A Step in the Right Direction
Late last month, Gov. Charlie Baker, heeding a call from a number of business groups that have steadily pushed for unemployment-insurance (UI) relief, proposed using $1 billion in state surplus money to help ease the burden facing the state’s business community from the widespread layoffs that occurred during the pandemic.
The governor filed a supplemental budget proposal with the Legislature that would set aside the $1 billion for unemployment rate relief as part of a broader $1.6 billion plan to spend the bulk of what remains of a massive, $5 billion state budget surplus from the fiscal year that ended on June 30.
If approved, the measure certainly won’t cover what is expected to be a $5 billion shortfall in the state’s UI fund — a shortfall that the Baker administration and the Legislature decided to address with an assessment that businesses will pay over the next 20 years or more — but it will help reduce the burden on the state’s businesses, and it represents a minor breakthrough of sorts when it comes to this administration and the business community.
Baker’s proposal shows that at least some people are paying more than lip service to the plight of the state’s businesses, which have often been overlooked when it comes to the long list of victims of this pandemic. Despite large amounts of local, state, and federal assistance in many different forms, from grants to loans, businesses in many sectors are still struggling in the wake of the pandemic.
This spring and summer have bought some relief to those in many sectors, including hospitality and tourism, but the road back to normal, pre-pandemic levels of revenue and profit is paved with uncertainty, especially as the highly contagious Delta variant continues to gain strength.
Businesses are, by and large, and to one degree or another, regaining their footing. But this improved stability, if it can even be called that, is threatened by many different forces — including the huge bill that has come due from so many of the state’s residents being forced into unemployment by the pandemic.
As we’ve said before, the state’s businesses didn’t cause the pandemic, and they should not have to bear the brunt of paying the enormous unemployment-insurance burden now facing the Commonwealth — not when the state has roughly $5 billion in federal American Rescue Plan Act funds at its disposal and the huge surplus from FY 2021, resulting from a flood of federal aid and better-than-expected tax revenue.
In announcing his proposal regarding unemployment insurance, Baker said “this UI piece would send a big, positive message to employers and employees that we’re looking to try to help them with what is going to be one of the biggest expenses … because of the pandemic.”
He’s right, but it’s more than a message — it’s a solid step, and hopefully a solid first step — toward addressing the unemployment-insurance deficit.
The Legislature will have a lot on its plate when it gets back in session after Labor Day. We hope the governor’s UI proposal gets the proper consideration and eventually becomes part of the plan to spend down the rescue-plan monies and the deficit.
Things are better for the business community, but many challenges remain, and this proposal is a big step in the right direction.