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Massachusetts Gov. Maura Healey announced Monday that the state must pay the federal government $2.1 billion over the next decade.
According to WBUR, the “Baker administration mistakenly used federal pandemic funds to cover unemployment benefits.”
Healey succeeded Baker in 2023.
Massachusetts must pay feds $2.1B after mistakenly using pandemic funds to cover unemployment benefits https://t.co/2IPtHIeyZT
— Fox News (@FoxNews) January 21, 2025
WBUR reports:
Gov. Maura Healey, who succeeded Baker in 2023, and her deputies unveiled details of a settlement they reached with the outgoing Biden administration Friday in which the Bay State will repay most but not all of the amount it owed due to the error committed years ago.
The settlement saddles the state with a major new cost at a time when budget-writers are grappling with a series of other headaches and the unemployment insurance system already faces fiscal problems.
Healey announced in the summer of 2023 that her team discovered the Baker administration improperly used about $2.5 billion in federal pandemic relief funds to cover jobless benefits that should have been paid by the state.
With fees and interest, the total liability surpassed $3 billion, according to Healey’s office, who said talks with with the U.S. Department of Labor reduced the amount owed to $2.1 billion over the next 10 years.
Massachusetts must pay the federal government $2.1 billion over the next decade after the Baker administration mistakenly used federal pandemic funds to cover unemployment benefits, officials said Monday.https://t.co/v1mG6xubka
— 7News Boston WHDH (@7News) January 20, 2025
“It is incredibly frustrating that the prior administration allowed this to happen, but we are going to use this as a moment to come together with the business and labor community to make meaningful reforms to the Unemployment Insurance system,” Healey said, according to CBS News.
In deal with feds, Mass. will have to pay back $2.1 billion misspent by Baker administration https://t.co/jVcNwX0MOI
— Boston.com (@BostonDotCom) January 21, 2025
Per CBS News:
The agreement was finalized with former President Joe Biden’s administration, just before President Donald Trump took office.
The National Federation of Independent Business said that small businesses in the state are already being “crushed” by unemployment insurance taxes.
“It is incomprehensible that the state made a monumental error, and it’s Massachusetts small employers that are required to today foot the $2.1 billion bill,” Christopher Carlozzi, the group’s Massachusetts state director, said in a statement.
Healey said businesses won’t see a hike on unemployment insurance rates through at least 2026. Whether they go up in the future depends on what the state does to reform the unemployment insurance system, she said.
The system is expected to be giving out more money than it takes in by 2028.