New Era Begins as Regan Becomes President of AIM

Posted by Christopher Geehern on May 20, 2019 10:28:04 AM

Regan.Annual.2019Editor's note: John R. Regan, who has directed AIM's government advocacy for the past 18 years, today becomes the new President and Chief Executive Officer of the largest business association in the commonwealth. Regan outlined a vision for the future of the organization during brief remarks to the AIM Annual Meeting Friday.

As the Roman philosopher Seneca observed “Omni fine initium novum” or, “Every new beginning comes from the end of another.”

As AIM prepares to write a new and exciting chapter in its distinguished history, I am reminded at every moment of the wisdom, generosity and quiet determination with which my predecessor Rick Lord has paved the road before me.

Rick never lost sight of where he came from and he never forgot that trust and respect are the ultimate currency of public policy and service.

Please join me - in again acknowledging Rick for all he has done for the Massachusetts economy.

Conscious of the fact that you have patiently listened to a full menu of speeches already, I would beg your indulgence to offer three brief observations.

First, to the members of AIM and especially to the Board of Directors, I gratefully accept your commission to lead this organization - supporting the dreams and aspirations of Massachusetts employers. We must keep as our guiding principal the fact that economic growth remains the only effective method of achieving the social equity that makes our commonwealth a great place to live and work.

Second, there has never been a more pressing need for businesses to work together with the sort of common purpose that drove 28 visionary companies to create Associated Industries of Massachusetts 104 years ago.

And third, meeting here in the Seaport district underscores the fact that we face an entirely new set of issues and challenges brought about by the breathtaking pace of change driving our economy.

The founders of AIM would no doubt be amazed to discover their association in 2019 wrestling with issues such as the rules governing ride-hailing apps, the appropriate use of drones, or how to integrate the autonomous vehicles driving around outside the building today.

You know, one can almost see the Seaport District from where I grew up in Dorchester. But in economic terms, it’s a different world and a different century being driven by a new generation of entrepreneurs.

AIM welcomes all employers and dedicates itself to serving the needs of the full range of Massachusetts companies working to provide the hope of a better life to our friends and neighbors.

We remain committed to the principals of diversity, equity and inclusion - on our board, on our staff, and throughout our membership. We assert unequivocally that AIM will be an association in the truest sense of the word, providing an opportunity for everyone – especially those who have historically been ignored – a full voice.

Everything we do at AIM is done to help businesses unlock their full potential. We fiercely advocate for positive public policy that helps to create a strong economy.

We empower businesses with the information, tools and resources needed to successfully navigate a fast-paced, complex business world. We foster connections, networks, and the flow of ideas between people and businesses.

We believe that business can be a positive force for change in helping to create a better, more prosperous society. And the best part is, we’re just getting started.

Topics: Associated Industries of Massachusetts, AIM Annual Meeting, John Regan

Attorney General Invites Collaboration with Business

Posted by Christopher Geehern on May 20, 2019 6:40:37 AM

Attorney General Maura Healey told more than 800 business leaders at the AIM Annual Meeting Friday that she looks forward to collaborating with employers on key issues such as education, substance abuse, health care and clean energy.

Healey2019AnnualNoting that she and previous attorneys general have worked closely with AIM on everything from health-care reform to implementation of paid sick days, Healey said the association has always based its advocacy on facts and knowledge.

“We look forward to building on Rick (Lord’s) legacy,” Healey said.

“I am firmly of the view that the problems we face today are not going to be solved by government. They will be solved by all of us working together.”

Healey made her remarks shortly after Lord symbolically handed over the job of president and CEO of AIM to John Regan, who has directed AIM’s government affairs advocacy for the past 12 years.

The attorney general said Lord was one of the first business leaders to whom she spoke when she became a candidate for the office. The two met during a driving snowstorm and spent an extended time discussing the burden that health-care costs placed on employers and the challenges of moderating energy prices.

“Under Rick’s leadership this organization has grown in amazing ways,” she said.

Healey’s collaborative agenda remains ambitious now that Regan is taking the reins at AIM.

