The Affiliated Chambers of Commerce of Greater Springfield, Inc. recently unveiled its legislative agenda for the year 2006, as part of its annual Outlook program. The ACCGS Board of Directors, upon recommendation of the Chamber’s Legislative Steering Committee, voted to adopt positions on several issues as the nucleus of its legislative efforts. As with all legislative issues the Chamber adopts, this year’s efforts signify "the Board's continued resolution to keep the cost of doing business in Massachusetts reasonable and to ensure that our members are 'economically competitive.' "

The issues are overseen by a Legislative Steering Committee which is comprised of 28 businessmen and businesswomen who meet the second Friday of every month to set the Legislative Agenda for the Affiliated Chambers of Commerce of Greater Springfield, Inc. It is the mission of the committee to identify those issues of major concern to the business community, research the issues and recommend positions on them. The committee is also charged with educating Chamber members on these issues, soliciting member support and encouraging elected officials to adopt the Chamber’s position. Over the past year the committee has hosted officials such as U.S. Congressman Richard Neal, Senators Stephen Buoniconti and Andrea Nuciforo and Representatives Joseph Wagner and Gale Candaras.

Massachusetts State Budget

The state fiscal year 2007 budget was presented by the Governor on January 25, 2006. The Chamber’s Budget Sub Committee continues to monitor the current fiscal year’s budget and revenue receipts as it prepares its analysis and recommendations for the Legislative Steering Committee. State revenues for FY 2005 exceeded conservatively set estimates by almost one billion dollars, however, after one-time revenues borrowed from the state’s rainy day fund to balance the FY 05 budget were paid back at year’s end, net revenue growth was less then $300 million.. FY 2006 revenues continue to grow at a modest pace with projected net revenues that could be utilized to increase support for business, in the $200-$300 million dollar range.

The Chamber has identified the following three areas of the state budget as of critical interest to the business community and as priority areas for state investment of new revenue growth: local aid to cities and towns to offset increasing commercial property taxes, support for higher education as a means of workforce development and health care reform that eliminates businesses’ cross subsidization of the state’s Medicaid program for the poor and hospital provided free care for uninsured employees. Each of these areas of concern directly impact businesses’ ability to compete regionally, nationally and globally.

For FY 07 the budget sub committee is focusing on reversing the negative impact that cuts in state funding of local aid to municipal government has had on our communities and businesses. We believe the state’s cut back in revenue sharing is the major reason for the increase in dual tax rate communities, as well as, disproportionately large annual increases in commercial tax rates. The Chamber supports the Mass Taxpayer Foundation’s proposal to increase state revenue sharing to local government by earmarking 40% of the state’s income, sales and corporate taxes to local aid. In addition the Chamber has proposed that the Massachusetts Taxpayers Foundation initiative be amended to include a position that the influx of new funding for cities and towns be used, in part, to reduce the cap on commercial property taxes from170% of the residential tax to a fairer percentage.

The Chamber strongly believes that both residential and business taxpayers should benefit from increased state aide to cities and towns through a rebalancing of property tax obligations.

Unemployment Insurance Reforms

The 2005 year was another one of great frustration for the Chamber’s Workplace Issues Sub Committee. The Chamber continues to strongly believe that having the nation’s highest per worker Unemployment Insurance (UI) tax payments is not good for attracting business, nor is it a good for the businesses that are here. The only way for meaningful and permanent change in this situation, is through reforms to the system. While rates have been frozen in the past, it is more important that changes to the outflow of funds be made in order to make the reforms more permanent. The Chamber continues to believe that Massachusetts should join with the other 49 states in allowing unemployed workers 26 weeks of benefits, not the 30 currently offered. Additionally, the Chamber believes that the current standard of allowing a worker to qualify for benefits after only 15 weeks of work is too low and that the standard should be raised to 20 weeks, which over half of the other states now use. These two simple changes would reduce the outflow of funds by $120 million. Lastly, the Chamber believes there should be some adjustments made to how quarters of work are accounted for when determining the benefit amount. The reduction for this change is $65 million. Organized labor fights each and every one of these ‘common sense’ adjustments, and the Chamber will continue to encourage its members to communicate what this high tax means to their businesses. The legislature should be applauded for their efforts to eliminate fraud in the system.

