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The Beacon Hill Report - May 1, 2014

Date: April 30, 2014

RISING GAS TAXES MAY IMPACT BALLOT QUESTION

As the American Automobile Association reported the price of gasoline had increased in Massachusetts 26 cents per gallon over the same time a year ago, following a leap in prices of 24  cents per gallon in late April, the Massachusetts House considered amendments to their version of the FY 2015 spending plan. One amendment would require the transparent display of the actual taxes contained in the price per gallon paid by consumers – more than 60 cents per gallon in MA.

It is also now likely that one question for voters to decide on the ballot in November will be whether the state gas tax should be tied to inflation and automatically increase annually. The legislature increased the gas tax 3 cents per gallon and indexed it to inflation last year. The price of gasoline may be a factor in the fate of the question. NFIB opposes tying the gas tax to inflation because it amounts to a higher tax which falls disproportionately on small business owners without a vote of the legislature. 

Health and Human Services Sebelius has decreed that Massachusetts' small and medium-sized businesses will be permitted to enjoy most of the benefits of rating factors for one more year.

Obamacare limited Massachusetts insurers to applying four rating factors to determine premiums for companies. Massachusetts insurers were no longer allowed to 'rate' businesses on such factors as size and industry under federal health care reform. But when it became clear that many Massachusetts businesses with less than 100 employees and their workers could see annual increases in premiums from twenty to fifty per cent, the feds granted the Commonwealth – the “model for health care reform” -- a waiver to phase in the elimination of the rating factors. This year insurers can use only two-thirds of the factors when determining premiums.

The new announcement extends this year's rating factors through 2015 and delays complete elimination of the factors until 2017. This means that the full impact from Obamacare on premiums for small and medium sized businesses is delayed until after the 2016 election.

Delay is good news for Massachusetts businesses and for every worker who contributes to the cost of their health insurance from his or her paycheck. But delay is not a solution to the problem of rising cost of health insurance for most Massachusetts workers and the companies that employ them. Frankly, Massachusetts’ small businesses that have insured their workers at record levels deserve permanent relief from the burdensome regulations of federal reform so that they can continue to offer affordable health insurance options to their workers.

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