She told the audience that the key to maintaining stability in the health-care market is to preserve the federal Affordable Care Act (ACA). Some 2.5 million Massachusetts residents have a pre-existing medical condition and 400,000 gained health-insurance coverage through the Medicaid expansion made possible by ACA, according to Healey.

The attorney general also noted the support of the Massachusetts business community for civil rights, stretching from the Goodridge decision establishing marriage equality to opposing a question on the 2018 statewide ballot that would have rolled back protections for transgender individuals.

She decried the new Alabama law restricting access to abortion by making an economic argument. Women are more than half the population and half of the work force, so anything that prevents women from full participation in the employment market will impede economic growth.

Healey concluded by saying that the commonwealth’s formula for funding education must change.

“Your zip code should never determine the quality of education you receive,” she said.

Topics: AIM Annual Meeting, Health Care, Attorney General Maura Healey

Joanne Hilferty to Chair AIM Board of Directors

Posted by Christopher Geehern on May 16, 2019 2:30:03 PM

BOSTON, May 16, 2019–Joanne K. Hilferty, president and CEO of Morgan Memorial Goodwill Industries in Boston, is set to be elected Chair of the Board of Associated Industries of Massachusetts (AIM) Friday as the state’s largest business association convenes for its annual meeting.

Hilferty2019Dennis Leonard, President and CEO of Delta Dental Plan of Massachusetts, is expected to be elected Treasurer of the association while Patricia Begrowicz, President of Onyx Specialty Paper in South Lee, will be Assistant Treasurer.

Hilferty, Leonard and Begrowicz will stand for election alongside a diverse slate of 13 new board members representing companies from every sector of the economy and from every corner of the commonwealth. The officers and new directors will be unanimously recommended by the AIM Nominating Committee.

A member of AIM’s board since 2008, Hilferty was elected to the AIM Executive Committee in 2010. She became Assistant Treasurer in 2012, and Treasurer in 2015. Hilferty will be the first woman to chair the AIM board.

Outgoing AIM Chair Dan Kenary said: “Joanne Hilferty is an accomplished business executive who runs a $45 million-a-year, multi-location enterprise focused on a critical need for the Massachusetts economy: training and developing talented employees. She has been part of the board leadership at AIM for almost a decade and is the perfect person to carry AIM into an exciting future.”

Kenary is CEO of the Massachusetts Bay Brewing Company, parent company of Harpoon Brewery and four other brands.

Hilferty said: “AIM stands at a pivotal moment as it seeks to represent the full diversity of employers creating economic opportunity for the people of Massachusetts. I look forward to working with the board to assure that the organization is inclusive as it represents current members and reaches out to new ones in order to continue to be a leading force advocating for economic vitality in the new economy.”

Hilferty has served as president and CEO of Morgan Memorial Goodwill Industries since 1995, substantially increasing its revenue, geographic reach and number and range of individuals served in its job training and career services. Morgan Memorial Goodwill Industries has been named one of the Top 100 Women-Led Businesses in Massachusetts by the Boston Globe Magazine and the Commonwealth Institute for the last five years.

Hilferty serves on the Board of the Massachusetts Council of Human Service Providers and has been appointed to numerous Boston economic development advisory groups. In April she received the Goodwill Industries International Advocacy Leader award and has received numerous other awards including the Greater Boston Chamber of Commerce Pinnacle Award for not-for-profit management.

A Phi Beta Kappa graduate of Brown University, Hilferty holds a master’s degree from the Woodrow Wilson School of Public and International Affairs at Princeton University. She lives in Cambridge.

