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John Regan

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Income Tax Surcharge Would Harm Business

Posted by John Regan on Jun 14, 2017 2:07:38 PM

We call ourselves a commonwealth.

From the preamble of the Massachusetts Constitution:

“The body politic is formed by a voluntary association of individuals: it is a social compact, by which the whole people covenants with each citizen, and each citizen with the whole people.”

This notion, affirmed in the language of Article XLIV of the Constitution, states that taxes “shall be levied at a uniform rate throughout the commonwealth upon incomes derived from the same class of property.” Everyone is treated the same.

Now the Legislature is considering a petition to amend the language of Article XLIV in a manner that would increase by 80 percent the taxes paid on incomes in excess of $1 million, adjusted annually by the same method used for federal income tax brackets to reflect any cost-of-living increases. According to the ballot question language, every dollar of income more than $1 million would face a tax of 9.1 percent.

Those earning $1 million of income per year currently pay 95 percent more tax than those making $50,000 annually - an income of $50,000 generates a tax obligation of $2,550, while the $1 million dollar income generates $51,000 of income tax (all things being equal).

Some additional facts to note:

  • This significant new tax burden will fall on individuals and certain business entities paying taxes at the individual rate. It is hard to imagine that this new obligation will not impede investment, employment, and certain locational decisions.
  • The Department of Revenue estimates (with some assumptions) that the proposal will generate between $1.6 billion to $2.2 billion, with $1.9 billion identified as the median.
  • The $1.9 billion tax increase will be paid by roughly 19,500 filers, 80 percent of whom are anticipated to file with some business income.
  • Those 19,500 filers represent half of 1 percent of all tax returns filed with the Department of Revenue.
  • Eighty-six percent of the affected taxpayers will be married couples filing jointly, and 11 percent will be individual filers with earnings of more than $1 million.

Advocates for this constitutional amendment focus on the revenue derived therefrom rather than the uneven or inequitable method of its generation. The amendment requires that generated revenues shall be used:

“…to provide the resources for quality public education and affordable public colleges and universities, and for the repair and maintenance of roads, bridges and public transportation, all revenues received in accordance with this paragraph shall be expended, subject to appropriation, only for these purposes.”

However, Section 2 of Article XLVIII of the Constitution clearly enumerates so-called “Excluded Matters” by stating in part: “No measure… that makes a specific appropriation of money from the treasury of the commonwealth shall be proposed by an initiative petition…” For a petition to be constitutionally valid, the Legislature must retain the ability to use tax revenues for any public purpose the Legislature deems appropriate.

It follows that a “yes” vote necessarily diminishes the authority and responsibility invested in the members of the Massachusetts General Court. Our Constitution gives members of the House and Senate the sole authority to authorize how tax revenues are appropriated. Any assertion by the petition's proponents about limiting how the money is used is folly and prohibited by the Constitution. By passing the amendment, legislators abdicate their constitutionally protected authority.

The 4,000 member employers of Associated Industries of Massachusetts therefore urge a “No” vote on this measure.

Before we approve a policy that raises so much from so few we must ask – does this imbalance make the commonwealth a better, or a worse place?

We would suggest that it makes Massachusetts an unfair place.

Topics: Taxes, Income Surtax

Paid Leave Proposals Not Reasonable or Manageable

Posted by John Regan on Jun 13, 2017 1:00:00 PM

Editor’s Note: The following testimony opposing paid leave was delivered to the State House by AIM today. The testimony was provided to the Joint Committee on Labor and Workforce Development regarding HB 2172 and SB 1048.

My name is John R. Regan, Executive Vice President of Government Affairs for Associated Industries of Massachusetts (AIM.); the state’s largest nonprofit, nonpartisan association of Massachusetts’ employers.

StateHouse-resized-600.pngWith thousands of members employing nearly one out of every five workers in Massachusetts, AIM’s mission is to promote the well-being of its members and the prosperity of the Commonwealth of Massachusetts by improving the economic climate, proactively advocating fair and equitable public policy, and providing relevant, reliable information and excellent services.

Thank you for the opportunity to present our testimony today.

