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and the
Citizens Economic Research Foundation
Post Office Box 1147 ●
Marblehead, Massachusetts 01945 ●
(508)
915-3665
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
44 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Sunday, April 22, 2018
Behind the curtains maneuvering
on ballot questions
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Sometime
this spring, the Massachusetts Supreme Judicial Court will
decide whether the so-called Fair Share Amendment can appear
on the state ballot in November. The proposal would amend
the Commonwealth’s constitution, which for more than 100
years has decreed that income may be taxed only at a uniform
rate. If approved, the initiative would subject anyone with
more than $1 million in income to a surtax 4 percentage
points higher than the state’s regular income tax rate of
5.1 percent. The tax on million-dollar-plus incomes would
thus rise to 9.1 percent — a prodigious 80 percent increase
in the marginal tax rate. Left-wing advocates have long
resented the flat-rate income tax. They’ve repeatedly tried
to get voters to approve an amendment to the Massachusetts
Constitution doing away with it. Five times they have
sponsored ballot initiatives to open the door to graduated
tax rates. Five times voters have said no.
The latest effort, spearheaded by a coalition of labor
unions and progressive activists called Raise Up
Massachusetts, comes with two twists....
Neither claim holds up to scrutiny....
The Fair Share amendment may be well intended, but it
combines bad policy with bad constitutional drafting. If the
SJC doesn’t spike this initiative, the voters certainly
should.
The Boston Globe
Wednesday, April 11, 2018
SJC should spike proposed millionaires tax
By Jeff Jacoby
Democratic legislative leaders and Republican Gov.
Charlie Baker are hoping to reach deals that would keep some
prospective ballot questions from reaching voters in
November, but they're running short on time and their
bargaining clout appears limited.
One initiative petition filed by Raise Up Massachusetts,
a coalition that includes unions, community activists and
clergy, would gradually raise the state's minimum wage from
the current $11 an hour to $15 an hour by 2022. It would
also raise the hourly sub-minimum wage for tipped workers,
such as restaurant workers, from $3.75 to $9 in that same
period.
The same group has offered a second proposed ballot
question that would require all workers in the state to have
access to paid family and medical leave.
Backers say a $15 minimum wage and paid leave would help
lift many of the state's workers out of poverty and assure
they do not have to choose between their livelihoods or
caring for their families.
Several business groups, including the Massachusetts
Restaurant Association, the Retailers Association of
Massachusetts and the National Federation of Independent
Business, say the measures could put some small employers
out of business or force them to raise prices for consumers.
Enter the Legislature, which could try to fashion a
compromise and avoid an expensive campaign to woo voters.
But there is no consensus on what such an agreement might
entail.
Associated Press
Saturday, April 14, 2018
Middle ground sought on minimum wage, paid leave proposals
Unless lawmakers can work a small miracle, a referendum
question on raising the minimum wage will be on ballots in
November.
Beacon Hill has limited time to get an acceptable
compromise solution through the normal legislative process
and avoid an expensive and contentious campaign on the
issue. And the proponents of the higher minimum have the
prerogative to reject any half measure they believe falls
short of their goals.
The big player in this initiative is called Raise Up
Massachusetts, a coalition that includes unions, community
activists and clergy. Their petition would gradually raise
the state’s minimum wage from the current $11 an hour to $15
an hour by 2022. It would also raise the hourly subminimum
wage for tipped worker, such as restaurant workers, from
$3.75 to $9 in that same period....
As economist Milton Friedman said about them, “There are
always in these cases two groups of sponsors — there are the
well-meaning sponsors and there are the special interests
who are using the well-meaning sponsors as front men.”
In this case, the well-meaning sponsors are the community
activists and clergy and the special interests are the many
powerful unions (19 listed on the Raise Up Massachusetts
website) behind the measure. The Massachusetts Teachers
Association alone contributed nearly three-quarters of a
million dollars to the campaign.
Many union contracts are tied to the minimum wage so when
it goes up so do their wages. Further, a minimum wage
increase would also mean that nonunion labor would become
more expensive, allowing union labor to stay competitive.
Ultimately, this will cause more businesses to go under, but
what do the unions care if the pie has shrunk as long as
they have a bigger piece of it?
