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Business, Advocates Join to Ask for Paid Leave Delay

Posted by Brad MacDougall on May 20, 2019 5:42:34 PM

Associated Industries of Massachusetts and the business organizations and advocates who last year negotiated a compromise version of paid family and medical leave are together asking state leaders to postpone the July 1 starting date of the program by three months.

statehousedome“In the course of our work together we have identified the need for a three-month extension of the July 1, 2019 deadline for approval of employers’ private paid family and medical leave plans and the commencement of the required plan contributions,” the groups said in a letter to Governor Charlie Baker, House Speaker Robert DeLeo and Senate President Karen Spilka.

“In addition, there are five other amendments to chapter 121 of the Acts of 2018 that are necessary for clarification of rights and responsibilities of stakeholders to effect the smooth implementation and operation of the new law,” the letter said.

The group noted that the extension would not impact any of the benefits or the timing for eligibility of benefits under the new law.

Signers of the letter include AIM, Raise Up Massachusetts, The Greater Boston Chamber of Commerce, The Coalition for Social Justice, Local 509 of the Service Employees International Union, Greater Boston Legal Services, The Massachusetts Business Roundtable, the Alliance for Business Leadership and the Chamber of Commerce of Greater Springfield.

The call for a delay from politically diverse groups reflects growing concern that neither the marketplace nor employers nor their workers are adequately prepared for the sweeping new benefits program.

The Baker Administration attempt to allay those concerns three weeks ago by extending the deadline for employers to secure private insurance that would allow them to opt out of the paid leave system. The administration also extended the deadline for employers to inform workers about opt-out plans from May 31 to the end of June.

The business and advocacy groups commended the administration’s efforts.

“However, given the lack of employer clarity on the regulations, the importance of communicating with employees regarding payroll deductions, and the ability for insurance providers to offer a private-sector option, we continue to support and urge legislative action on the proposed amendment extending the deadline for private plan approvals and the commencement of required contributions from July 1, 2019, to October 1, 2019, as well as the additional five clarifying amendments to the statute…” the group writes.

The proposed amendments are intended to provide clarity for employers, insurance providers (developing and providing products to employers), employees applying for the leaves covered by the new law, and health care providers certifying the need for leave. In addition, the clarifying amendments align core principles of the Massachusetts paid family and medical leave law with the federal Family and Medical Leave Act (FMLA).

The amendments include:

  1. Intermittent Leave – This amendment would clarify that leave taken on an intermittent or reduced leave schedule reduces the amount of remaining leave available to a covered worker. This change tracks the language of the federal FMLA.
  2. Serious health condition – This amendment clarifies that eligibility for medical leave for the covered individual’s own serious health condition arises where such a serious health condition “makes the covered individual unable to perform the functions of the covered individual's job.”

If you are an AIM Member and want updates sign up here or contact Brad MacDougall.

Not an AIM member?  Contact Bob Paine to learn how AIM’s advocacy and resources can help your company.

Topics: Massachusetts Legislature, Charlie Baker, Paid Family Leave

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 Calls on Legislature to End MassHealth Assessment on Employers

Posted by Katie Holahan on Mar 26, 2019 1:52:06 PM

Editor's note - AIM Vice President of Government Affairs Katie Holahan today delivered the following testimony to the Legislature's Joint  Committee on Labor and Workforce Development in favor of ending the MassHealth employer assessment.

State House 2015Associated Industries of Massachusetts (AIM), on behalf of its member companies, supports H.1647, An Act relative to repealing the employer medical assistance contribution tax. We support an end to the two-year assessment imposed on employers to close a financial gap at the state’s MassHealth insurance program for low-income residents.

AIM believes the assessment is no longer necessary as employers last year paid tens of millions of dollars more than anticipated originally under the levy.