The 13 new directors set to join AIM’s 75-member board are:

  • Arthur Barrett, President, Barrett Distribution Centers, Franklin
  • Peter Bowman, Vice President, External Affairs, Verizon Communications, Boston
  • Janice Goodman, Owner, Cityscapes, Boston
  • Dominick Ianno, Head of State Government Relations, MassMutual, Springfield
  • Marie Johnson, Treasurer, Ken’s Foods, Inc., Marlborough
  • Pia Sareen Kumar, Owner, Universal Plastics, Holyoke
  • Marianne Lancaster, President, Lancaster Packaging, Hudson
  • Emiley Lockhart, Senior Counsel and Director of Regional Initiatives, Woods Hole Oceanographic Institution (WHOI)
  • Thomas Pacheco, Chief Financial Officer, Acushnet Holdings Corporation, Fairhaven
  • Srinivas Reddy, Director, Global Innovation & Supply Network Operations, Procter & Gamble, Boston
  • Emily Reichert, Chief Executive Officer, Greentown Labs, Somerville  
  • Kumble Subbaswami, Chancellor, University of Massachusetts, Amherst
  • Annemarie Watson, President, Crane Currency, Dalton

“We are delighted to welcome such an impressive group of CEOs, entrepreneurs and business leaders to the AIM Board of Directors. These new board members are accomplished, committed, and full of  creative energy that will keep AIM moving into the future,” said outgoing AIM President and CEO Rick Lord.

About AIM

Founded in 1915, AIM engages in public policy advocacy for more than 3,500 Massachusetts employers who collectively employ one of every five residents of the commonwealth. AIM is dedicated to supporting pro-business legislation and policy on the full range of economic issues including the cost of health care and energy, compliance with employment laws, state and federal budget, taxes, financial issues, and workforce development.

Topics: Associated Industries of Massachusetts, AIM Board of Directors, Joanne Hilferty

AIM Names John Regan New President and CEO

Posted by Christopher Geehern on May 9, 2019 12:12:47 PM

John R. Regan, a Boston native who has directed government affairs advocacy at Associated Industries of Massachusetts (AIM) for the past 12 years, was selected today as the next President and Chief Executive Officer of the commonwealth’s largest business association.

Regan2019The AIM Board of Directors approved the selection of Regan during a special board meeting this morning. Regan succeeds AIM President and CEO Richard C. Lord, who is retiring after two decades leading the organization.

The appointment is effective May 20.

“The AIM board of directors conducted a comprehensive search to find just the right person to lead this dynamic organization into the future,” said Patricia Begrowicz, Chair of the AIM CEO Search Committee and President of Onyx Specialty Papers in South Lee.

“After engaging with an extraordinary and diverse group of more than 100 candidates and prospects, our committee recommended unanimously to the board that John Regan should be the next President of AIM.”

Regan, who joined the AIM Government Affairs Department in 2000 and was appointed Executive Vice President in 2007, said: “My goals are to ensure that AIM remains the pre-eminent voice for businesses on Beacon Hill, and to make Massachusetts an attractive state for employers of all kinds to succeed. I’m committed to ensuring that AIM represents, and advocates for, the full diversity of Massachusetts employers. I am deeply honored and grateful to the board of directors for their confidence in me and for all the time and effort they invested in this search process.”

At AIM, Regan’s focus has been administrative and legislative advocacy, regulatory affairs, litigation, and ballot initiatives. He has negotiated favorable outcomes for employers on major issues such as health-care reform, paid family and medical leave, use of non-compete agreements, pay equity, unemployment-insurance rate freezes, and the 2018 “Grand Bargain” compromise that avoided costly and contentious ballot questions concerning the minimum wage, sales tax, and paid leave.

Dan Kenary, Chair of the AIM board of directors said: “John emerged as the clear top choice to build on Rick Lord’s long legacy of success advancing the interests of employers and fostering economic growth and opportunity in the commonwealth. We’re excited to have John lead our organization.” Kenary is CEO and co-founder of Mass. Bay Brewing Company in Boston.

Regan has deep experience in both the private and public sectors. Prior to his tenure at AIM, he served as Chief Operations Officer for MassDevelopment, the state’s finance and development agency, overseeing real estate development and community revitalization projects including the transformation of the former Fort Devens. Before MassDevelopment, Regan was the Executive Director of the Massachusetts Office of Business Development, leading the commonwealth’s business retention and recruitment efforts.  

Regan, a graduate of Boston Latin School, earned his bachelor’s degree from St. John’s Seminary College in Boston and a certificate in organizational management from the U.S. Chamber of Commerce.

