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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, July 8, 2018
Record high revenues
demand higher
taxes ― what?
|
Marblehead's Chip Ford, executive
director of Citizens for Limited Taxation, has taken
a brief respite from his advocacy on behalf of taxpayers to
seek "greener pastures" elsewhere. In a
letter to members earlier this month he wrote: "As I've
reported a few times recently, support for CLT has been
steadily declining. ... Upon my return from scouting for a
less abusive and oppressive, more affordable place to
relocate (they are multitude), CLT will be mailing out to
you its last fundraising request package. The response to it
will determine whether CLT will be able to continue through
the November election, or instead will just fade away as
operating funds run out. I'd like to see CLT fight on
through the coming election ― a
final crusade on behalf of taxpayers ―
but even if we somehow manage to stretch CLT's life-support
through then, it'll be game-over, the end of an era."
He continues: "There is simply not enough support anymore
for the sustained effort required to defend Massachusetts
taxpayers. Too few and getting fewer are carrying the burden
for far too many who have taken a free ride for all these
decades. Soon all will need to individually fend for
themselves, without CLT I don't want be here when that
happens. That's why I'm looking to bail out now."
Without watchdogs like CLT, taxpayers had better get used to
funding exorbitant items like the latest Methuen police
contract that, according to our sister paper, The
Eagle-Tribune, will pay captains well in excess of
$400,000 a year. The Salem News
Friday, June 29, 2018
Weekly Column
By Nelson Benton, Editor Emeritus
In a major freedom of speech decision, the U.S. Supreme
Court on Wednesday morning dealt a blow to public sector
labor unions, ruling that public employees cannot be forced
to pay fees or dues to a union to which he or she does not
belong.
The high court handed down its 5-4 ruling in Janus v.
American Federation of State, County, and Municipal Employee
on the final day of its session, a ruling in which new
Justice Neil Gorsuch appears to have been the deciding
vote....
The case challenged compulsory payment of union fees for
public sector employees, regardless of whether they belong
to the union. It revolved around Mark Janus, an employee of
the state of Illinois who disagreed with the public sector
union's positions and refused to join.
"The First Amendment is violated when money is taken from
nonconsenting employees for a public-sector union; employees
must choose to support the union before anything is taken
from them," Justice Samuel Alito wrote for the majority.
"Accordingly, neither an agency fee nor any other form of
payment to a public-sector union may be deducted from an
employee, nor may any other attempt be made to collect such
a payment, unless the employee affirmatively consents to
pay." ...
"The Supreme Court's decision in Janus v. American
Federation is a major win for the small business community,"
Karen Harned, executive director of the NFIB Small Business
Legal Center, said in a statement. "For too long dissenting
public employees have been forced to fund public employee
unions that they do not agree with." ...
The American Legislative Exchange Council, an
organization that includes nearly a quarter of state
legislators across the country, called Wednesday a great day
for freedom.
"The Supreme Court finally recognized that it is
unconstitutional to force public employees to join or pay
dues to a union as a condition of employment," State Rep.
Ron Hood of Ohio said in a statement....
The Pioneer Institute applauded the court's decision and
predicted that it will have a "significant impact" on union
political activity in Massachusetts.
"The ruling will have significant impact in
Massachusetts, where 18 of the 20 political action
committees that contributed the most to candidates for state
and county offices were labor organizations, and 85 percent
of all PAC contributions went to Democratic candidates,"
Pioneer Institute wrote, citing data from the Office of
Campaign and Political Finance. "Janus will likely result in
public employees having to earn membership, which translates
to focusing more on issues like pay and working conditions
that members care most about, and less on political
activity."
Attorney General Maura Healey said the Supreme Court
"turned its back on millions of Americans who keep our
communities safe, educate our children, and care for our
most vulnerable populations."
State House News Service
Wednesday, June 27, 2018
Free speech ruling seen as blow to Massachusetts unions
As lawmakers mull the impacts of a U.S. Supreme Court
ruling seen as a devastating blow to public sector labor
unions, the Massachusetts House is hoping labor leaders will
suggest ways the Legislature can respond and soften the
blow....
House Speaker Robert DeLeo told the Democratic Party's
convention earlier this month that House was prepared to
move quickly to make sure "unions can remain strong" if the
court did not side with unions in the Janus case.
The speaker said Wednesday that he thinks it is the
"overwhelming feeling of the House that unions play an
important part in terms of our workplace and that any issues
that come up that could limit the role that they play could
be detrimental to our economy."
DeLeo told reporters Wednesday that he hopes to bring a
bill responding to the Janus ruling to the House floor for a
vote before formal sessions end on July 31. What that bill
might look like, he said, has not yet been determined.
"Right now, we're talking to some of the unions. We're
looking more to see if there is a consensus among all of
them or at least some of them, so there may be some
legislation before we break to address this issue," DeLeo
said. He added, "I think there might be some various
opinions in terms of what the best avenues may be to take so
we're trying to wait and see if they can come up with some
type of consensus that we could support."
The Senate is also looking to respond to the Janus
decision before the end of July. Scott Zoback, a spokesman
for Senate President Harriette Chandler, said "the Senate
plans on working with impacted parties, as well as the
House, to address this anti-worker decision."
State House News Service
Wednesday, June 27, 2018
DeLeo invites unions to offer legislative response to Janus
ruling
Gov. Charlie Baker signed a new law Thursday that could
affect virtually every resident of Massachusetts, a week
after lawmakers settled months of negotiations over proposed
ballot questions that could have had dramatic consequences
for the state's finances and economy.
Legislators scrambled to assemble the so-called grand
bargain bill after interest groups, fed up with inaction on
Beacon Hill, initiated ballot drives and forced legislative
leaders to engage with them at the negotiating table, or
risk having major policies written into law by voters.
Under the law, the hourly minimum wage will rise from $11
to $15 over a five-year period. During those same five
years, time-and-a-half pay for workers on Sundays and
holidays will be phased out. An $800 million paid family and
medical leave program overseen by the state government and
backed by a payroll tax will be launched so workers can more
easily take care of themselves and their families without
facing fiscal crises.
And every August beginning in 2019, the state will
suspend the 6.25 percent sales tax on many purchases for a
weekend....
The governor was largely a bystander in the negotiations
and declined to stake out positions on the issues while
encouraging legislators to work on alternatives to the
ballot questions. By signing the bill into law, Baker
registered his support for its contents.
"The product of this is a far better product for the
commonwealth than each of these as standalone entities would
have been for Massachusetts, which is why I'm signing it,"
Baker said Thursday.
The Republican governor, who is up for reelection this
fall, has repeatedly voiced a general opposition to
broad-based tax increases but in signing the compromise bill
Thursday he gave the green light to a new payroll tax
expected to pull in about $800 million.
"I guess the way I think about this is there's a benefit
that's attached to this thing, and that benefit is a paid
family leave provision that did not previously exist in
state law," Baker said Monday when asked if a no-new-taxes
stance would prevent him from signing the bill....
Thursday's signing of the grand bargain further
establishes Raise Up as a force on Beacon Hill, having
successfully fought for the last minimum wage increase, an
earned sick time ballot law and now having secured another
minimum wage increase and the establishment of the paid
leave program.
State House News Service
Thursday, June 28, 2018
Baker signs law raising minimum wage, creating paid leave
program
Gov. Charlie Baker signed into law a bill that would hike
the minimum wage from $11 to $15 over five years; increase
the wage for tipped workers from $3.75 to $6.75 over five
years; phase out over five years extra pay for employees who
work on Sundays and holidays; institute a permanent sales
tax holiday on a weekend every August; and establish a $1
billion family and medical leave program funded by a payroll
tax paid for by both employers and employees.
Dubbed the “Grand Bargain Bill” by some supporters and
“Grand Theft Bill” by some opponents, the compromise is in
response to the likely successful effort by the Raise Up
Massachusetts coalition to get the minimum wage and paid
leave questions on the November ballot; and the likely
success of the Retailers Association of Massachusetts (RAM)
to get a question on the ballot to reduce the sales tax from
6.25 percent to 5 percent....
“Gov. Baker can try to spin this so-called ‘grand
bargain’ any way he wishes, but a new $800 million payroll
tax is a huge new tax,” said Chip Ford, executive
director of Citizens for Limited Taxation.
“Unfortunately for taxpayers, Charlie Baker is the best
Democrat we can hope to elect from the field running for
governor. He’s not as conservative as Democrat Ed King was,
but he’s head and shoulders above Mike Dukakis.”
Beacon Hill Roll Call
Week of June 25-29, 2018
Raise minimum wage, family and medical leave and sales tax
holiday (H 4640)
By Bob Katzen
Yesterday, Gov. Charlie Baker signed the “grand bargain”
bill into law. It increases the minimum wage to $15 an hour
by 2023, requires paid leave for workers starting in 2021
and establishes an annual sales tax holiday each August.
The bill is as warm and fuzzy as they come but will
ultimately hurt businesses and subsequently the residents of
the commonwealth it was designed to help....
