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Employer Confidence Strengthens Again

Posted by Christopher Geehern on Jul 5, 2017 10:08:03 AM

Massachusetts employer confidence rose for the ninth time in 10 months during June amid optimism about an economy that is finally attracting more people into the work force.

BCI.June.2017.jpgThe Associated Industries of Massachusetts Business Confidence Index (BCI) rose one point to 61.8 last month, leaving it 5.7 points higher than a year ago. The Index has gained ground in each of the past two months after slipping in April.

The results come a month after state officials reported a long-awaited expansion of the Massachusetts labor market – the labor-force participation rate rose to 66.7 percent in May, its highest mark since before the Great Recession.

“Employer confidence in both the state and national economies remains well above the level we saw a year ago, especially among manufacturers,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“Key Massachusetts indicators such as total jobs, wages and gross state product far exceed pre-recession levels and that is outweighing concerns about long-term growth.”

The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009.

The index has remained above 50 since October 2013.

The constituent indicators that make up the overall Business Confidence Index were mostly positive during June.

The Massachusetts Index, assessing business conditions within the commonwealth, gained 2.1 points to 64.2, leaving it 5.7 points higher than in June 2016.

The U.S. Index of national business conditions rose 2.8 points to 57.4 despite lingering uncertainty about federal economic policy. June marked the 87th consecutive month in which employers have been more optimistic about the Massachusetts economy than the national economy.

The Current Index, which assesses overall business conditions at the time of the survey, rose 1.5 points to 61.9 while the Future Index, measuring expectations for six months out, increased 0.4 points to 61.7. The Future Index was 5.1 points higher than a year ago.

The Company Index, reflecting overall business conditions, was unchanged for the month at 62.4 and up 4.7 points during the 12-month period. The Employment Index fell 0.4 points to 58.1 while the Sales index rose 0.6 points to 62.6.
The AIM survey found that 39 percent of respondents reported adding staff during the past six months while 18 percent reduced employment. Expectations for the next six months are stable – 38 percent hiring and only 10 percent downsizing.

Alan Clayton-Matthews, a professor in the School of Public Policy and Urban Affairs at Northeastern University, said the supply of workers remains one of the most important factors in the ability of Massachusetts to maintain long-term economic growth.

“There is little slack left in the labor market. Unemployment rates are back to pre-recession levels, and employment rates are very close to pre-recession levels. The slack that does remain is largely among young workers, those with less than a high-school education, and part-time workers who have been unable to find full-time work, suggesting that many workers lack the skills that employers are seeking,” Clayton-Matthews said.

Overall participation in the labor force nationally has hovered below 63 percent during the recovery, compared with more than 66 percent before the recession.
Eastern Massachusetts companies were more confident in June than those in the western portion of the commonwealth. Eastern Massachusetts employers posted a 61.8 confidence reading in June versus 60.8 for employers in the west.

AIM President and CEO Richard C. Lord, also a BEA member, said employers are increasingly concerned about a passel of potentially expensive and disruptive Beacon Hill proposals, including a surtax on incomes more than $1 million, paid family leave and an employer assessment to close a budget gap in the MassHealth program.

“Massachusetts employers have led what is now one of the longest and most consistent economic recoveries of the past 100 years. Much of that growth reflects the fact that policymakers have refrained from unnecessarily raising business costs and imposing inefficient regulation,” Lord said.

“We look forward to working with the Legislature and the Baker administration to ensure that those policies continue.”

Topics: Employers, AIM Business Confidence Index, Massachusetts economy

Economic Warmup Thaws Employer Confidence

Posted by Andre Mayer on May 6, 2014 11:46:00 AM

Is a warming economy finally melting employers’ frosty view of the recovery?

BCI.April.2014The Associated Industries of Massachusetts Business Confidence Index for April suggests that the answer may be yes.

The Index added 1.9 points in April to 53.0, its best reading more than a year and a half. It marked the second consecutive month of improving employer confidence and left the Index a full 2.5 points above its level at the beginning of the year.

"The last time the Index was at or above this level was in August 2012, just before the impending 'fiscal cliff' crippled confidence in fiscal policy leadership," said Raymond G. Torto, global Chairman of research at CBRE and Chair of AIM's Board of Economic Advisors (BEA).

