May 29, 2018 by Jon Hurst, President
As RAM members know, your association has been working for almost a year to qualify a ballot initiative to roll back the sales tax to the 5% rate last seen in 2009. The measure also authorizes an annual two day sales tax holiday.
Sufficient signatures have been obtained to file with the Secretary of State by the July 3rd deadline to qualify the measure for the November ballot. But important negotiations are underway on Beacon Hill with various ballot measure sponsors in order to achieve middle ground and avoid the questions being placed before the voters. Besides the sales tax question, two payroll mandate proposals are being negotiated: the initiative to raise the minimum wage to $15 over 4 years, and another initiative to create the most costly and extensive paid family and medical leave mandate in the country.
Complicating the negotiations are pending court cases on whether a constitutional amendment to increase the state income tax by 4% for those persons earning $1 Million or more will reach the November ballot. That case is before the MA Supreme Judicial Court. And before the US Supreme Court is the landmark case on whether states can mandate out of state internet sellers to collect the sales tax from local consumers (SD vs Wayfair).
Whether RAM moves forward with the ballot question on the sales tax rollback will be based on a combination of the outcome of those court cases; as well as on the ability of negotiations to produce more reasonable payroll mandate measures; while still giving taxpayers and local small businesses some sales tax relief to incent local consumer spending rather than driving purchases to NH or to Silicon Valley.
In case we do move forward with the sales tax ballot question, investments are being made for a campaign. The 10,792 required voter signatures for the second round of qualification have been obtained and will be held for potential filing. In addition, the Beacon Hill Institute has completed a study which confirms the economic benefits of lowering the sales tax—particularly for lower income consumers and our small businesses—as well as the fact that the tax loss is far less than what opponents might suggest due to increased local investment and jobs.
What links the high and avoidable sales tax and the proposed costly state labor mandates together is that both make it harder for local sellers to attract and retain local consumer spending due to the resulting and obvious higher customer prices.
In the age of the smart phone, we must all adapt. That includes our existing and proposed laws under the purview of our public policy leaders--who are all very quick to say they support small businesses and our Main Streets. To have laws which make local consumer prices far higher than our competitors, whether through a high sales tax or through unaffordable payroll mandates, is simply antiquated, unacceptable and counterproductive state economic policy. In the 21st Century, that fact is certainly crystal clear to anyone that has ever worked to make a payroll, and to attract consumers armed with unlimited spending options.
More than ever, the employer community, labor, and elected officials should all be working together to keep consumer spending--which is 70% of our economy—right here in Massachusetts. The next few weeks will be telling as to whether that cooperation can and will happen.