A Boston Herald editorial
Wednesday, April 18, 2018
Wage hike a bad deal
The message from House Speaker Robert DeLeo and Senate
President Harriette Chandler was clear: They wanted the
business, labor, and progressive leaders they had called to
the State House to solve a multi-pronged problem for them —
a problem that could both blow a hole in the state’s budget
and, some fear, hurt its business climate.
In short, the two legislative leaders tasked the group
with hammering out a compromise that lawmakers could pass,
thereby derailing three of the questions headed toward the
November ballot. That trio: a measure to hike the minimum
wage to $15 an hour by 2022, another to require
Massachusetts companies to offer 16 weeks of paid family
leave and 26 weeks of medical leave, and a third to cut the
state sales tax from 6.25 percent to 5 percent. Estimates of
the lost revenue of the last are $1.2 to $1.3 billion.
All this plays out against the backdrop of another matter
that may be on the ballot: a proposed constitutional
amendment that would raise $1.9 billion or so by imposing a
4 percent income tax surtax on earnings above $1 million a
year.
In the room last week: Deb Fastino and Lew Finfer,
cochairs of Raise Up Massachusetts, the
union-progressive-religious coalition behind the three
ballot questions, and Tim Foley and Chris Condon from the
Service Employees International Union, a crucial part of
that coalition; Jon Hurst, president of the Retailers
Association of Massachusetts; John Regan, executive vice
president for government affairs at the Associated
Industries of Massachusetts; J.D. Chesloff, executive
director of the Massachusetts Business Roundtable; and
Christopher Carlozzi, Massachusetts director of the National
Federation of Independent Business; plus a handful of
legislators, including House majority leader Ron Mariano.
Several political realities will likely set the contours
for the negotiations.
First, Hurst and his retailers have considerable leverage
here, since it’s their sales-tax-cut question that spurred
the two legislative leaders to set these negotiations in
motion. Why? Because if that question passes, and the
millionaires tax is knocked off the ballot by the legal
challenge currently before the Supreme Judicial Court (or if
it stays on the ballot but loses), state coffers would be
$1.2 billion or so poorer.
Second, if the millionaires tax survives this court
challenge, it’s politically easier for the Retailers
Association of Massachusetts to push ahead with its sales
tax cut. If both pass, state government would still see a
net revenue gain of at least $600 million, while the
association would achieve significant sales tax relief.
Which means that if the SJC keeps the millionaires tax on
the ballot, the retailers group could then demand more in
return for abandoning its ballot question. Contrariwise, if
the SJC smites the millionaires tax, the retailers,
frustrated but responsible political players, would likely
be more amenable to cutting a deal.
The Boston Globe
Thursday, April 19, 2018
Behind the ballot-question scene on Beacon Hill
By Scot Lehigh
The downward spiral in state matching funds for
communities that have agreed to local tax hikes to pay for
Community Preservation Act investments has grown so severe
that state lawmakers are now pushing for a deeds fee
increase.
According to the Community Preservation Coalition, the
base state match was 17.2 percent last year and the
Department of Revenue is now projecting it will fall to 11.5
percent when the state distributes CPA Trust Fund revenues
in November....
The dwindling state matching funds, even in the face of
record state spending, have chipped away at the idea that
the program is a partnership, with local voters in recent
years shouldering the bulk of the program costs.
State House News Service
Friday, April 20, 2018
Support for deeds fee increase growing in House
House Session —
Thursday, April 19, 2018
The Massachusetts House on Thursday gave its
initial approval for "Roadrunner," the Jonathan Richman and
the Modern Lovers ode to driving on Route 128 with music
blaring, to be the official rock song of the commonwealth.
The push to enshrine the song about driving "faster miles an
hour" as the official rock song of Massachusetts began with
then-Rep. Marty Walsh. Despite fans turning out to State
House hearings to push for the Modern Lovers song, lawmakers
have never brought the bill to the floor of either branch
for a vote.
The House also gave its initial approval
Thursday to a bill that would make Bell's Seasoning
— a mix of rosemary, oregano,
sage, ginger, marjoram, thyme and pepper produced by a
Weymouth-based company — the
official seasoning of the commonwealth.
The House also advanced legislation of local
importance to Abington, Ayer, Haverhill, Hopkinton and
Westminster.
The House will meet next on Monday in a full
formal session — the start of
House budget week.
