Massachusetts

$2.5B federal funding ‘error' still hanging over Mass. entering new year

If Massachusetts needs to repay some or all of that mistakenly spent money, it could cause massive headaches for state budget-writers

The Massachusetts State House
NBC10 Boston

Exploding emergency shelter costs and lackluster tax collections have made headlines recently as Massachusetts budget stressors, but a roughly $2.5 billion error continues to lurk in the background as a potential costly wild card.

More than six months after auditors discovered the Baker administration mistakenly used federal funds to pay jobless benefits during the COVID-19 emergency instead of the state's Unemployment Insurance Trust Fund, there's still no clarity on whether Massachusetts will need to repay that money or how.

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"The amount that may be due to the federal government, and the timing, method, and source of such reimbursement, are currently unknown," the state Department of Economic Research wrote in its latest monthly report about the UI Trust Fund. "The Commonwealth is engaged in discussions with USDOL to resolve this matter."

Healey administration officials say their predecessors mistakenly used about $2.491 billion in federal funding between fiscal years 2020 and 2022. If Massachusetts needs to repay some or all of that money, it could cause massive headaches for state budget-writers, who are also facing nearly $1 billion per year in costs to manage record demand on the shelter system while tax collections lag projections by hundreds of millions of dollars.

This week the team is Taking@Issue with the haggling on Beacon Hill over the supplemental budget. State Republicans hold the cards as Democrats try to get the legislation to Governor Healey's desk. George Santos does not go quietly, but is ultimately kicked out of congress. And Nikki Hayley's run for the White House gets some help from the Koch brothers, while Ron DeSantis debates someone who isn't running for president. 

Neither state nor federal officials have shed much light on the UI outlook. In November, the U.S. Department of Labor declined to make anyone available for an interview.

"The Department is still actively engaged with Massachusetts on this issue, but we don't have an update to provide," a U.S. Department of Labor spokesperson said last month.

Copyright State House News Service
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