Massachusetts Governor Charlie Baker’s (R) administration announced on April 15 that the state intends to issue $2.6 billion of bonds to help replenish the state’s unemployment trust fund and pay back $1.77 billion of federal loans to the fund. The state legislature in 2021 approved bond sales to help fund the unemployment trust fund.
The state’s unemployment trust contains $2.64 billion according to a report released April 15. Subtracting the federal loans and $372 million in employer credits from the balance brings the account total to under $500 million.
The state estimates the trust fund will grow to about $3.32 billion at the end of the year with the bond sales. The state expects to sell the bonds by the end of September 2022. Employers in the state will pay the bonds back through the COVID-19 Employer Relief Account tax passed last year.
Unemployment insurance is a joint federal and state program that provides temporary monetary benefits to eligible laid-off workers who are actively seeking new employment. Qualifying individuals receive unemployment compensation as a percentage of their lost wages in the form of weekly cash benefits while they search for new employment.
The federal government oversees the general administration of state unemployment insurance programs. The states control the specific features of their unemployment insurance programs, such as eligibility requirements and length of benefits.