State House News Service
Thursday, April 19, 2018
House Session
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Chip Ford's CLT
Commentary
There's not a whole lot going on in plain
sight on Beacon Hill, but behind the curtains there's a lot
of maneuvering over four big ballot questions with
interlocking consequences. The multiple win-lose
potential scenarios are daunting, but if The Takers
should prevail over The Providers of all government
spending there won't be enough moving vans and U-Haul
trucks available to handle the mass exodus out of this
state.
That's not idle speculation or conjecture.
It is what is and has been happening in California as more
and more of its beleaguered residents and businesses are
bailing out as fast as they can:
The
San Jose Mercury News
March 8, 2018
U-Haul prices reflect growing push to leave Silicon
Valley
By Marisa Kendall
Highlighting the recent push to flee Silicon Valley,
moving-truck rental company U-Haul charges much
higher rates — in some cases more than 10 times
higher — for travelers leaving the Bay Area,
compared to those entering it.
It’s simple supply and demand, says Mark Perry, a
finance and economics professor at the University of
Michigan and scholar with the American Enterprise
Institute think tank. As the Bay Area exodus
continues, U-Haul is watching its trucks drive out
of the region and not return — leaving the company
with a shortage in the area, Perry wrote in a blog
post. So the company is raising and lowering its
prices accordingly.
“They’re almost paying people to get the trucks back
into San Jose,” he said in an interview. That
suggests “there’s a huge outflow, and a lot of
outbound moves leaving the area, and very few moves
coming in.”
Moving from San Jose to Las Vegas, Nevada? You’ll
shell out $945 to rent a 10-foot U-Haul truck, and
$1,990 to rent a 26-foot truck, for up to four days,
according to the U-Haul website. But make the move
in the other direction, and you’ll pay $119 for a
10-foot truck and $132 for a 26-foot truck....
Moving company North American Van Lines, which
publishes an annual report on migration trends, last
year found California was one of the top five states
people left — a distinction the state has never had
before.
What's causing the mass exodus from the
once-known-as "Golden State"? The motivation in large
part is the cost of doing business and the overburden of
taxation.
In May of 2014 the American Enterprise
Institute reported ("The
California exodus to Texas is reflected in market-based,
one-way U-Haul truck rental prices," by Mark J. Perry):
“When
you look at the whole package, it’s difficult to be
a business here,” lamented Torrance (Calif.) Mayor
Frank Scotto, whose community on the edge of the
Pacific will suffer as the jobs migrate to Texas.
The Torrance mayor is right about the difficulty of
being a business in California. According to Forbes,
California ranks as the 12th worst state in the
country for doing business, while Texas ranks as the
7th best state for business overall, and No. 1 for
“economic climate.” The Tax Foundation ranks Texas
No. 11 for state tax climate, while California ranks
second-worst in the country at No. 49.
An interesting and revealing market-based measure of
the relative attractiveness (and migration patterns)
of the two states is to compare the cost of a
one-way U-Haul truck going from California to Texas
vs. the cost going in the other direction.
The cost of a one-way U-Haul truck leaving
California for Texas is more than twice the cost to
rent that same truck going from Texas to California,
suggesting that there are twice as many trucks and
people leaving California for Texas than vice-versa.
Based on the huge difference in demand for one-way
truck rentals, there is a premium of more than 100%
for Californians to rent trucks going to Texas, and
large discounts for trucks going in the opposite
direction to California. U-Haul’s market-based
pricing seems to confirm the California exodus to
Texas of jobs, people and businesses like Toyota and
Occidental.
This situation will soon be coming to our
state if The Takers prevail in November
— and Massachusetts doesn't
even have California's famous climate to fall back
on. Massachusetts — "The Pay
State" — has been closing in on capturing
California's long-held title as "The Land of Fruits and
Nuts." Passage of The Takers' troika of
confiscatory ballot questions in November could well put
this commonwealth over the top and beyond reclamation.
Even our state legislators
— if you can believe it — can
see the headlight of this speeding freight train bearing
down the tracks at us. But The Takers are bent
on no compromise, no backing down, on irrevocably
transforming Massachusetts.
"We're not interested in making a concession
that hurts workers or leaves anyone behind on these issues,"
said Andrew Farnitano, a spokesman for The Takers
coalition.