About AIM

Founded in 1915, AIM engages in public policy advocacy for more than 3,500 Massachusetts employers who collectively employee 1 of every 5 residents of the commonwealth. AIM is dedicated to supporting pro-business legislation and policy on the full range of economic issues including the cost of health care and energy, compliance with employment laws, state and federal budget, taxes, financial issues, and workforce development.

Topics: Associated Industries of Massachusetts, John Regan

Employer Confidence Rises in April

Posted by Christopher Geehern on May 8, 2019 8:55:23 AM

Massachusetts employers grew more confident during April as the state and national economies regained their footing.

BCI.April.2019The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 2.4 points to 60.3 last month. Confidence remains well within optimistic territory, though still 3.9 points below its strong reading of April 2018.

The April 2019 increase reflected growing employer optimism about economic prospects for the next six months and about the future of their own companies.

All of the constituent indicators that make up the BCI rose during April with one notable exception. The Employment Index fell 1.5 points to 54.4, suggesting that employer sentiment continues to be tempered by a persistent shortage of qualified workers.

“The Business Confidence Index continues to show a conflict between short-term economic optimism and long-term concern about the prospect of finding enough appropriately skilled workers to run Massachusetts businesses,” said Raymond G. Torto, Chair of AIM's Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design.

“The immediate news for employers is positive as economic growth in Massachusetts surged to an annual rate of 4.6 percent during the first quarter of 2019 and US growth came in at 3.2 percent.”

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.

Constituent Indicators

The constituent indicators showed a broad-based strengthening of confidence during April.

The Massachusetts Index assessing business conditions within the commonwealth rose 1.5 points to 63.2, while the US Index gained 2.8 points to 58.3. The Massachusetts reading has declined 0.9 points during the past 12 months and the US reading has dropped 5.6 points during the same period.

The Future Index, measuring expectations for six months out, surged 3.1 points to 60.5. The Current Index, which assesses overall business conditions at the time of the survey, rose 1.7 points to 60.0, still 5.1 points lower than a year ago.

The decline in the Employment Index left that measure 5.4 points lower than in April 2018. One good sign for job seekers is that the Sales Index, a key predictor of future business activity, rose 3.9 points during the month.

Non-manufacturers (64.1) were more confident than manufacturers (57.3). Large companies (60.7), medium-sized companies (60.5) and small companies (59.7) all had similar confidence outlooks. Companies in Eastern Massachusetts (64.5) continued to be far more bullish than those in the west (55.5).

Edward H. Pendergast, Managing Director of Dunn Rush & Co. and a BEA member, said employer confidence reflects first-quarter economic growth that was stronger than most experts anticipated. That growth sent US stocks to record highs in April before this week’s selloff.

“The consensus on Wall Street is for slowing growth as the year progresses, but the economy is setting a solid and predictable pace that reassures employers that there is little immediate threat of recession,” Pendergast said.

Training and Education

AIM President and CEO Richard C. Lord, also BEA member, said the sluggish Employment Index underscores the urgency for business and government to collaborate on ways to train and educate the workers who will drive the economy in the future.

“The persistent shortage of workers will become more severe as large numbers of baby boomers continue to leave the work force. It is imperative that we address the next generation of workers, so we can extend opportunity broadly to the people of Massachusetts.”

Lord’s commentary is his final one before retiring as President of AIM next week.

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

Baker Administration Seeks to Address Critical Problem with Paid Family/Medical Leave

Posted by Brad MacDougall on May 1, 2019 4:21:11 PM

The Baker Administration today extended by almost three months the deadline for employers to secure private insurance that would allow them to opt out of the Massachusetts paid family and medical leave system.

State House 2015The administration also extended the deadline for employers to inform workers about opt-out plans from May 31 to the end of June.

Both changes are intended to address a looming problem that could have forced employers to decide whether or not to opt-out at a time when insurance companies have yet to offer private alternatives.

Associated Industries of Massachusetts, which has conducted extensive conversations with the administration on the issue, plans to survey its member employers to determine whether the extension provides enough time to make a responsible decision about their companies’ approach to paid leave.