The prior, existing Employer Medical Assistance Contribution (EMAC) assessment increased from $51 to $77 per employee, and employers were required to pay up to $750 for each worker receiving public health benefits. By the time the EMAC assessment sunsets in 2019, Massachusetts businesses are on track to contribute $519 million instead of the $400 million envisioned under the 2017 legislation – or 30 percent more than originally estimated.

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

The Legislature passed the assessment in July 2017, minus a set of structural reforms proposed by the governor to place the MassHealth/Medicaid program on a firm financial footing. The assessment fell most heavily upon companies whose employees elect to use MassHealth rather than the employer-sponsored health plan.

AIM member employers are proud to lead the nation in providing health care coverage to their employees. Sixty-five percent of Bay State companies offer health insurance coverage to their workers, compared with 56 percent of employers nationwide. A full 100 percent of Massachusetts employers with 200 or more employees offer coverage.

As health-care premium and utilization costs continue to grow, employers have fewer options and less flexibility to keep year-over-year increases in check, raising important concerns about their ability to offer comprehensive insurance to their employees. Adding the cost of the state’s public health insurance program is not a sustainable financial plan, long-term.

Employers stand ready to work with policymakers to make comprehensive structural reforms to both the MassHealth program and commercial insurance markets to make the financing of health care for all Massachusetts residents sustainable this year and for many years to come.

Topics: Massachusetts Legislature, Health Care Costs, Health Insurance

Senate President Calls for 'Bold Steps'

Posted by Christopher Geehern on Mar 15, 2019 11:20:37 AM

 

Senate President Karen E. Spilka today called for Massachusetts to take “bold steps” to address issues such as transportation, education, health-care costs and economic development in the face of relentless changes to the state economy.

SP.Spilka“The common thread of all the challenges we face is unprecedented change. The success of our Commonwealth will ultimately be measured by how well we navigate and harness the potential of this change,” Spilka told more than 300 business leaders at the AIM Executive Forum on Waltham.

She said Massachusetts finds itself in a unique political moment that will determine the future course of its economy.

“It would be a mistake to waste this moment on incremental changes and small ideas,” she said. “Now is the time to be bold. That said, we have to find a way to reach consensus on our bold ideas.”

Spilka said state leaders must replicate the collaborative model of last year’s “grand bargain,” which brought together employers, advocacy groups and legislators to hammer out a compromise on paid family leave and the minimum wage. She thanked the business community for engaging in those conversations and invited employers to continue to participate in major policy debates.

The Senate President cited the growth of the Metrowest district she represents as an example of the challenges and opportunities facing the Massachusetts economy. Technology and innovation have transformed Metrowest from a Boston bedroom region to the home of major employers like Staples, TJX and Boston Scientific, but that growth has stressed the transportation infrastructure and priced some workers out of the housing market.

She acknowledged that resolving these issues carries a large price tag.

“I firmly believe we must create an economic development and tax framework for the 21st century where innovative technology-driven businesses can develop and thrive here but where we also capture new revenue to continue providing essential services, and fund our vision for our future,” she told the audience.

“So far, we have been addressing these new industries on a piecemeal basis, which only serves to breed confusion for business, government, and consumers. We must work together to find a balance that benefits us all, especially as we will be relying on these industries to continue to fuel our economic success.”

Spilka said the Senate will address health-care costs by looking at the price of prescription drugs and the cost transparency of the medical system. She praised the initiative led by AIM and the Massachusetts Taxpayers Foundation to reduce unnecessary use of emergency rooms.

Topics: Massachusetts Legislature, AIM Executive Forum, Senate President Karen Spilka

AIM's John Regan Talks Issues on Comcast Newsmakers

Posted by Christopher Geehern on Jan 31, 2019 12:38:52 PM

John Regan, AIM's Executive Vice President of Government Affairs, recently joined Comcast Newsmakers and host Jenny Johnson for a look at the issues facing employers as the Massachusetts Legislature begins a new, two-year session.