We respectfully ask that HB 2172, SB 1048, and any similar bills receive adverse reports from this Committee.

We agree with the proponents of these bills that Massachusetts’ citizens need to balance the needs of work and family. In fact, according to the 2016 AIM Benefit Survey, 87% of responding companies offer short-term disability to their employees with benefits ranging from 51 to 70% salary replacement; 79% offer long-term disability insurance and 59% have a leave of absence policy, all in addition to the leave benefits under FMLA.

However, we do not agree, and do not believe, that the legislation before you is a reasonable, manageable, or affordable approach to address those needs, either from an employee or employer perspective.

Last session, we asked a series of questions that we would like to ask this Committee again.

We strongly believe that the Committee should have answers to each of these questions before any bill can be reasonably released from your consideration. (For this portion of our testimony, we will be using section references to the language of Senate 1048. Similar language and concepts are found in the House bill as well.)

  • Section 2, of the proposed new Chapter 175M, creates a new office within the Executive Office of Labor will be created to administer the new leave program for the Commonwealth; does the Committee know the costs associated with this new office?1
  • Sections 3 & 4 creates the benefit durations and levels of wage replacement for the leave program; does the Committee know what the estimated take-up rate is for individuals taking both the maternity leave and disability leave? For cost estimating purposes, take-up rates per program are critical to know.
  • Further, what is the Committee’s estimate of the total program costs incurred by employers and the Commonwealth for administering this program and providing these new benefits?2
  • In Section 8, the director of the fund is charged with “assessing” the tax to fund this new program. Is this Committee aware of any precedent for the creation of this type program as well as the power to set and raise revenue by a non-elected individual? Are we sure that this is constitutional?
  • The director will become responsible for numerous operational duties in managing the funds related to this bill. Is there a cost estimate for this function?
  • In addition, has anyone determined what the tax assessment per employee might be for this program and, if so, could we see that analysis?3
  • Lastly, the bill requires that claims for family and medical leave benefits shall be filed with the department and handled under the procedures prescribed in sections 1, 10, 11, 12, 14, 15, and 16 of chapter 30A. Is there an estimate of the number of claims to be adjudicated and the costs for that process?4

The terms of this legislation are far-reaching. Although the initial implementation in January of 2019 would require 50% salary replacement levels, that level is increased to 90% by January of 2021 and the average weekly wage is then tied to the Consumer Price Index for the Boston-Cambridge-Quincy consolidated metropolitan statistical area. Not only is this an extraordinarily high rate of compensation, but it also derives the wage rate from on the area of the Commonwealth with the most expensive cost of living. This will not accurately reflect the economic complexity of different areas in Massachusetts, placing an undue burden on employers and employees living in less costly areas.

Of late, many have wondered why with a recovered economy and lower unemployment rates Massachusetts own-source revenue continues to fall below even relatively conservative benchmark levels. One reason cited by our members is lack of wage growth.

According to the Pew Charitable Trust, personal income growth in Massachusetts has only grown by 2.0% since Q4 of 2007.5 Employers in the Commonwealth are faced with considerable non-wage job costs for health care, unemployment insurance, workers compensation insurance, and other Massachusetts-only high costs, like electricity rates. Combine these with higher than average base wage costs, and you restrict employers’ ability to raise wages in a manner similar to other post-recessionary recovery periods.

Inevitably and necessarily, this lack of wage growth affects tax revenue growth for Massachusetts.

A new, and expensive paid family and medical leave program, as envisioned by these bills, will contribute to a diminished pool from which to fund additional jobs and additional wage growth.

Register for the Paid Leave Webinar

Topics: Employment Law, Mandated Paid Leave, Paid Family Leave

The Constitutional Amendment Tax Trap - Myths and Facts, Part 4

Posted by John Regan on Jun 13, 2017 9:08:03 AM

Editor's note - Beacon HIll lawmakers will vote on Wednesday whether to place on the 2018 statewide ballot a proposed constitutional amendement that would impose a four percentage-point surtax (an 80 percent increase) on incomes of more than $1 million. AIM opposes the Constitutional Amendment Tax Trap and will look at the myths and facts surrounding the issue each day through Wednesday.

