Bill Vernon's Beacon Hill report

Week of April 9

Budget: Now What?

With the casino issue put to rest for the year, the Legislature will be looking for new revenue and possible savings to close a $1.3 billion budget gap. The debate on the FY09 state operating budget is scheduled for the last week in April in the House. A tax bill, which will likely include a measure to close so-called corporate tax loopholes ($200 million) coupled with a phased-in reduction in the corporate excise tax rate, a $1.00 per pack increase in the cigarette tax, and a plan to increase enforcement on the underground economy, including employee classification rules, to increase revenue, will be debated before the budget. Speaker DiMasi also plans to count on spending more than $400 million in reserves and cutting $100 million in unspecified areas to reach a balanced budget to reach balance. Some of the spending reductions include giving cities and towns power to take advantage of state health insurance without approval of local unions and limiting the number of police paid details at transportation construction sites. A gas tax increase is under consideration but so far remains a political non-starter. Speaker DiMasi has reiterated several times that broad-based taxes are a last resort In the battle to balance the state budget, the state still has some weapons including a balance of $2 billion in the “rainy day” fund and revenues for the current fiscal year that are $645 million above the original projected modest increase. Most observers do not expect a sharp decline in revenues next year. Then there are still spending accounts that former Governor Weld famously described as where “the lard is marbled in.”



A report on the state’s liability for non-pension expenses and benefits (mostly health insurance for the state’s retirees) is due. The report will likely suggest a long-term plan to pay the estimated $13 billion bill.



Health Insurance Reform

With growing evidence that the 2006 MA health insurance reform legislation is unsustainable due to increasing costs, the legislative leadership remains fully supportive, but increasingly concerned about the program’s immediate future. The cost of healthcare must be addressed for individuals who are required by law to have insurance and for taxpayers who are paying for state government subsidies of individual plans. NFIB continues to advocate for legislators to take bold steps, including greater transparency of consumer costs, greater insurance product flexibility, reduced state mandates, expanded

group buying and reconsideration of expensive provisions in the minimum creditable coverage standards. Bringing market forces to bear in the healthcare industry is difficult but not impossible. In fact, it is the only way that costs can be reduced and the program sustained.



Fishing

A series of hearings at port locations will discuss the distribution of $13.4 million in federal funds to support ground fishermen who have been financially hurt by what some call excessive federal regulation. The state is also developing alternative regulations that will supplant the current “days at sea” scheme and protect both the ground fish industry and fish stocks.



Who Needs the Legislature?

First, changes in the state’s automobile insurance system from premiums set by state bureaucrats to “managed competition” were instituted by the office of the Insurance Commissioner. Legislation to make similar changes was submitted for years but never passed. Now comes a ruling by the state Appellate Tax Board to allow municipalities to assess property taxes on telecommunications companies’ infrastructure (poles and lines). Legislation to give cities and towns that right has been stalled in the legislature. The tax court’s ruling has been appealed.



Leadership Council Scholarship

Members of the NFIB/MA Leadership Council have again this year funded a $1000 scholarship for a Massachusetts High School graduating senior who has demonstrated an interest in entrepreneurship and the free enterprise system through either his or her education, employment, or own business. And NFIB member Office Paper Recovery Systems in Wilmington has sponsored a separate award. Twenty-five Massachusetts students have won scholarships during the program’s three years and one won a $5000 regional award. For more information, see www.NFIB.com/YEF. Contributions are tax deductible.



Events

NFIB is sponsoring with the Retailers Association and several regional chambers of commerce a forum with Senate President Therese Murray focusing on small business issues. The forum will be held at the John Carver Inn in Plymouth on Friday, April 18, 2008 at 8:30 AM. All small business owners are invited. There is no charge.



On Friday, April 25, at 8:00 A.M., in Providence, Rhode Island, NFIB President and CEO Todd Stottlemyer will host a Fix It Forum on the rising cost of health care to hear your ideas from the frontlines of the health care issue. When healthcare is fixed for small business owners, it will be fixed for America. All NFIB members are invited. Further details will follow.



This is our way of keeping you informed and ready to react when politicians address issues that affect your bottom line. We hope you find it useful and informative. Visit www.nfib.com/MA for more state news, views and tools for Massachusetts small businesses.



Sincerely,



Bill Vernon

NFIB/Massachusetts State Director

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