Regan.Comcast.2019

 

 

 

Topics: Massachusetts Legislature, Associated Industries of Massachusetts, Charlie Baker

AIM Calls for End to MassHealth Employer Assessment

Posted by Rick Lord on Jan 2, 2019 8:57:01 AM

Associated Industries of Massachusetts and its 4,000 member companies today called upon the Legislature and Governor Charlie Baker to end to the two-year assessment imposed on employers last year to close a financial gap at the state’s MassHealth insurance program for low-income residents.

health_careAIM believes the assessment is no longer necessary 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. And state tax collections have exceeded targets over the past several months, putting the state on firmer financial footing.

“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 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 assessment fell most heavily upon companies in which employees elect to use MassHealth rather than the employer-sponsored health plan.

The Boston Globe: Employer group balks at fees to prop up MassHealth

An existing assessment called the employer medical assistance contribution (EMAC) increased 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.

Governor Baker originally proposed a $2,000-per-employee assessment upon companies at which at least 80 percent of full-time worker equivalents did not take the company’s offer of health insurance, and that did not make a minimum contribution of $4,950 annual contribution for each full-time worker. That proposal encountered significant opposition from the business community.

AIM member employers are proud to lead the nation in providing health care coverage to their employees. Sixty-five percent of Bay State companies offer health insurance coverage to their workers, compared with 56 percent of employers nationwide. A full 100 percent of Massachusetts employers with 200 or more employees offer coverage. 

Employers stand ready to work with policymakers to make long-term structural reforms to both the MassHealth program and the commercial insurance markets to make the financing of health care for Massachusetts residents sustainable.

“Eleven years ago, employers joined with doctors, hospitals, patient advocates and lawmakers to forge a health-reform law that required all parties to share the responsibility for improving access to health care. The employer community calls for that same sense of shared responsibility now to solve the MassHealth shortfall,” Regan said.

Please contact Katie Holahan, Vice President of Government Affairs at AIM, keh@aimnet.org, for updates on this issue.

Topics: Massachusetts Legislature, Health Care, Charlie Baker, Employer Health Assessment

Potential Legislative Involvement in Lockout Sets Dangerous Precedent

Posted by John Regan on Nov 2, 2018 8:34:04 AM

Proposed legislation that would penalize National Grid during the ongoing lockout of gas workers represents a troubling – and perhaps unconstitutional – foray by Beacon Hill into a private-sector labor dispute.

State House 2015The bill, called An Act relative to the employment of certain workers by National Grid, would prohibit National Grid from:

  • receiving public funds for the upgrade, repair, installation or maintenance of its gas distribution system
  • applying for funds to assist in paying the costs of gate box maintenance and improvements, or
  • receiving from the Massachusetts Department of Public Utilities any increase in its rates for consumer gas or electric distribution.

The bill would also require National Grid to continue to provide health insurance under its expired collective bargaining agreements with Steelworkers Locals 12003 and 12012-04.

The House of Representatives has admitted the bill, but no hearing has been scheduled. The measure is unlikely to pass before January since the Legislature remains in informal session when a single legislator may stop a bill.

National Grid, which provides natural-gas service to 116 Massachusetts communities, has 85 communities impacted by a lockout of 1,250 workers after the Steelworkers rejected a five-year contract offer that will boost the current average employee salary, including overtime, from $120,000 a year to $137,000.

The offer also includes a 10 percent increase in the pension plan for current employees, while new employees would be assigned to a completely company-funded defined contribution plan with a 3 to 9 percent company match, in addition to a regular 401 (k) with a company match. The company’s health insurance proposal would also introduce modest deductibles and coinsurance, which the unions currently do not pay.

Intervention in a private labor dispute is beyond the scope of the Massachusetts Legislature and sets a dangerous precedent for the ability of government to takes sides in negotiations between companies and their workers. If lawmakers interject themselves in the National Grid lockout, what would prevent them from also becoming involved in disputes involving manufacturing, service or technology companies across the commonwealth?