Myth: High income earners in Massachusetts are not paying their “fair share” to support the cost of state government programs and investments.

Fact: The existing Massachusetts income tax is highly progressive, with the highest income earners paying the highest share of taxes and the highest effective tax rates.

According to data from the Massachusetts Department of Revenue, the top 20 percent of earners already pay 73 percent of all the income taxes paid to the state. (The top 1 percent of earners alone account for 28 percent of all income taxes paid.) Furthermore, the top 20 percent of earners had an average effective tax rate of 4.7 percent, nearly double the average effective rates paid by the lowest 40 percent of earners.

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Myth: The proposal will help to narrow wealth and income gaps and enhance our status as a true “commonwealth.”

Fact: The proposal is intentionally divisive and misleading. Special interest groups are using the popular vote and their ability to spend unlimited campaign funds to advance their own narrow self-interests by targeting a minority of citizens to foot the bill.

The proposal will not increase any citizen’s income, lower anyone’s tax rate, provide any new tax credit or deduction or provide any guaranteed benefit to anyone. There is no guarantee the revenue raised will benefit lower income citizens-or any citizen at any income level in any way.

Topics: Taxes, Income Surtax

The Constitutional Amendment Tax Trap - Myths and Facts, Part 3

Posted by John Regan on Jun 12, 2017 2:32:49 PM

Editor's note - Beacon HIll lawmakers will vote on Wednesday whether to place on the 2018 statewide ballot a proposed constitutional amendement that would impose a four percentage-point surtax (an 80 percent increase) on incomes of more than $1 million. AIM opposes the Constitutional Amendment Tax Trap and will look at the myths and facts surrounding the issue each day through Wednesday.

Myth: Without new tax revenue, Massachusetts’ economy will suffer.

Craneandworkerssmall.jpgFact: Massachusetts is thriving right now and our economy is expanding. Unemployment rates remain low and state tax revenues are at an all-time high.

During the past 20 years, Massachusetts has taken positive steps to shed much of its “Taxachusetts” moniker and high-tax brand. Adoption of the proposed tax increase would be a damaging step backward for the state. It will send the wrong message to many job creators and entrepreneurs: namely if you come to Massachusetts and succeed, we’ll punish you.

Myth: The new tax will help stabilize and strengthen the state’s financial foundation.

Fact: The proposal would inject significant instability into the state’s finances by adding billions of dollars in new, permanent special-interest spending to the state budget based upon on a volatile, non-recurring revenue stream.

Other states that have made the same mistake have found themselves in dire budgetary crises when estimated revenue failed to materialize. This year, Connecticut budget makers saw anticipated tax revenues drop by a staggering $450 million, putting the lie to a long history of promises that new and additional taxes on high income earners would solve the state’s fiscal challenges.

On April 28, Connecticut’s Democratic Governor Dannel Malloy was forced to acknowledge the state’s failed policy of trying to support ever-increasing state spending a too-narrow group of high income earners, publicly admitting "Connecticut is too dependent on our highest-income earners for our revenue.”

(Sources: Maryland Public Policy Institute; Hartford Courant 4.28.17)

Myth: Impacted taxpayers will remain in Massachusetts and pay the increased taxes.

Fact: The recent experiences of other states indicate that retirees and high-income earners often relocate to lower tax states in response to increased taxes.

Within three years of Maryland enacting its “millionaire tax,” 40 percent of the state’s seven-figure earners were gone from the tax rolls - and so was $1.7 billion from the state tax base.

Similarly, in 2010 Boston College researchers released a report on the migration of wealthy households to and from New Jersey. They concluded that wealthier New Jersey households did in fact consider the high-earner taxes when deciding whether to move to or remain in New Jersey.

The researchers’ data analysis found that from 1999 to 2003 - before the millionaires’ tax was imposed- there was a net influx of $98 billion in household wealth into the state. After the tax was implemented, an increasing number of wealthy families left the state, resulting in a loss of $70 billion in wealth.

