New bill helps to give companies a bit of a break on the cost of the coverage.
Should a new budget bill be passed in Massachusetts after having already advanced in the House as of Monday, it will mean that the unemployment insurance rates that businesses have to pay will be frozen this year in order to avoid a surge in employer fees in order to cover benefits for the jobless.
The proposal was made by Governor Deval Patrick to block the increase that had been scheduled.
The Governor of Massachusetts made his proposal in January in order to block the increase of $500 million in the amount that businesses would have had to pay in order to provide unemployment insurance coverage. Should this bill receive the Legislature’s approval, it would mean that there will have been rate freezes for four consecutive years. This is an effort that has had the approval of both Patrick and many lawmakers, as the recipients of requests from businesses who are seeking relief in order to be better able to survive and to promote job creation.
The governor’s administration believes that the unemployment insurance fund will still hold strong.
According to their estimates, the trust fund for the unemployment insurance in the state will close the year with a balance of $600 million if the rate freeze receives its approval.
The unemployment insurance bill itself was a response from the House to the proposal that Governor Patrick made in order to address a deficit of $540 million, which was discovered in December when $255 million was slashed from the state spending by the governor. This was the same time that he requested that the authority make a 1 percent reduction to local aid and to take another $200 million from the Massachusetts reserves.
The initial approval from the House was already granted on Monday, and it will be debated for passage today. This unemployment insurance bill rejected the request made by the Governor for the authority to reduce local aid by $9 million. However, it did give its authorization to a requested rainy-day fund, and also included an additional $115 in spending to the fiscal budget for the year.