"Since then we have been stumbling along, with ups and downs but no real forward momentum. While this could be another more or less random fluctuation, we have reason to hope that employer confidence is finally beginning to catch up with improving economic fundamentals."

Those fundamentals include accelerating job growth that has reduced the U.S. unemployment rate to 6.3 percent and boosted Massachusetts job levels to an all-time high. The Massachusetts economy grew at an estimated 2.6 percent annual rate in the first quarter after surging 4.4 percent during the final three months of 2013.

“We are seeing steady if not spectacular job creation both nationally and here in Massachusetts, where we have set a new record for total employment," Torto said.

The AIM Index has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009. In April 2013 it stood at 50.5

Nearly all the components that make up the Index were up from March and from last April.

The Company Index, reflecting survey respondents' assessments of conditions for their own operations, rose 2.5 points in April to 56.1.  The Sales Index added 1.6 to 56.3, and the Employment Index was up 4.7 at 54.8.

Thirty-two percent of employers responding to the survey expect to add personnel in the next six months, while only 11 percent foresee staff reductions – much more positive than the 26 percent-18 percent split reported for the previous six months, which was itself an improvement from past surveys.

"The employment results are striking," noted BEA member Michael A. Tyler, Chief Investment Officer at Eastern Bank Wealth Management.

"They may mark a shift from a post-recession to an expansion mindset, as employers become more open to adding staff."

Confidence was lower in the manufacturing sector (51.9, +1.5) than among other employers (54.6, +2.5), and lower outside Greater Boston (50.0, -5.5) than within the metropolitan area (54.3, +3.3). Smaller employers were much more negative than larger ones.

"These differences fit into the big picture of how our economy is changing," Tyler pointed out. "Centers of innovation, like the Boston area, and innovative companies are thriving; we see predominantly positive responses from eastern Massachusetts manufacturers as well as service providers.  More traditional industries, like many in central and western Massachusetts, have little ability to raise prices as costs increase, and face the disruption and consolidation of supply chains in which the occupy intermediary positions."

Topics: Employers, AIM Business Confidence Index, Massachusetts economy

Employer Opinions Make a Difference on Beacon Hill

Posted by John Regan on Apr 2, 2012 3:03:00 PM

A transformation is taking place on Beacon Hill, driven by the growing willingness of Massachusetts employers to communicate with state lawmakers.

The traditional cynicism among business people that “they never listen anyway” has in recent years given way to the reality that employer activism has put jobs and economic growth on the front burner of state politics. Everyone from Governor Deval Patrick to House Republicans is proposing economic development plans to address the cost of doing business, regulatory reform and education.

ForryState Representative Linda Dorcena Forry, House Chair of the Joint Committee on Community Development and Small Business, is among a new generation of state legislators who have their ears open to the employers who create opportunity for the people of Massachusetts. Forry led her committee on an eight-stop statewide listening tour during the dark days of the recession in 2009-2010, and the result has been a series of bills aimed at reducing regulatory red tape and controlling the cost of health insurance.

“The top three concerns we heard about at every stop from the North Shore to Springfield were over-burdensome regulations, limited access to capital and rising healthcare costs,” Forry says.

The listening tour paved the way for passage of the AIM-backed Small Business Impact Statements Bill (H3772), which was signed in part into law in August 2010 as part of the omnibus Economic Development Reorganization bill. The measure requires state agencies to assess the potential impact of all new regulations on small businesses before their implementation and to review old and current regulations to take out any unnecessary or over-burdensome rules.

Governor Patrick upped the ante on regulatory reform last month when he announced that the commonwealth will review more than 1,000 state regulations to find at least 250 rules that can be streamlined or rescinded.  State agencies have been directed to consider the appropriateness of adopting national models or standards to align the state’s practices with those in place elsewhere in the country.

The same 2010 Economic Development bill that produced the small-business impact requirement also simplified access to capital by consolidating the Massachusetts Community Development Finance Corporation (CDFC) and the Economic Stabilization Trust (EST) into the Massachusetts Growth Capital Corporation.

And Forry isn’t finished. She recently worked with AIM to file H2896, An Act to Provide Immediate Relief to Small Businesses on Healthcare Costs, under which employees already covered by an alternative healthcare plan - through a spouse for example - would be removed from the calculation determining the "Fair Share Contribution.” The bill is currently before the Joint Committee on Public Health.

