Governor proposes municipal unemployment insurance reform

Responding to complaints about local public employees abusing the municipal unemployment benefit system, Gov. Deval Patrick last week announced reforms that would stop cops, school employees, and others from double-dipping.

Patrick said he would file legislation to adopt the recommendations of a task force that spent the better part of the last year examining the municipal unemployment insurance system, proposing four changes that state and municipal officials said would restore “integrity” in the system.

“The overwhelming majority of public employees do the right thing by the UI system, but the few who don’t undermine the integrity of the whole system,” Patrick said at a press conference on January 9.

The governor was joined outside his office by members of the task force, including Newton Mayor Setti Warren, Salem Mayor Kimberly Driscoll, Labor Secretary Joanne Goldstein, Massachusetts Municipal Association Executive Director Geoff Beckwith, and Rep. John Scibak, a South Hadley Democrat.

The legislation would reduce an employee’s unemployment benefits by 65 percent of their weekly pension for workers who have retired, but return to work part-time with a cap on their potential earnings, but are then laid off. In effect, the law change would eliminate UI benefits for retired workers earning a pension of $53,920 or higher.

The bill would also make employees who provide services to school departments such as bus drivers or substitute teachers ineligible for unemployment benefits during school vacations over the summer holiday if they have “reasonable assurance” of having a job when school reconvenes.

Finally, election workers earning less than $1,000 a year would be ineligible for benefits, and the Department of Unemployment Assistance would be empowered to participate in a federal program allowing the agency to intercept federal tax returns for anyone who owes unemployment funds as a result of overpayment.

“This legislation puts an end to UI abuse and gives us the kind of program we can all be proud of,” Patrick said.

Goldstein said that if the Legislature approves the governor’s proposal, the administration plans to review the program again at this time next year to see how the changes are working.

Patrick convened a task force last spring to look at municipal unemployment insurance after reports of abuses surfaced in the Boston Herald and local leaders wrote to the administration about concern they had with loopholes that were costing cities and towns money.

Lynnfield Town Administrator Bill Gustus, in particular, wrote with concerns about a retired Lynnfield police officer who was receiving a pension, and returned to work part-time for the town. Under state law, the police officer was allowed to earn up to $25,000 before the wages were deducted from his pension. The officer then filed for unemployment benefits, costing the town more money.

“Every single municipal leader wants to make sure you have unemployment benefits for employees who need it, and it’s important that we correct of those loopholes to make sure those dollars are available for people when they need it and curb some of these abuses,” Driscoll said.

Patrick said the specific examples provided by local leaders of perceived problems in the system provided “real texture” to the issue, and Goldstein said it was the first time municipalities reached out in numbers to the administration with their concerns.

Goldstein said that while some workers were exploiting the system, others did not violate any laws and their so-called abuses “were the result of either laws or practices that were not friendly or conducive to municipalities managing their budgets.”