November 18, 2003

ROMNEY DENOUNCES LEGISLATURE’S UI BILL, SAYS IT “KILLS JOBS”

Legislation would make Massachusetts highest cost UI system in nation

Governor Mitt Romney today criticized the Legislature for missing an opportunity to reform the unemployment insurance system, which will result in the loss of tens of thousands of Bay State jobs. Romney called on the Legislature to enact real reform before the session ends tomorrow.

“There is no more important piece of economic development legislation that the Legislature will consider this term. The UI bill makes the jobs bill look like rounding error,” said Romney.

Earlier this year, Romney took a balanced approach to reforming the unemployment insurance system by not unfairly hurting workers or the business community. His plan maintains the state’s standard as number one in the nation in unemployment benefits and encourages employers to locate to Massachusetts and create more jobs.

“The best benefit we can provide an unemployed worker is a new job,” said Romney.

Under the Legislature’s proposal, Massachusetts unemployment insurance costs will go from the ninth highest in the country to the highest, costing the state jobs and competitive edge. The legislative plan puts 100 percent of the burden on employers – a $578 million increase for businesses next year – with the average cost per employee increasing by 71 percent, from $341 per employee to $582 per employee.

Even with the increase on businesses, Romney noted the Legislature’s bill does not solve the problem, meaning the UI fund will likely go into insolvency next fall. If that happens, the Legislature included in their bill an emergency surcharge for all employers.

“This surcharge will come as a last-minute surprise to businesses. This makes our UI costs not only the highest in the country, but totally unstable and unpredictable,” said Romney.

Romney’s Secretary of Economic Affairs, Bob Pozen, added, “The Legislature’s own projections show that there will be so little money left in the UI fund at the end of next year that the slightest change in our economic conditions could throw the fund again into insolvency. At that point, employers will automatically be assesses an additional surcharge under the Legislature’s plan.”

“That will drive jobs from the state and cripple our economic growth,” added Romney. “This bill will be debated on the floor today. I ask legislators to enact real reform to preserve jobs for our people.”

“Regulatory and tax policies influence decisions at global companies like Sun, which can choose to grow and create jobs in a number of locations,” said Mark Canepa, Executive Vice President of Sun Microsystems. “Skyrocketing, unpredictable unemployment insurance rates will be taken into account when Sun decides where to hire new engineers or invest in existing operations.”

###