The paid-leave law passed by the Legislature and signed by Governor Charlie Baker last year allowed companies to bypass the state PFML system if they maintain disability or other insurance policies that provide benefits equal to, or better than, the state program. But companies face a Catch-22 because private insurance companies, citing uncertainty about key elements of the paid-leave regulations, have yet to introduce policies that would qualify as alternatives.

Starting paid leave with no option for companies seeking a private alternative would have contravened the spirit of the 2018 paid-leave law and generated a storm of opposition from the business community.

“The original deadline did not provide enough time for insurance companies to develop effective alternatives to the state paid leave program for employers who want them,” said John Regan, Executive Vice President of Government Affairs at AIM.

“Employers who have for years voluntarily provided some form of paid leave should be able to continue those benefits in the private market.”

The administration plan would give employers until September 20 to file for a private-plan exemption from the state paid-leave system. Employers would need to show proof of insurance by September 20 to remain out of the public system. If the request for exemption is disapproved, employers must then make their first-quarter payment on Oct 1.

Employers are also in the process of deciding how to split the cost of the new program with employees.

Meanwhile, there is also uncertainty surrounding the issue of whether employee deductions will be made pre-tax or post-tax and whether the federal government will tax paid family and medical leave benefits when they become available in January 2021.

The Massachusetts Department of Family and Medical Leave today sent guidance to employers about the impending paid-leave deadlines and the tax issue.

The paid family and medical leave law provides workers with 12 weeks of family leave and 20 weeks of personal medical leave. Workers on paid leave will earn 80 percent of their wages up to 50 percent of the state average weekly wage, then 50 percent of wages above that amount, up to an $850 cap.

Companies and workers are scheduled to begin paying into a paid leave trust fund on July 1. The initial payroll tax is 0.63 percent and will be adjusted annually.  The payroll tax is divided between medical (0.52 percent) and family (0.11 percent) leave. 

The employer is required to pay at least 60 percent of the medical leave contribution required for each employee. The employer is required to pay none of the contribution for family leave. Employers may, of course, pay a higher percentage for each category of leave or elect to pay the entire contribution for each employee.

Companies employing an average of fewer than 25 employees in Massachusetts will not be required to pay the employer portion of premiums for either family or medical leave.

An individual’s paid family or medical leave weekly benefit amount is calculated as follows: (a) The portion of an individual’s average weekly wage that is equal to, or less than, 50 percent of the state average weekly wage is replaced at a rate of 80 percent; the portion of an individual’s average weekly wage that is more than 50 percent of the state average weekly wage is replaced at a rate of 50 per cent.

The initial maximum weekly benefit amount is $850.

The law requires that companies seeking to opt out must have private insurance that offers:

  • Same number of job-protected weeks of leave
  • Equivalent wage replacement
  • Employee contributions no more than required by law

Sign up here to receive regular updates on paid family and medical leave in Massachusetts, or contact Brad MacDougall at

Topics: Charlie Baker, Mandated Paid Leave, Paid Family Leave

AIM Honors Wayfair with 2019 Vision Award

Posted by Christopher Geehern on Apr 29, 2019 8:00:00 AM

Wayfair Inc., a Massachusetts-born technology company that has redefined how people shop for their homes, is the recipient of the 2019 Vision Award from Associated Industries of Massachusetts (AIM). Wayfair has more than 5,500 full-time employees in the commonwealth and continues to grow its presence in Boston and beyond.

WayfairFounded in 2002 when engineers Niraj Shah and Steve Conine started selling stereo racks over the Internet, Wayfair has grown into one of the world’s largest online destinations for the home. The company currently offers 14 million products from 11,000 suppliers and last year generated $6.8 billion in net revenue.

The AIM Vision Award recognizes companies, organizations and individuals who have made unique contributions to the cause of economic opportunity in Massachusetts. The award reflects AIM’s mission to stand for jobs, economic prosperity, innovation and a government that acknowledges that the private sector has the unique responsibility to create the common wealth for the people of Massachusetts.

The largest employer association in Massachusetts will present the award at its Annual Meeting on May 17 in Boston. Attorney General Maura Healey will deliver the keynote address.

