LAWMAKERS URGED TO ACT ON ARPA $
Business groups emphasize extent of unemployment hit
Industry groups accused Beacon Hill lawmakers of “not grasping” the scope of the unemployment hit on business owners, noting as at least 30 states have already moved to relieve the debt racked up amid the pandemic.
“The state is looking to businesses to lead the recovery from the pandemic, and they can’t do that if they’re being weighed down by high taxes,” Christopher Carlozzi, state director for NFIB, said. “They don’t fully grasp just how much of a crisis this is at this point. This is a dire situation.”
Massachusetts is on the hook to repay a $7 billion loan after the historic number of unemployment benefits claims paid out during the pandemic pushed its trust fund into insolvency.
For now, the burden has been placed on the backs of business owners who will be paying higher unemployment rates for the next 20 years as the bond is paid down.
States paid out roughly $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 claims ran out after Labor Day, Massachusetts had paid out $33.9 billion in claims.
At least 30 states so far have committed portions of federal relief dollars to relieve pressure on businesses still struggling to bounce back after governmentmandated shutdowns and restrictions.
The federal government in May gave states the green light to use the $195.3 billion on local relief from President Biden’s American Rescue Plan Act to cover unemployment costs.
Jon Hurst of the Retailers Association of Massachusetts said that’s the kind of “shared responsibility” Massachusetts officials should be offering.
“To have $7 billion hanging over the heads of small businesses for government-triggered layoffs sends the wrong message. It’s an anti-employer, anti-growth message,” Hurst said.
Beacon Hill lawmakers have been sitting on $4.9 billion in ARPA relief funds since May as they mull spending priorities. The state also took in nearly $5 billion in surplus tax revenue last year.
Senate President Karen Spilka said last week a bill to spend “some” of the cash on immediate needs is expected by Thanksgiving, but it’s unclear if unemployment is among those priorities.
Republican Gov. Charlie Baker in August filed a nearly $1.6 billion spending bill that would direct $1 billion of the surplus cash to pay down the unemployment debt.
Hurst said the governor’s proposal is a “start” but is “still not enough.”
“We’d 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 those rising costs on the state’s already strapped businesses, it could slow the state’s recovery.
“I don’t care how gets done, they need to move over money from the surplus or ARPA or both,” Carlozzi said.