Republican candidate for governor Geoff Diehl on Monday called for Gov. Charlie Baker to veto the $4 billion spending bill that the Legislature finalized last week, arguing that the plan to spend American Rescue Plan Act funds fell short of the need in the business community for the state to reduce employers’ unemployment insurance costs.
The bill passed by the House and Senate dedicated $500 million from the state’s share of ARPA to the unemployment insurance trust fund.
Baker has previously proposed spending $1 billion on UI support for businesses. “There is a clear and present need to protect Massachusetts businesses — and through them, the workers they employ — from the imminent threat of higher taxes,” Diehl said in a statement. “For our state to allocate recently-received federal funding without adequately protecting our state’s economy from potential disaster is irresponsible and must be corrected.”
Earlier this year with businesses facing a steep spike in unemployment insurance costs due to the COVID-19 pandemic, the Legislature passed a bill authorizing up to $7 billion in borrowing to eliminate the sticker shock and allow employers to spread the cost of replenishing the UI fund over many years.
The state has yet to borrow any money, but Baker said recently a decision could be coming this month on how much will be required to put the fund back on solid footing.
Officials recently reported that the fund had a balance of $2.9 billion, but about $2.3 billion was borrowed and must be repaid to the federal government.
The administration also hasn’t published monthly trust fund reports in months.
State Sen. Diana DiZoglio, a Democratic candidate for state auditor, wrote a letter to Baker on Friday requesting a full financial report.
Diehl said he was “shocked by the irresponsibility of spending this money without taking credible action to address shortfalls in our unemployment insurance fund.” “I have no doubt that certain spending in the bill is well-warranted, if not necessary, and I do not advocate that the entire $4 billion bill be spent on unemployment claims,” Diehl said. “The pandemic brought about many needs that rightfully should be addressed. However, the $500 million allocated by the Legislature is not enough.”
Baker has until next Monday to act on the bill, which proposes to spend a combination of ARPA funding and fiscal year 2021 surplus revenue.
The Legislature also left about $2.25 billion in state ARPA money unallocated, to be considered at a later date.
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