“The 3,500 member employers of AIM are delighted to honor a company that was launched in Massachusetts and continues to create economic opportunity from one end of the commonwealth to the other,” said AIM President and Chief Executive Officer Richard C. Lord, who noted that the Pittsfield Wayfair facility is expected to employ 300 people.

“Wayfair is the prototype of the economic growth we love to see – a company with deep local roots that uses technology and great management to dominate a global market.”

In addition to growing its corporate headquarters in Massachusetts, Wayfair has also recently announced it will open its first-ever full-service physical retail store in the Natick Mall later this year.

“We are proud to have built our business in the Commonwealth of Massachusetts and delighted to accept the 2019 Vision Award from Associated Industries of Massachusetts,” said Shah, who is a native of Pittsfield.

The company has also become a major player in the community, structuring its social responsibility efforts around creating safe and comfortable living spaces for people in need. It maintains charitable partnerships with Habitat for Humanity, Homes For Our Troops, and other organizations.

Wayfair will join a distinguished list of AIM Vision honorees, including Fidelity Investments Chief Executive Abigail Johnson, Woods Hole Oceanographic Institution, General Electric, Bright Horizons Family Solutions, MassMutual, philanthropists Bill and Joyce Cummings, Boston University brain researcher Dr. Ann McKee and Nuance Communications.

AIM is the statewide business association in Massachusetts, representing the interests of employers form all sectors of the economy on public-policy issues.

Topics: AIM Annual Meeting, Massachusetts economy, AIM Vision Award

AIM to Present Gould Education, Training Award to Snapchef

Posted by Christopher Geehern on Apr 16, 2019 8:00:00 AM

A Massachusetts company that has become the largest culinary training and staffing organization in New England will receive the 2019 John Gould Education and Workforce Development Award, AIM announced today.

SnapchefSnapchef, a Dorchester-based company founded 17 years ago by husband and wife Todd and Daniella Snopkowski, provides free culinary training to thousands of people who often subsequently find jobs through the company’s staffing operation. The company places students in entry level positions at blue-chip clients that include the region’s most prominent universities, hospitals, five-star hotels, food service corporations, caterers and corporate cafeterias.

The Snopkowskis have also established deep connections with community groups, churches and culinary schools to address the issue of culinary job readiness training and job creation.

“Snapchef is a wonderful example of the employer community rolling up its sleeves to solve the ongoing shortage of qualified workers in Massachusetts,” said Richard C. Lord, President and Chief Executive Officer of AIM.

“AIM is pleased to honor a company that not only employs more than 1,000 people throughout Massachusetts but also understands the broader significance of work and economic opportunity.”

Snapchef maintains training kitchens in Boston, Worcester, Springfield and Providence, R.I., where students get to take home the food they make while training and ride to job sites in Snapchef’s fleet of more than 50 vans.

The cornerstones of the Snapchef educational program are a 14-unit Fast-Track Culinary Training Program, ServeSafe classes and a 12-week Chef Apprenticeship Program that includes 240 hours of classroom instruction and 2,000 hours of supervised, on-the-job training.

“We help people find a career, not simply a job for one day,” said Snopkowski, who developed the Snapchef model after growing frustrated with culinary placement services while serving as a chef at the 1996 Atlanta Olympics and for Goldman Sachs in New York.

“And, being a staffing company, we don’t only train, we also match folks looking for work in the industry with jobs that are available. If they don’t have the skills to do a job, we actually train them, whether it be dishwashing, cooking, cheffing, you name it. We cover those bases and give them a foothold in the industry,” he told BusinessWest magazine in Springfield.

The company has earned a multitude of honors for its work. CEO Todd Snopkowski received the 2015 US Small Business Association Small Business Person of the Year award for Massachusetts, as well as the 2016 Citizens Bank Good Citizens Award. Daniella Snopkowski, who serves as CFO, has been named among the Boston Business Journal’s 40 under 40 business leaders.

Snapchef – the name is a variation on Snopkowski’s family nickname of “Snap” or “Snapper” - provides workers to clients ranging from individual restaurants and caterers to Foxwoods Resort Casino and Gillette Stadium, as well as large food-service corporations like Aramark, Sodexo, and the Compass Group.

