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Fiscally Sound House Budget Proposal Benefits Massachusetts Economy

Posted by John Regan on Apr 13, 2011 1:08:00 PM

The Massachusetts House Ways and Means Committee proposed a Fiscal Year 2012 budget today that would narrow the onerous treble-damages law, ensure consistent funding for the Workforce Training Fund by placing it in a trust, and allow cities and towns to save money by designing health insurance plans outside of collective bargaining.

Massachusetts House BudgetAssociated Industries of Massachusetts (AIM) and its 6,500 employer members welcomed the $30.45 billion spending blueprint, which includes no tax increases. AIM commended the Ways and Means Committee for taking steps to encourage job creation in a still-uncertain state economy.

“In the face of challenging fiscal times, Chairman Brian Dempsey and the committee have balanced the budget while addressing the economic growth that is the only long-term solution to the commonwealth’s financial picture,” said Richard C. Lord, President and Chief Executive Officer of AIM.

In his introduction to the budget document, Dempsey told colleagues, “Our budget also includes several provisions designed to foster job growth and improve the business climate in the commonwealth.  In this spirit, we have adhered to Speaker (Robert) DeLeo’s commitment to no new taxes or gimmicks that would place any additional burden on Massachusetts taxpayers.”

The proposed budget would limit the imposition of mandatory treble damages to “willful” violations of the commonwealth’s complex Wage and Hour law. The change would update a controversial 2008 law that currently imposes punitive treble damages even in cases where an inexperienced employee of a Massachusetts business makes a clerical error.

“Limiting treble damages to willful violations will draw cheers from Massachusetts employers who have seen their administrative burdens increase on issues ranging from exempt/nonexempt classifications to holiday pay,” said Sandra Reynolds, Executive Vice President of the AIM Employers Resource Group.

The provisions governing workforce training and municipal plan design appear in both the House Ways and Means Budget and in Governor Deval Patrick’s spending plan submitted in January. The agreement signals a growing consensus around two issues that AIM has aggressively supported for years on behalf of employers.

The House budget plan would place the commonwealth’s flagship Workforce Training Fund Program into a trust to guarantee that employer contributions to the program are used to train new and incumbent workers. Employers contribute approximately $21 million the WTFP each year, but the program was cut in half during Fiscal Years 2009 and 2010 as the commonwealth entered a prolonged fiscal crisis.

WTFP has provided $193.2 million in grants since its inception to some 2,500 Massachusetts employers to train 277,351 workers.

“The trust will ensure that the full $21 million contributed by employers through a surcharge on Unemployment Insurance bills is used efficiently to expand the skills of Massachusetts workers,” said Lord, who also chairs the Workforce Training Fund Advisory Council.

AIM supports so-called municipal plan design because cities and towns 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 the economy now sits.

A recent report found that Massachusetts municipalities spend 37 percent more to provide health insurance to their employees than the amount spent by private companies as measured by the AIM Benefits Survey.

AIM applauded the work of Ways and Means Committee Vice Chair Steven Kulik and Assistant Vice Chair Martha Walz on the proposed House budget.

Lord said AIM will continue to review the House budget proposal and inform employers about any additional business-related provisions.

Topics: Associated Industries of Massachusetts, Budget, Massachusetts House of Representatives

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