Industry groups have accused Beacon Hill lawmakers of “failing to grasp” the extent of unemployment hitting business owners, noting that at least 30 states have already taken steps to alleviate debt accumulated amid the crisis. pandemic.
“The state is looking to business to lead the recovery from the pandemic and they cannot do it if they are burdened with high taxes,” said Christopher Carlozzi, state director of the NFIB. “They don’t fully understand how much of a crisis this is at this point. It is a dire situation. “
Massachusetts is set to repay a $ 7 billion loan after the historic number of unemployment benefit claims paid during the pandemic pushed its insolvency trust fund.
For now, the burden has been placed on the backs of business owners who will pay higher unemployment rates over the next 20 years as the bond is paid off.
States have paid out around $ 175 billion in unemployment benefits collectively throughout the pandemic, with the federal government providing an additional $ 660 billion in assistance.
When assistance for most pandemic-related claims ran out after Labor Day, Massachusetts had paid out $ 33.9 billion in claims.
So far, at least 30 states have pledged a portion of federal relief dollars to ease pressure on businesses still struggling to bounce back from government-imposed closures and restrictions. In May, the federal government gave states the green light to use the $ 195.3 billion in local aid under President Biden’s American Rescue Plan Act to cover the costs of unemployment.
Jon Hurst of the Retailers Association of Massachusetts said that’s the kind of “shared responsibility” that Massachusetts officials should offer.
“Having $ 7 billion hanging over the heads of small businesses for government-initiated layoffs sends the wrong message. It’s an anti-employer and anti-growth message, ”said Hurst.
Beacon Hill lawmakers have been sitting on $ 4.9 billion in ARPA relief funds since May as they reflect on spending priorities. The state also collected nearly $ 5 billion in excess tax revenue last year.
Senate Speaker Karen Spilka said last week that a bill to spend “some” of the money on immediate needs was expected by Thanksgiving, but it is not clear whether the unemployment is one of those priorities.
Republican Gov. Charlie Baker introduced a nearly $ 1.6 billion spending bill in August that would use $ 1 billion in excess cash flow to pay down unemployment debt.
Hurst said the governor’s proposal is a “start” but is “still not enough”.
“We would like to see a minimum of $ 2 billion, which is still only 28% of the cost before interest,” he said.
Carlozzi said if lawmakers ignore these growing costs on businesses already short of the state, it could slow the state’s recovery.
“I don’t care how it’s done, they have to transfer money from the surplus or from ARPA or both,” Carlozzi said.