POLLING: Mass Should Follow New York’s Lead on Unemployment Insurance Reform

Call it a tale of two states: On Sunday, the Massachusetts Department of Unemployment Assistance announced that it was substantially increasing the amount of benefits that the state can pay out to unemployed workers. On Wednesday, New York Gov. Kathy Hochul announced that the Empire State would also raise its weekly benefits maximum.

The difference is, unlike New York, Massachusetts can’t afford this new increase. Let’s take a closer look.

It’s no secret Massachusetts’ unemployment insurance (UI) system is “a mess.” On top of being on the hook for paying back $2.1 billion in debt to the federal government, now the state is increasing the amount of benefits that the system can pay out, well past the maximum provided by most other states. New polling shows this recent announcement is out of touch with taxpayers who want reform.

What is Unemployment Insurance—And What Does It Mean For You?

When someone loses their job, unemployment insurance provides weekly pay outs while they search for a new job. It provides a safety net while workers get back on their feet, and is a key service funded by a tax on employers.

Each quarter, Massachusetts employers pay a special tax into a state-run Trust Fund, which is designed to cover the benefits when workers become unemployed. This unemployment insurance (UI) system is supposed to be self-sustaining—meaning, employer contributions should roughly cover what gets paid out to unemployed workers.

Instead, the Massachusetts UI fund is almost empty, thanks to lax eligibility requirements and some of the highest maximum weekly benefit amounts in the country. In October, maximum benefits rose up to $1,105 per week, for up to 30 weeks. According to the National Federation of Independent Businesses (NFIB), that’s the second-highest weekly allowance in the country. That’s on top of having some of the highest unemployment insurance taxes on businesses in the country.

This crisis came to a head last year, when the Healey administration discovered the state had misused federal COVID relief funds during the prior administration to pay state unemployment benefits. In January, the state announced a deal with the federal government that meant the Commonwealth would be on the hook for paying $2.1 billion back to the feds—money that would allegedly come from the dwindling state UI trust fund financed by more business taxes.

But according to a new MOA survey of over 500 state voters, most residents don’t believe Massachusetts businesses should be forced to shoulder the burden of the state’s mistake. They also agree that real reform is necessary, with a majority approving of how New York handled its own UI debt headache.

Forcing Businesses to Pay Back State UI Debt? New York Says Fuhgeddaboudit

Like many of its peers, New York’s UI trust fund level tanked due to massive layoffs during the COVID pandemic. As a result, the state was forced to take a loan from the federal government to pay out unemployment benefits.

In the years that followed, the state focused on rebuilding its UI system and replenishing its coffers. To do so, New York froze the maximum amount that could be paid out to out-of-work employees at $504 per week. This responsible ceiling helped prevent debts from increasing and allowed the state to get its own trust fund back on track.

The Empire State’s fiscal discipline paid off. When it was time to pay back the federal loan and restore its own funding, New York was able to allocate funds in its 2025 budget to do so. Just this week, the state announced the maximum UI benefit unemployed workers can receive will increase up to $869 per week.

Voters Agree: Mass Should Follow New York’s Example

In a poll of Massachusetts voters conducted from September 18-23, a majority agreed that Massachusetts should use its own money to pay off our $2.1 billion debt, rather than using UI trust fund dollars that come from more business taxes.

There is also bipartisan support for the state fixing its UI debt problem. Two-thirds of Republicans believe the state should pay for the debt, along with most (56%) Democrats.

Voters Want Unemployment System Reform

The system desperately needs reform to remain sustainable. Even without our billion-dollar debt to the federal government, the UI system funding available to pay out regular benefits is also rapidly declining. These challenges come at a time when unemployment remains high in Massachusetts. In practice, that means the number of people depending on the state’s UI benefits is climbing while coffers continue to dwindle.

Voters agree that changes must be made to restore the health and sustainability of the state’s UI system.

When asked about potential solutions, the largest share of respondents (45%) said the state should provide more subsidies to the UI trust fund in order to maintain current benefit levels. A third of voters support adjusting the benefits levels to ensure they are in line with other states instead of being some of the highest in the country.

Just one in five voters believe the right answer is raising taxes and making businesses funnel more money into the UI trust fund.

Conclusion

Unemployment insurance is a key function of state government: it makes sure those who lose their jobs have a safety net. But Massachusetts needs to figure out how to pay its debt to the federal government without forcing businesses to foot the bill.

The state has the money to pay off its debt without pushing it off on businesses. According to the state comptroller’s office, the Commonwealth’s Stabilization (“Rainy Day”) Fund reached $8.165 billion as of June 2025.

Unfortunately, the state’s reckless decision to increase benefits when the fund is already approaching insolvency doesn’t inspire much confidence. Policymakers should listen to public opinion and its peers in New York—a better fix for our broken UI system is long overdue.