If The Takers and their
multi-millions of special interest unions' campaign dollars
prevail in November, when the working millionaires run for
the borders, when large businesses relocate to elsewhere
with more hospitable business climates, when mom-and-pop
shops start shuttering their small businesses and adding to
the unemployment rolls, when the rest of us must pay more
when we shop locally, when we need to make up the taxes
those banished victims are no longer paying but the state
keeps spending at the rate of an additional billion dollars
every year — then we too may
soon be looking for one of those expensive and rare moving
vans to join the exodus.
We must make sure this never happens in
Massachusetts.
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Chip Ford
Executive Director |
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The Boston Globe
Wednesday, April 11, 2018
SJC should spike proposed millionaires tax
By Jeff Jacoby
Sometime this spring, the Massachusetts Supreme
Judicial Court will decide whether the so-called
Fair Share Amendment can appear on the state
ballot in November. The proposal would amend the
Commonwealth’s constitution, which for more than
100 years has decreed that income may be taxed
only at a uniform rate. If approved, the
initiative would subject anyone with more than
$1 million in income to a surtax 4 percentage
points higher than the state’s regular income
tax rate of 5.1 percent. The tax on
million-dollar-plus incomes would thus rise to
9.1 percent — a prodigious 80 percent increase
in the marginal tax rate.
Left-wing advocates have long resented the
flat-rate income tax. They’ve repeatedly tried
to get voters to approve an amendment to the
Massachusetts Constitution doing away with it.
Five times they have sponsored ballot
initiatives to open the door to graduated tax
rates. Five times voters have said no.
The latest effort, spearheaded by a coalition of
labor unions and progressive activists called
Raise Up Massachusetts, comes with two twists.
One is a lament about inequality. The coalition
decries the fact that the richest Massachusetts
households pay a smaller share of their income
in state and local taxes than other households
do. While Bay State tax filers in the top 1
percent expend less than 5 percent of their
income on state and local taxes, those in the
bottom quintile pay more than 10 percent. In the
face of such an unfair and regressive tax
system, argue the amendment’s drafters, boosting
the income tax rate paid by the very wealthy is
a matter of simple fairness.
The other twist is an assurance that Beacon Hill
won’t have carte blanche when it comes to
spending the annual $1.9 billion the new surtax
is optimistically projected to raise. The
Legislature will instead be restricted from
using the funds for anything other than what
Raise Up Massachusetts calls “much-needed
investments in transportation and public
education.”
Neither claim holds up to scrutiny.
For starters, the Massachusetts income tax is
anything but regressive. Households making more
than $1 million collect 19 percent of all the
income in Massachusetts — but they fork over 29
percent of all the income tax paid to the state.
Households making $75,000 or less, by contrast,
account for 23 percent of all income earned in
Massachusetts, but generate merely 7 percent of
the income tax revenue. By any yardstick, that’s
a highly progressive arrangement.
Without violating the constitutional requirement
of a uniform tax rate, the Legislature has
fashioned an income tax burden that falls much
more steeply on the wealthy. Thanks to various
deductions and credits, taxpayers in the lowest
quintile pay an effective income tax rate of
only 0.8 percent. Those in the highest quintile
pay an effective rate of 4.2 percent — more than
five times greater.
The regressive tax system that critics bewail is
a function entirely of sales and property
levies. If liberal activists want to lighten a
tax bite that disproportionately affects those
at the bottom of the economic ladder, those are
the taxes they should be targeting. But skewing
an already progressive income tax system even
more sharply against the wealthy is the very
opposite of a “Fair Share” reform.
Equally misleading is the suggestion that
revenue from a millionaires tax will mean more
funding for education and transportation. True,
the proposed amendment declares that the money
“shall be expended” only for those purposes. But
Beacon Hill already expends far more on
education and transportation than the $1.9
billion the surtax will supposedly raise. The
MBTA budget alone is about $2 billion. In the
most recent state budget, $7.1 billion goes for
education.
If the amendment passes, the Legislature will be
under no obligation to change anything. The
measure doesn’t say that spending on education
and transportation must be increased. It doesn’t
say that spending may not be decreased. It says
only that revenue from the surtax must not be
used for any other purpose. Since dollars are
fungible, lawmakers could effortlessly meet that
obligation by affirming that $1.9 billion of the
education or transportation budget had been
funded through the new tax.
