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Report targets municipal unemployment benefit loopholes

A report from the task force charged with reforming what many consider to be loopholes in the municipal unemployment system is receiving praise from officials who brought their concerns to light earlier this year.

“I’m very pleased,” said Bill Gustus, the town administrator from Lynn­field who started the process after an online discussion with other state finance officers who compared cases they’d dealt with within the system.

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The case that spurred Gustus involved retired Lynnfield police officer Hartley Boudreau, who turns 71 this month and receives a $36,192 annual pension. State law allows him to earn up to $25,000 in police details, after which earnings are subtracted from his pension.

When the town told Gustus in August 2011 that he had earned more than $26,000 and additional detail pay would come from his pension for the rest of the year, he applied for unemployment. He was awarded the unemployment benefits, in addition to collecting his pension and the $25,000 he had made earlier that year.

In February, citing that case and various questionable scenarios in which employees sought and received unemployment benefits, Gustus and 23 other finance officers from various communities sent a letter to Governor Deval Patrick asking for help.

The cosigners included officials from Andover, Boxford, Lowell, and Peabody.

Besides Boudreau, the letter and subsequent information gathered from municipalities around the state listed examples such as school bus drivers and crossing guards who collected unemployment benefits during vacations and other days off; and teachers — who work on 10-month contracts — who received notification in the spring that they might be laid off, collecting unemployment benefits all summer befoe being rehired in September.

In response, the state asked for feedback from all 351 cities and towns and put together the Municipal Unemployment Insurance Task Force to deal with the issues.

The 44-page report, released last month, reviewed several types of cases, and recommends multifaceted solutions that include changes to the law and best practices that cities and towns can use. The report is available online at the Executive Office of Labor and Workforce Development website, mass.gov/lwd.

“What I think we have done is taken a problem that was brought to our attention and [come] up with a comprehensive analysis, conclusions, and recommendations,” said Joanne Goldstein, secretary of the state agency, who chaired the task force that also included Salem Mayor Kim Driscoll; state Representative David Torrisi of North Andover; Michael Widmer of the Massachusetts Taxpayers Foundation; retired appeals court judge Raya Dreben; Paul Toner of the Massachusetts Teachers Association, and Jennifer Springer of the Massachusetts AFL-CIO

Recommendations include:

 A legislative proposal that would no longer allow retirees who return to work for their previous long-term public sector employer to collect unemployment if their annual pension is $53,920 or higher, because their pension offset would be the same or greater than their unemployment benefit. A proportionate offset would be applied to retirees earning less.

 A legislative proposal that addresses employees who work at schools but are not paid by schools — such as crossing guards — who would become ineligible to collect unemployment benefits during school vacations.

 Non-tenured teachers who are informed in the spring they will not be hired back in the fall remain potentially eligible for unemployment insurance, but under a new system being implemented by the Department of Unemployment Assistance, those benefits will stop if teachers receive notification they have been rehired for a comparable position by their current school district or another school district.

“I think everybody came to the table with the idea to come up with solutions that are fair to folks who need unemployment insurance,” said Driscoll, whose city has paid out unemployment benefits to seasonal workers at the city-owned golf course during the winter. “It’s a valuable tool if you’ve been unemployed through no fault of your own. You need to have that safety net, but you certainly don’t want it to be abused.”

Geoff Beckwith, executive director of the Massachusetts Municipal Association , a collective of municipal leaders throughout the state, was among those who applauded the report.

“The comprehensive approach of offering statutory, administrative, and best-practices changes in order to deal with this issue and save communities and taxpayers money is impressive,” he said.

“The task force did a terrific job of identifying the major problems and the best ways to approach and solve those problems to the benefit of taxpayers.”

Municipal claims make up only .5 percent of all unemployment claims in the state. Cities and towns generally self-fund their unemployment benefits rather than pay in to the state system. If a town is paying out $30,000 to $60,000 — as Boxford has in some years — that’s money that could otherwise go to hiring a teacher or filling other full- or part-time positions.

“Sometimes the public has the wrong image of municipal employees, and I don’t think the stories that came out in the Globe helped that image. But that’s only a very small percentage of people that work in municipal government,” said Kathy Benevento, director of finance in Boxford.

In a larger city such as Lowell, with a budget of approximately $300 million, the total unemployment payout was as high as $622,000 in 2011 and $838,000 in 2010, according to Tom Moses, the city’s chief financial officer.

Moses said the high municipal payouts also lead to the perception that officials are not being good stewards of public funds.

“It’s a challenge to explain to the public,” he said.

Like Gustus, both Benevento and Moses – cosigners of the letter to the governor – responded favorably after reading the report, praising both the recommendations from the task force and the responsiveness from the state.

“It’s great,” said Moses. “We’re not over the hump yet, though. It needs to be implemented. At this point, these are just recommendations.”

Reach David Rattigan at Drattigan.Globe@­Gmail.com.
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