Senator: Businesses bearing burden of unemployment fraud
Also wants more money put in to help out
Candidate for state auditor, state Sen. Diana DiZoglio is calling for “sorely needed clarity” in the effort to replenish the unemployment trust — drained during the pandemic — with businesses apparently on the hook to pay back an eye-popping $7 billion — including nearly $2 billion in fraud.
“It is important that we know precisely how much of this deficit is due to fraud and overpayment issues which, we should add, should not be up to employers to pay for,” DiZoglio, D-Methuen, wrote in a Dec. 3 letter to Gov. Charlie Baker, signed by a group of bipartisan lawmakers.
The unemployment insurance fund — which is funded through a tax on employers — may have wracked up $7 billion in debt amid an unprecedented number of claims during the coronavirus pandemic, the Department of Unemployment Assistance has said.
As much as $1.6 billion in Massachusetts unemployment benefits payouts made amid the pandemic could be fraudulent, according to the the National Conference of State Legislatures and the U.S. Department of Labor.
“Mom and pop shops are left shouldering the burden of fraudulent claims,” DiZoglio told the Herald
in an interview. She is calling for a full accounting and vowed to audit the Unemployment Insurance Fund and others cashing in on pandemic relief dollars should she win the auditor’s seat.
Lawmakers have authorized bonding the Unemployment Insurance debt so that it can be spread out over 20 years and paid for through increased fees to businesses.
But the Baker administration said last week it still doesn’t actually know how much money it will ultimately borrow to cover the cost of the unprecedented number of pandemic-era claims. The Department of Unemployment
Assistance recently reported to the Treasury a $2.9 billion positive balance, “creating tremendous uncertainty” amid a continued lack of transparency, DiZoglio said.
Officials have said that balance is money owed to the federal government, warning that the state cannot pay back those advances and keep benefits flowing without additional borrowing.
A $4 billion spending bill — funded through remaining American Rescue Plan Act money and tax revenue surplus — now sitting on Baker’s desk includes $500 million to help replenish the fund.
But it’s not enough money to make a meaningful dent, DiZoglio said.
The state senator tried to double the amount to $1 billion in a failed amendment to the ARPA bill. Now, DiZoglio said she’ll file legislation to get to $1 billion.
Christopher Dempsey, DiZoglio’s challenger, has also committed to oversight when it comes to ARPA funds, which he called “a once-in-a-generation opportunity to make our Commonwealth stronger than it was before the pandemic; but that will only happen if we ensure these dollars are spent well.”