While a sales tax holiday is a good thing, cutting the
state sales tax is a much better thing. But no matter. Pols
on Beacon Hill fended off some dreaded ballot questions and
the hard-working taxpayers of the commonwealth are now left
with no line of defense — not the state Senate, the House or
the governor’s office....
Last year, the state Legislature voted themselves a
handsome pay raise. This week the mayor of Boston as well as
the City Council did the same. Taxpayers are made to hand
over their hard-earned dollars to improve the standard of
living for their elected representatives again and again.
When do they get some relief? One weekend in the summer?
We deserve better.
A Boston Herald editorial
Friday, June 29, 2018
New law no bargain
Capital gains tax collections have been pouring into
state coffers at such a high volume that it's triggered a
$290 million deposit into the state's rainy day fund, and a
second large automatic deposit appears likely.
In a letter to Comptroller Thomas Shack on Thursday,
Revenue Commissioner Christopher Harding said third quarter
capital gains income of $673 million had pushed such
receipts up to $1.49 billion over three quarters, exceeding
a $1.169 billion threshold. State finance law requires that
capital gains receipts over that threshold be automatically
transferred to the stabilization fund, and Harding told
Shack his letter certifies that required transfer....
The deposit will push the state's rainy day fund balance
above $1.6 billion, which Baker administration officials
said represents an increase of about $500 million since the
governor took office in 2015.
State House News Service
Thursday, June 28, 2018
Cap gains windfall triggers $290 Mil rainy day fund deposit,
and counting
On Beacon Hill, they call it the "grand
bargain" — the new law that will gradually increase the
state's minimum wage to $15 an hour, require paid family and
medical leave for workers and mandate a sales tax holiday
every August.
It's also the mother of political deals
involving the Republican governor, the Democratic leaders of
the Massachusetts House and Senate and representatives of
labor unions and business groups.
The ultimate goal? Making sure voters didn't
get the chance to weigh in on a raft of proposed ballot
questions in November, including a question that would have
lowered the state sales tax from 6.25 percent to 5 percent.
The negotiators feared that if voters backed
the tax cut — and polls suggested they would — the loss of
revenue would leave a massive hole in the state budget of
about $1.2 billion a year.
That fear took on new urgency after the
state's highest court tossed out another question that would
have created an amendment to the state constitution that
would have imposed a 4 percent surtax on any portion of an
individual's annual income that exceeded $1 million....
With the so-called "millionaire tax" off the
table, Beacon Hill leaders ramped up their efforts to cut a
deal to make sure voters didn't get a chance to approve the
sales tax cut.
The "grand bargain" talks put Gov. Charlie
Baker — no friend of tax hikes and an avowed supporter of
the ballot question process — in the awkward position of
defending a deal that aimed to kill a significant tax cut by
blocking a series of ballot questions from reaching voters.
Associated Press
Sunday, July 1, 2018
"Grand bargain" keeps voters from deciding ballot questions
The Massachusetts Supreme Judicial Court’s
recent rebuke to supporters of a graduated income tax
amendment showed how progressives failed to understand the
checks and balances of the state’s constitution —conceived
admirably by John Adams and amended narrowly and —perhaps
ironically —by turn-of-the-20th-century Progressives.
The ruling was a stinging defeat for Raise
Up Massachusetts, the union-backed coalition that
spearheaded the petition drive, and state Attorney General
Maura Healey, who certified the petition last year. Healey,
and others, made clear that, even in defeat, they intend to
pursue higher taxes.
Both the Attorney General and her allies
expected the court to overlook the niceties of
constitutional law in favor of vague sentiments such as
fixing potholes and reducing income inequality.
That impulse proved to be the undoing of the
amendment, long in the making and equally long in raising
expectations for spending sprees....
For progressives, the state constitution has
stood in their way for too long. The Millionaires Tax legal
defeat last week was just a bump in the road.
The New Boston Post
Sunday, July 1, 2018
Progressives Logroll Themselves Out of a Pro-Tax
Constitutional Amendment
But For How Long?
By Frank Conte
Projecting that state tax collections will
surpass estimates for the year that just ended by $1.2
billion, the Baker administration is forecasting a surplus
of $150 million to $200 million in funds that are not yet
earmarked for any purpose and signaling to the Legislature
that it may have up to $200 million in additional money to
play with for the fiscal 2019 budget that is nearly a week
overdue.
The new revenue forecasts come as the House
and Senate are locked in increasingly antagonistic
negotiations over a budget that is expected to exceed $41
billion for the fiscal year that began on Sunday, July 1. In
a reversal of the trend over the past couple years that have
seen tax revenues drop off each spring, forcing the state to
retreat from spending plans, the state is suddenly flush
with cash and now may face decisions about how to spend it.
"We are pleased that the Commonwealth's
finances are in such a strong position, but we must remain
disciplined and keep future spending in line with recurring
revenue," Administration and Finance Secretary Mike
Heffernan said in a statement....
After accounting for $90 million less in
one-time settlements than had been budgeted and unraveling
an attempt that hasn't come to fruition to collect sales
taxes in real time, the state will have about $1 billion in
revenue in excess of what had been budgeted for fiscal
2018....
This is all good news for those on Beacon
Hill who are still reeling from a Supreme Judicial Court
decision that took a potential new revenue source -- a
surtax on millionaires -- off the ballot for November and
left questions about where new money would come from to
invest in a long list of priorities like transportation and
education.
After needing to lower their revenue
estimate in each of the last two budget cycles, House
Speaker Robert DeLeo and Senate budget conferee Sen. Joan
Lively have acknowledged that budget negotiators are
currently giving their fiscal 2019 revenue estimate a second
look, but with the possibility of raising it....
State House News Service
Friday, July 6, 2018
State savings, spending to get lift from $1.2 Bil revenue
surplus
Massachusetts prides itself on being first.
The first public school. The first state to
legalize gay marriage. The state with the "best" benefits
for veterans. So it must've been jarring this week for
policy makers to acclimate themselves to the quandary they
put themselves in.
With the stroke of South Carolina Gov. Henry
McMaster's pen on Thursday, Massachusetts became the last
state in the country without a permanent spending plan in
place for fiscal 2019, which in 46 states, including this
one, started on Sunday.
Some might shrug it off as a technicality.
After all, the Legislature and governor did work together to
put in place temporary funding to keep government fully
operational while negotiations continue....
In addition to the budget, legislation
proposing to regulate short-term rentals, protect consumers
from data breaches, enhancing civics education and
overhauling health care laws are all in conference
committees.
Then there are economic development, opioid
abuse prevention, and clean energy bills (just to name a
few) that haven't even gotten that far yet. And the two-year
session ends in 25 days....
Gov. Baker has also threatened to veto any
"sanctuary state" provisions in the budget, which might have
been what he had in mind when he suggested the House and
Senate just strip the budget of all the policy riders and
send him a clean budget focused purely on dollars and cents.
Speaking of dollars and cents, Baker
administration budget officials signaled to fiscal 2019
budget negotiators that if they're arguing over nickels and
dimes, they can stop.
With a projected $1.2 billion in excess tax
revenue now expected to find its way onto the ledger for
fiscal 2018, the governor's budget office teased Friday that
legislators would not be out of line if they assumed an
extra $100 million to $200 million for fiscal 2019.
State House News Service
Friday, July 6, 2018
Weekly Roundup - The Lost Week
If there is to be a sales tax holiday this
August, the Legislature must first agree to it, and schedule
the weekend.
House Speaker Robert DeLeo's office declined
to comment when asked whether the House would take up
legislation this month to designate one weekend in August as
sales-tax-free. However, with elections approaching, tax
receipts pouring in well above estimates and lawmakers
having just signed off on a permanent sales tax holiday, it
would be surprising if the Legislature did not give
consumers a break next month with a weekend that typically
costs the state a little over $20 million....
Starting in 2019, the Legislature will have
until June 15 to pick a weekend in August to hold the sales
tax holiday. If lawmakers miss that deadline, the
commissioner of the Department of Revenue by July 1 must set
the dates.
State House News Service
Friday, July 6, 2018
"Grand bargain" silent on 2018 sales tax holiday
Fourth of July revelers on the Esplanade
loudly rejected the notion that Massachusetts ranks 50th in
patriotism — we love America in our own way, they said,
shrugging off a survey that dissed the Bay State.
“How can they say that about us? We vote in
every election,” said Beth Fuller, 62, of Medford, who was
out on the Esplanade with red, white and blue beads around
her neck.
“How many people have we had run for
president from here? This is the hub of the universe,”
Fuller said.
Fuller, 62, who described herself as “pretty
patriotic,” and others took umbrage at the results of a
recent survey from the web site WalletHub that deemed
Massachusetts to be the least patriotic state in the
country.
The Boston Herald
Thursday, July 5, 2018
Massachusetts last on patriotism scale? They beg to differ!
