Associated Industries of Massachusetts is asking lawmakers to adopt the House version of a bill giving cities and towns the power to control health insurance costs.
AIM said in a letter to budget conferees that the Senate version of the municipal health measure would undermine the estimated $100 million in savings promised by the bill.
AIM's concern about the Senate bill was confirmed this morning by a study showing that: “Dozens of communities across the state would lose the benefits of municipal health care reform under the Senate’s provision requiring that municipal contributions for retirees be the same as for active employees, according to a preliminary analysis by the Massachusetts Taxpayers Foundation. The Foundation has identified 50 municipalities and regional school districts that would be impacted, with that number likely to be as high as 100 when all communities have been analyzed.”
Click here to read the MTF analysis.
AIM and Massachusetts employers generally support municipal health reform because the spiraling cost of health insurance is eroding the ability of city and town governments to deliver educational, public safety and other services upon which the economy depends.
Next week, members of the Massachusetts House of Representatives will debate and vote on the Fiscal Year 2012 budget which includes language limiting the current punitive treble-damages law to “willful” violations of the wage and hour statute only. This change has been sought by AIM since the original law passed in 2008.
AIM urges you to contact House members asking them to support this language and to oppose any amendment preventing the fixing of the treble damages law.
The current law penalizes companies that have done nothing outrageous, have not acted with an evil motive, and have not acted with reckless indifference to employees' rights. The same would be true in the case of a good-faith dispute over whether an employer owes commissions.
This House proposal mirrors Governor Deval Patrick’s language to fix a 2008 law that imposed punitive treble damages even in cases where an inexperienced employee of a Massachusetts business makes a clerical or other honest error.
Massachusetts is rated poorly by the US Chamber of Commerce because of this onerous law that mandates treble damages for any Wage Act violation. The House Ways and Means Committee proposal would bring fairness and equity to a law which is now unduly punitive.
AIM thanks Speaker Robert DeLeo and House Ways and Means Chairman Brian Dempsey for a fiscally sound House budget which benefits the Massachusetts Economy. AIM also recognizes the work of Ways and Means Committee Vice Chair Steven Kulik and Assistant Vice Chair Martha Walz on the proposed House budget and for addressing the treble damages issue.
to contact your elected officials and urge them to fix the treble damage law.
Employers in Massachusetts and elsewhere will not face onerous new 1099 tax reporting requirements now that the U.S. Senate has passed and sent to President Barack Obama a repeal of the controversial health-care reform provision.
Senators voted 87-12 today to repeal the controversial law that would have required businesses beginning in 2013 to file 1099 tax forms for every vendor that sold them more than $600 worth of goods and services. Both Massachusetts senators – Democrat John Kerry and Republican Scott Brown – supported the measure.
President Obama has expressed concern about the funding portions of the repeal but is expected to sign it.
The Senate vote apparently spares 38 million businesses, charities and non-profit organizations from a bureaucratic nightmare that some experts estimate would have increased paperwork by 2,000 percent. Associated Industries of Massachusetts has strongly supported repeal of the provision, which would have saddled employers with significant administrative and accounting expense at a time when many are already struggling with the soft economy.
“AIM and its member employers commend Senator Kerry, Senator Brown and their colleagues for taking a stand against a regulation that would have placed an intolerable burden on millions of small companies across the country. We urge President Obama to sign the repeal,” said Richard C. Lord, President and Chief Executive of the Association.
Today’s Senate vote approved an earlier version of the 1099 repeal approved by the House of Representatives on March 3.
The 1099 filing requirement was projected to raise nearly $25 billion over the next decade by ensuring that vendors pay their taxes. Now, the money will be made up by changing another part of the health care law, requiring more families to repay tax credits designed to help them cover insurance premiums, if their incomes increase beyond certain levels.
Massachusetts employers are having trouble filling job openings despite the Bay State’s 8.2 percent unemployment, according to the AIM Business Confidence Index (BCI) released this morning.
Fifty-two percent of AIM member employers who responded to the monthly BCI survey for March indicated that they are encountering problems finding qualified people to work at their companies.
“The biggest problem they cited was lack of people with required skills in the applicant pool; in some cases they reported that applicants with technical skills lacked other relevant skills,” said Raymond Torto, Global Chief Economist at CB Richard Ellis Group, Inc., and Chair of the AIM Board of Economic Advisors.
“There is a debate as to the cause of this problem. Some employers believe that unemployment insurance benefits are deterring return to work, and others noted the lack of skills of applicants or the lack of training resources for new hires. Persistent high unemployment is our most serious concern in this economic recovery, so these finding are very significant.”