The Fair Share amendment may be well intended,
but it combines bad policy with bad
constitutional drafting. If the SJC doesn’t
spike this initiative, the voters certainly
should.
Associated Press
Saturday, April 14, 2018
Middle ground sought on minimum wage, paid leave
proposals
BOSTON — Democratic legislative leaders and
Republican Gov. Charlie Baker are hoping to
reach deals that would keep some prospective
ballot questions from reaching voters in
November, but they're running short on time and
their bargaining clout appears limited.
One initiative petition filed by Raise Up
Massachusetts, a coalition that includes unions,
community activists and clergy, would gradually
raise the state's minimum wage from the current
$11 an hour to $15 an hour by 2022. It would
also raise the hourly sub-minimum wage for
tipped workers, such as restaurant workers, from
$3.75 to $9 in that same period.
The same group has offered a second proposed
ballot question that would require all workers
in the state to have access to paid family and
medical leave.
Backers say a $15 minimum wage and paid leave
would help lift many of the state's workers out
of poverty and assure they do not have to choose
between their livelihoods or caring for their
families.
Several business groups, including the
Massachusetts Restaurant Association, the
Retailers Association of Massachusetts and the
National Federation of Independent Business, say
the measures could put some small employers out
of business or force them to raise prices for
consumers.
Enter the Legislature, which could try to
fashion a compromise and avoid an expensive
campaign to woo voters. But there is no
consensus on what such an agreement might
entail.
Lawmakers have only until the end of the month
to act on the petitions, after which the
sponsors may begin collecting the additional
10,792 signatures for each measure to secure a
spot on the ballot. Negotiations could continue
beyond May 1, but once the additional signatures
are certified in early July there would be no
legal means for removing the questions from the
November ballot, according to the Secretary of
State's office.
Both measures are currently before the
Legislature's Labor and Workforce Development
Committee. Members of both panels told a recent
gathering of small business owners in Boston
they were concerned about the economic
ramifications of the proposed ballot questions
and would prefer compromise.
"We are listening to you because we are
concerned about the minimum wage going too high
and the tipped minimum and what paid family and
medical leave would do," said Democrat Jason
Lewis, the Senate chair of the committee.
But lawmakers acknowledged they have little
power to impose any middle ground, as Raise Up
Massachusetts could simply reject any changes to
the proposals.
"At the end of the day we don't hold the cards —
they do," said Lewis. "And if it isn't an
agreement they find acceptable they will go to
the ballot."
Baker also told the small business owners that
he hoped the minimum wage and paid leave issues
would be settled "in the context of the
legislative process," though the governor has
yet to formally take a position on either
proposal.
Raise Up Massachusetts said it hoped the
Legislature would approve the proposals in their
current form or with minor technical revisions
but appeared reluctant to cut any deal resulting
in substantial changes.
"We're not interested in making a concession
that hurts workers or leaves anyone behind on
these issues," said Andrew Farnitano, a
spokesman for the coalition.
Retailers like Neil Abramson, chief financial
officer of a company that operates several
consignment stores in Leominster, called for
lawmakers to find a "reasonable solution."
Instead of helping workers, he feared the cost
of increasing the minimum wage could force the
company to trim hours or staff.
Douglas Bacon, president of Red Paint
Hospitality Group, owners of several
neighborhood bars and restaurants in Boston,
said the proposed increase in the minimum wage
for tipped employees would be "devastating" for
small eateries.
"We will have to raise our prices dramatically
to cover that 150 percent increase," he said.
But supporters of the minimum wage and family
leave measures say the concerns of business
owners are overstated. They also point to
Business for a Fair Minimum Wage, a national
group of employers that has supported efforts to
raise wages for the lowest-paid workers in
several states.
The Boston Herald
Wednesday, April 18, 2018
A Boston Herald editorial
Wage hike a bad deal
Unless lawmakers can work a small miracle, a
referendum question on raising the minimum wage
will be on ballots in November.
Beacon Hill has limited time to get an
acceptable compromise solution through the
normal legislative process and avoid an
expensive and contentious campaign on the issue.
And the proponents of the higher minimum have
the prerogative to reject any half measure they
believe falls short of their goals.