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Chip Ford's CLT
Commentary
There's a lot of big news from the past week
or so to catch up on. One huge event was the U.S.
Supreme Court asserting that government workers are not
required to join public employee unions nor can they be
coerced into membership. For many state and municipal
taxpayers this was a major breakthrough. Weaker public
employee unions directly translate into weaker negotiating
power for union bosses ― though
they will still be "negotiating" with the employers whose
election campaigns they will continue to fund
― our elected
"representatives." The unions will have less money to
toss around at politicians, thus less influence
― maybe elsewhere, but not in
Massachusetts it would appear.
In reaction to the highest court's ruling, The State
House News Service reported:
"The
speaker said Wednesday that he thinks it is the
'overwhelming feeling of the House that unions play
an important part in terms of our workplace and that
any issues that come up that could limit the role
that they play could be detrimental to our
economy.'"
When House Speaker Robert DeLeo uses the phrases "our
workplace" and "our economy" obviously he refers to that of
his fellow hacks in the Legislature and their cohorts
"working" across the "public service" sector. We all
know what "the role that they play" is to which he refers,
union bosses being the politicians' largest donor class.
The U.S. Supreme Court said no, but in the Pay State, Mistah
Speaker responded 'We'll see about that!'
A week ago Governor Baker signed "The Grand Bargain"
(aka, "The Grand Theft Bargain") into law a week ago which,
among other additional burdens imposed, took the sales tax
rollback off the ballot, where polling showed it had
overwhelming voter support ―
and enacted a new $800 million payroll tax on employers and
employees.
"The Republican governor,
who is up for reelection this fall, has repeatedly
voiced a general opposition to broad-based tax
increases but in signing the compromise bill
Thursday he gave the green light to a new payroll
tax expected to pull in about $800 million.
"'I guess the way I think
about this is there's a benefit that's attached to
this thing, and that benefit is a paid family leave
provision that did not previously exist in state
law,' Baker said Monday when asked if a no-new-taxes
stance would prevent him from signing the bill."
Has Charlie Baker ever come across a tax hike that
didn't have some "benefit attached" for somebody?
Every time spending is increased it "benefits" somebody,
and every time someone benefits from government spending
it's paid for by us taxpayers.
Guv, this is why a "No New Taxes" pledge is necessary,
and why a "No New Taxes" pledge is taken, and why a
candidate professes "No New Taxes" so loudly to get elected.
June
28: "Capital gains tax collections have been
pouring into state coffers at such a high volume
that it's triggered a $290 million deposit into the
state's rainy day fund, and a second large automatic
deposit appears likely."
July 6: "Projecting that state tax collections
will surpass estimates for the year that just ended
by $1.2 billion, the Baker administration is
forecasting a surplus of $150 million to $200
million in funds that are not yet earmarked for any
purpose and signaling to the Legislature that it may
have up to $200 million in additional money to play
with for the fiscal 2019 budget that is nearly a
week overdue."
June
19: "But within hours of Monday’s decision,
some officials quickly called for the Legislature to
consider tapping into new revenue streams to replace
the $2.2 billion that the [millionaires tax"]
question could have generated. That included Senate
President Harriette L. Chandler, who said the
Legislature needs to 'take a hard look' at it, and
Mayor Martin J. Walsh, who said the decision shifts
responsibility squarely on lawmakers to act as early
as next legislative session."
―
The Boston Globe, June 19, 2018, "Voters
won’t be able to weigh in on the millionaires tax.
How about the Legislature?"
The Legislature can't "afford" to roll back the nearly
three-decades old promised "temporary" income tax hike,
can't afford a sales tax-free weekend, and needs to "tap
into new revenue streams."
But there it is once again, for anyone who still needs
more proof that Massachusetts government doesn't have a
revenue problem
― it
has an insatiable spending addiction. More Is
Never Enough (MINE) and never will be, until they take it
all.
Massachusetts is the only state in the nation into a new
fiscal year but still without a fiscal year 2019 budget, and
it just ranked 50th out of 50 states on the patriotism
scale. So much for The People's Republic of
Taxachusetts "leading the way" as Number One in everything.
Our state saves that pursuit for crazy schemes, ridiculous
programs, profligate spending, and abusive laws. With
things that matter most to taxpayers, this state invariably
comes in at the bottom if not last.
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Chip Ford
Executive Director |
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State House News Service
Wednesday, June 27, 2018
Free speech ruling seen as blow to Massachusetts
unions
By Colin A. Young
In a major freedom of speech decision, the U.S.
Supreme Court on Wednesday morning dealt a blow
to public sector labor unions, ruling that
public employees cannot be forced to pay fees or
dues to a union to which he or she does not
belong.
The high court handed down its 5-4 ruling in
Janus v. American Federation of State, County,
and Municipal Employee on the final day of its
session, a ruling in which new Justice Neil
Gorsuch appears to have been the deciding vote.
At the Democratic Party's convention earlier
this month, House Speaker Robert DeLeo told the
hall of roughly 6,000 Democrats that the
Massachusetts House is prepared to move quickly
to make sure "unions can remain strong."
The case challenged compulsory payment of union
fees for public sector employees, regardless of
whether they belong to the union. It revolved
around Mark Janus, an employee of the state of
Illinois who disagreed with the public sector
union's positions and refused to join.
"The First Amendment is violated when money is
taken from nonconsenting employees for a
public-sector union; employees must choose to
support the union before anything is taken from
them," Justice Samuel Alito wrote for the
majority. "Accordingly, neither an agency fee
nor any other form of payment to a public-sector
union may be deducted from an employee, nor may
any other attempt be made to collect such a
payment, unless the employee affirmatively
consents to pay."
Unions say the case was driven by wealthy
corporate interests and that the court ruling in
favor of Janus would limit the power of unions.
"We recognize that the loss of payments from
nonmembers may cause unions to experience
unpleasant transition costs in the short term,
and may require unions to make adjustments in
order to attract and retain members," Alito
wrote. He added, "It is hard to estimate how
many billions of dollars have been taken from
nonmembers and transferred to public-sector
unions in violation of the First Amendment.
Those unconstitutional exactions cannot be
allowed to continue indefinitely."
Writing for the four-justice minority, Justice
Elana Kagan said there could be no
"sugarcoating" the ruling supported by the
court's five more conservative justices and that
the First Amendment was "meant not to undermine
but to protect democratic governance --
including over the role of public-sector
unions."
"The majority overthrows a decision entrenched
in this Nation’s law -- and in its economic life
-- for over 40 years. As a result, it prevents
the American people, acting through their state
and local officials, from making important
choices about workplace governance," Kagan
wrote. "And it does so by weaponizing the First
Amendment, in a way that unleashes judges, now
and in the future, to intervene in economic and
regulatory policy."
In a statement released soon after the court's
ruling, SEIU Local 509 President Peter MacKinnon
said the ruling was backed by "anti-worker
extremists."
"Today, the Supreme Court came down on the wrong
side of history in a case that the rich and
powerful are hoping will divide us," he said.
"But no court case is going to stop us from
fighting for the strong unions our communities
need."
American Federation of Teachers Massachusetts
President Beth Kontos said, "Members of the AFT
Massachusetts enjoy the strength and solidarity
that comes with union membership, and we expect
that our membership will continue to grow
despite the Janus decision. We will continue to
exercise our first amendment right to freely
assemble and associate with our co-workers, and
we will continue to advocate strongly for full
funding and equal access for our public
educational institutions."
The ruling was celebrated Wednesday by the
National Federation of Independent Business,
which had filed an amicus brief arguing that the
compulsory fees are unconstitutional.
"The Supreme Court's decision in Janus v.
American Federation is a major win for the small
business community," Karen Harned, executive
director of the NFIB Small Business Legal
Center, said in a statement. "For too long
dissenting public employees have been forced to
fund public employee unions that they do not
agree with."
The local chapter of NFIB tweeted Wednesday that
the ruling "helps level playing field for #smallbiz
in MA where big labor wields strong influence.
Protects 1st Amend rights & preserves voice of #smallbiz
that cant afford initiatives pushed by public
unions like $15 minwage, pd family/med leave &
income tax surcharge."
The American Legislative Exchange Council, an
organization that includes nearly a quarter of
state legislators across the country, called
Wednesday a great day for freedom.
"The Supreme Court finally recognized that it is
unconstitutional to force public employees to
join or pay dues to a union as a condition of
employment," State Rep. Ron Hood of Ohio said in
a statement.
Justices Alito, Gorsuch, John Roberts, Clarence
Thomas and Anthony Kennedy constituted the
majority in the Janus decision and Justices
Kagan, Sonia Sotomayor, Ruther Bader Ginsberg
and Stephen Breyer were in the minority.
When the Supreme Court last decided a case
related to compulsory union payments, it
deadlocked 4-4 during the period after the death
of Justice Antonin Scalia. After the U.S. Senate
refused to hold a confirmation hearing for
President Barack Obama's appointee Merrick
Garland, President Donald Trump nominated
Gorsuch to the court and he was confirmed by the
Senate.
