BREAKING: Public Education Campaign Says Mass. Businesses Shouldn’t Pay for the State’s $2.1B UI Mistake

Today, the Mass Opportunity Alliance (MOA) launched a statewide campaign to educate Massachusetts residents about the state government’s $2.1 billion blunder in mismanaging federal funds.

The campaign launch includes a new website, explainer video, and a series of digital ads, all meant to urge voters to contact their representatives to express concerns over employers’ being forced to cover the state’s UI debt. MOA launched its grassroots campaign in concert with businesses across the Commonwealth that are already struggling under the state’s tax burdens. 

The $2.1 Billion Blunder

During the COVID-19 pandemic, Massachusetts misappropriated $2.1 billion of federal relief funds to pay for state unemployment benefits, instead of drawing from the state’s unemployment insurance (UI) fund as required. Now, the federal government is demanding repayment—-and, without a fix, Massachusetts businesses will be left footing the bill.

The UI Tax Burden

Massachusetts businesses are already struggling under some of the highest unemployment insurance tax rates in the nation. The Tax Foundation currently ranks Massachusetts in 47th place for unemployment insurance tax rates. 

Without a fix to the system, Massachusetts employers will see a tax hike on top of the already high rates they pay. Small businesses—vital to local communities—would be particularly hard hit, forcing difficult choices about hiring, expansion, or even survival.

Voters Oppose Saddling Businesses With UI Debt

Polling from MOA shows 71 percent of Massachusetts voters agree businesses—large and small—should not be responsible for fixing the state’s mistake. State leaders have expressed an openness to reforming the UI system. MOA’s campaign aims to ensure policymakers hear the public’s support for this approach.

Why We Need a Fix Fast

Protect Local Businesses from Tax Increases: Massachusetts businesses already face some of the highest UI tax rates in the nation. If the state does not find an alternative solution, additional tax increases could be imposed to cover the debt—raising costs for employers and threatening jobs.

 Maintain Massachusetts’ Economic Competitiveness: Massachusetts’ high employer tax burden has contributed to its declining national ranking for competitiveness. A less competitive tax and business environment risks driving away talent, especially as other states offer a lower cost of living and more business-friendly policies.

Ensure Economic Stability for Workers: A failure to fix this issue could create further economic uncertainty. A well-managed UI system is essential to making Massachusetts a more attractive place for investment and job creation. High UI debt may signal a less resilient system for supporting unemployed workers during economic downturns.

Fiscal Responsibility Matters

Massachusetts already has one of the highest improper UI payment rates in the nation, ranking 10th with an estimated 22.90 percent error rate between July 2021 and June 2024. 22.06 percent of total UI benefits paid in that time frame were considered overpayments. 

Over that period, $1.18 billion in taxpayer money was lost due to improper payments. Instead of burdening employers with additional taxes to cover this debt, policymakers should consider ways to reform the system to minimize overpayments and maintain financial integrity. 

Join Our Effort

The MOA invites all Massachusetts residents concerned about economic fairness and business growth to visit YouBrokeItYouFixIt.com to learn more about this issue and how to contact their representatives.