“Small businesses are critical to the economic growth and vitality of the entire Commonwealth, and I strongly believe it is only through building partnerships with you that we will envision and realize policies enabling our communities to thrive once again,” Forry said.  

The lesson for employers is that the 2008 recession and financial crisis have underscored for public officials the importance of creating a business climate that will put some of the 240,000 unemployed Massachusetts residents back to work. Sure, government can seem like a foreign country to business people accustomed to making decisions on a dime. But the doors are more open than they have been in years. Don’t hesitate to speak up.

 Top 10 Public Resources for Small Business

Topics: Massachusetts Legislature, Employers

AIM Joins Administration Effort to Encourage Hiring of Veterans

Posted by Christopher Geehern on Nov 3, 2011 1:51:00 PM

Associated Industries of Massachusetts has joined a Patrick Administration initiative to promote the hiring of veterans by Bay State employers.

VeteransThe initiative announced yesterday at the State House includes $500,000 in Fiscal Year 2013 to train veterans through the Massachusetts Manufacturing Extension Partnership’s Mobile Outreach Skills Training (M.O.S.T.) program. MassMEP also plans to immediately use $200,000 in existing state funds to offer a new training class for veterans during this fiscal year.

“AIM and the business community are honored to work with the administration to support the hiring of veterans,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“At a time when many Massachusetts employers are struggling to find qualified workers, people returning from military service provide just the kind of experience that can help any business. These returning heroes know how to get up in the morning, show up on time and get the job done.”

Governor Patrick declared November “Hire a Veteran Month” and announced the formation of an inter-agency task force to help state government increase its hiring of veterans.  The administration will also offer Massachusetts businesses an option to post an official state logo designating the company as a “Proud Employer of Massachusetts Veterans,” if the company employs a certain percentage of veterans.

“By partnering with the business community, we can encourage and increase the hiring of more Massachusetts veterans, including those returning from Iraq and Afghanistan,” Patrick said.

The initiative comes as unemployment rates for post 9-11 veterans continue to run higher than for non-veterans. The current jobless rate for returning veterans between the ages of 18 and 24 is 21.1 percent, more than double the rate for the overall population. Economists fear those numbers may deteriorate as the United States ends operations on Iraq and large numbers of military personnel return to civilian life.

Jack Healy, Director of Operations for MassMEP, said training is key to addressing the problem.

“This high percentage of unemployment is due partly to stereotyping veterans’ fitness for employment, such as inadequate technology skills and lack of education. M.O.S.T. training helps veterans overcome such stereotypes and equips them to fill unmet skills needs in our advanced manufacturing sector.”

Other business groups supporting the veterans’ initiative include the Massachusetts Association of Chamber of Commerce Executives (MACCE), the Greater Boston Chamber of Commerce, the Massachusetts Business Roundtable, the Massachusetts Biotechnology Council, the Mass High Tech Council, the Defense Technology Initiative, and the Retailers Association of Massachusetts

AIM looks forward to providing more information about the initiative in the coming weeks.
Employers with questions about hiring veterans may contact the Governor’s Advisory Council on Veteran’s Services (www.mass.gov/veterans), their local One-Stop Career Center, or AIM.

Topics: Veterans, Employers, Deval Patrick

Massachusetts Employer Confidence Rises as 2011 Begins

Posted by Andre Mayer on Feb 1, 2011 9:23:00 AM

Massachusetts employers began 2011 with a dose of measured optimism that pushed the Associated Industries of Massachusetts Business Confidence Index (BCI) up 2.8 points in January to 55.2. 

Business ConfidenceThe increase left the BCI in positive territory for a fourth consecutive month after a slump in the third quarter of 2010. Employer confidence now rests more than 20 points above the historic low of 33.3 posted at the height of the financial crisis in February 2009.

“Four consecutive months in the positive range, above 50 on the Index’s 100-point scale, points to cautious but real optimism about the economy and business climate,” said Raymond G. Torto, Global Chief Economist at CB Richard Ellis Group, Inc. and Chair of AIM's Board of Economic Advisors (BEA).

 “The January survey results show that Massachusetts employers are regaining confidence in state and national economic conditions, and expect further improvement over the next six months.”  