On Wednesday, Trump tweeted that the court's
Janus ruling was a "Big loss for the coffers of
the Democrats!"
Organized labor groups including the
Massachusetts AFL-CIO, AFSCME, Massachusetts
Teachers Association and others are scheduled to
hold a 1:30 p.m. conference call with reporters
to respond to the court's decision.
"Today's misguided Supreme court decision
represents an attack on the freedom and the
rights of workers," Massachusetts AFL-CIO
President Steve Tolman said. "But what it
doesn’t change is that public support for unions
is growing. The number of workers who want to be
in a union is increasing. And every day, more
workers are organizing and voting to join
unions."
The Pioneer Institute applauded the court's
decision and predicted that it will have a
"significant impact" on union political activity
in Massachusetts.
"The ruling will have significant impact in
Massachusetts, where 18 of the 20 political
action committees that contributed the most to
candidates for state and county offices were
labor organizations, and 85 percent of all PAC
contributions went to Democratic candidates,"
Pioneer Institute wrote, citing data from the
Office of Campaign and Political Finance. "Janus
will likely result in public employees having to
earn membership, which translates to focusing
more on issues like pay and working conditions
that members care most about, and less on
political activity."
Attorney General Maura Healey said the Supreme
Court "turned its back on millions of Americans
who keep our communities safe, educate our
children, and care for our most vulnerable
populations."
State House News Service
Wednesday, June 27, 2018
DeLeo invites unions to offer legislative
response to Janus ruling
By Colin A. Young
As lawmakers mull the impacts of a U.S. Supreme
Court ruling seen as a devastating blow to
public sector labor unions, the Massachusetts
House is hoping labor leaders will suggest ways
the Legislature can respond and soften the blow.
The Supreme Court ruled 5-4 Wednesday in Janus
v. American Federation of State, County, and
Municipal Employees that public employees cannot
be forced to pay fees or dues to a union to
which he or she does not belong, a decision
cheered by some as a victory for freedom of
speech and decried as an attack on organized
labor by others.
House Speaker Robert DeLeo told the Democratic
Party's convention earlier this month that House
was prepared to move quickly to make sure
"unions can remain strong" if the court did not
side with unions in the Janus case.
The speaker said Wednesday that he thinks it is
the "overwhelming feeling of the House that
unions play an important part in terms of our
workplace and that any issues that come up that
could limit the role that they play could be
detrimental to our economy."
DeLeo told reporters Wednesday that he hopes to
bring a bill responding to the Janus ruling to
the House floor for a vote before formal
sessions end on July 31. What that bill might
look like, he said, has not yet been determined.
"Right now, we're talking to some of the unions.
We're looking more to see if there is a
consensus among all of them or at least some of
them, so there may be some legislation before we
break to address this issue," DeLeo said. He
added, "I think there might be some various
opinions in terms of what the best avenues may
be to take so we're trying to wait and see if
they can come up with some type of consensus
that we could support."
The Senate is also looking to respond to the
Janus decision before the end of July. Scott
Zoback, a spokesman for Senate President
Harriette Chandler, said "the Senate plans on
working with impacted parties, as well as the
House, to address this anti-worker decision."
The Pioneer Institute, which filed a brief in
the case on behalf of petitioner Mark Janus,
predicted Wednesday that the ruling will have a
"significant impact" on union political activity
in Massachusetts, noting that 18 of the 20
political action committees that contributed the
most to candidates for state and county offices
were labor organizations, and 85 percent of all
PAC contributions went to Democratic candidates.
"Janus will likely result in public employees
having to earn membership, which translates to
focusing more on issues like pay and working
conditions that members care most about, and
less on political activity," Pioneer wrote in
response to the Janus ruling.
The Massachusetts Fiscal Alliance, which has
tangled with Beacon Hill Democrats, said the
Janus ruling could affect political donations to
Democrats.
"The Janus decision will finally bring some
equity to this situation by allowing people who
disagree with the political positions of their
unions to opt out of funding that speech, and by
forcing union leadership to be more responsive
to their members and less beholden to the Beacon
Hill political elite," the alliance said. The
alliance predicted "broad implications" from the
Janus ruling in Massachusetts, saying, "For
nearly forty years, a series of bureaucratic
decisions and court rulings have allowed union
bosses to dominate the political discourse of
our country and our state."
On a conference call Wednesday afternoon, union
leaders said they were brainstorming among
themselves about what a legislative response
might look like.
"We're going to all be meeting and working
together to figure out what collectively," Steve
Tolman, president of the Massachusetts AFL-CIO
and a former state senator, said. "We're going
to be getting together and we're going to be
putting our heads together and work on that.
It's a good question, we're working on it."
Massachusetts Teachers Association President
Barbara Madeloni declined to go into specifics,
but said that what she and other union leaders
have talked about "is really making sure that we
preserve the freedom and right of every worker
in Massachusetts to join a union and to be
powerful within that union."
"There are a variety of things we're going to
look at to make sure we do that, but we are all
committed to that as our goal," she said.
Asked about possible options before the
Legislature, Tolman said there are a lot of
options but did not cite any specific proposals.
He said, "Most importantly, we want to be able
to represent our membership. It's very clear, we
want to be able to stand up and represent the
membership, we want to be able to do what is
right and we don't want to let this outside
money, this wealthy group to try to destroy what
we have in Massachusetts."
State House News Service
Thursday, June 28, 2018
Baker signs law raising minimum wage, creating
paid leave program
By Colin A. Young
Gov. Charlie Baker signed a new law Thursday
that could affect virtually every resident of
Massachusetts, a week after lawmakers settled
months of negotiations over proposed ballot
questions that could have had dramatic
consequences for the state's finances and
economy.
Legislators scrambled to assemble the so-called
grand bargain bill after interest groups, fed up
with inaction on Beacon Hill, initiated ballot
drives and forced legislative leaders to engage
with them at the negotiating table, or risk
having major policies written into law by
voters.
Under the law, the hourly minimum wage will rise
from $11 to $15 over a five-year period. During
those same five years, time-and-a-half pay for
workers on Sundays and holidays will be phased
out. An $800 million paid family and medical
leave program overseen by the state government
and backed by a payroll tax will be launched so
workers can more easily take care of themselves
and their families without facing fiscal crises.
And every August beginning in 2019, the state
will suspend the 6.25 percent sales tax on many
purchases for a weekend.
Baker signed the historic wage and benefits
legislation into law in his ceremonial office,
flanked by House Speaker Robert DeLeo, Senate
President Harriette Chandler and other
legislators.
"That one's a done deal," Baker said at 10:36
a.m. after his signature was on the law. The
governor used several pens to sign his name and
distributed each to the lawmakers standing
behind him. The ceremonial office was packed
with reporters, cameras, aides to the governor
and staffers from various legislative offices.
The governor was largely a bystander in the
negotiations and declined to stake out positions
on the issues while encouraging legislators to
work on alternatives to the ballot questions. By
signing the bill into law, Baker registered his
support for its contents.
"The product of this is a far better product for
the commonwealth than each of these as
standalone entities would have been for
Massachusetts, which is why I'm signing it,"
Baker said Thursday.
The Republican governor, who is up for
reelection this fall, has repeatedly voiced a
general opposition to broad-based tax increases
but in signing the compromise bill Thursday he
gave the green light to a new payroll tax
expected to pull in about $800 million.
"I guess the way I think about this is there's a
benefit that's attached to this thing, and that
benefit is a paid family leave provision that
did not previously exist in state law," Baker
said Monday when asked if a no-new-taxes stance
would prevent him from signing the bill.
The one issue involved in the negotiations that
Baker did publicly support was a reduction in
the state sales tax. The Retailers Association
of Massachusetts proposed a ballot question
cutting the tax rate from 6.25 percent to 5
percent.
Baker at the Republican convention in late April
touted his support for a sales tax reduction,
saying his opponents are against it, but he has
not proposed a sales tax cut on Beacon Hill and
it's not clear how he plans to achieve it now
that the grand bargain, which keeps the sales
tax at 6.25 percent, has been signed into law
and retailers have committed to dropping their
popular tax relief question after scoring
concessions on premium pay and a sales tax
holiday.
Baker did not take questions from the press at
Thursday's bill signing, or make comments about
the policy implications of the far-reaching
legislation.
"The Massachusetts workforce continues to grow
with more and more people finding jobs and our
administration is committed to maintaining the
Commonwealth’s competitive economic
environment," the governor said in a press
release after the signing ceremony.
The Raise Up coalition, the amalgamation of more
than 100 labor, community and faith-based groups
behind the minimum wage and paid leave ballot
questions, celebrated the bill becoming law
Thursday and shared reactions from workers who
will benefit from the new law.
"For the past five years, my coworkers and I
have been fighting for higher wages and it is
just amazing that we have finally won! Winning
$15 will make it easier for me to pay my bills
and buy food each month," Dayail Gethers, a
wheelchair attendant at Logan Airport, said in a
statement.
