A TOP AIDE to Gov. Charlie Baker said on Friday that the administration is still trying to determine the current balance in the state’s unemployment insurance trust fund.
Rosalin Acosta, the secretary of labor and workforce development, told members of a study commission that US Treasury data indicate the fund has a current balance of $2.9 billion and owes the federal government $2.3 billion in connection with previous borrowings to keep the fund solvent.
Although the two numbers would seem to indicate the fund has a surplus after the $2.3 billion owed the federal government is paid off, Acosta indicated she isn’t ready to go along with that conclusion. She called the $2.9 billion number “a fluid number that can change daily.”
The unemployment insurance trust fund pays out the state’s share of unemployment benefits. Its funding comes from businesses. Until the last few days, state officials have been saying the trust fund is drowning in red ink brought about by the pandemic and needs financial support to remain solvent and reduce the financial burden on businesses.
Lawmakers have authorized the Baker administration to borrow up to $7 billion to help stabilize the fund and the Legislature seems poised to steer at least $500 million in American Rescue Plan Act money into the fund. But those decisions hinge on determining the fund’s current financial status, which Acosta’s office has been unable to do for the last several months.
“There are a lot of federal debits and credits and reconciliation that we’re still doing on our side and I assure you as soon as that is completed we will get all our reports out and we have some that are late. Our reports will come out as soon as we are very sure and very sure-footed on exactly what the balance is so we can then put to rest the bond issue etc.,” Acosta told her fellow commission members at a virtual meeting.
Members of the commission didn’t press Acosta for details on the holdup or why her office hasn’t released its monthly report on the unemployment insurance trust fund since June.
Reports by legislative staffers working for the commission indicated the trend lines of the unemployment insurance trust fund are moving in a positive direction. They said unemployment insurance claim levels have returned to pre-pandemic levels, borrowing from the federal government ended in April, and the assets of the fund have been steadily and sharply rising since May.
A Tax Foundation report issued in September indicated Massachusetts was the only state with a positive balance in its account — $442.5 million – after the money owed to the federal government is subtracted.
“That is a sign that we are in recovery and doing well,” said Sen. Patricia Jehlen of Somerville, the co-chair of the commission. “It’s a pretty good success story.”
Jehlen, who on Wednesday opposed an amendment to funnel more ARPA money ($1 billion, up from $500 million) into the trust fund, said the state’s focus should be on paying off the money borrowed from the federal government. She said the state has paid $5 million in interest on that borrowing so far this year.
Jehlen said the commission needs to address the long-term solvency of the unemployment insurance trust fund, but she said it came as a shock to her that the current status of the fund was so much better than people had been led to believe.
“Other people were surprised. I was surprised. Fewer surprises are better,” she said.
