2011 is the beginning of a new legislative session. As such, all bills are filed or re-filed, and the first year of the two-year session continues until November. Due to the timing, many bills will begin the hearing process at the same time the upcoming fiscal year budget is debated. With a busy year on tap, the Chamber recently surveyed its members to create a Legislative Agenda custom tailored to the needs of our membership.

The agenda is structured to address issues our members deemed most important to fostering a healthy business environment, allowing our members to compete and grow. It is also flexible enough to allow the Chamber to react to any late-filed bills or those gaining more momentum in the process. 

MASSACHUSETTS STATE BUDGET.

The Governor’s Budget, filed on January 26, 2011, addressed a projected deficit of roughly $1.5 billion. Fortunately, some of this shortfall will be offset by $.5 billion in increased tax revenue projected for 2012. The state’s rainy day reserve has been utilized over the past few years and offers no relief. In addition, federal stimulus funds no longer exist. All this leads to a challenging budget shortfall for the 2012 fiscal year.

The Chamber, while last year opposing a ballot question to reduce the income tax rate, continues its call for no new or increased taxes in the current economic climate. However, at the appropriate time, we do recommend a roll back of the sales tax to 5%. The challenges of the 2012 budget are bringing core efficiencies in the delivery of services; continuing to promote reforms, especially in health care and pensions, and to prioritize spending areas.

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Areas of Spending, Efficiency and Reform.

• The survey conducted by the Chamber in December showed a high level of concern over the amount the state spends to promote overall economic development in western Massachusetts. As the economic recovery restores tax revenue, economic development initiatives targeted to regions such as western Massachusetts are necessary.

• It also highlighted an area that has been on the Chamber’s list for several years - spending on education, both K – 12 and public higher education. The business community realizes these students are the future workforce and need to have access to a first-class education. Despite spending $10,700 per student per year in education, the portion of these dollars spent on healthcare costs within education has increased at an alarming rate, reducing the amount that goes into the classroom. The Chamber supports the Administration’s health insurance plan proposal that will require all cities and towns to either join the GIC or institute a program of equivalent value and cost. Reducing healthcare costs within government needs to be a top priority, and we support the administration’s efforts to move eligible municipal retirees into Medicare. This action would save an estimated $15-30 million annually.

• Infrastructure was also important to our members and highlights the need to efficiently and cost effectively move goods, services and personnel throughout the region. The Chamber supports the administration’s proposal of a $9.7 million competitive regionalization and efficiency grant initiative.

• Pension Reform continues to be a priority for the Chamber. Last year brought some much-needed reform in this area; these reforms should be built upon in 2011. The private sector has made many revisions to its individual pension plans over the past few years, and the state and municipalities must follow suit in ensuring that these plans are affordable and equitable in relation to those in the private sector.

Workplace Issues

The high cost of doing business in Massachusetts continues to be a major concern for our members. Our recent survey revealed that members feel something must be done to reduce the high cost of doing business in Massachusetts

Unemployment Insurance. This is an area the Chamber has long targeted that is in need of reform. The UI system is completely funded by the employer community and as such, merely freezing rates, or lowering them, does not address the fundamental, systemic changes that must be made so that Massachusetts is no longer one of the top cost of unemployment insurance states in the U.S.

That said, a projected 40 – 50% increase in UI tax rates for 2012 must be avoided. Part of that projected increase is in the prolonged drain of the pool due to the slow economy but as stated above, it is also due to the structure of the program. Among needed changes are:

·        Time spent employed in order to qualify.

·        Tightening the use of the solvency assessment fund. This assessment is often times equal to or exceeds the regular assessment for some employers.

·        Establishment of a more reflective UI tax table

·        Making the fund more helpful to people re-engaging in the work force rather than discouraging the return.

Paid Sick Leave and Mandated Leave Legislation. Efforts to mandate benefits such as sick leave removes all discretion from employers as they set benefits packages they believe they need in order to attract and maintain their workforce. These types of bills only increase the difficulties businesses have in being competitive and retaining jobs in Massachusetts.

Non-Compete Legislation was another effort in the last legislative session that is expected to arise again in this one. This legislation is not needed, especially in light of the fact that any differences of opinions regarding non-compete clauses currently in force have been fairly adjudicated by the court system. Chamber members that use these clauses have expressed their concern and opposition to any legislation that would ban this long-used employment contract legislation. The Chamber believes it is unneeded and if adopted would serve as a deterrent to businesses investing in their personnel and growing jobs in Massachusetts.

Triple Damages. Action taken by the legislature two years ago, making Massachusetts the only state that mandates triple damages for all payroll violations, must be reversed this year. Legislation to return the law to where it was before, allowing triple damages for willful violations only, would remove this “anti-business” feeling caused by this legislation.

Health Care

The cost of health care was the highest ranked issue in the Chamber survey. These costs actually spill into all areas of the survey; they are a major cause of the need for cuts in the state’s budget as health care consumes 30% of the entire budget. They have caused the needed changes that allow cities and towns more control over their health plan design, and they are a major cost of doing businesses in Massachusetts.

While the changes in health care made in 2006 have succeeded in having almost everyone in the state covered, the issues of curtailing the high increases in the cost of health care insurance must now be addressed.

Association Health Plans. These associated health plans, or purchasing cooperatives, were approved on a trial basis last year. The ACCGS applied to be one of the approved plans. While not a proven answer to lowering costs, and only available to a finite number of businesses, the Chamber believes that this will be a useful tool, at least in the short term, for many businesses looking to bend the curve of escalating costs.

Included with the association health plan, which allows the pooling of businesses and their employees, will also be the ability for smaller firms to engage in healthy lifestyle programs, emphasizing the importance of all employees meeting certain benchmarks in key indicators of good health such as blood pressure, cholesterol, etc. These programs are already in place in many larger businesses, and while it does take a longer period of time to judge effectiveness, they are acknowledged as yet another tool in the difficult battle to achieve better health and lower premiums.

Longer term changes in the emphasis on healthy living rather than waiting to address illness and disease must begin now; the Chamber is a willing partner in these discussions.

Other issues

The high cost of electricity in Massachusetts, and cost of energy on the whole, was highlighted in the survey.  In 2011, the Chamber will research what impacts the ongoing change to renewable energy sources have on the current bills of its members, and also look at “trackers” on all electric bills that pay for various social and policy programs. This area, where Massachusetts ranks as the highest cost in the United States, must be addressed in order to foster economic development.

Jeffrey S. Ciuffreda

President

Email. Ciuffreda@myonlinechamber.com

Direct telephone number: 413-755-1312