Sandra Cormier of Wareham said: "I am excited to
have the paid leave insurance bill become law.
When my mom got sick and needed help at home, my
work offered unpaid leave, but I couldn’t get by
without income. I ended up taking early
retirement so I could have a small income,
helped my mom, and now I’m looking for a job
because the bills don't stop. I would have been
glad to contribute a few dollars for insurance
that can keep you from losing so much."
The Raise Up coalition voted last week to drop
its paid family and medical leave ballot
proposal but waited until Tuesday to make a
determination about its minimum wage question.
The group confirmed Thursday that since the
governor signed the bill it will not submit the
signatures necessary to put the questions on the
ballot.
In agreeing to the compromise, the coalition
passed on bringing its version of the minimum
wage increase bill to the voters. Had the
question gone to the ballot and won, Raise Up
could have celebrated securing a hike to $15 per
hour in four years rather than five and would
have ensured that the minimum wage was annually
indexed to inflation.
With the three ballot questions wrapped in the
grand bargain now off the November ballot,
voters will be left to decide questions imposing
nurse staffing mandates at hospitals and rolling
back the state's new law aimed at preventing
discrimination against transgender individuals
in public accommodations.
Combined with the Supreme Judicial Court's
rejection of the proposed income surtax ballot
question, it also means that Baker's reelection
effort will not contend with a wave of
progressive voters eager to vote on the
so-called millionaire's tax, a paid family and
medical leave program and an increase in the
minimum wage.
David Maher, president and CEO of the Cambridge
Chamber of Commerce, said the grand bargain
should be the model for how businesses,
legislators and advocates can work together to
tackle some of the state's most pressing
challenges.
"This new law will bolster the Commonwealth's
ability to attract world-class talent and
innovative companies, without decimating budget
funds we rely on to fund our schools and
transportation system. It's a compromise that
works for Massachusetts, and one we hope can be
replicated as we tackle future challenges on
housing, education and public transit," he said.
Not everyone was pleased with the outcome of the
grand bargain and soon after the governor signed
the bill restaurant workers announced they plan
to present lawmakers with "a bill for balance
due" Thursday at 2 p.m. The activists said the
grand bargain "does not address are the poverty
wages of tipped workers."
The bill increases the minimum wage for tipped
workers to $6.75 over five years, though the Not
on the Menu Coalition said it "will continue to
demand an end to this discriminatory wage
system, beginning with today's action."
Thursday's signing of the grand bargain further
establishes Raise Up as a force on Beacon Hill,
having successfully fought for the last minimum
wage increase, an earned sick time ballot law
and now having secured another minimum wage
increase and the establishment of the paid leave
program.
In a statement Wednesday, the coalition pledged
to continue to fight on behalf of workers "who
were left behind by the Legislature in this
bill," possibly hinting at its next effort.
"We will continue to do this work until every
worker in Massachusetts has a livable wage,
family-supporting benefits, and a transportation
and education system that lifts people up,
funded by the wealthy paying their fair share,"
the group said. "We are only getting started."
Shortly after Baker signed the bill, Lew Finfer,
one of the leaders of the Raise Up coalition,
notified reporters that Baker has "stepped in
with state funds" to extend emergency housing
for a month to more than 300 Puerto Rican
families who are in Massachusetts as evacuees
from the hurricane in Puerto Rico. Saying the
Federal Emergency Management Agency had refused
to extend emergency housing assistance beyond
June 30, Finfer said the families are staying in
motels in Springfield, Holyoke, West
Springfield, Worcester, Lawrence and Dedham.
Beacon Hill Roll Call
Week of June 25-29, 2018
Raise minimum wage, family and medical leave and
sales tax holiday (H 4640)
By Bob Katzen
Gov. Charlie Baker signed into law a bill that
would hike the minimum wage from $11 to $15 over
five years; increase the wage for tipped workers
from $3.75 to $6.75 over five years; phase out
over five years extra pay for employees who work
on Sundays and holidays; institute a permanent
sales tax holiday on a weekend every August; and
establish a $1 billion family and medical leave
program funded by a payroll tax paid for by both
employers and employees.
Dubbed the “Grand Bargain Bill” by some
supporters and “Grand Theft Bill” by some
opponents, the compromise is in response to the
likely successful effort by the Raise Up
Massachusetts coalition to get the minimum wage
and paid leave questions on the November ballot;
and the likely success of the Retailers
Association of Massachusetts (RAM) to get a
question on the ballot to reduce the sales tax
from 6.25 percent to 5 percent.
Raise Up Massachusetts has agreed not to bring
its family and medical question or minimum wage
question to the ballot while RAM has agreed to
drop its effort to reduce the sales tax to 5
percent.
RAM President Jon Hurst had mixed feelings about
the compromise but ultimately embraced it. “The
compromise legislation passed today contains
very costly initiatives that will negatively
impact the thousands of small business owners
and their employees that RAM represents,” said
Hurst. “The retail marketplace has never been
more competitive, and the margins have never
been smaller. The new payroll mandates passed
today will significantly increase costs,
resulting in businesses being less competitive,
forcing some doors to close and good jobs to be
lost. This is not rhetoric, but reality. At the
same time, the results would be far worse had
these measures gone to the ballot, and the
Legislature deserves credit for bringing the
parties together to bring a balanced
resolution.”
Meanwhile, critics of the compromise say that
RAM was able to extract compromises from Raise
Up by using the sales tax cut as a bargaining
chip. The Supreme Judicial Court had just ruled
that a proposed ballot question imposing an
additional 4 percent income tax on taxpayers’
earnings of more than $1 million cannot go on
the November 2018 ballot. Supporters of that
measure saw millions of tax dollars lost as a
result of the decision and said that reducing
the sales tax would cause a fiscal crisis and
require cutbacks of many programs.
“I am thankful that all parties came together,
compromised and found common ground to produce a
better set of policies than what the ballot
questions represented,” said Gov. Charlie Baker.
“The Massachusetts workforce continues to grow
with more and more people finding jobs and our
administration is committed to maintaining the
Commonwealth’s competitive economic
environment.”
“I fundamentally disagree with the premise that
we have to give up some workers’ rights in order
to gain new workers’ rights,” said Sen. Kathleen
O’Connor-Ives (D-Newburyport).
“Regardless of what happens in Washington D.C.,
this law demonstrates that in Massachusetts we
can come together to create policies which
benefit working families, employers, and the
commonwealth as a whole,” said Rep. Paul Brodeur
(D-Melrose). “While this process took months, I
am proud that this law strikes the right balance
in delivering improved wages and expanded
benefits for millions of hard working residents
while providing key protections for small
businesses.”
“Gov. Baker can try to spin this so-called
‘grand bargain’ any way he wishes, but a new
$800 million payroll tax is a huge new tax,”
said Chip Ford, executive director of
Citizens for Limited Taxation.
“Unfortunately for taxpayers, Charlie Baker is
the best Democrat we can hope to elect from the
field running for governor. He’s not as
conservative as Democrat Ed King was, but he’s
head and shoulders above Mike Dukakis.”
State House News Service
Thursday, June 28, 2018
Cap gains windfall triggers $290 Mil rainy day
fund deposit, and counting
By Michael P. Norton
Capital gains tax collections have been pouring
into state coffers at such a high volume that
it's triggered a $290 million deposit into the
state's rainy day fund, and a second large
automatic deposit appears likely.
In a letter to Comptroller Thomas Shack on
Thursday, Revenue Commissioner Christopher
Harding said third quarter capital gains income
of $673 million had pushed such receipts up to
$1.49 billion over three quarters, exceeding a
$1.169 billion threshold. State finance law
requires that capital gains receipts over that
threshold be automatically transferred to the
stabilization fund, and Harding told Shack his
letter certifies that required transfer.
Capital gains taxes are assessed on investment
gains and analysts have tied some portion of the
spike in taxes to impacts of the new federal tax
law. The Massachusetts Taxpayers Foundation this
week cautioned that a surge in sales of capital
assets is temporary and can't be counted on for
ongoing revenue.
The deposit will push the state's rainy day fund
balance above $1.6 billion, which Baker
administration officials said represents an
increase of about $500 million since the
governor took office in 2015.
"This significant deposit into the Stabilization
Fund is exciting news for the Commonwealth and
taxpayers, and represents an increase of nearly
45 percent in reserves since the Baker-Polito
Administration took office," Administration and
Finance Secretary Michael Heffernan said in a
statement. "The administration's goal for the
past three years has been to restore structural
balance in our state budget so when the
Commonwealth makes a meaningful deposit into the
Stabilization Fund, it will remain there until
needed for true emergency purposes."
Just over a year ago, in June 2017, S&P Global
Ratings lowered its rating for Massachusetts
bonds to AA from AA+ and admonished the state
for its approach to savings.
"The downgrade reflects what we view as the
commonwealth's failure to follow through on
rebuilding its reserves as stipulated through
its own fiscal policies aimed at mitigating the
state's propensity for revenue volatility," S&P
Global Ratings credit analyst John Sugden said
at the time.