And Todd and Daniella Snopkowski believe the company is just getting started. Snapchef is developing proprietary software for its clients and eventually plans to franchise Snapchef outside of New England.

The Gould Award was established in 1998 to recognize the contributions of individuals, employers, and institutions to the quality of public education and to the advancement, employability, and productivity of residents of the Commonwealth.

In 2000, the award was named after the late John Gould, upon his retirement as President and CEO of AIM, to recognize his work to improve the quality of public education and workforce training in Massachusetts.

Past recipients of the Gould Award include the late Jack Rennie, Chairman and Founder of the Massachusetts Business Alliance for Education; Middlesex Community College; Gordon Lankton, President and CEO (retired), NYPRO Inc.; William Edgerly, Chairman Emeritus, State Street Corporation; Northeastern University; The Davis Family Foundation; Intel Massachusetts; EMC Corporation; IBM; David Driscoll Commissioner (Retired) Massachusetts Department of Education; State Street Corporation and Year UP Boston; Beth Israel Deaconess Medical Center; Massachusetts Manufacturing Extension Partnership; Brockton High School; the Manufacturing Advancement Center – MACWIC Program; Christo Rey Boston High School; CVS and Massachusetts Rehabilitation Commission; Morgan Memorial Goodwill Industries and the Springfield Empowerment Zone Partnership.

Topics: Education, Workforce Training, Gould Education and Workforce Training

The Millionaires Tax is a Failure

Posted by John Regan on Apr 11, 2019 8:34:11 AM

The “millionaires tax” is a failure.

Small BusinessEvidence from states that have already imposed a surtax on incomes of more than $1 million shows that the policy causes irreparable harm to the economy while generating far less tax revenue than promised.

A millionaires tax will cause the same harm in Massachusetts, Associated Industries of Massachusetts will tell the Legislature’s Joint Committee on Revenue today.

Lawmakers have refiled a proposal to amend the state Constitution to impose a graduated income tax, adding a four percentage-point tax (representing an 80 percent increase in the personal income tax rate) on all incomes more than $1 million. The amendment would dictate that the revenue be spent on transportation and education.

An identical proposal was struck down by the Supreme Judicial Court last year in a suit brought by AIM President Rick Lord and the leaders of four other business groups, but the current proposal operates under different rules because it was filed by legislators.

A graduated income tax would eviscerate the small, family owned businesses that form the heart of the Massachusetts economy. The surtax would take an estimated $2 billion from some 17,000 Main Street businesses and others that pay taxes at the individual rate and who would otherwise use the money to hire additional employers or expand their companies.

These companies are already drowning in more than $1.5 billion in new taxes and fees to pay for a financial shortfall in the Medicaid program and to fund the new paid family and medical leave program.

How do we know that surtaxes don't work?

Because our neighbors in Connecticut just drove their economy off a cliff by raising taxes three times in the past 10 years.

Connecticut in 2009 added a 6.5 percent income tax bracket for those earning more than $500,000 per year. The state followed up with a comprehensive $1.5 billion tax increase in 2011 to deal with a budget shortfall. A final round of tax increases took effect in 2015.

According to information compiled by Pew Charitable Trusts, tax revenue for all 50 states is averaging 6.3 percent higher than it was at the start of the 2008 recession. Connecticut tax revenue, on the other hand, is only 3.8 percent higher, despite the three tax increases.

Once the economic heavyweight of New England, Connecticut is the only state in the nation which has yet to recover the jobs lost during the economic downturn.

In addition, the state has seen an out-migration of residents since 2013 and the loss of major financial investors. Data from the Internal Revenue Service showed a spike in residents earning more than $200,000 per leaving the state in 2015 and studies conducted by Connecticut state agencies and commissions have confirmed the loss of higher income residents to other states.

Income surtax laws have failed in other states as well.

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.