Fifty-three percent of employers who responded to the monthly BCI survey said they expect “continued slow, halting growth” while 41 percent foresee robust or accelerating economic growth and 6 percent ‘deteriorating conditions.’ Torto said the balance is towards the positive side amid signs that we may be approaching the end of the jobless phase of the recovery. 

AIM’s Business Confidence Index has been issued monthly since July 1991. The January reading was up 9.4 from a year earlier, 18.5 over two years, and 4.6 compared to January 2008, the first month of “official” national recession.

Most components of the BCI gained ground in January along with the main Index. The Current Index of conditions prevailing at the time of the survey was up 1.1 points at 52.4, while the Future Index of expected conditions six months ahead surged 5.1 to 58.3.

“The Current Index is holding above 50, about 10 points better than a year ago, but the improvement in the Future Index is more significant,” commented BEA member Michael Goodman, chair of the Department of Public Policy at the University of Massachusetts Dartmouth. “We have not seen Massachusetts employers this optimistic about immediate future prospects in almost four years.”  

Topics: Employers, AIM, AIM Business Confidence Index, Massachusetts economy

AIM Executive Brings Pro-Growth Ideas to Economic Development Panel

Posted by John Regan on Jan 25, 2011 2:12:00 PM

McAnnenyAIM Senior Vice President of Government Affairs and Associate General Counsel Eileen McAnneny will assume her seat tomorrow on a state economic development commission that AIM believes must concentrate on creating a uniformly favorable business climate to encourage job growth.

McAnneny will press AIM’s emphasis on jobs, economic opportunity, fiscal predictability, business formation, innovation and education. The association believes that the private sector has the unique ability and responsibility to create economic opportunity for the people of Massachusetts.

“The creation of a job and a person’s ability to do it weaves together every important aspect of social and economic stability – the desire for a better life, the ability to support a family, the confidence to start a business, and the need to support efficient government management of services such as education, health care, and public safety,” McAnneny said.

The commission, created two years ago but only now getting off the ground, is expected to conduct sessions throughout Massachusetts to assess the strengths and weaknesses of each region.

“Moving around or going to various regions may provide us with more information, more opportunities to hear from people,”  Representative John Scibak, co-chair of the jobs commission, told State House News Service last month. He added that he would like to “hear from people who are actually involved in [job creation] on a day-to-day basis.”

Gov. Deval Patrick approved a resolve creating the commission in January 2009. Members appointed by the governor include: Tim Sullivan of the Massachusetts AFL-CIO, Aaron Tanaka of the Boston Workers' Alliance, Alan Clayton-Matthews of Northeastern University, and McAnneny.

Senate President Therese Murray and House Speaker Robert DeLeo appointed Senator Karen Spilka and Scibak as co-chairs. Republican leaders appointed Senator Bruce Tarr and Representative Paul Frost. All nine cabinet secretaries were appointed to the panel and permitted to designate officials to appear on the commission in their place.

AIM believes that sustained economic growth requires:

  • Economic policy that balances key public investments with a competitive cost structure that keeps jobs in Massachusetts.
  • Predictable, responsible and long-term state fiscal policy.
  • A favorable environment for business development across all industries.
  • Leadership from business executives to help government resolve important issues.
  • Well-conceived and collaborative regulation that creates measurable benefits. 
  • Valuing Massachusetts’ employees, the contributions they make to a successful business and the willingness to pay them accordingly.
  •  A world-class education system that provides opportunity for all Massachusetts citizens and the knowledge base for economic growth.
  • Collaboration between business and government to ensure mutual success.

The commission will hold its first meeting amid a debate over the use of tax and other incentives to encourage companies to create or retain jobs in Massachusetts.

AIM believes first and foremost in a fair and simple corporate tax code.  But we also believe that when economic incentives are needed, those incentives should take the form of broad-based, statutorily clear tax credits that are taken as a matter of right if companies achieve certain investment goals, not credits granted via discretionary administrative fiat. 

Statutory tax credits have the value of being predictable and understandable for taxpayers and investors alike.  Pure tax credits also have the virtue of being payable only if the taxpayer actually has a Massachusetts corporate tax liability – refundable credits cost the commonwealth money directly and immediately.

What is your suggestion for the economic development commission? Please feel free to leave a comment below.