The state collected $229 million in capital
gains in the first quarter and $589 million in
capital gains during the second quarter. The
month of June is considered the fourth quarter
under an arrangement in which quarters are not
evenly spread over three months, as usual, due
to uneven capital gains flows that are tied to
tax filing deadlines.
Because the threshold has already been hit,
capital gains receipts in June will also go to
the rainy day fund.
The total over-threshold capital gains figure is
$322 million, but $16 million will automatically
flow to the State Retiree Benefits Trust Fund
and another $16 million will move through the
stabilization fund and into the state's Pension
Liability Fund, according to Harding's letter.
Administration officials also say the state's
reliance on non-recurring revenue sources has
been reduced from $1.2 billion per year to under
$100 million.
The news of the big rainy day fund deposit comes
as Democratic legislative leaders grapple with
details of a more than $41 billion budget for
fiscal 2019. The budget is due by Sunday but
lawmakers on Thursday adjourned for the week,
ensuring the annual budget will be late this
year.
Gov. Charlie Baker on Thursday afternoon signed
a $5 billion interim budget to prevent any
disruption in state services while negotiations
continue on an annual budget.
Legislative leaders acknowledged Thursday that
marking up their fiscal 2019 revenue estimate,
given strong fiscal 2018 collections, is under
consideration.
The Boston Herald
Friday, June 29, 2018
A Boston Herald editorial
New law no bargain
Rocky seas are ahead for businesses in
Massachusetts.
Yesterday, Gov. Charlie Baker signed the “grand
bargain” bill into law. It increases the minimum
wage to $15 an hour by 2023, requires paid leave
for workers starting in 2021 and establishes an
annual sales tax holiday each August.
The bill is as warm and fuzzy as they come but
will ultimately hurt businesses and subsequently
the residents of the commonwealth it was
designed to help.
Raising the minimum wage to $15 per hour will be
burdensome to small and big businesses alike.
Mom-and-pop shops will simply stop hiring, and
fast food restaurants and the like will expedite
their push for automation over people. It’s
already happening.
Mandatory paid leave is compassionate in concept
but destructive in execution. Allowing mom and
dad to stay home to enjoy the new baby is
wonderful, but it will come at the price of $800
million in payroll taxes on workers and
employers in Massachusetts.
While a sales tax holiday is a good thing,
cutting the state sales tax is a much better
thing. But no matter. Pols on Beacon Hill fended
off some dreaded ballot questions and the
hard-working taxpayers of the commonwealth are
now left with no line of defense — not the state
Senate, the House or the governor’s office.
Candidate Baker was stalwart in his advocacy of
the Massachusetts taxpayer. He hammered his
opponent, Martha Coakley, on the topic and the
electorate rewarded him for it.
No doubt, ballot petitioners needed to be dealt
with, and there are some positive nuggets in the
bill, but overall this legislation is bad for
businesses and workers.
Last year, the state Legislature voted
themselves a handsome pay raise. This week the
mayor of Boston as well as the City Council did
the same. Taxpayers are made to hand over their
hard-earned dollars to improve the standard of
living for their elected representatives again
and again.
When do they get some relief? One weekend in the
summer?
We deserve better.
Associated Press
Sunday, July 1, 2018
"Grand bargain" keeps voters from deciding
ballot questions
BOSTON — On Beacon Hill, they call it the "grand
bargain" — the new law that will gradually
increase the state's minimum wage to $15 an
hour, require paid family and medical leave for
workers and mandate a sales tax holiday every
August.
It's also the mother of political deals
involving the Republican governor, the
Democratic leaders of the Massachusetts House
and Senate and representatives of labor unions
and business groups.
The ultimate goal? Making sure voters didn't get
the chance to weigh in on a raft of proposed
ballot questions in November, including a
question that would have lowered the state sales
tax from 6.25 percent to 5 percent.
The negotiators feared that if voters backed the
tax cut — and polls suggested they would — the
loss of revenue would leave a massive hole in
the state budget of about $1.2 billion a year.
That fear took on new urgency after the state's
highest court tossed out another question that
would have created an amendment to the state
constitution that would have imposed a 4 percent
surtax on any portion of an individual's annual
income that exceeded $1 million.
The question — which polls also suggested was
popular with voters — could have generated an
extra $2 billion in state revenue each year,
more than enough to offset the loss of revenue
from the proposed sales tax cut.
With the so-called "millionaire tax" off the
table, Beacon Hill leaders ramped up their
efforts to cut a deal to make sure voters didn't
get a chance to approve the sales tax cut.
The "grand bargain" talks put Gov. Charlie Baker
— no friend of tax hikes and an avowed supporter
of the ballot question process — in the awkward
position of defending a deal that aimed to kill
a significant tax cut by blocking a series of
ballot questions from reaching voters.
Baker said he's been on the pro and con side of
ballot questions. Two years ago he supported a
proposal to which would have let Massachusetts
add up to a dozen new or expanded charter
schools each year outside of existing state
caps. The question was defeated.
But Baker said not every question has to go
before voters to get sorted out.
"I don't have a particular problem with doing it
either way," he told reporters this week. "In
this particular case I've said for months that I
thought these issues would be better resolved in
a statutory manner than they would be on the
ballot."
Baker also said that the "grand bargain", which
he said was being worked on for months, was
about more than just the proposed cut in the
sales tax.
Under the deal — which was signed by Baker on
Thursday — workers will be able take up to 12
weeks of paid leave to care for a sick family
member or new baby, and up to 20 weeks of paid
leave for their own medical needs.
The measure would gradually raise the state's
minimum wage from the current $11 to $15 an hour
by 2023. And it would phase out over five years
the rule that workers be paid time-and-a-half
for working on Sundays, a vestige of the state's
mostly defunct Sunday blue laws.
The bill also includes a requirement the state
hold an annual August sales tax holiday as
proposed by the Retailers Association of
Massachusetts.
The deal essentially knocks three questions off
the ballot in part by writing many of their
goals into the new law.
One question, pushed in large part by union
supporters, would have raised the minimum wage
to $15, but over a shorter period of time.
Another backed by the same group would have
provided for paid family leave. A third, pushed
by retailers, would have required the sales tax
holiday while also lowering the sales tax rate.
The groups behind the questions agreed to pull
the initiatives once the bill was signed by
Baker.
The New Boston Post
Sunday, July 1, 2018
Progressives Logroll Themselves Out of a Pro-Tax
Constitutional Amendment
But For How Long?
By Frank Conte
The Massachusetts Supreme Judicial Court’s
recent rebuke to supporters of a graduated
income tax amendment showed how progressives
failed to understand the checks and balances of
the state’s constitution —conceived admirably by
John Adams and amended narrowly and —perhaps
ironically —by turn-of-the-20th-century
Progressives.
The ruling was a stinging defeat for Raise Up
Massachusetts, the union-backed coalition that
spearheaded the petition drive, and state
Attorney General Maura Healey, who certified the
petition last year. Healey, and others, made
clear that, even in defeat, they intend to
pursue higher taxes.
Both the Attorney General and her allies
expected the court to overlook the niceties of
constitutional law in favor of vague sentiments
such as fixing potholes and reducing income
inequality.
That impulse proved to be the undoing of the
amendment, long in the making and equally long
in raising expectations for spending sprees.
The Fair Share amendment intended to levy a
4-percentage-point income tax surcharge on
individuals earning more than one million
dollars. It purported to earmark the revenue for
education and infrastructure, subject to
appropriation. The term “subject to
appropriation” apparently was inserted to
attempt to to avoid a specific prohibition of
Article 48 of the Massachusetts Constitution,
which provides in part that: “No measure that
relates to …. or that makes a specific
appropriation of money from the treasury of the
commonwealth, shall be proposed by an initiative
petition…” The petition’s language also served
as a wink and nod to the state legislature,
respecting their supreme role in tax and budget
matters.
In 2016 and 2017, the legislature obliged the
wishes of Raise Up Massachusetts, approving
(while meeting as a constitutional convention)
the measure, which was required before it could
go on a general election ballot.
The proposal, which ostensibly had public
support according to several polls, was headed
to the November 2018 ballot. But business groups
asked the Supreme Judicial Court to intervene.
In a 5-2 decision, the high court ruled that the
petition, by introducing three distinct elements
in one package, was written in such a way as to
confuse voters in violation of said Article 48.
Voters, the court said, deserved clarity, not a
jumble of assorted objectives. It sided with the
key arguments made by the business community:
that the allure of two un-related matters
wrapped up in a wish violated the state’s
constitution and ample legal precedents.
“We conclude that the initiative petition should
not have been certified by the Attorney General
as ‘in proper form for submission to the
people,’ because, contrary to the certification,
the petition does not contain only subjects
which are related or which are mutually
dependent,” wrote Justice Frank Gaziano for the
majority.