Many of the business owners who fled Connecticut, Maryland and New Jersey moved to states that have worked to reduce, rather than boost, taxes:

  • North Carolina revenues grew 3.8 percent in 2016. As a result, it has reduced its 5.49 percent income tax to 5.24 percent in 2019.  It also will reduce its corporate tax to the lowest in the nation at 2.5 percent and will repeal the corporate levy as more businesses move in and revenues increase.
  • New Hampshire, a state with no income tax, is reducing corporate taxes two years in a row because of revenue growth of 2 percent.
  • Georgia is also reducing income and corporate taxes in 2019 because of a strong revenue growth rate of 4.5 percent.
  • Tennessee only taxes interest and dividends and reduced tax rates from 6 to 3 percent as its population grew 6.7 percent from 2010-2017 and revenues increased 2.4 percent.

Topics: Massachusetts Legislature, Income Surtax, Taxation

AIM, Coalition Ask Legislature to Limit MassHealth Assessment

Posted by Katie Holahan on Apr 8, 2019 3:34:04 PM

A diverse coalition of organizations ranging from AIM to groups representing human services providers and home-care aides urged key legislators today not to extend the two-year assessment imposed on employers last year to close a financial gap at the state’s MassHealth insurance program.

State House 2015In a letter to House Ways and Means Committee Chair Aaron M. Michlewitz and Vice Chair Denise C. Garlick, the coalition says that  the “burden of the (Employer Medical Assistance Contribution) EMAC Supplement falls particularly on certain industries, especially small employers with lower wage workers, many of whom are paid via state contracts.”

“This unbudgeted and unanticipated expense is threatening employers’ ability to make critically needed investments in our workforce and to maintain vital programs that support vulnerable members of our communities.”

The Ways and Means Committee is currently developing the state budget for the fiscal year that begins on July 1.

AIM has already urged the Legislature to end the EMAC assessment immediately because employers last year paid tens of millions of dollars more than anticipated under the levy. Businesses are on track to contribute some $519 million by the time the assessment sunsets at the end of this year instead of the $400 million envisioned under the 2017 legislation.

At the same time, enrollment in MassHealth has fallen as the Baker Administration has initiated steps to ensure that only people eligible for benefits receive them. 

The Center for Health Information and Analysis (CHIA) recently indicated that, in calendar year 2017, total MassHealth spending decreased by 0.2 percent, driven in part by a 2.4 percent decrease in enrollment. The trend indicates relief from the pressures of enrollment increases that have plagued the MassHealth program in recent years and produced the fiscal deficit that resulted in the EMAC Supplement policy.

“The conditions that led to the imposition of the surcharge no longer exist. Employers who have paid hundreds of millions of dollars in assessments believe it is fair to look at ending the surcharge in year two,” said John Regan, Executive Vice President of Government Affairs at AIM.

The next round of EMAC supplement billings will be delivered to employers in the next week.

The members of the coalition include BAMSI (Brockton Area Multi-Services, Inc.), Building Trades Employers’ Association, Home Care Aide Council, MAB Community Services, Massachusetts Staffing Association, New England MCA/MSCA, Providers’ Council, The ERISA Industry Committee, Italian Home for Children, Massachusetts Senior Care Association, the Nashoba Valley Chamber of Commerce and the Springfield Chamber of Commerce.

The coalition said the EMAC supplement has raised costs for Massachusetts nursing facilities alone by more than $16 million.

“As a Commonwealth, we face a renewed imperative to lower the cost of health insurance for everyone in Massachusetts via long-term, efficient strategies. Short-term, unpredictable financial obligations like the EMAC Supplement tax serve only to deter business expansion and employee recruitment, and to reduce our ability to provide vital services,” the group wrote.

The Legislature passed the assessment in July 2017 minus a set of structural reforms proposed by Governor Baker to place the MassHealth/Medicaid program on a firm financial footing. The surcharge raised the EMAC assessment from $51 to $77 per employee. Employers also were required to pay up to $750 for each worker who receives public health benefits.

Employers may request a waiver from the fees if they prove a hardship. Of 246 such waiver requests, administration officials said they have allowed 99.

Topics: Massachusetts House of Representatives, Employer Health Assessment, EMAC Surcharge

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