Topics: Employers, Associated Industries of Massachusetts, AIM, Economic Development, Deval Patrick

Massachusetts Blue Cross CEO Adds Momentum to Health-Cost Control

Posted by Eileen McAnneny on Jan 24, 2011 3:59:00 PM

The push to control health costs in Massachusetts gained significant momentum over the weekend as the chief executive of Blue Cross Blue Shield of Massachusetts urged hospitals to adopt a new global payment system and warned that providers who hold onto traditional fee-for-service arrangements face level or reduced payments.

Health cost controlBlue Cross President and CEO Andrew Dreyfus, in a letter to hospitals and physician practices reported Sunday in The Boston Globe, noted that “we all know that rising costs continue to threaten the health care that is so important to our community.

“Health care costs are making businesses in Massachusetts less competitive, and limiting their ability to grow. Health care costs are squeezing municipal budgets, taking money from schools and police and fire protection, and health care costs are consuming too much of family incomes, forcing many families to make difficult sacrifices,” Dreyfus wrote.

Dreyfus’ comments came as the Patrick administration prepares to file health cost legislation that is widely expected to institute a payment system under which medical care providers are put on an annual budget and given incentives to control costs and improve care instead of being paid for individual doctor visits and procedures.

Associated Industries of Massachusetts, which has been at the forefront of efforts to resolve the insurance crisis facing employers, applauds Dreyfus’ comments as a constructive step in helping employers suffering with rate increases of up to 40 percent. Employers remain ready to work with lawmakers, doctors, hospitals and insurers to ensure that spiraling health costs do not divert an already tentative economic recovery.

We encourage members to read the full article and to leave your comments below.

Topics: Employers, Associated Industries of Massachusetts, AIM, Health Care Costs, Health Care

Massachusetts Employers Face Assessment Hike for Jobless Health Fund

Posted by John Regan on Dec 29, 2010 10:40:00 AM

Massachusetts employers bracing for a 40 percent average increase in Unemployment Insurance taxes January 1 may face additional assessments after a state panel meets tomorrow to address a $70 million deficit in the fund that provides medical insurance to unemployed people.

Medical Security Trust FundThe Unemployment Health Insurance Rate Review Board could decide to increase employer assessments to keep the Medical Security Trust Fund solvent at a time of persistently high unemployment.  Massachusetts increased the assessment from $16.80 to $33.60 per employee for 2010, but officials suggest that the rate may have to increase again to $50.40 per employee or more for 2011 to keep the fund above water.

AIM favors eliminating the Medical Security Trust Fund because it duplicates the services offered under the 2006 Massachusetts Health Care Reform law. The Commonwealth Care program created under health reform allows individuals who have lost their jobs and income to purchase short-term health insurance through the Commonwealth Connector Authority.

AIM has filed bills in each of the past three legislative sessions to eliminate the Medical Security Trust Fund. The association believes that the commonwealth would not be staring at the current deficit if lawmakers had recognized the duplicative nature of the fund and eliminated it in 2006.

 “Why would we raise assessments on struggling employers for a program that provides a service available elsewhere?” said Eileen McAnneny, Senior Vice President of Government Affairs at AIM.

McAnneny said AIM would support revising the eligibility requirements for Commonwealth Care to state explicitly that unemployed people could use the system.

The Medical Security Trust Fund should also be eliminated, AIM believes, because lawmakers during better economic times used the fund to pay for programs unrelated to health care for the unemployed.

Gov. Deval Patrick’s budget chief, Jay Gonzalez, confirmed earlier this year during a public meeting that the administration was considering merging the Medical Security Trust Fund with Commonwealth Care.

“Over the long-term I think we need to consider all options,” Gonzalez said, as reported State House News Service.

But the administration has not disclosed its position on the merger more recently.

The possibility of increased medical security assessments comes as AIM works with the Patrick administration to find ways to ease the average $258-per-employee Unemployment Insurance increase set to hit Massachusetts businesses.  Analysts fear an increase of that magnitude could suppress job growth and create even more demand in the unemployment system.

Projections from the Massachusetts Division of Unemployment Assistance show that the Unemployment Insurance Trust Fund, which ran a balance of more than $2 billion prior to the recession, will begin 2011 some $202 million in the red. That deficit would trigger a move to the highest rate schedule permitted under Massachusetts law, raising the average UI cost per employee from the current $646 to $904.

A move to schedule G would increase total contributions from Massachusetts employers from $1.576 billion to $2.235 billion.