The March BCI rebounded 2.8 points during March after declining the previous month in the face of rising energy prices and political instability overseas. The index has remained in positive territory for six consecutive months, fluctuating within a narrow positive range since hitting a three-year high of 55.3 in October.
The leveling off of business confidence reflects the slowing of overall economic growth in Massachusetts and throughout the country after a steady 18-month recovery. The BCI for the first quarter of 2011 was 53.5 - much healthier than the same period in 2010 (45.6) or 2009 (34.5), or even 2008 (49.4), but barely stronger than the fourth quarter of 2010 (53.3).
Every component of business confidence gained ground during March. The Massachusetts Index of business conditions prevailing within the commonwealth added a point to 49.7, while the U.S. Index of national conditions rose 1.5 to 45.5. Since March 2010, the state indicator was ahead 9.1, its national counterpart 6.6 points.
“The employment data revisions issued in March alter our understanding of the shape of the recession here in Massachusetts,” said Professor Alan Clayton-Matthews of the School of Public Policy and Urban Affairs at Northeastern University, a BEA member.
“Our job loss was less serious than first appeared, and we’ve added fewer since the trough, winding up in about the same place. The new numbers still support the perception of Massachusetts employers that conditions here have been somewhat better than the national average.”
AIM’s Business Confidence Index has been issued monthly since July 1991. Its historical high was 68.5, attained in 1997 and 1998; its all-time low was 33.3 in February 2009. The Index’s March reading was up 7.2 from a year earlier, 20.5 over two years, and 6.6 compared to March 2008, which saw the first “negative” reading of the recent recession.
The recent $20 billion buyout of Cambridge-based Genzyme by Sanofi-Aventis SA of France adds another foreign-owned company to the roster of firms in Massachusetts with overseas parents.
Foreign-owned firms provide more than 170,000 jobs in Massachusetts and are critical to the state’s economy. Companies with household names such as Stop and Shop, John Hancock, TD Bank, Osram-Sylvania, Reebok, Novartis, Citizens Bank, EMDSerono, Philips Electronics, National Grid, Fairmont Copley Plaza, and AstraZeneca have foreign owners, as do hundreds of smaller firms, particularly in industries like pharmaceuticals, medical devices, professional services and machinery manufacturing.
“Foreign direct investment in our state is an extremely positive trend for the Massachusetts economy and we are proud to be a part of it,” said Bennett Schwartz, Senior Vice President and Director of Foreign Exchange at TD Bank, and Chairman of the Associated Industries of Massachusetts International Business Council (AIM-IBC). “Not only does it provide jobs and development, it can also lead to joint ventures and global partnerships, and we hope that the awards will encourage this growth.”
AIM-IBC is recognizing the value of internationally-owned companies by adding a new category to its annual Global Trade Awards. The awards, which recognize excellence among Massachusetts companies engaged in international trade, will this year include at least one firm whose headquarters are overseas. Award winners will be honored at AIM’s Annual Meeting & Luncheon on May 13 at the Waltham Westin Hotel. The nomination deadline is March 31, 2011. Entry forms are available online at www.aimnet.org/international.
Business leaders and teachers unions appear to agree broadly on the need to establish a reliable method to evaluate educators, providing hope that the two sides will be able to resolve their many differences and improve the prospects of Massachusetts students, panelists at a recent AIM Public Affairs Council meeting said.
The meeting featured a discussion between Linda M. Noonan, Executive Director of the Massachusetts Business Alliance for Education (MBAE), and Paul Toner, President of the Massachusetts Teachers Association. MBAE is the principal business voice on school reform in the commonwealth, and has been AIM’s partner on k-12 education issues for two decades. The MTA is the state’s largest teachers’ union with 107,000 members (including retirees) in communities of all kinds.
AIM and employers throughout Massachusetts have long advocated for improvement of the public schools as a key element of growing the state economy. But many employers accustomed to evaluating business processes and employees with strict, evidence-based systems have been puzzled by the lack of a coherent system to rate teachers.
MBAE has called for a robust statewide educator-evaluation system to produce valuable data and achieve efficiencies in training and implementation, weeding out or remediating ineffective teachers and rewarding effective ones.
The MTA, while protective of its members’ rights and of the collective bargaining process, has supported participation in Race to the Top and issued a report acknowledging the need for an improved educator evaluation system with a student performance component.
MBAE and MTA both participate, along with AIM and other groups, in the Working Group for Educator Excellence, which advocates for a research-based approach to professional teaching.
