One of the more complex issues currently before us is the rate structure for unemployment insurance. One of the major features of the Senate’s recently passed bill was a shift in rates that would charge more to companies who routinely layoff workers on a seasonal basis. This is only fair to other businesses — it’s not right to make year-round employers subsidize seasonal employers. On the other hand, we do want to get this right — businesses should pay for their UI costs, but not more. This is a subject of continuing evaluation and negotiation by the Senators leading on the issue, notably Senator Wolf. Hopefully, we’ll get it settled and passed in both branches by the end of the session — my sense is that there is strong commitment to do so.
Below is a sample of emails that I have been recently receiving from the construction industry — the substance of which I have passed on to Senator Wolf.
I am writing to express my alarm about proposed reforms to the Unemployment Insurance system that are now being considered by the House and the Senate. Specifically, I’m referring to proposed changes in the rating scale, combined with expansion of the taxable wage base to $21,000. Together, these changes would increase my UI taxes by 36% starting in 2015. That’s not just a small bump up, as some people are saying. It’s huge, and would be a financial disaster for my company. I urge you to do what you can to stop it.
I understand we should all pay our fair share, and construction businesses should pay more because we put more workers into the system. However, we already pay 10 times what most other employers pay, and this would increase our taxes by $619 per employee, on top of the $1718 we’re already paying. That adds up very quickly to tens and hundreds of thousands extra in taxes every year. There is no way any business can absorb that without cutting back somewhere else, and that means less hiring, less spending on new equipment, and less money being invested in growth. It’s not good for us, it’s not good for our workers, and it’s not good for the economy.
I don’t understand why the Legislature would deal this kind of blow to the construction industry, given how hard we were hit in the recession and how important our industry is to the Massachusetts economy. We don’t deserve the stereotype as bad employers. I would love to keep my workers employed full time, all the time, but I can’t do it when projects end and the next project is weeks or months from starting. This is the nature of the industry. Higher taxes won’t change that or make construction more stable. It just punishes us for circumstances we can’t control.
There are so many other reasons the proposed increase just doesn’t make sense. I would be happy to send you more information , or talk with you about it in person to answer any questions you may have.
This is very important to me. I hope you will support the construction businesses in your district and across the commonwealth by voting NO to raising our taxes 36%.