Legislative Issues:
Important positions on significant topics
1. Gas Tax
In what is probably our most vocal effort, the Chamber has opposed the effort to increase the Gas Tax in Massachusetts. The current tax is set at approximately $0.24, but the proposed increase of 40-55% (depending on the bill) would outrageously inflate the price of gas. With gas prices hovering between $2.50 and $3.00 per gallon and a rise expected over the winter months, the increase in the gas tax will negatively impact not only small businesses that rely on transportation, but also the hundreds of thousands of workers that commute every day in an already fragile economy.___________________________________________________________________________________________________
2. Sales Tax
The Chamber is opposed to the new legislative revenue enhancement (tax increase) that increases the Massachusett's Sales Tax 25% and eliminates the liquor exclusion from the tax. This tax will dramatically change the retail landscape in North Central Massachusetts and certainly in the Greater Gardner area."People are driving across our borders every day to cut costs, including taxes and bottle deposits in Massachusetts, and we have just increased the reasons for them to shop in NH and bypass retailers in Massachusetts," former Greater Gardner CEO Michael Ellis said. "With declining sales tax revenue, we can say this well is drying up. You don't increase the size of the pump. You dig a new well and look for other, more creative revenue sources. I am concerned for the businesses that are keeping what remains of our economy stable, as this increase will not help those retailers that are left in the Greater Gardner area."
Additionally, in a surprising move the legislature eliminated the exemption of liquor from the Sales Tax in Massachusetts. While proponents of this tax increase will argue that the new revenues generated will help drive municipal aid and road repairs, the fact remains that our economy is particularly frail and vulnerable. As you are keenly aware, in North Central Massachusetts and in the Greater Gardner Area in particular we are experiencing very high unemployment and critical business conditions. Without a doubt, this move will jeopardize those businesses in border communities and their ability to be viable and sustainable business operations over the long term, especially for those in the liquor retail industry.
Let's look at what government intervention has done to retail in North Central Massachusetts. The Sales Tax already has put Massachusetts businesses at a competitive disadvantage. Higher employment taxes drive large employers to New Hampshire and Massachusetts continues to lose jobs to its neighbor to the North. Additional and egregious luxury taxes on items, for example cigarettes, have driven Massachusetts consumers across the border in record numbers, as the cost of a carton of these items is nearly half in our neighboring state as it is here in the Commonwealth.
Interestingly enough, while we have seen the dramatic economic effect of the cigarette tax the health benefits of the tax, similar to the ones now being used for the alcohol tax, are sketchy at best. Massachusetts consumers purchase cigarettes in New Hampshire, so overall Massachusetts "use" rates are being reported as decreasing in our State as a function of purchases. Massachusetts legislators have continually raided the fund to go to general overhead and other projects. In fact, in 2008 the American Lung Association gave Massachusetts an "A" for cigarette taxation, but a "C" for adequate cessation programs, and an "F" for tobacco prevention and control spending. Indeed, a portion of the new tax on alcohol is proposed to go towards prevention and treatment programs, as was proposed for the Massachusetts cigarette tax when it was implemented.
Excise taxes (federal and state) already account for over 40 cents of each dollar spent for liquor purchases in Massachusetts. In essence, this proposed sales tax is actually a tax on an already existing tax. Massachusetts already loses beverage alcohol sales to New Hampshire, which generally has lower spirit sales and no deposit required on beer containers.
Massachusetts retailers must compete on an unlevel playing field every day with New Hampshire and the Internet - both tax free and both not employing Massachusetts residents. TAX FREE Amazon.com reported an 18% increase in both 2008 Fourth Quarter sales, and 2009 First Quarter sales, while most MA retailers saw a decrease in equal amounts.
"We are gravely disappointed that the Massachusetts Legislature not only decided to raise the sales tax in Massachusetts, but also decided to eliminate the exemptions that protect businesses along our border communities and preserve the idea of fairness and equity by not double-taxing consumers across the Comonwealth," Ellis said.
