Senate Minority Leader Bruce Tarr and House Minority Leader Bradley Jones have joined with their House and Senate Republican colleagues in filing legislation to freeze the currently scheduled unemployment insurance tax rate, citing the current economic climate as the primary reason for such a measure.
If passed, the unemployment insurance tax rate would stay at its current level, preventing an increase of about 31%, with an average cost of $935 per employee, compared to last year’s $715 average tax rate. It would mark the fourth straight year that similar legislation had been passed by the legislature and signed into law.
State Sen. Michael R. Knapik (R-Westfield) said he supports the legislation.
“Businesses are facing about a 30 percent increase in unemployment insurance rates, which amounts to over $200 per employer per year,” said Knapik.
Knapik began receiving calls from local business owners last week saying they cannot afford an increase.
“Unemployment insurance is already a major cost for employers in Massachusetts, and one that relates directly to the number of people they employ. A substantial rate increase now will not only imperil a struggling economic recovery, it will also put a new obstacle in the way of getting people back to work,” said Tarr.
“Passing this rate freeze is the best and most concrete way we can help to move the Massachusetts economy forward in the new year,” said Jones. “In these tough fiscal times, we need to remove any impediments to economic growth in the Commonwealth.”
In October 2010, the Tax Foundation, a Washington D.C. think tank, ranked the Massachusetts’ unemployment insurance tax 49th worst in the nation. The scheduled unemployment insurance tax rate took effect on January 1st. However, employers will not have to begin paying the tax until the end of the first quarter. Currently, the Republican caucus is also working on some long-range reforms to the unemployment insurance system to help lower the cost of doing business in Massachusetts and promote more job creation statewide.
The legislation is set to be taken up this week as part of a supplemental budget discussion.
Also in line for action this week is a line item for fuel assistance.
“We are facing a 30 percent cut in federal fuel assistance,” Knapik said. “In the past we have not had the money to fund fuel assistance, but this year we feel with the federal cuts, we have to help replenish some of those funds for folks,” said Knapik.
Residents locally receive fuel assistance through the valley opportunity Council in Holyoke. Knapik said residents who need assistance cannot afford taking a one-third cut,
Knapik said the senate plans to pass its supplemental budget and Gov. Duval Patrick is set to release his budget next week.
