sensitive to these concerns, I will ask that the House once again freeze the UI increase,” DeLeo said after winning election to a third term as speaker.

“Because this appears to have become a semi-permanent condition, I will ask the appropriate committees to study ways in which we can reform our UI system to deal with our long-term liabilities while mitigating the burden on employers.”

AIM supports long-term structural reforms that would bring Massachusetts into line with Unemployment Insurance practices in a majority of other states by limiting the duration of benefits to 26 weeks, increasing work and wage requirements for benefit eligibility, and updating rate tables to create equity in employer UI payments. Massachusetts currently has some of the highest Unemployment Insurance rates in the nation.

DeLeo pledged to focus on economic development and job creation. He noted that Massachusetts has already begun to cultivate the type of environment conducive to economic growth and innovation, proving to be an attractive place for new businesses, such as Japanese stem cell company ReproCELL that has just announced a decision to open an office in Boston.

Both DeLeo and Senate President Therese Murray used their inaugural speeches to address transportation issues in advance of a long-term transportation financing plan expected from Governor Deval Patrick next week. The two legislative leaders emphasized the need to create efficiency through reform as lawmakers grapple with operational deficits at the MBTA and long-term highway and bridge construction needs.

“In 2009, we completely overhauled the state’s transportation system, dissolving the Turnpike Authority and consolidating multiple agencies into a unified, independent agency.  We recognized that we were dealing with a broken system, and we insisted on reform before revenue,” Murray said in remarks to the Senate.

“In the upcoming session, we will continue to look for opportunities to help the Department (of Transportation) continuously improve its services, redouble its commitment to reform, and come closer to fulfilling its new potential.”