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3. Unemployment Insurance Rate Increase
Every year, the Chamber fights the automatic increase businesses face in the UI program in the state, even in times of robust economy and virtual unemployment. Due to the language of the law, it is almost guaranteed that rates will increase, based on certain economic indicators and without legislative intervention, every year. In the past, the Chamber has been successful in eliminating or reducing the increases called for by the law. The Greater Gardner Chamber lobbied for and succeeded in getting our area legislators to sponsor a bill that reduced rates by four levels, saving Massachusetts businesses almost $100 million.___________________________________________________________________________________________________
4. Unemployment Reform
Massachusetts pays some of the most generous benefits for the longest time, and we want parity with other states.The Chamber has worked hard and lobbied aggressively for this parity. In Massachusetts, workers need only be on the job for 15 weeks to get 30 weeks of benefits during a time of robust economy. The expansion of weeks one has to work in a year to qualify for benefits from 15 to 20 weeks is a reasonable reform. The UI system was established to help those workers committed to the workforce who have lost their job through no fault of their own. There are many people who enter the workforce for short period of times. In fact, in 1999, during a period of virtual full employment, our state paid out over $600 million in unemployment benefits, attributed in large part to the number of seasonal employees collecting these funds. Furthermore, only four other states in the nation require 15 weeks or less of employment to be eligible for benefits, while the remainder require 20 weeks, and over half of these states require more than 20 weeks.
Reducing the benefits duration from 30 weeks to 26 weeks is another benefit reform included in this bill. Every other state in the nation has established 26 weeks as the proper benefit duration and the federal government uses that standard when allowing federal extensions of benefits. In other words, the 13-week federal extension is added onto the 26 weeks, not the 30 that Massachusetts uses. It is an error to think that workers will lose four weeks of benefits if this is adopted. In fact, the average benefit duration for claimants in the system is approximately 18.4 weeks, far short of the 30-week period allowed by law.
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5. Requirements for Security Breach Notifications Under Chapter 93H
The Office of Consumer Affairs and Business Regulation ("OCABR") requires compliance with specific regulations for the protection and storage of consumers' personal information. When OCABR first initiated these requirements, an advanced timeline was set for businesses to comply with the standards. The Chamber was among many business organizations that asked for an extension on compliance with these regulations, primarily because many small businesses did not understand the complexity of the task. On November 14, 2008, OCABR extended the deadline for compliance, and in the following spring of 2009, the Chamber hosted a program to assist small businesses complete the OCABR requirements.___________________________________________________________________________________________________
6. Small Business Exemption from Sales Tax for Utilities
With the increase in energy costs affecting all of our members, the Chamber wants to be sure small businesses are aware of a state law commonly referred to as the Small Business Exemption. Under this law, certain small businesses do not have to pay the sales tax on gas, steam, electricity, and heating fuel purchased solely for their own use. Under the law, only purchases made after the certificate has been submitted are eligible for the exemption.This law applies to small businesses that:
- Have a gross income of less than $1,000,000 for the prior calendar year
- Reasonably expect the same in the current year, and
- Have 5 or less employees.
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7. HR 1873 Small Business Contracting
Many services and products are supplied to the federal government by small businesses. A bill regulating these small business contracts has been introduced at the national level. The Chamber contacted our federal representatives on this bill because it does not contain the annual re-certification provision that was recommended by the SBA Inspector General to stop the diversion of Federal small business contracts to large companies. We asked our delegation to propose and support an annual re-certification provision in the Senate version of this legislation, requiring annual re-certification for all firms that currently hold Federal small business contracts, preventing the Federal government and prime contractors from reporting awards to any business that would not currently meet the definition of a small business. This bill is vital to small businesses across the nation.___________________________________________________________________________________________________
8. Health Care
Health Care costs have risen 129% in the last nine years for some businesses. With no relief in sight, the Chamber has made this the number 1 issue on our legislative agenda for the last two years, as well as the number 1 issue on the Massachusetts Council of Chambers. We have brought expert speakers, including our own Dan Moen, President of Heywood Hospital, to address our group on real issues that are forcing the cost of health care up in our state. We are working on getting new initiatives through to help curtail the cost of health care in Massachusetts.As we research health care reform, some important issues have come to our attention:
- Massachusetts, and the nation as a whole, does not make primary medicine an attractive career path for doctors. This has led to a shortage of primary care doctors. Health Care Reform is great; everyone has a card. However, this does not stop them from going to the Emergency Room to get their care, because they cannot see their primary care doctor or another doctor in a timely manner when something is wrong.
- There are too many plans to administer, which creates too much overhead and increases cost. Each insurance company has a plethora of plans - literally thousands. They need an army of people to monitor and administer each plans, as do care providers, including hospitals, doctors offices, and pharmacies. The paperwork and bureaucracy adds a significant amount to our health care costs.