The big player in this initiative is called
Raise Up Massachusetts, a coalition that
includes unions, community activists and clergy.
Their petition would gradually raise the state’s
minimum wage from the current $11 an hour to $15
an hour by 2022. It would also raise the hourly
subminimum wage for tipped worker, such as
restaurant workers, from $3.75 to $9 in that
same period.
On their website, they describe themselves as
“committed to building an economy that works for
all of us. An economy that invests in families,
gives everyone the opportunity to succeed, and
creates broadly shared prosperity.”
At a glance, a minimum wage hike seems like a
compassionate measure.
For our example, fast food monolith ACME Burger
Co. pays cashier Sheila a paltry $11 per hour to
smile, take orders and maybe upsell us on
cookies. Sheila would technically be considered
a low-skilled worker but she’s a solid cashier.
Government comes in after being given a mandate
from voters to create some “broadly shared
prosperity” and ACME must now pay her $15 an
hour.
Excellent. The economy is working for all now,
right?
Wrong.
ACME Burger Co. will most likely pay for this
wage hike by cutting back on Sheila’s hours or
laying off one of her co-workers, and in the
meantime, they will invest in the technology to
replace as many workers as possible. This is not
in the far-distant future. Some McDonald’s
franchises and other big chains already feature
self-service kiosks for ordering right here in
Massachusetts, and Amazon, which now owns Whole
Foods, is experimenting with entirely
cashierless grocery stores.
But of course, the neighborhood mom-and-pop
shops won’t be able to afford that kind of
infrastructure, so what will they do? They
cannot just keep raising prices and hope that
consumers will choose to absorb the costs rather
than shopping at bigger competitors or online
retailers. Many will probably face the choice of
layoffs or closing their businesses altogether.
So while Raise Up Massachusetts says that they
want to “make sure workers can earn a living
wage of $15 an hour,” what they will really
achieve is to make sure workers won’t be allowed
to earn less than that. And once employers
adjust or close up shop accordingly, quite a few
workers may find that they are left out of the
promised prosperity.
The compulsion to help someone like Sheila is
laudable but raising the minimum wage is much
more likely to result in Sheilas everywhere
being shut out of the workforce.
The forces behind the minimum wage hike are
powerful and it is helpful to know their
motivations.
As economist Milton Friedman said about them,
“There are always in these cases two groups of
sponsors — there are the well-meaning sponsors
and there are the special interests who are
using the well-meaning sponsors as front men.”
In this case, the well-meaning sponsors are the
community activists and clergy and the special
interests are the many powerful unions (19
listed on the Raise Up Massachusetts website)
behind the measure. The Massachusetts Teachers
Association alone contributed nearly
three-quarters of a million dollars to the
campaign.
Many union contracts are tied to the minimum
wage so when it goes up so do their wages.
Further, a minimum wage increase would also mean
that nonunion labor would become more expensive,
allowing union labor to stay competitive.
Ultimately, this will cause more businesses to
go under, but what do the unions care if the pie
has shrunk as long as they have a bigger piece
of it?
Ultimately the endeavor is fruitless for the
well-meaning, a temporary inconvenience for big
corporations, unworkable for small businesses,
bountiful for the unions, and terrible for
Sheila.
The Boston Globe
Thursday, April 19, 2018
Behind the ballot-question scene on Beacon Hill
By Scot Lehigh
The message from House Speaker Robert DeLeo and
Senate President Harriette Chandler was clear:
They wanted the business, labor, and progressive
leaders they had called to the State House to
solve a multi-pronged problem for them — a
problem that could both blow a hole in the
state’s budget and, some fear, hurt its business
climate.
In short, the two legislative leaders tasked the
group with hammering out a compromise that
lawmakers could pass, thereby derailing three of
the questions headed toward the November ballot.
That trio: a measure to hike the minimum wage to
$15 an hour by 2022, another to require
Massachusetts companies to offer 16 weeks of
paid family leave and 26 weeks of medical leave,
and a third to cut the state sales tax from 6.25
percent to 5 percent. Estimates of the lost
revenue of the last are $1.2 to $1.3 billion.
All this plays out against the backdrop of
another matter that may be on the ballot: a
proposed constitutional amendment that would
raise $1.9 billion or so by imposing a 4 percent
income tax surtax on earnings above $1 million a
year.
