Dear Neighbors,
MBTA Service Cuts
Gov. Baker's cuts to MBTA service were based on temporary drops in ridership, though we still saw photos of crowded trains. Cutting T service endangers public health, and disproportionately affect Black, brown and Latinx communities and all those who rely one public transit. It would prevent public transit recovery, drive up traffic, and stall efforts to combat climate change. All to save only $21 million in the short run. He ignored almost $2 billion in federal emergency funding to the T this year.
I joined 45 colleagues in a letter to the governor urging him to reverse the March 14 cuts and restore service quickly. Our senators and congressional representatives strongly urged him to use the federal aid to maintain service.
In response, General Manager Steve Poftak pledged no layoffs or furloughs, and to restore service cuts as soon as possible.
Meanwhile, our bill to establish fare-free pilot programs in mass transit is attracting attention.
This week's bill: Unemployment and Paid Sick Time
On Thursday, the legislature sent the governor a bill extending the tax deadline, creating emergency paid sick time, and assisting businesses and individuals with unemployment issues.
Tax Deadline Extended
The bill extends the Commonwealth’s tax filing deadline from April 15, 2021, to May 17, 2021.
Emergency Paid Sick Time
The bill includes a provision that offers up to 40 hours of leave for people directly impacted by Covid, or with family members impacted by Covid, and includes time off to receive the vaccine. In combination with a Federal program, all employers and employees will now have access to paid sick time off.
I'm grateful to all the folks who organized with Raise Up Massachusetts to support the bill, and to Senate President Karen Spilka for prioritizing Emergency Paid Sick Time.
I think often of the time a year ago as the virus devastated our nursing homes. Administrators told me about workers who didn't want to be tested, because they couldn't afford to lose pay if they had to quarantine. Paid time off benefits public health, not just the individual.
Unemployment Issues: the word from our constituents
Hundreds of constituents have called our office to ask for help in getting their unemployment benefits, after waiting for weeks or months. Thanks to my constituent services director, Rachel Clinton, who has dealt with these cases and helped us advocate for better systems. Every legislator's office has done the same, despite the Department of Unemployment Assistance hiring hundreds of people in its call center.
The system faced massive fraud; someone filed an unemployment claim in my name as well as thousands of others. But the slow response of the system has been frustrating and damaging.
The Globe called the UI system a "dinosaur" and included my comment: "It seems wasteful to have hundreds of people answering the phones, unable to help and sometimes giving incorrect information, so that people have to turn to legislative staff who then call DUA back."
The pandemic has made prominent the importance of unemployment benefits. Constituents told us that while waiting for benefits they faced hunger, homelessness, and despair. Small businesses and landlords also suffered when people didn't have income.
Constituent service doesn't just help individuals; it also helps us understand the need for public policy action. Last year, I sponsored and passed legislation to eliminate the waiting period, to extend the benefit period, to protect employers from experience rate increases, to eliminate the cap on dependent benefits, and provide a grace period for non-profits.
Unemployment Issues: Tax Break for Recipients
Hundreds of thousands of people received benefits last year without taxes being withheld. As many as 338,000 didn't have taxes withheld from the PUA program alone. They have no idea that they owe taxes on those payments and were going to be hit hard in April.
The bill waives tax penalties on UI benefits in 2020 and 2021, and excludes $10,200 of unemployment compensation received by an individual with a household income of less than 200% of the federal poverty level, putting up to $500 into the hands of lower income unemployed individuals. This chart shows the federal poverty level; multiply by 2 to see if you qualify.
These provisions were based on a bill I filed in January.
The chart below shows unemployment in Massachusetts since 1975; the shaded areas show recessions, and demonstrates how the pandemic has led to many times higher unemployment than any previous recession.
Unemployment Issues: Employer Tax Freeze
The bill freezes unemployment insurance rates to prevent a 60 percent increase from hitting employers.
The Trust Fund that pays unemployment insurance benefits ran out of money last June, and we've already had to borrow over $2 billion from the federal government. The governor filed a bill in December that froze rates to prevent a mandated rate increase to pay for those costs. It also proposed issuing bonds for up to 30 years to pay back the loans. That would mean those higher payments would continue through future likely recessions.
The governor's bill solved the short term problem but avoided the long term problem: our trust fund was among the five least adequately funded in the country. It has been underfunded and unprepared for recession for 20 years, as rates have been frozen on scheduled tax adjustments nearly every year, while avoiding the structural problem of inadequate funding. That means that we have to borrow during every recession.
By bonding the debt, the governor reduces the cost to businesses now, but increases the cost over the term of the bonds. This would result in higher payments for decades, during likely future recessions.
The bill freezes rates, but reduces the possible term of the bonds to 20 years.
Unemployment Issues: Solvency
The bill creates a commission on the long-term solvency of the Unemployment Insurance Trust Fund. As chair of the Labor and Workforce Development Committee, I'll co-chair this commission with Rep. Josh Cutler.
Massachusetts’ fund is rated the fifth worst in solvency in the country.Our program solvency was less than half the federal standard, which would allow us to get interest free loans, avoiding the long-term costs of both loans and bonds. 31 states meet the federal standard.
Bonding our trust fund debt is necessary now to avoid short term shockingly high tax increases during a recession. But it will cost employers more over the long run. I will work with the commission to find a long term, responsible, and fair way to support our unemployment system.
Other Unemployment Bills this Past Year
In the past year, as chair of the Labor and Workforce Development Committee, I worked along with my chief of staff Matt Hartman, to help pass legislation to:
- eliminate the 1 week waiting period to start a UI claim
- eliminate the cap for dependent credits
- not charge businesses on their experience rating for uncontrolled pandemic layoffs
- expand the Lost Wages Assistance program so that 15,000 of our worst off UI recipients could receive the $300/week federal supplement last summer. That bill returned $23 million in federal aid to our neediest unemployed residents.
Stay safe, stay in touch!