- Generic prescription medications take too long to get to market. Patent protection laws protect pharmaceutical companies for extended periods of time, even for simple substitutions of inert (filler) ingredients in the drugs. Generic drug companies cannot manufacture or market these products while they are protected. These protections should not be extended to drugs that do not have significant changes made to their active ingredients.
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9. Health Care Reform Changes to Minimal Creditable Coverage
The Chamber opposes an increase to the Minimal Creditable Coverage in Massachusetts. Chapter 58, the Health Care Reform Law, establishes an individual mandate that every resident of Massachusetts must carry health care coverage. Minimum Creditable Coverage (MCC) is the basic level of coverage required by Massachusetts citizens to prevent paying a tax penalty to the state. Amendments were introduced to increase the benefits required for an individual to meet the MCC standard. These changes were to go into effect beginning January 1, 2009. The Chamber lobbied hard, writing to our State Representatives and Senators about the negative effect this would have on our businesses and their employees. In November 2008, the Chamber was notified that there would be no change to the Minimal Creditable Coverage under the Health Care Reform Law for this year. Though we can expect this issue to reappear in the future, we hope that our continued efforts will convince our local legislators of the detriments of these changes.___________________________________________________________________________________________________
10. Health Care Reform Changes to Fair Share Contribution
The Greater Gardner Chamber, along with other Chambers from across the state, oppose the increase of the Fair Share assessment at this time. Burdensome employer reporting requirements were recently expanded by the State Legislature and Governor Deval Patrick in approved changes to the Fair Share Contribution (FSC) program. Additionally, the Patrick Administration is finalizing companion regulatory changes to the program in an attempt to raise more tax revenue. Already, the administration has changed how employers calculate the number of employees, and the new changes require the calculation of employees to be made quarterly. This will drastically alter the net effect of part-time/full-time equivalent calculations for many businesses in certain quarters by changing their eligibility status and requiring these businesses to pay the fair share assessment. Furthermore, regulations were changed that force businesses to meet both eligibility requirements if they were on the cusp, a significant deviation from the "either/or" requirement in the initial legislation.___________________________________________________________________________________________________
11. Family Leave and Paid Sick Days
The Chamber opposed the Massachusetts Family Leave Bill because of the likelihood of abuse, difficulty by small businesses to keep the positions open, and likelihood that costs were going to be shifted to the business.___________________________________________________________________________________________________
12. Massachusetts Gift Certificate Law
In mid-June 2009, the Massachusetts law regarding gift certificates changed regarding the ability of companies to charge certain fees associated with the gift certificates and gift cards, as well as the time frame in which a customer is allowed to redeem the certificate or card for cash.The new law prohibits dormancy or administrative fees, or any other fee that decreases the value of the gift certificate. This law does not, however, apply to a gift certificate that can be used at multiple retailers, such as an American Express or Visa gift card.
This law also changes when a customer has the right to cash out the value of a gift card. For reloadable cards, a customer can cash out once the value falls below $5.00. For non-reloadable cards, there is no change to the law: customers can continue to request a cash pay-out when 90% or more of the gift card's value has been redeemed.
For the text of this law, click here: CHAPTER 58 OF THE ACTS OF 2008
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13. Quarterly Estimated Payments of Corporate Excise Tax
The Chamber asked our legislators to approve this more equitable method of payment for businesses.___________________________________________________________________________________________________
14. Casino Gambling
The Chamber aggressively supported this initiative to allow casino gambling in Massachusetts, as it would provide a new revenue source for the state and benefit the tourism industry as a whole. Hotels, restaurants and other businesses in the tourism industry would all profit from this initiative. Most importantly, this would provide a way to drive new revenues to local cities and towns.___________________________________________________________________________________________________
15. Tax Policy
In April of 2008, House members approved a bill to increase in the state cigarette tax. Governor Deval Patrick has made the corporate tax increase a centerpiece of his fiscal policy.The bill increases business taxes by imposing combined reporting and "check the box" apportionment formulas on companies with operations in multiple states. At the same time, it lowers the tax rate on corporations from 9.5% to 8.75% starting January 1, 2009, with the possibility of additional reductions to 7.5% based upon economic conditions. Financial institutions have their tax rates fall from 10.5% to 10%, with the possibility of additional reductions to 9%.
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