(Source: Wall Street Journal, 2.7.12; Center on Wealth and Philanthropy at Boston College)

Topics: Taxes, Income Surtax

The Constitutional Amendment Tax Trap - Myths and Facts, Part 2

Posted by John Regan on Jun 9, 2017 10:00:00 AM

Editor's note - Beacon HIll lawmakers will vote on Wednesday whether to place on the 2018 statewide ballot a proposed constitutional amendement that would impose a four percentage-point surtax (an 80 percent increase) on incomes of more than $1 million. AIM opposes the Constitutional Amendment Tax Trap and will look at the myths and facts surrounding the issue each day through next Wednesday.

Myth: The new tax revenue will be dedicated to funding only investments in public education and transportation.

Finance.pen.small.jpgFact: There is no guarantee that any additional funds from the increased income tax would go to education, transportation or any other dedicated purpose. Any new tax revenue will go straight to the state’s general fund to be appropriated by the legislature for any purpose whatsoever.

The proponents are asking taxpayers to trust future legislatures to keep this spending promise. Unfortunately, the legislature has a long history of diverting the flow of funds that taxpayers believed were “dedicated” for a specific purpose. For example, the leader of a Massachusetts anti-smoking non-profit estimates that 99 percent of $851 million in state tobacco taxes and related revenues have been diverted away from the tobacco cessation programs they were “dedicated” to support.

Similarly, the legislature has previously diverted tens of millions of dollars from the Renewable Energy Trust Fund and the Workforce Training Fund to satisfy unrelated spending demands.

(Source: Lawrence Eagle Tribune, 1.27.13)

Myth: This new tax will support approximately $2 billion in additional state spending.

Fact: It is unlikely that actual revenues from the new tax will be remotely close to the $2 billion proponents estimate.

Many of the individuals who are most likely to be impacted by the tax are highly mobile and their income can fluctuate significantly from year to year. Any revenue generated by the new tax will be volatile at best. When these taxpayers leave Massachusetts, the state will lose significant revenue it would otherwise have captured.

Maryland estimated its 2007 “millionaire tax” surcharge would raise $330 million. Instead it raised just $120 million, leaving state lawmakers - who had immediately locked in $330 million in additional, permanent spending - with a gaping budget deficit. Researchers also estimate Maryland lost $5 billion in personal income tax collections from 2000 to 2010 due in part to high income individuals migrating to states with lower taxes.

Connecticut first adopted an income tax in 1991 and the state taxes high income earners at a rate of 6.99 percent, more than double the rate applied to the lowest tax bracket. In the past 25 years, Connecticut lost more than $12 billion in net adjusted gross income to other states.

(Sources: Maryland Public Policy Institute; the Tax Foundation; the Yankee Institute for Public Policy; Forbes.)

Topics: Income Surtax, tax

The Constitutional Amendment Tax Trap - Myths and Facts, Part 1

Posted by John Regan on Jun 8, 2017 1:26:49 PM

Editor's note - Beacon HIll lawmakers will vote on Wednesday whether to place on the 2018 statewide ballot a proposed constitutional amendement that would impose a four percentage-point surtax (an 80 percent increase) on incomes of more than $1 million. AIM opposes the Constitutional Amendment Tax Trap and will look at the myths and facts surrounding the issue each day through next Wednesday.

Myth: Massachusetts has a revenue crisis and cannot support the cost of essential state government services without new taxes.

Fact: Massachusetts is one of the highest spending states in the nation on a per capita basis. Revenue collection and state spending in the commonwealth have increased significantly during the past 15 years. In that time period the state budget has doubled to more than $40 billion dollars, a growth rate that far outpaces inflation.

State Budget by Year 2017.jpg

Massachusetts has a spending problem, not a revenue crisis. Fiscal Year 2016 state revenues were $4.7 billion more than they were just five years earlier. In just the past five years, Massachusetts has increased the sales tax rate by 25 percent, raised the gas tax by 14 percent and adopted major policy changes, including casino gaming, designed to raise billions of dollars in new revenue each year. 

Revenue Trends-1.jpg

Myth: Massachusetts under-invests in its K-12 public educational system.

