February 2, 2022
Baker Proposes $48.5 Billion Budget, alongside $700 Million Tax Cut Proposal
Last week, Gov. Charlie Baker filed his FY23 state budget proposal, H.2, a $48.5 billion spending plan that was accompanied by a separate $700 million tax cut proposal that “will relieve the tax burden for very low-income residents, provide significant relief for housing and childcare costs, and improve the state’s competitiveness,” according to the Governor’s letter.
The budget includes a $749 million increase to the Stabilization Fund, which will bring the balance to a record high of $6.64 billion by the end of FY23. Governor Baker’s proposal did not include plans to spend any of the remaining $2.3 billion in federal relief funds still available. A separate spending plan is expected at a later date to appropriate those funds, leftover from the state’s share of COVID-19 relief funds from the American Rescue Plan Act of 2021 (ARPA).
Unfortunately, but not unexpectedly, the budget again includes the “Real Time” sales tax collection proposal, or daily remittance requirement, that the Governor has included now for the 6th year in a row. The proposal requires “third party processors (predominantly credit card companies) to remit to the Commonwealth, on a daily basis, the portion of a sale that is attributable to sales tax, with an effective date of July 1, 2025.” This troubling proposal can be found in Section 34 of the budget. The Governor also again proposes to allow for the use of debit cards in lottery purchases, in Section 10 of the budget. RAM will continue to actively oppose both of these measures as the budget process advances, relaying to legislators the negative impacts of both proposals on our members.
The tax plan expands tax breaks for senior citizens, parents, and low-income workers, as well as proposing changes to the estate tax and capital gains tax. The estate tax is reformed, in a proposal to double the current $1 million threshold and eliminate the “cliff effect” that taxes the full amount below the threshold. The tax rate on short-term capital gains would be cut from 12 to 5% under the plan.
Also, the budget does anticipate receiving $35 million in revenue from the Administration’s yet to be adopted proposal to allow for sports betting in MA.
The House and Senate Committees on Ways and Means will next hold a series of public hearings on the budget, broken out by subject matter, over the next 6-8 weeks. The House will then release and debate its budget plan in April.
MA Senate Adopts Extension of Outdoor Dining & Cocktails-to-go
The MA Senate last week passed a $75 million COVID-19 related supplemental budget bill, S.2626, utilizing the legislation to also extend the popular restaurant provisions allowing for outdoor dining, drinks and cocktails-to-go through December 15, 2022. The extensions were added during Senate floor debate in an amendment offered by Sen. Susan Moran of Falmouth. An amendment to extend the restaurant provisions to May of 2023 was withdrawn. The bill will now need to be reconciled with an earlier passed House version that did not include the restaurant extensions.
OSHA COVID-19 Vaccination Mandate Withdrawn
The Occupational Safety and Health Administration (OSHA) has officially withdrew its Emergency Temporary Standard (ETS), which would have required large employers with 100 or more employees to mandate that they become vaccinated or alternatively produce a negative COVID-19 test on a weekly basis. In withdrawing the ETS, OSHA specifically cited the U.S. Supreme Court’s recent decision to reinstate a stay of the proposed rule, which effectively prohibited its implementation. In addition to the withdrawal, OSHA also moved to dismiss the remaining lawsuits pending before the federal courts which target the ETS. Between the ETS withdrawal and motion for dismissal, this appears to be the end of this version of OSHA’s large employer ETS. RAM will continue to monitor OSHA activity for renewed efforts regarding employer mandates.
Legal Alert: SJC Clarifies MA Consumer Protection Law
In support of one of our member companies, RAM recently submitted an amicus brief with the Massachusetts Supreme Judicial Court in the case of H1 Lincoln, Inc. vs. South Washington Street, LLC, involving a drawn out dispute over a commercial lease agreement. In performance of the lease, the defendant was found to have engaged in “unfair and deceptive acts and practices” prohibited under the state’s consumer protection law (Chapter 93A), which also allows for enhanced damages to be imposed by the courts for certain violations. On appeal to the SJC, the defendant attempted to shield itself from additional 93A damages awarded by the lower court by pointing to language in the lease designed to limit the parties’ liability for breach of contract. In a decision that aligns with the position taken by RAM, the SJC clarified that when violations of 93A are intentional, contract provisions limiting liability will not be enforced as a means to circumvent the law. In doing so, the ruling reinforces the 93A business protections, provides legal certainty for businesses and promotes fair and honest dealings between business organizations.
MA Data Privacy Bill Released Favorably from Committee
This week the MA Legislature’s Committee on Advanced Information Technology, the Internet and Cybersecurity released a redraft of S.46/H.142, the Massachusetts Information Privacy and Security Act (MIPSA). This Data Privacy legislation is intended to provide residents greater control over their personal information online and establish core standards for how companies can collect, use, and sell personal information collected from MA residents. Unfortunately, inconsistencies between the proposal and existing state Data Privacy Laws (CA, CO, VA) create significant compliance obstacles for retailers operating across the country.
RAM has long advocated that Data Privacy is an issue best regulated at the federal level to avoid such a patchwork of inconsistent and incompatible state laws across the country.
The majority of the bill applies only to entities with global revenues of at least $25 million per year or those processing the personal information of at least 100,000 Massachusetts residents. It would require that residents be provided notice prior to the collection of their personal information, as well as the ability to access, delete, correct, and opt-out of the sale of their personal information. Enforcement authority is given to the Attorney General’s office which would be empowered to promulgate additional regulations, initiate enforcement actions, and impose significant penalties for violations. The bill also updates the state’s existing Data Breach Notification Law to allow for a private right of action for violations.
RAM staff, in coordination with member experts, is in the process of conducting further review of the bill to determine its true impact on the industry and establishing an opposition strategy moving forward. Opposing this bill will remain a priority issue for RAM heading into the end of the current legislative session.
|