The bill would tread upon and regulate a sphere of private sector collective bargaining that is intended to be unregulated by the U.S. Congress.  As such, the legislation is pre-empted by the National Labor Relations Act.  Strikes and lockouts are both federally protected actions.

The federal courts have a long history of pre-empting local and state efforts to shape labor disputes. In 1986, for example, the U.S. Supreme Court pre-empted the Los Angeles City Council’s bid to condition renewal of a taxi license on the resolution of a labor dispute.

The proposal could also violate the United States Constitution because, in targeting National Grid and only National Grid, it constitutes a Bill of Attainder proscribed by Article 1 of the Constitution. 

No one likes labor disputes and AIM joins others in hoping that National Grid and its unions can find common ground soon. That hope should not, however, lead elected officials down the road of political expediency.

Topics: Massachusetts Legislature, Energy, Organized Labor

Compromise Produces Solid Legislative Scorecard

Posted by John Regan on Oct 3, 2018 1:30:00 PM

A legislative session marked by grand compromises and outside ballot initiatives gave state lawmakers generally solid grades in the 2017-2018 AIM Legislative Scorecard released today.

Scorecard2AIM publishes the Legislative Scorecard at the end of each two-year Beacon Hill session to ensure that employers 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.

The 2017-2018 legislative session was dominated by a wave of ballot initiatives that forced employers and lawmakers to forge a broad compromise establishing paid family and medical leave, increasing the minimum wage to $15 per hour and eliminating overtime pay for Sunday retail work.

AIM helped to negotiate the compromise because the proposed ballot questions on those issues were dangerous to business and almost certainly would have passed in a year of unprecedented electoral activism.

A separate potential ballot question establishing a surtax on incomes of more than $1 million died in the face of a court challenge lodged by AIM President Richard Lord and four other prominent business leaders.

And employers struggling to provide good health insurance to their employees remained frustrated at having to pay a $200 million annual assessment to close a budget gap in the MassHealth program for low-income people with no prospect of reforms.

Virtually every member of the House of Representatives earned grades of 60 percent or higher. Eight representatives topped the list at 100 percent, while 36 ended the session at 80 percent.

The ratings were based on five roll-call votes dealing with issues ranging from economic development to energy.

In the Senate, 29 of 36 members posted scores of 50 percent or better, with three senators leading the way at 75 percent. Six senators ended the session at 38 percent and three were at 25 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.

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. That structure must include a reliable and efficient transportation system.
  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.

Should the Legislature resume formal sessions before January, AIM may issue an updated Scorecard.

Topics: Massachusetts Legislature, Massachusetts senate, Massachusetts House of Representatives, Charlie Baker

Slow and Steady Approach to Clean Energy Protects Ratepayers

Posted by Robert Rio on Aug 27, 2018 8:30:00 AM

The energy bill passed in July by the Massachusetts Legislature, signed by Governor Charlie Baker and supported by AIM has been criticized by environmental advocates for not being “aggressive” enough in promoting the use of renewable energy.

WindTurbinesOceanSmallThe new law doubled the requirement for purchasing new renewable power over the next ten years and allowed the procurement of an additional 1600 MW of offshore wind, in addition to the 1600 MW of offshore wind and 1200 MW of hydro power already on tap.

It’s true that AIM urged lawmakers to take a cautious approach on the measure, especially since a sweeping 2016 energy bill that created a host of new initiatives is still being phased in.

But AIM has learned over the years that moving slowly and deliberately often leads to a better environmental and economic outcome than reacting quickly to the latest fad.   

Remember Cape wind? 

Back in 2010 the same environmental advocates and the administration of then-Governor Deval Patrick fell all over themselves supporting the Cape Wind project, even when it became obvious the development was in trouble. AIM recognized Cape Wind for what it was – a no-bid project with sky high prices that would have added hundreds of millions of dollars to 
the electric bills of Massachusetts ratepayers.

