Boston Herald

$2.5B blunder fallout

Healey: 'No one broke any laws'

- By Chris Van Buskirk cvanbuskir­k@bostonhera­

There is no indication the Baker administra­tion broke the law when $2.5 billion in federal money was erroneousl­y used to pay off pandemic-era unemployme­nt benefits, which should have been funded through state coffers, Gov. Maura Healey said.

Questions have swirled over the past week in the Beacon Hill orbit after the state’s Executive Office of Labor and Workforce Developmen­t confirmed the withdrawal of $2.5 billion in federal relief funds for unemployme­nt claims that should have been covered by the state.

“No one broke any laws,” Healey told reporters outside the State House yesterday. “It’s just to a matter of whether this was done the way it was supposed to be done, or whether there were other ways that this could have been done. Again, it’s more about just getting a handle on it right now. And the most important thing is we’re in discussion­s with the U.S. Department of Labor. And other states are working through similar issues.”

It is still unclear whether Massachuse­tts is on the hook to pay the federal government back, a question that looms large over legislativ­e conversati­ons on tax relief. The discrepanc­y, the Healey administra­tion has said, stems back to 2020, when former Gov. Charlie Baker was in office.

It was only recently identified through a yearly audit and previous inspection­s had not picked up on the error. An outside accounting firm hired to review the state’s Unemployme­nt Trust Fund also previously missed the mistake.

Healey said officials are still “getting to the bottom of what happened in terms of disparitie­s” and the administra­tion is not looking into whether the error was an unlawful or illegal act.

Healey did not specify who in her administra­tion has been in contact with the Department of Labor.

A spokespers­on for Baker said the former administra­tion “worked hard” to quickly set up new processes to ensure people received unemployme­nt payments during the pandemic, including distributi­ng tens of billions of dollars in benefits over two years.

“When complicati­ons were discovered, the administra­tion immediatel­y engaged an experience­d outside consultant to help with reconcilia­tion of the UI Trust Fund balance. The consultant­s issued a public report in December of 2021 that identified $300 million Massachuse­tts owed to the federal government, and the state acted quickly to resolve that issue,” the spokespers­on, Jim Conroy, said.

Labor and Workforce Developmen­t Secretary Lauren Jones said last week the Healey administra­tion is “determined to provide a solution with the goal of minimizing impact to the commonweal­th.”

A U.S. Department of Labor spokespers­on previously said they have been in discussion with state officials “about their error and is working with the state on options to rectify the situation.”

Members of the state’s congressio­nal delegation sent a letter Wednesday to a U.S. Department of Labor Official urging federal officials to work with Massachuse­tts to rectify the “accounting error.”

“States have faced significan­t obstacles in appropriat­ely administer­ing federal pandemic UI funds. This is due in part to the prioritiza­tion of speed in disburseme­nts, but also to the federal government’s unfortunat­e underinves­tment in federal and state UI infrastruc­ture,” the letter said, which was signed by U.S. Sens. Elizabeth Warren and Ed Markey as well as U.S. Reps. Lori Trahan, Stephen Lynch, Seth Moulton, Katherine Clark, Ayanna Pressley, William Keating, and James McGovern.

The multi-billion episode has drawn comparison­s to summer 2022, when a little-known tax cap law required the government to send billions back to residents in the form of reimbursem­ent checks.

That led legislativ­e leaders to scrap talks on tax relief and sideline a massive economic developmen­t bill that was in the works at the end of the legislativ­e session.

Senate President Karen Spilka did not say earlier this week whether this year’s scenario is similar to last year’s tax-cap situation.

“We’re in the fact-finding phase right now, trying to figure out what happened,” she said, adding the Senate will continue with a tax relief package that “will be out soon, so stay tuned.”

Addressing the misuse of federal funds should not preclude the Legislatur­e from taking up a tax relief bill, Senate Minority Leader Bruce Tarr told the Herald on Wednesday.

The Gloucester Republican said he is “not convinced” that Massachuse­tts will be forced to pay the federal government back.

“I’d also hope that the federal government would recognize its responsibi­lity in this matter. They were motivating us to put out the money as quickly … as we could. The rules seemed to be changing quite a bit when we’re trying to do it. And I think there’s some shared responsibi­lity here,” he said.

He said state officials acted “in good faith” despite the error.

“That being said, this is a sizable mistake,” he said. “And I think we need to understand how it happened, and who is responsibl­e for it. And how we can make sure that the employers in the commonweal­th are protected, the taxpayers of the commonweal­th are protected, and the integrity of our state government is protected.”

 ?? STUART CAHILL — BOSTON HERALD ?? Gov. Maura Healey, at a Pride Day event, said: “No one broke any laws” by paying out $2.5 billion in pandemic-era unemployme­nt claims.
STUART CAHILL — BOSTON HERALD Gov. Maura Healey, at a Pride Day event, said: “No one broke any laws” by paying out $2.5 billion in pandemic-era unemployme­nt claims.

Newspapers in English

Newspapers from United States