Fact: Massachusetts taxpayers support the seventh highest level of per-pupil spending in the country with an average expenditure of $15,000 per student each year. Massachusetts students perform better than their peers across the country, evidenced by the National Assessment of Education Progress (NAEP) eighth-grade student performance in Science (1st), Reading (tie 1st) and Math (tie 4th). (Source: MATTERS.mhtc.org; NCES)

Myth: Massachusetts under-invests in its transportation infrastructure.

Fact: Year after year, Massachusetts spends significantly more per mile on highways than nearly every other state in the country. Currently, Massachusetts spends more annually to build and maintain each mile of highway than 47 other states and four times the national average. Yet the condition of our roads and bridges is among the worst in the country.

The state Department of Transportation and MBTA acknowledge they are unable to effectively spend the capital funds already available to them.

According to Transportation Secretary Stephanie Pollack “for years the T [has been] leaving hundreds of millions on the table, failing to spend it on desperately needed maintenance and repair projects. The T is like a bathtub full of holes. Turning the spigot to let more water in is not going to fill up the bathtub. We need to fix the holes.”

Before any additional funds are expended, the state transportation system needs to adopt significant additional structural and management reforms and improvements.

State Highway Spending.jpg

(Sources: MATTERS.mhtc.org; the Reason Foundation; Boston Globe, 9.2.15)  

 

Topics: Taxes, Income Surtax

Which Issues Matter to You? Take the AIM Issues Survey

Posted by John Regan on Sep 26, 2016 7:30:00 AM

The two major candidates for president will debate tonight. Will they address issues that matter to employers?

statehouse.jpgThe Massachusetts Legislature will kick off its 2017-2018 session in January. Will lawmakers identify the public-policy challenges that most concern Massachusetts employers as they seek to grow, create jobs and generate economic opportunity?

Employers have an important role to play in the debate over how to improve the Massachusetts economy. How can you ensure that your opinions and good ideas are heard? Start by participating in the biennial Issues Survey from Associated Industries of Massachusetts.

The commonwealth’s largest and most powerful employer association wants to hear from you so it can accurately represent the interests of employers both large and small before Massachusetts state government. Which issues pose a threat to your business? What steps could Massachusetts take to improve the business climate? How can Massachusetts assure its global competitiveness in a world in which economic growth is becoming ever more concentrated?

AIM will use responses from the Issues Survey to construct a pro-growth Legislative Agenda for the 2017-2018 Beacon Hill session. Legislators rely upon the AIM Legislative Agenda to identify the issues of importance to the Massachusetts employer community.

All responses will remain confidential.

Why participate? As AIM’s Chairman Dan Kenary remarked at this year’s Annual Meeting:

“The late House Speaker Tip O’Neill’s maxim that ‘all politics is local’ has never been truer that it is today. And if all politics is local, the employer community represents a sleeping giant with enormous potential to drive sound public policy from the bottom up.  Call it entrepreneurial populism - those of us who risk everything to employ our neighbors in Boston, Worcester, Springfield or more than 348 other communities in Massachusetts must tell our stories to the representatives, senators and member of Congress in whose districts we operate.”

We stand at a singular moment in the history of Massachusetts as the forces of political moderation struggle to hold back furious attacks from progressive insurgents who see business and employers as the problem rather than a force for good. The ability of employers to ensure economic stability and continued opportunity rests entirely on their willingness of individuals to add their voices to the public debate.

AIM will publish its Legislative Agenda in January, immediately after President and Chief Executive Officer Richard C. Lord delivers his annual State of Massachusetts Business address.

AIM represents the interests of 4,000 companies from every sector of the economy.

Take the Issues Survey

 

Topics: Massachusetts Legislature, Massachusetts employers

Legislative Scorecard Paints Tale of Two Chambers

Posted by John Regan on Aug 29, 2016 7:35:05 AM


Associated Industries of Massachusetts (AIM) today released its 2015-2016 Legislative Scorecardd, the most widely read report on the voting record of Massachusetts legislators on issues important to employers. AIM releases the Legislative Scorecard at the end of each two-year session to ensure that members know legislators’ records on key economic and public-policy issues, and to recognize lawmakers who understand the importance of a vibrant economy for all residents.