Educator evaluation is a hot issue – hot in terms of both urgency and controversy. Recent reports highlight the inadequacy (and sometimes absence) of evaluation in our schools, even at the point of tenure; the irrelevance of seniority and advanced degrees, the factors currently rewarded in compensation systems, as measures of effectiveness; and the lack of support for teachers seeking to improve their skills. The costs of sub-par teaching are estimated in the trillions of dollars. Race to the Top and other federal initiatives compel development of evaluations based in part on student achievement, and compensation reform lurks in the background.
Both Noonan and Toner served on the Department of Elementary and Secondary Education’s Task Force on Educator Evaluation. Toner voted for the commission’s just-released report; Noonan did not, primarily because she considers the report too weak on the issue of including student achievement in teacher evaluation.
The most striking element of the discussion was the broad agreement between the two discussants on a range of key issues, offering substantial hope that meaningful progress is possible. There are evident differences, but not diametric opposition on the most important points. The devil will surely be in the details, but they may well be susceptible to negotiation and resolution.
The Education Reform Act of 1993 focused on inputs (funding), outputs (student achievement – MCAS) and to some extent leadership (strengthening administrative autonomy), treating the classroom itself as a “black box.” The subsequent years have brought increasing awareness of the centrality of teaching, and teachers, to educational effectiveness.
The time is right to develop and implement statewide evaluation system closely tied to ever-improving measures of student achievement. Because those measures are still evolving, and districts are starting in different places, and credibility takes time to build, this is not something that can be done overnight. There will have to be extensive negotiations, in which teachers (and their organizations) must be participants. Some important issues, notably ties to compensation, may come later. But an agreed-upon foundation for meaningful and much-needed reform appears to be in place.
Associated Industries of Massachusetts is supporting a request to have state regulators revisit their approval of the Cape Wind/National Grid power sales agreement now that other utilities are seeking to purchase wind-generated electricity at less than half the price of the proposed offshore project.
AIM submitted a letter Friday to the Massachusetts Department of Public Utilities (DPU) supporting a motion by The Alliance to Protect Nantucket Sound for DPU to reopen the Cape Wind/National Grid case to admit new evidence. That evidence includes filings by the utility NSTAR, which is seeking permission to buy 109 megawatts of land-based wind power for a price experts estimate at less than 10 cents per kilowatt hour.
The NSTAR price compares to the 24 cents per kilowatt hour on average over 15 years that businesses and residents in the National Grid territory will pay for Cape Wind electricity.
AIM is currently appealing the commonwealth’s approval of the Cape Wind/National Grid agreement to the Massachusetts Supreme Judicial Court. AIM has argued for months that customers of National Grid face needless increases in their monthly bills because the utility has decided to pay a premium price for electricity from Cape Wind instead of buying much cheaper renewable power available from other sources.
The association also seeks in its Friday letter to include similar renewable power agreements from Western Massachusetts Electric Company (WMECO) in the Cape Wind/National Grid case.
“Again, the new and timely evidence from the NSTAR filings provides invaluable information, data and insight about a number of facts currently in the record, shedding new light on the availability of renewables, the timing of such supply, and cost. The Department would be remiss in not admitting the NSTAR filings, and hopefully the WMECO filing, because of the facts and decision-making value they bring to the proceeding,” AIM wrote.
The letter cites three reasons for opening the Cape Wind decision:
- The NSTAR filings were executed under Section 83 of the Green communities Act, the same section under which National Grid executed the Cape Wind contracts.
- The NSTAR filings contain information that is germane as to whether National Grid testimony was accurate about the cost-effectiveness of the Cape Wind contract and the availability of other less expensive renewable projects region wide.
- Since one of the NSTAR filings was executed with a wind project in Massachusetts (D.P.U. 11-06), the NSTAR filings contain information that is germane as to whether the National Grid testimony about cost-effectiveness of the Cape Wind contract and the availability of other less expensive renewable projects in Massachusetts was accurate
The numbers confirm that AIM has been right on the money to identify Cape Wind as an overpriced project that represents one of the largest potential transfers of wealth from productive sectors of the economy to a single private developer. The recent competitive electricity bids provide the good news that Massachusetts can move toward a future of wind and renewable power without bankrupting the rest of the economy and the jobs that go with it.
Massachusetts added 15,400 jobs in February, the state’s Executive Office of Labor and Workforce Development reported today, as the unemployment rate edged off 0.1 percentage points to 8.2 percent. The state rate continues to be below the national (8.9 percent) and is down 0.6 percentage points from February 2010, but it has changed little in the past six months. For the year, jobs are up 33,500 overall, and 37,000 in the private sector.