Meanwhile, AIM joined business organizations from throughout the country in November to ask Congress to continue to waive the interest on loans used by Massachusetts and 31 other states to pay unemployment insurance claims. AIM also asked Congress to waive penalties under the Federal Unemployment Tax Act levied on employers in states borrowing from the federal government to meet their obligations to jobless workers.

Topics: Employers, Associated Industries of Massachusetts, AIM, Unemployment insurance, Health Insurance

The AIM Top 10 Massachusetts Business Stories of 2010

Posted by Christopher Geehern on Dec 16, 2010 11:09:00 AM

2010 shifted the always unpredictable alchemy of business and politics in the Bay State.

Top 10A year that began with a political earthquake when Republican Scott Brown won the Senate seat formerly occupied by Edward M. Kennedy ended amid hopeful signs that the halting economic recovery was here to stay. Massachusetts employers spent 2010 trying to put the economic crisis behind them while dealing with developing crises surrounding the cost of health care and electricity.

What were the top 10 stories that affected Massachusetts employers during 2010?

  1. Massachusetts economy recovers fitfully, but faster than the nation as a whole.

    The unique mix of knowledge-based, high-value companies that drive the Massachusetts economy helped the commonwealth end 2010 with an unemployment rate of 8.1 percent, well under the national rate of 9.3 percent. The AIM Business Confidence Index rose throughout the spring, and then returned to positive territory late in the year after turning bearish in the third quarter.

  2. AIM challenges expensive National Grid/Cape Wind power agreement.

    Associated Industries of Massachusetts (AIM) asked the Massachusetts Supreme Judicial Court in December to set aside the commonwealth’s approval of a power-purchase agreement between National Grid and Cape Wind that will increase electric bills for thousands of Massachusetts employers. AIM said the agreement sets a dangerous precedent for allowing utilities to negotiate expensive power agreements outside of the competitive bidding process and to allocate the costs of those contracts unfairly to commercial and industrial customers.

  3. Rising cost of health care reaches crisis stage in Massachusetts; Governor Patrick and Legislature respond.

    The cost of providing health insurance to workers reached the tipping point for employers as rates rose up to 40 percent and virtually everyone agreed that the Massachusetts health care market is unsustainable without fundamental changes to the way companies and consumers purchase medical services. Governor Patrick rejected scores of proposed rate increases by insurance plans, then signed a cost-containment law requiring insurers to offer low-cost, limited or tiered network plans, and setting the stage for broad changes in the way insurance companies pay for medical care.

  4. Political scramble - Scott Brown elected to the Senate and Governor Patrick re-elected despite national Republican landslide.

    Republican Scott Brown of Wrentham shook the political world in January when he won a special election to fill the Senate seat held for decades by the Kennedy family. The election made Brown a superstar in Washington and unleashed a tidal wave that returned Republican control to the House of Representatives in the November elections. Ironically, one of the only states the tidal wave missed was Massachusetts, where Governor Patrick won re-election and every Democratic representative was returned to office.  

  5.  Corporate acquisitions are back.

    Two years after the global financial crisis, New England companies with strong balance sheets pulled out their wallets and began to make strategic acquisitions. Connecticut-based Northeast Utilities agreed in October to buy NStar for $4.17 billion in a deal that will create the largest New England utility company. German drug giant Merck KGaA bought life sciences company Millipore of Billerica for $6 billion in March. Massachusetts companies were also buyers: Thermo Fisher Scientific announced in December that it would purchase Dionex Corporation of California for $2.1 billion.

  6. Congress passes federal health care reform; judge later declares portions of the law unconstitutional.

    President Barack Obama in March signed landmark national health reform legislation that bore a striking resemblance to the Massachusetts health care reform law of 2006.  The federal law requires individuals to carry health insurance, changes underwriting rules and imposes a fee if an employer does not offer coverage. The fact that Massachusetts was the only state in the nation with its own health reform initiative was a mixed blessing for employers – the concepts were familiar, but there are significant differences between the state and federal laws that must be reconciled. In December, a U.S. District Court judge in Virginia ruled that the individual mandate is unconstitutional.

