Massachusetts has reached a settlement with the federal government to repay $2.1 billion over the next ten years. This debt stems from the previous administration's improper use of federal pandemic relief funds to cover unemployment benefits, a mistake discovered by the current administration under Governor Maura Healey. The original liability, including interest and fees, exceeded $3 billion, but negotiations with the U.S. Department of Labor reduced this amount. Governor Healey expressed frustration with the previous administration's error but emphasized the current administration's commitment to addressing the issue and implementing reforms to the Unemployment Insurance system.
Maura Healey, governor of Massachusetts, speaks at Roxbury Community College.
Payments will commence on December 1st and continue annually for the next decade. The agreement mandates that principal payments originate from the Unemployment Insurance (UI) Trust Fund, which is financed by employer taxes and utilized to cover benefits. Interest payments will be drawn from the state’s General Fund. The Healey administration has assured businesses that they will not face increased unemployment insurance payment rates until at least the end of next year. Future rates will be contingent on system reforms. Governor Healey has tasked state officials with a comprehensive review of the UI Trust Fund's solvency and an assessment of potential reforms. Projections indicate the fund would be significantly in debt by 2028, even before considering the $2.1 billion repayment.
Former Massachusetts Gov. Charlie Baker speaks during a Juneteenth commemoration.
Massachusetts Gov. Maura Healey takes questions from reporters during a news conference.