Raise Up Massachusetts was tripped up by its own
ambitions. The belief that the Supreme Judicial
Court would affirm the Attorney General’s
decision was seized upon by the opposition, who
dangled the relatedness clause in front of the
high court. That strategy —rather than focusing
on who gets to appropriate tax revenues —proved
to be crushing. In the end, the court majority
was not moved by a “conceptual or abstract bond”
between education and transportation. Doing so
would have placed “voters in the untenable
position of either supporting or rejecting two
important, but diverse spending priorities,
accompanied, in either case, by a major change
in tax policy,” Gaziano wrote. Each item — the
tax, the education spending, the transportation
spending – could have been voted on
independently.
Article 48 —the stubborn fact at issue in 2018
—was a Progressive invention born of the
initiative and referendum push that led
Massachusetts voters to approve the amendment in
November 1918. As the court ruled the referendum
movement embodied compromises to safeguard
against excesses of both direct and
representative democracy. For example, the
article expressly left the direct financing of
public goods – appropriations — to the
legislature. It also protected individual
liberties, religious minorities, and judicial
independence. These and other matters were
off-limits. (The book to read is David D.
Schmidt’s Citizen Lawmakers: The Ballot
Initiative Revolution; Schmidt called the
Massachusetts initiative-and-referendum process
the most “cumbersome and complicated.”)
The sentiments that “taxes do not matter” and
that behavioral responses to higher taxes are
inertly negligible remain mainstream
progressivist thinking in Massachusetts. The
holy grail of those that hold this view is the
adoption of progressive taxation, no matter the
poor track record at the ballot box.
Since the tax limitation movement solidified in
1978, progressives have sought work-arounds to
erase one of the state’s remaining tax policy
advantages, its single-rate flat tax. That
advantage is part of the reason why
Massachusetts thrives competitively, despite
other drawbacks such as housing and energy
costs.
Blessed with strength in numbers, progressives
believe that wall of tax resistance will
eventually be breached. Opposition to taxes in
Massachusetts once enjoyed broad-based support,
but the foot soldiers who introduced Proposition
2 ½ are unfunded and outnumbered compared to the
power of public sector unions. The business
community that opposed the Fair Share amendment
in court this time may not be so fortunate in
the future in the courts or on Beacon Hill.
Moreover, the state’s top businesses, dominated
by the health care and biotechnology sectors,
may be more inclined to support progressive
business leaders. One of the groups filing an
amicus brief in favor of the petition was the
Alliance for Business Leadership, whose aims are
not far from those of organized labor.
Combining the disparate “needs” of its
constituents, the progressive movement excels at
logrolling, which aggregates all the wishes of
its constituents from teachers to trench diggers
with the hope that voters will go along. That
may have worked in lobbying the legislature; it
does not work in the arena of
initiative-and-referendum.
The failed Raise Up Massachusetts effort was the
product of a vain attempt to “sweeten the pot”
by including popular spending on education and
roads. Thus, the supporters were done in by
their marketing pitch, which trumped sound legal
thinking.
For despite its failure in 1994, drafters of the
graduated income tax back then were smart enough
to clear any constitutional anxieties before
they were trounced by the voters. They were also
blinded to the failure of the Common Core
education ballot question from a few years ago
that suffered the same relatedness problem. Had
they learned anything? In 2018, greed got ahold
of the progressives by aligning their selfish
interests behind the cloak of popular spending.
Such conceits are never fatal for the phalanx of
Massachusetts progressives in a one-party state.
Temporary disappointment is giving way to a
makeover, this time from allies in the
legislature who will come up with their own
constitutional change for 2022 (after a
four-year respite required by law). State
Senator Jason Lewis (D-Winchester) expects to
introduce a legislative version of the Fair
Share amendment that will be free of the kind of
constraints cited by the Supreme Judicial Court
last month.
For progressives, the state constitution has
stood in their way for too long. The
Millionaires Tax legal defeat last week was just
a bump in the road.
―Frank Conte is
the Editor and Publisher of EastBoston.com. He
formerly served as the Director of
Communications for the Beacon Hill Institute.
State House News Service
Friday, July 6, 2018
State savings, spending to get lift from $1.2
Bil revenue surplus
By Matt Murphy and Michael P. Norton
Projecting that state tax collections will
surpass estimates for the year that just ended
by $1.2 billion, the Baker administration is
forecasting a surplus of $150 million to $200
million in funds that are not yet earmarked for
any purpose and signaling to the Legislature
that it may have up to $200 million in
additional money to play with for the fiscal
2019 budget that is nearly a week overdue.
The new revenue forecasts come as the House and
Senate are locked in increasingly antagonistic
negotiations over a budget that is expected to
exceed $41 billion for the fiscal year that
began on Sunday, July 1. In a reversal of the
trend over the past couple years that have seen
tax revenues drop off each spring, forcing the
state to retreat from spending plans, the state
is suddenly flush with cash and now may face
decisions about how to spend it.
"We are pleased that the Commonwealth's finances
are in such a strong position, but we must
remain disciplined and keep future spending in
line with recurring revenue," Administration and
Finance Secretary Mike Heffernan said in a
statement.
The one note of caution the administration
sounded on Friday was that the excess revenues
flooding into state coffers were coming from
historically volatile sources and may have a lot
to do with decisions made around the federal tax
reform law signed by President Donald Trump. The
bump in revenues many not carry over into the
next year, according to officials who discussed
the situation with the News Service.
For instance, $690 million in excess revenues
are believed to have come from capital gains
taxes and taxes on other non-withholding income
linked to federal tax reform, according to the
administration. Another $300 million in
additional corporate tax revenue could be tied
partially to the new federal law and the
repatriation of foreign investments that will be
a non-recurring revenue stream for the state.
The strength of the state's economy, the
administration said, has likely contributed to
strong corporate profits as well, and
collections from traditional income and sales
taxes each will exceed estimates by $80 million.
The amount of discretionary funds, however, may
not be as large as it seems it should be.
After accounting for $90 million less in
one-time settlements than had been budgeted and
unraveling an attempt that hasn't come to
fruition to collect sales taxes in real time,
the state will have about $1 billion in revenue
in excess of what had been budgeted for fiscal
2018.
About half of that, or $450 million to $500
million in capital gains tax revenues, will be
funneled by statute directly into the state's
reserve account, which credit rating agencies
have been urging the state to build up as a
bulwark against the next recession.
Another $300 million, according to
administration officials, is needed to cover
spending that has already occurred. In the
coming weeks as these tax numbers get finalized,
Gov. Charlie Baker is expected to file a
supplemental spending bill to close the books on
fiscal 2018 that will enumerate those expenses.
That leaves an estimated $150 million to $200
million in unallocated revenue that, if left
untouched, would also go into reserves, but
could also be spent by lawmakers. Administration
officials said the governor will have more to
say about his preference for the use of those
funds when he files the close-out budget bill.
Lawmakers and the Baker administration have
already approved $168 million in spending spread
over three mid-year spending bills approved this
fiscal year, but that money was already
accounted for in January when Baker revised the
state's revenue forecast upward by $157 million.
This is all good news for those on Beacon Hill
who are still reeling from a Supreme Judicial
Court decision that took a potential new revenue
source -- a surtax on millionaires -- off the
ballot for November and left questions about
where new money would come from to invest in a
long list of priorities like transportation and
education.
After needing to lower their revenue estimate in
each of the last two budget cycles, House
Speaker Robert DeLeo and Senate budget conferee
Sen. Joan Lively have acknowledged that budget
negotiators are currently giving their fiscal
2019 revenue estimate a second look, but with
the possibility of raising it.
While cautioning that she was not saying the
estimate would be changed, Lovely told the News
Service last week, "They're coming to an
agreement on what that number's actually going
to look like."
Baker budget officials said they are not yet
ready to formally revise upward the revenue
estimate for fiscal 2019, but are comfortable
projecting that revenues may come $100 million
to $200 million higher than the estimates agreed
to in January to build the new state budget.
Using a higher estimate might enable Democrats
in the House and Senate to resolve differences
over spending proposals. The business-backed
Massachusetts Taxpayers Foundation has also
suggested an adjustment to the estimate might be
warranted.
June is the second biggest tax collection month
of the year, behind April. Revenue Commissioner
Chris Harding in a June 20 letter to House Ways
and Means Chairman Jeffrey Sanchez and Senate
Ways and Means Chairwoman Karen Spilka reported
the state collected $1.717 billion from
taxpayers over the first half of June.
That's up $370 million or 27.4 percent compared
to the same period in June 2017. Administration
officials project that tax revenue growth for
the year may approach 8 percent.
Income taxes totaled $872 million and were up 17
percent over the first half of the month, sales
and use tax collections of $114 million were up
16.1 percent, and corporate and business
collections of $647 million were up 48 percent.
Capital gains tax collections have been pouring
into state coffers this fiscal year at such a
high volume that it's triggered a $290 million
deposit into the state's rainy day fund, with a
second large automatic deposit likely based on
capital gains collections in June. The
administration expects that some $450 million to
$500 million could ultimately wind up being
funneled into the state's reserves.
