Unemployment Insurance Saved the Massachusetts Economy. How Can We Ensure It Will Be Strong for the Future?
More than any other economic program, Unemployment Insurance (UI) has helped the Massachusetts economy during the COVID-19 pandemic. UI enabled many families to remain safe …
States rely on borrowing to manage their finances in good times and bad. Yet borrowing is not a substitute for raising the revenue needed for an economic recovery. Policymakers should look to raising progressive new revenues paired with limited borrowing to avoid cuts to critical public spending.
As a result of the pandemic, municipalities face increased spending needs and declining revenues. Many have the ability to raise property taxes, though others are constrained by Proposition 2 1/2. Moreover, property taxes tend to fall hardest on those with lower incomes. Without sufficient municipal aid, cities and towns may be forced to make public cuts which would slow the economic recovery.
The Commonwealth has responded to the COVID-19 pandemic and its economic consequences by implementing several bold new federal unemployment policies that are also supported with federal funds. These have provided crucial protection to many workers and the economy, though undocumented workers have been excluded. Since late April, the greatest volume of unemployment claims have been for a new program for workers traditionally ineligible for unemployment insurance. Without new federal legislation, this program will expire at the end of the year. The federally-funded $600 enhancement to weekly benefits will expire at the end of July. The loss of these benefits would hurt many workers and slow the state’s economic recovery.
Testimony supporting legislation for state stimulus checks for taxpayers excluded from federal benefits because they pay taxes with an Individual Tax Identification Number (ITIN) instead of a social security number.
Anyone concerned about Massachusetts' economic recovery should be worried about state and municipal budget cuts. This is not the time for austerity. Avoiding budget cuts through targeted tax increases is the best way to build a strong recovery in Massachusetts. Learn more in the latest on our Blogs & Briefs publication.
A new tax subsidy initially approved two decades ago, the state charitable deduction, is set to automatically go into effect in January 2021, reducing revenue by $300 million annually. Are there ways to stem revenue loss and limit the subsidy to high incomes? Learn more about what the state charitable deduction could mean for the Commonwealth amid COVID-19.
Responding to the COVID-19 Crisis: Filling Gaps in Federal Cash Support for Individuals and Families
Congress enacted billions of dollars in new direct cash assistance to individuals and families during the crisis, but there’s still work to be done to ensure people are not left behind. Learn what state-level solutions are available to fill the gaps.
It’s a sudden economic freefall like no other. By some estimates, Massachusetts will have 473,000 COVID-induced job layoffs and furloughs by summer. Most people with jobs won’t make or spend as much in the months ahead.