In the room last week: Deb Fastino and Lew
Finfer, cochairs of Raise Up Massachusetts, the
union-progressive-religious coalition behind the
three ballot questions, and Tim Foley and Chris
Condon from the Service Employees International
Union, a crucial part of that coalition; Jon
Hurst, president of the Retailers Association of
Massachusetts; John Regan, executive vice
president for government affairs at the
Associated Industries of Massachusetts; J.D.
Chesloff, executive director of the
Massachusetts Business Roundtable; and
Christopher Carlozzi, Massachusetts director of
the National Federation of Independent Business;
plus a handful of legislators, including House
majority leader Ron Mariano.
Several political realities will likely set the
contours for the negotiations.
First, Hurst and his retailers have considerable
leverage here, since it’s their sales-tax-cut
question that spurred the two legislative
leaders to set these negotiations in motion.
Why? Because if that question passes, and the
millionaires tax is knocked off the ballot by
the legal challenge currently before the Supreme
Judicial Court (or if it stays on the ballot but
loses), state coffers would be $1.2 billion or
so poorer
Second, if the millionaires tax survives this
court challenge, it’s politically easier for the
Retailers Association of Massachusetts to push
ahead with its sales tax cut. If both pass,
state government would still see a net revenue
gain of at least $600 million, while the
association would achieve significant sales tax
relief. Which means that if the SJC keeps the
millionaires tax on the ballot, the retailers
group could then demand more in return for
abandoning its ballot question. Contrariwise, if
the SJC smites the millionaires tax, the
retailers, frustrated but responsible political
players, would likely be more amenable to
cutting a deal.
The retailers association’s ballot question has
given it real clout — clout it isn’t likely to
bargain away cheaply, particularly since Hurst
thinks the retail sector’s concerns too often
get short shrift on Beacon Hill. Indeed, he says
the impetus for the ballot question came when,
in the space of a few weeks in 2016, lawmakers
exempted fulfillment centers (things like
Amazon’s Fall River distribution warehouse) but
not retailers from paying time and a half for
Sunday and holiday work, and then spurned the
association’s request to continue the
sales-tax-free summer weekend that retailers
have used to promote sales.
The retailers’ must-have conditions for a deal,
Hurst says, are eliminating time and a half pay
on Sunday and holidays — something in effect
only here and in Rhode Island — and at least
some sales tax relief. Labor is said to be
adamant about the minimum wage hike, but open to
a (time-limited) training wage and willing to
negotiate on Sunday and holiday time and a half.
Other business groups are more concerned about
the costs of the paid leave ballot question than
the prospect of another sizable minimum wage
hike.
So the players are now at the table, preparing
for a political poker game. It will begin in
earnest as soon as the Supreme Judicial Court’s
ruling on the millionaires tax clarifies just
what the stakes will be.
State House News Service
Friday, April 20, 2018
Support for deeds fee increase growing in House
By Michael P. Norton
The downward spiral in state matching funds for
communities that have agreed to local tax hikes
to pay for Community Preservation Act
investments has grown so severe that state
lawmakers are now pushing for a deeds fee
increase.
According to the Community Preservation
Coalition, the base state match was 17.2 percent
last year and the Department of Revenue is now
projecting it will fall to 11.5 percent when the
state distributes CPA Trust Fund revenues in
November.
With support from House Minority Leader Brad
Jones, 70 House members have signed on to a
budget amendment (#466) that Rep. Aaron
Michlewitz and Kate Hogan plan to offer during
next week's House budget debate that would
increase deed fees to make more state money
available for the CPA. Other Republicans who
have signed on to support the fee amendment are
Reps. Angelo D'Emilia, Timothy Whelan, William
Crocker Jr., and Matthew Moratore. Independents
Susannah Whipps and Solomon Goldstein-Rose are
also cosponsors.
Voters in Boston, Springfield, Pittsfield,
Holyoke, Chelsea and Watertown recently adopted
the CPA, agreeing to local tax increases in
exchange for matching funds from the state to
finance local housing, historic preservation and
open space projects. The dwindling state
matching funds, even in the face of record state
spending, have chipped away at the idea that the
program is a partnership, with local voters in
recent years shouldering the bulk of the program
costs. |
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Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
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