Finally, many members are finding the charge for the solvency assessment to be more than their actual experience assessments. It seems that the administration of the UI program has become lax when allowing benefits to be paid from the solvency fund. More stringent regulations for determining eligibility for these benefits would reduce that charge to every employer.

The Chamber is aware of companies in the area that because of the continued high cost of this program, with no meaningful reforms in sight, have relocated jobs out of state or overseas. This high cost results in fewer jobs.

Health Care

The Chamber’s Health Care Sub Committee, works feverishly on bringing about health care reforms that will make health care more affordable, more accessible, and easier to understand and compare when choosing providers. This area of legislation is perhaps the most complex and challenging of any that the Chamber is involved in. It is also perhaps the most important. It does appear that 2006 will bring about the largest reforms in health care in several years. Some of this is driven by the federal government’s mandate to make changes or lose hundreds of millions of dollars. The other driver is the escalating costs to employers, employees, and our cities and towns. It seems that several pieces of legislation may be needed to address various aspects of this issue and the anticipated reforms of 2006 will be followed by additional reforms in the next few years. The Chamber believes that more businesses would provide this benefit if an affordable health care plan could be developed. It also strongly believes that the business community that does provide this benefit has been subsidizing those employees of businesses that do not provide the benefit as well as those people who get their health care through the state’s ‘free care pool.’ This cross subsidization must end. The Chamber has issued a position paper on health care with the expansion of the successful Insurance Partnership Program a key point in it. More sliding scale subsidies, increasing the size of the businesses eligible for the program, and instituting a mandate for every employee to have health care, are all included in the position. It is clear that employers, employees, and the state must all step up their efforts to insure more people in Massachusetts.

Associated with health care, is another bill that would mandate a very specific and rigid ratio of patients to nurses. The Chamber continues its opposition to this legislation as it would do nothing to address the real problem of the need for more nurses, while at the same time drive the cost of health care up dramatically. The Chamber continues to advocate for legislation that helps increase the number of nurses.

Property Tax Classification

This issue comes up in virtually every affiliate of the ACCGS. Massachusetts allows municipalities to shift more of the local property tax burden onto businesses by using a higher property tax rate for business than used for residents. As municipalities have become more dependent on this stream of revenues due to cut backs in local aid from the state, the political will to have this burden shared equally gets weaker and the tendency has become to shift more of the burden onto the business sector. The business tax rates in three of our communities approaches or exceeds 170% of what it would be if there was only one rate. It should be obvious that this shift inhibits job creation and the Chambers continue to speak up at the hearings that precede the annual vote in October and November on this issue. It appears that this issue will only get more difficult in 2006 and in future years, and the Affiliate Chambers will all have to increase their efforts to have a reasonable and fair tax rate set for businesses. This vote by the local selectmen or councilors is perhaps the most important business vote cast on the local level all year.

The efforts of the budget sub committee previously written about are tied directly into this issue. Aid to our municipalities from the state must be increased. A steady and fixed stream of revenue to cities and towns from sources other than this unfair and regressive tax is essential.

Other issues

There are several other issues that the Chamber is aggressively involved with or monitoring. Three of these issues are listed here.

Springfield’s financial situation is acknowledged by all Affiliate Chambers as a regional issue and it is constantly monitored.

Legislation banning certain chemicals is always lurking. The ban was not enacted, although a study of certain chemicals and alternatives is underway. The Chamber feels a properly conducted study is a better tool to use than an outright ban.

Workers compensation is an area that continues to be monitored. While changes are needed in some areas of the administration of this system, the reforms put into place years ago appear to still be working.