Scorecard2016.jpgThe 2015-2016 legislative session was a tale of two chambers. While the House of Representatives and Speaker Robert DeLeo successfully forged consensus on important measures such as wage equity and energy, the Senate hewed to a more progressive, ideological approach that produced a steady stream of bills with the potential to harm the Massachusetts economy. The divergent approaches are reflected in the Legislative Scorecard results.

Virtually every member of the House of Representatives earned grades of 50 percent or higher and 126 reps ended the session at 75 percent or better. The ratings were based on a dozen roll-call votes dealing with issues ranging from economic development to restricting the use of non-compete agreements.

In the Senate, meanwhile, only five of 40 members managed grades above 50 percent and a staggering 15 Senators posted scores of 18 percent. The highest score in the Senate belonged to Senator Don Humason of Westfield at 59 percent.

The Senate scores were based upon many of the same issues debated by the House, as well as additional votes on so-called wage theft and efforts to modify the commonwealth’s punitive treble damages law. Two key Senate votes – on energy and non-compete agreements – were not included because they were conducted as voice votes.

The Legislative Scorecard selects votes that reflect the objectives of The Blueprint for the Next Century, AIM’s long-term plan for economic prosperity in Massachusetts. The plan maintains that only a vibrant, private-sector economy creates opportunity that binds the social, governmental, and economic foundations of our commonwealth.

The Blueprint contains four specific recommendations against which AIM measures public policy issues:

  1. Develop the best system in the world for educating and training workers with the skills needed to allow Massachusetts companies to succeed in a rapidly changing global economy.
  2. Support business formation and expansion by creating a uniformly competitive economic structure across all industries, geographic regions and populations, rather than picking winners and losers.
  3. Establish a world-class state regulatory system that ensures the health and welfare of society in a manner that meets the highest standards of efficiency, predictability, transparency and responsiveness.
  4. Moderate the immense long-term burden that health care and energy costs place on business growth.
"We hope that employers find the Legislative Scorecard informative, and that they will share the results with your colleagues and associates," said Richard C. Lord, President and Chief Executive Officer of AIM.

Topics: Massachusetts Legislature, Massachusetts senate, Massachusetts economy, Massachusetts House of Representatives

Lawmakers OK Energy, Economic Bills; Non-Competes Remain Unchanged

Posted by John Regan on Aug 1, 2016 8:40:56 AM

A frenzied conclusion to the 2015-2016 Beacon Hill legislative session produced far-reaching measures on energy and economic-development, but no agreement on restricting the use of non-compete agreements.

statehousedome.jpgA consensus pay-equity bill supported by the business community passed a week earlier and is due to be signed by Governor Charlie Baker today.

Richard C. Lord, President and CEO of AIM, said employers should take encouragement from the fact that the final bills that passed around midnight Sunday largely reflected the moderate approach to business issues taken by the House of Representatives.

“The House and the Baker Administration again showed an understanding of the factors that contribute to business growth and job creation,” Lord said. “We give particular credit to House Speaker Robert DeLeo, who forged meaningful compromises on pay-equity, non-compete agreements and other key issues.”

He also noted that lawmakers and Governor Baker worked responsibly to balance a difficult budget with no tax increases.

The energy bill commits Massachusetts utilities to purchasing up to 30 percent of the state’s electricity from offshore wind generation and hydropower imported from Canada or upstate New York. The final version rejects a troublesome proposal to double the state's minimum requirements for renewable energy and also maintains funding mechanisms for development of natural gas pipelines.

“The bill will raise electricity rates as the commonwealth transitions to non-carbon fuel sources. That said, lawmakers approached the issue in a careful and thoughtful manner that recognizes the need to include a variety of generation sources for electricity,” said Robert Rio, Senior Vice President of Government Affairs at Associated Industries of Massachusetts.

Average electric rates in Massachusetts are the third highest in the nation for industrial ratepayers, and more than twice as high as companies pay in the competitor state of North Carolina. Those costs place employers at a significant disadvantage when competing with businesses located in other areas of the country.