  7. Defense industry emerges as the untold success story of the Massachusetts economy.

    A report by AIM and the University of Massachusetts in December showed that as the overall economy has struggled in the face of two recessions and fundamental industry shifts, Massachusetts defense contractors quietly tripled the value of their contracts to $15.6 billion. They doubled their employment rolls to 115,563 people and increased their overall economic output by 146.2 percent. The report also found that innovation-rich Massachusetts defense contractors are well positioned to offset overall defense cutbacks by addressing technology needs at the Departments of Defense and Homeland Security.

  8. Business blocks organized labor priorities; Obama appointments to labor board create challenge for employers.

    Furious lobbying by AIM and business interests around the country prevented passage in Congress of the so-called Employee Free Choice Act, which would have deprived workers of the right to a private ballot in union elections. Congress also declined to pass another labor priority, the Paycheck Fairness Act. But President Obama’s appointment of union lawyers Craig Becker and Mark Pearce to the National Labor Relations Board shifted the labor relations playing field steeply away from employers.

  9. Massachusetts approves wide-ranging economic development measure.

    The Legislature approved and the governor signed an economic development bill that limits the scope of combined tax reporting, creates a 3 percent capital gains tax rate for individual investors in start-up companies, and provides most industries with the ability to extend a net operating-loss (NOL) carryforward from five to 20 years. The bill also places an automatic sunset provision on state regulations and requires proposed new regulations to include a business impact statement. The state will undertake a study of the factors driving the high price of electricity for Massachusetts employers.

  10. State lifts charter school cap, adopts national standards and wins Race to the Top dollars for education reform.

    A controversial decision to endorse national education standards paid off for Massachusetts in August when the commonwealth won some $250 million in federal education money through the Race to the Top (RTTT) competitive grant program for school improvement. The money will support reform efforts in four areas: standards and assessments; statewide data systems; effective educators; and turning around low-performing schools. These priorities were supported by employers, who recognize the importance of educated citizens to fuel economic growth.

What is your opinion about the most important business developments of 2010? We welcome your comments.

Topics: Employers, Associated Industries of Massachusetts, Health Care Reform, AIM, Health Care Costs, Education, Cape Wind, Health Insurance, Govenor Patrick, Charter Schools, Business Costs, Senator Scott Brown

AIM Appeal of Cape Wind Agreement Gains National Headlines

Posted by John Regan on Dec 14, 2010 9:20:00 AM

The filing of an appeal yesterday by Associated Industries of Massachusetts to the approval of a power-purchase agreement between National Grid and Cape Wind generated news headlines throughout the country, including an editorial in the Boston Herald saying that AIM deserves credit for speaking out on behalf of all ratepayers who will see increases in their bills because of the deal.

“Associated Industries of Massachusetts has earned a shout-out not just from the businesses it represents but from all ratepayers who’ll be hit by the unconscionable deal the state has struck with Cape Wind,” the Herald said in an editorial entitled AIM to Ratepayer Rescue.

The editorial concludes: “For business this isn’t a matter of turning down the thermostat or caulking windows, it’s a matter of survival - something the green brigade refuses to acknowledge.”

On New England Cable News, AIM Senior Vice President and Associate General Counsel Robert Rio said AIM appealed the power-purchase approval because it will increase electricity costs for employers who already pay some of the highest electric bills in the country.

The story also appeared in scores of newspapers, blogs and television news reports.

AIM argued in its appeal that approval of the National Grid/Cape Wind deal by the Department of Public Utilities (DPU) was “arbitrary, capricious,” an “abuse of discretion and not otherwise in accordance with the law.” AIM believes the agreement sets a dangerous precedent for allowing utilities to negotiate expensive power agreements outside of the competitive bidding process and to allocate the costs of those contracts unfairly to commercial and industrial customers.

The DPU approved the proposed power-purchase agreement between National Grid and the 130-turbine offshore Cape Wind project on November 22. It was the first such agreement ever approved under a provision of the Green Communities Act (GCA) allowing utilities to sign long-term contracts for renewable power directly with generators.

The legal challenge by AIM to the Cape Wind/National Grid contract is based upon three issues:

  1. The contract was not competitively bid.
  2. The amount of the Power-Purchase Agreement exceeds 3 percent of National Grid’s load.
  3. National Grid’s ratepayer allocation of the above-market costs of Cape Wind is inconsistent with the law and harms ratepayers on competitive energy supply.

Topics: Employers, Associated Industries of Massachusetts, AIM, Massachusetts economy, Massachusetts employers, Energy, Cape Wind

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