State House News Service
Friday, July 6, 2018
Weekly Roundup - The Lost Week
By Matt Murphy
Massachusetts prides itself on being first.
The first public school. The first state to
legalize gay marriage. The state with the "best"
benefits for veterans. So it must've been
jarring this week for policy makers to acclimate
themselves to the quandry they put themselves
in.
With the stroke of South Carolina Gov. Henry
McMaster's pen on Thursday, Massachusetts became
the last state in the country without a
permanent spending plan in place for fiscal
2019, which in 46 states, including this one,
started on Sunday.
Some might shrug it off as a technicality. After
all, the Legislature and governor did work
together to put in place temporary funding to
keep government fully operational while
negotiations continue.
But of the 10 budgets House Speaker Robert DeLeo
has overseen in the big chair, this one will be
the latest. And don't think he's not aware.
"Like everything, of course we would've wanted
it done, but we're working hard and trying to
get through it and we're here today," House Ways
and Means Chairman Jeffrey Sanchez said
Thursday, emerging from the speaker's office to
otherwise sleepy hallways on the day after the
Fourth of July.
The mid-week holiday essentially smothered
productivity on Beacon Hill where the branches
dropped any guise that agreement might be
reached on the budget, or other bills, and met
only briefly and informally.
With idle time on their hands and the weight of
a missed deadline on their shoulders, tension
between the branches spilled out into the
public, as it sometimes does this time of year.
One House source accused the Senate of being
unfocused and riled by "internal politics,"
while a senior Senate Democrat laid any blame
that there is for the late budget on the
doorstep of Sanchez, whose inexperience, they
said, has led to a bottleneck of legislation in
his committee.
The sniping between the branches over the budget
deserves attention not just because it is
holding up a single deal, but has the potential
to fester during the closing weeks of the
session when many more compromises will need to
be made.
In addition to the budget, legislation proposing
to regulate short-term rentals, protect
consumers from data breaches, enhancing civics
education and overhauling health care laws are
all in conference committees.
Then there are economic development, opioid
abuse prevention, and clean energy bills (just
to name a few) that haven't even gotten that far
yet. And the two-year session ends in 25 days.
"As time goes by, obviously one of the things I
do worry about is the opportunity cost on all
the other stuff that's currently pending that
needs to get worked on and done by the end of
the session," Gov. Charlie Baker said this week.
Details about the budget sticking points are
hard to come by, but it's not much of a stretch
to think that immigration has to be one of the
hurdles. The Senate passed an amendment to
restrict local police cooperation with federal
immigration agents, but House leadership has
been reluctant to take that issue on this
session.
Gov. Baker has also threatened to veto any
"sanctuary state" provisions in the budget,
which might have been what he had in mind when
he suggested the House and Senate just strip the
budget of all the policy riders and send him a
clean budget focused purely on dollars and
cents.
Speaking of dollars and cents, Baker
administration budget officials signaled to
fiscal 2019 budget negotiators that if they're
arguing over nickels and dimes, they can stop.
With a projected $1.2 billion in excess tax
revenue now expected to find its way onto the
ledger for fiscal 2018, the governor's budget
office teased Friday that legislators would not
be out of line if they assumed an extra $100
million to $200 million for fiscal 2019.
The new federal tax law and general economic
strength has been a windfall for Massachusetts,
even though business confidence took a dive
following passage of a state law that would pile
added expenses on employers in the form of a
higher minimum wage and paid family leave.
The administration also said that after making
legally mandated deposits into the state's
"rainy day" fund of about $500 million and
paying about $300 million in accrued bills, the
state may have up to $200 million in free cash.
It wasn't all about fireworks, in the sky or
otherwise, this week.
Overturning a Superior Court judge's ruling, the
Supreme Judicial Court found that the state's
20-day pre-election voter registration deadline
did not unconstitutionally restrict someone's
right to vote. The decision was a win for
Secretary of State William Galvin, who had
appealed to the state's highest court, but it
may not look that way to everyone.
Galvin's primary opponent Josh Zakim has
criticized Galvin for appealing when it appeared
the courts had struck down the impediment to
last minute voter registration, and voting
rights groups decried the decision.
For his part, Galvin tried to spin it both ways.
He said the ruling "will be of assistance in my
fight to pass legislation that would change the
laws in Massachusetts to allow same day
registration."
The Cannabis Control Commission also handed out
its first recreational retail marijuana license
to a shop in Leicester, and Baker put his
signature on the "red flag" gun access law, to
the excitement of gun control advocates and the
disgust of the National Rifle Association.
STORY OF THE WEEK: The beach proves more
alluring than the bargaining table.
State House News Service
Friday, July 6, 2018
"Grand bargain" silent on 2018 sales tax holiday
By Matt Murphy
"The "grand bargain" law signed by Gov. Charlie
Baker last week makes a summer sales tax holiday
a permanent annual fixture on the calendars of
shoppers and business owners in Massachusetts.
But most of the new law, including the brief
August respite from the state's 6.25 percent
sales tax, doesn't kick in until January 2019.
So what about this summer?
If there is to be a sales tax holiday this
August, the Legislature must first agree to it,
and schedule the weekend.
House Speaker Robert DeLeo's office declined to
comment when asked whether the House would take
up legislation this month to designate one
weekend in August as sales-tax-free. However,
with elections approaching, tax receipts pouring
in well above estimates and lawmakers having
just signed off on a permanent sales tax
holiday, it would be surprising if the
Legislature did not give consumers a break next
month with a weekend that typically costs the
state a little over $20 million.
One possibility is that a sales tax holiday
could be added to an economic development bill
that the Legislature is expected to consider in
the closing weeks of the session. The
legislation passed through the Committee on
Economic Development and Emerging Technologies
without addressing the sales tax holiday that
Gov. Baker had included in his version of the
bill.
At that time, the concept of a permanent sales
tax holiday was still the subject of
negotiations between legislators and interest
groups hoping to strike a compromise law
addressing the minimum wage, paid family leave
and a sales tax reduction.
A sales tax reduction, which Baker says he
supports, was not part of the grand bargain law
that spurred proponents of minimum wage, paid
leave and sales tax cut ballot questions to
abandon those efforts. The law calls for the
minimum wage to rise from $11 to $15 over five
years and for a new $800 million paid family and
medical leave program supported by a payroll
tax.
Starting in 2019, the Legislature will have
until June 15 to pick a weekend in August to
hold the sales tax holiday. If lawmakers miss
that deadline, the commissioner of the
Department of Revenue by July 1 must set the
dates.
The Boston Herald
Thursday, July 5, 2018
Massachusetts last on patriotism scale? They beg
to differ!
By Jordan Frias and Sean Philip Cotter
Fourth of July revelers on the Esplanade loudly
rejected the notion that Massachusetts ranks
50th in patriotism — we love America in our own
way, they said, shrugging off a survey that
dissed the Bay State.
“How can they say that about us? We vote in
every election,” said Beth Fuller, 62, of
Medford, who was out on the Esplanade with red,
white and blue beads around her neck.
“How many people have we had run for president
from here? This is the hub of the universe,”
Fuller said.
Fuller, 62, who described herself as “pretty
patriotic,” and others took umbrage at the
results of a
recent survey from the web site WalletHub
that deemed Massachusetts to be the least
patriotic state in the country.
WalletHub leaned heavily on military engagement
— factors such as each state’s rate of military
enlistment and veterans. The rankings also
looked at civic factors such as voter turnout
and how many people volunteer in organizations
such as the Peace Corps.
Massachusetts scored third-lowest on the
military side, and 38th out of the 50 states on
the civic side — but the Bay State’s combined
score left it in last place. The survey ranked
Virginia as most patriotic.
“I don’t believe that, because of what you see
all around and what you hear all around,” said
Kevin Brown, 63, of Roslindale, clad in a
star-spangled tank top and a hat on the
Esplanade. “This is one of the biggest venues
for the Fourth of July.”
Salem State University politics professor Daniel
Mulcare said the survey should have looked at
other types of civic engagement, such as
protesting, joining local organizations or
working in public sector jobs.
“The emphasis has been put too much on the
military,” Mulcare said.
Meanwhile, a Gallup poll released this week
found that the percent of people who feel
“extremely proud to be American” dropped to 47
percent, the lowest mark in the 17 years the
organization has asked about that. The drop is
largely driven by Democrats and liberals, who
increasingly over the past few years told Gallup
they were less proud. The poll over the past
several years has shown Republican pride is
consistently higher than Democratic pride with
little wavering up or down.
Arielle Dede, 18, of Dedham, was celebrating the
nation’s birth on the Esplanade yesterday,
though she said the country’s handling of
immigration issues and foreign policy under
President Trump has her feeling a bit down about
the country lately.
“Right now a lot of people, at least Democrats,
don’t feel so hot about the U.S.,” Dede
acknowledged. |
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