August 3, 2023

RAM members are reminded that the Annual Massachusetts Sales Tax Holiday is set for August 12-13.  The annual consumer tax incentive suspends the sales tax for individual purchases of single items of tangible personal property costing $2,500 or less, with certain exceptions. 
 
Specific rules governing the Sales Tax Holiday can be found on the Department of Revenue’s (DOR) website, in regulation 830 CMR 64H.1.8: Sales Tax Holiday.  
 

As occurs every two years, a variety of ballot questions have been filed with the Massachusetts Attorney General for constitutional, form, summary and title review over the next month.  Those that pass the initial certification review process with the Attorney General will have the opportunity to collect voter signatures to qualify the questions for the ballot.  That is a very costly process, with some estimating the cost to qualify a ballot question this election cycle could approach a million dollars for those interest groups without a significant volunteer ground organization.  Typically, less than a quarter of the filed ballot questions survive each step of the fall signature gathering process, followed by review next year by the Legislature, another round of signature gathering in May and June, as well as possible legal challenges brought by opponents to the Supreme Judicial Court (SJC).   

Initiatives of concern and interest to RAM include a campaign by an organization called One Fair Wage, which seeks to eliminate the tip wage at full-service restaurants over a phased in period. 

23-12 Initiative Petition for a Law Requiring the Full Min. Wage for Tipped Workers with Tips on Top seems to be part of a national effort, and will likely attract out of state funding for qualification and campaigning purposes.  

The current tip wage in Massachusetts is 45% of the full minimum wage.  This initiative would raise that percentage to 64% on 1/1/2025, to 73% on 1/1/2026, 82% on 1/1/2027, 91% 1/1/2028, and then require the server wage to be 100% of the state minimum wage by 1/1/2029.
 
In addition, there will be multiple questions on app-based ride and delivery platforms (Uber, Lyft, etc.) and dealing with the employment status of those drivers.  Industry proposals seek to clarify that the drivers are independent contractors, while guaranteeing them certain levels of compensation and benefits.  At the same time, labor organizations have filed an initiative to allow for the drivers to organize. 

Teacher unions are seeking to repeal the longstanding and successful state MCAS testing standards for students. Measures seek to limit electromagnetic radiation exposure from wireless communication devices. Multiple questions would also seek to lower the gas tax.  An organization is seeking to legalize the sale of "plant-based psychedelic substances" such as psilocybin mushrooms.   Other filed measures seek to institute voter ID laws, and allow for local rent control measures.

RAM will coordinate with allies in the employer community throughout the process on matters of interest to our membership.  All of the filed proposed ballot initiatives and constitutional amendments may be found on the AG’s website, click here.
 

$56.2 Billion 2024 State Budget Sent to the Governor

The Legislature on Monday sent to Governor Healey the $56.2 B 2024 State Budget, which she will have 10 days (August 10) to review and act upon.  RAM was watching closely for the final Conference Report on three outside section law changes which had earlier passed in the House Budget, but not the Senate.  One section that did not survive the Conference Committee process was the provision to take the State Lottery online, and to allow for debit purchases for lottery tickets.  With no real guardrails or parameters on the type and number of online games, and with stores being left with picking up the cost of the debit card swipe fee, RAM opposed the proposal, and wishes to thank the Conferees and the Legislature for dropping the expansion.

Making into the Budget was a provision to create a 2-year pilot at the state’s health insurance exchange—the Connector—which would authorize taxpayer subsidies for individual coverage from the normal ACA 300% federal poverty level (FPL) eligibility cap up to 500% FPL.  The dramatic eligibility increase threatens to significantly expand the program, with implications for the small group marketplace, and perhaps in the future for all employers with employees in the government program.  RAM remains concerned the program will further contribute to the “death spiral” which has occurred in small group—59% or half a million lives gone since 2006—as younger, healthier lives have left to go to spouse plans or to Connector plans in order to save money.  The resulting risk pool for small businesses have therefore resulted in huge annual premium increases as well as dramatic increases in cost sharing under the plans.  The pilot may accelerate that death spiral for small employers; and, if made permanent after two years, funding will most certainly be needed to subsidize the program.  Ideas will likely then be raised like the abusive and unfair EMAC surcharge to UI bills from 2018-2019.  That tax was applied for all employees who made common sense financial decisions to receive either Medicaid or ConnectorCare coverage during that period, through no fault of the employer.  RAM has asked Governor Healey to either veto the section, or return it with an amendment allowing for health insurance market reforms to bring fairness and equality for small businesses and their employees.   

Also making it into the Budget was a significant change to the Paid Family and Medical Leave (PFML) law which was negotiated in 2018 under the “Grand Bargain.”  Specifically, not allowing for “topping off” of the program with other employer provided paid time off benefits (sick leave and vacation), the change in the budget would authorize that practice, increasing costs of leave, and hurting return to work efforts for employers. RAM was the key employer community negotiator of the Grand Bargain, as the sponsor of the 25% Sales Tax Rollback Initiative.  The carefully crafted negotiations lead us to remove our sales tax initiative from the November, 2018 ballot.  We are now concerned that compromises are being broken without negotiation and balance for both sides; and that not enough time has passed to allow for adequate experience and utilization of the program in order to make informed decisions on such a significant change in law.

RAM has communicated with the Office of the Governor on the section, and has asked for a veto of this PFML law change.