The breakdown of negotiations on non-compete agreements brought a stunning, if temporary, end to a contentious effort by venture capitalists to do away with current law governing non-competes. AIM has waged a protracted battle to defend the vast majority of Massachusetts employers who wish to preserve the use of non-competes, but the association nevertheless negotiated a reasonable compromise measure that passed the House of Representatives.

The House bill would have limited the duration of non-competes to one year and required employers who did not compensate workers at the time they signed a non-compete to pay 50 percent of the worker’s salary during the non-compete period. A separate Senate bill would have limited the term of non-competes to three months and required employers to pay 100 percent of a worker’s salary regardless of existing financial compensation.

The deadlock means that opponents of non-competes will have to return to square one and refile their proposals when the 2017-2018 legislative session begins in January.

“The outcome of negotiations on the use of non-competes is disappointing to the business community, which worked in good faith with the House on a reasonable compromise. AIM continues to believe that non-compete agreements with common-sense limitation protect intellectual property and stimulate investment and innovation in Massachusetts,” said Brad MacDougall, Vice President of Government Affairs at AIM.

The economic development bill includes $500 million in authorized borrowing for the MassWorks infrastructure program, $45 million in capital dollars for brownfields environmental projects and $45 million for equipment for career and technical education, among other measures. The bill also features a new tax deduction intended encourage families to save for college tuition costs.

The pay-equity bill is intended to promote salary transparency, limit upfront questions to job candidates about salary history, and encourage companies to conduct reviews to detect pay disparities. It explicitly recognizes legitimate market forces such as performance and the competitive landscape for certain skills that cause pay differences among employees. 

 Register for AIM Brown Bag Webinar:   Legislative Wrap-Up

 

Topics: Massachusetts Legislature, Economic Development, Non-Compete Agreements, Energy

Pulling the Plug on Solar Reform

Posted by John Regan on Apr 6, 2016 3:05:08 PM

Massachusetts lawmakers last week imposed an $8 billion tax on electric ratepayers and put the money into the pockets of solar energy developers.

solarpanels.small.jpgThe state Legislature approved a bill that does nothing to reform the commonwealth’s bloated solar-energy subsidy program. The result: businesses and homeowners will continue to foot the bill for twice as much in solar giveaways as residents of other states.

Governor Charlie Baker said Friday that he will sign the measure.

And big solar isn’t done. Even before the ink dries on the current bill, solar energy advocates are rallying to raise the cap again before the end of the legislative session, continuing what appears to be a never-ending demand for government-mandated support.

“AIM supports the development of solar energy and takes pride in the fact that many of its 4,500 member employers have installed solar at their plants and offices,” said Robert Rio, Vice President of Government Affairs at AIM.

“But this bill represents lawmakers turning their backs on ratepayers to perpetuate an ideologically based energy policy.”

The solar bill that emerged from a legislative conference committee on Tuesday would raise the cap on net metering – the process by which solar developers sell excess electricity back to the power grid – by 60 percent for private projects and 75 percent for public projects. The primary reform contained in the measure would lower the net metering credit to 60 percent of the retail rate, but that reduction would not apply to facilities owned by municipalities and government entities.

“Municipalities and other government entities will still receive retail rates for net metering – a sad case of ‘taking care of your own’ while others pay,’ ” AIM said in a letter to the Legislature this morning.

The proposal will add $8 billion to the energy bills of Massachusetts consumers during the next 10 years - 2.0 cents/kilowatt hour for residential customers and 1.6 cents/kWh for Commercial and Industrial customers.   

AIM supports reform of solar subsidies because Massachusetts employers already pay some of the highest rates for electricity in the country. The legislature with the current bill has shown neither the will nor the inclination to say no to unnecessary subsidies, even when other states have reformed their programs in the face of falling costs for solar installations.

Solar subsidy advocates are already planning to seek additional increases in the program.

"With the bill's 3 percent increase to the program cap, we expect to address net metering again next year in order to avoid endangering solar jobs yet again,” said Sean Garren of VoteSolar.

AIM urges the state Senate not to pass the conference report and asked Governor Charlie Baker to veto it.

Topics: Massachusetts House of Representatives, Energy, Solar Subsidies

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