The 30 cents-per-kilowatt hour average price of Cape Wind would have become even worse than it seemed at the time because the wholesale cost of electricity has plummeted over the last eight years due to low natural-gas prices. 

Abandoning Cape Wind allowed offshore wind technology (and the law) to catch up to a place where we now have zero carbon-energy at reasonable costs. New offshore wind turbines are expected to produce electricity at less than a third of the cost of Cape Wind.   

AIM and its 4,000 member employers deserve a share of the credit for that cost shift.

It was AIM, not the environmental advocates, that ensured that the 2016 energy bill required all future offshore wind contracts to be transparent and competitively bid, because we knew competition would drive down prices. The bidding process also attracted world-renowned companies because they knew the process would be fair and open.

The 2016 law included two other important provision pushed by AIM. First, any future offshore wind contracts would have to be cheaper than any existing contract, guaranteeing lower prices in the future as technologies and experience levels become better. Second, these contracts would have to be cost-effective to the ratepayers of Massachusetts.

When Thomas Jefferson wrote the first draft of the Declaration of Independence it was widely criticized. Eighty-six changes were eventually made to that first draft, and the final document was shortened by one-fourth.   

 Our country’s founders weren’t against independence – they just wanted to make sure they got it right.

It worked backed then and we think it’s the best approach now.    

Topics: Massachusetts Legislature, Massachusetts economy, Energy

AIM Urges Governor to Sign Energy Bill, Parts of Economic Development Bill

Posted by Christopher Geehern on Aug 6, 2018 8:00:00 AM

Associated Industries of Massachusetts on Friday urged Governor Charlie Baker to sign a clean-energy bill and approve portions of a $1.2 billion economic-development bill passed by the Legislature earlier in the week.

State_House_and_One_BeaconIn a letter to the governor, AIM expressed support for key portions of the economic-development bill ranging from an apprenticeship tax credit to imposition of reasonable limits on the use of non-compete agreements. But the largest employer association in the commonwealth urged the governor to strike other elements of the bill, including a “patent-trolling” provision that could prevent companies from protecting their intellectual property.

“The patent trolling language contained in the bill pending before you is materially different from the compromise language approved by the Joint Committee on Consumer Protection and Professional Licensure committee (S.2432),” AIM President and CEO Richard C. Lord wrote to Baker.

“The changed language appeared within the final days of the legislative session and has raised significant concerns from employers who believe it may limit the ability of companies to protect intellectual property.”

The economic-development and energy measures were part of a flurry of activity as the Legislature ended the formal portion of its 2017-2018 session early Wednesday morning. Governor Baker has 10 days to sign the bills, veto them or send back amended language.

The language in the economic-development bill governing use of non-competes mirrors a compromise that AIM and other business groups reached two years ago with House Speaker Robert DeLeo. The measure limits non-competes to one year and gives employees the opportunity to consult a lawyer when signing a non-compete but does not require companies that compensate employees at the time they sign non-competes to pay them again during the restricted period.

AIM fought relentlessly for more than 11 years on behalf the vast majority of Massachusetts employers who wish to preserve the use of non-competes to protect intellectual property. The new bill accomplishes that goal.

The new energy bill authorizes an additional procurement of offshore wind power, increases the renewable portfolio standard that governs the amount of clean energy utilities must purchase, and establishes an energy storage target. The renewable portfolio standard will increase by one percent until the end of 2019, then by two percent each year until the end of 2029. It would then set the state on a track of one-percent increases each year thereafter.

The bill “is a measured approach to public policy. It changes only those programs that need changing without disrupting newly established programs before they have had a chance to work. It will reduce greenhouse-gas emissions in Massachusetts while being considerate of our high electric prices,” Lord wrote in a separate letter to the governor.

Topics: Massachusetts Legislature, Economic Development, Energy, Charlie Baker

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