The preliminary estimates show employment gains in Education and Health Services; Leisure and Hospitality; Professional, Scientific, and Business Services; Other Services; Trade, Transportation, and Utilities and Financial Activities; while Manufacturing, Construction, and Government lost jobs. The total labor force was 3,501,600 – 3,213,400 residents employed and 288,200 unemployed. Since the unemployment rate peaked at 8.8 percent in October 2009, employment is up by 45,000 and unemployment down by 6,200.
The overall picture remains one of real, but disappointingly slow and halting progress on the employment front. The job growth in February is in those sectors where we would expect to see it as the economy comes back. But the vicious circle of a weak labor market contributing to low consumer confidence which restrains spending and discourages hiring continues. In Massachusetts and nationally, high nonwage costs of employment, especially for health benefits, remain a significant deterrent to job creation. And the new uncertainties arising from the disaster in Japan, with its complex economic ramifications, will not be helpful.
Another, much less significant source of uncertainty is the employment numbers themselves.
The monthly estimates are among the most current indicators we have of trends in the overall economy, but they have been markedly unstable and unreliable in this cycle. The benchmark revisions released earlier this month substantially altered our understanding of the course of recovery in Massachusetts and our state’s performance relative to the nation; and the February release revises January’s job creation down from 5,600 to 1,600. (This is in addition to issues arising from differences between the two separate surveys, of households and employers.) Even reduced to statistics, this recovery is elusive.
In a short span of four years, American business will face a changed world in which consumers will use iPads and other mobile devices to enable two-thirds of all their purchases, demand two-way interaction with sellers and use real-time search to find the items they need, a Google executive told the AIM Executive Forum this morning.
Seth van der Swaagh, a National Industry Manager in Google’s Cambridge office, told more than 220 business leaders that the new electronic world will require successful companies to master the “four be’s”: - be relevant, be found, be engaging and be accountable to consumers who will have at their disposal an amount of information that will increase 50 times by 2020.
“So how, in this accelerated world, do you keep up? It’s not enough just to know the basics. Google believes that businesses need to get ahead of the trends get ahead of the consumer,” van der Swaagh said.
The digital revolution, according to van der Swaagh, means that all elements of business and life move faster than ever before - information is created faster, news travels faster, consumer trends change faster, and business is conducted faster. He said that the world now creates the same amount of information in two days as it did from the beginning of time until 2003.
The explosive growth of technology and information is everywhere:
- The number of people on social networks has grown from 300 million people in 2008 to one billion today;
- Twitter visitors have gone from 1.25 million in 2008 to 190 million;
- More than 24 hours of video are uploaded to YouTube every minute; YouTube serves 2 billion videos daily;
- Android mobile devices did not exist in 2008; Google now ships 350,000 Android devices per day.
- The number of mobile subscribers will double worldwide from 5 billion at the end of 2010 to 10 billion in 2020.
“But the biggest driver of all? The consumer. Unlike other eras that were driven by science, or industry, our era is driven by people, consumers,” van der Swaagh said.
“Science fiction is already fact - we have computers in our pockets. The consumer has been first to figure out how this can benefit them: their behavior is evolving at breakneck speed/scale.”
Van der Swaagh said the digital revolution will put increasing pressure on companies to be engaging and interesting in a society saturated with information. He noted that 94 of the top 100 advertisers listed by Advertising Age have YouTube campaigns and that well-known Massachusetts employers such as Reebok, Biogen Idec and Philips Electronics have been leaders in online video communication.
AIM Associate Vice President Brad MacDougall testifyed at a packed Beacon Hill hearing today in favor of an AIM bill that would allow municipal officials to negotiate health insurance plan design outside of collective bargaining.
The hearing at Gardner Auditorium drew some 300 spectators to comment on competing proposals to help the 351 cities and towns of Massachusetts manage the crushing cost of providing health insurance for employees and retirees. Governor Deval Patrick, the business community, municipal government officials and organized labor have all proposed strategies to address the crisis.
Absent meaningful reform, cities and towns will find themselves swallowed by accelerating health care premiums that are already diverting scarce money from the schools, police, fire, roads and bridges upon which business depends. Rising health premiums consumed two-thirds of all increases in state spending between FY 2000 to FY 2010 and are also diverting desperately needed state education funding from the classrooms where the future of our economy now sits.
"Health care costs are unsustainable," Salem Mayor Kim Driscoll told the hearing minutes ago.
AIM’s Brad MacDougall is at the hearing. Follow his updates on Twitter @aimbusinessnews.