The Beacon Hill Report - June 5, 2014

Date: June 04, 2014

Related Content: News State Massachusetts

After two days of debate, the Senate adopted its
version of the FY15 state budget. The House and Senate versions will be
reconciled with the House proposal and sent to the Governor for his signature.
The fiscal year begins on July 1.

The bottom lines for the original budget from the
Governor and the two legislative proposals are within $200,000. Spending is
increased by about $1.7 billion from the current fiscal year. The House and
Senate did not include new taxes and fees as proposed by Governor Patrick in
their budgets.

The budget is an important policy document because
it lays out the spending priorities and because it contains some statutory
changes. NFIB works for changes to strengthen small business and enhance the
opportunity to grow your business, such as removing barriers to new small
businesses (minimum corporate tax) and to affordable health insurance
(restoring rules and regulations of Massachusetts’ health insurance program). The
Senate agreed to consider the effect on the Massachusetts economy of the
federal tax on medical devices and to force the Governor to request again that
the old health insurance rating factors be restored in Massachusetts. 

The conference committee to work out differences
between the House and Senate versions of legislation to increase the minimum
wage and make changes in the unemployment insurance has begun its work. The UI
rate “freeze” for 2014 was enacted earlier this year – all employers should
have their new unemployment insurance rates and paid their first quarter UI
taxes by May 30.

Again there are three versions of the minimum wage
bills: the versions that passed the House and the Senate and the version that
is slated for the ballot in November. Major differences among the bills are the
size of the tipped wage for restaurant workers (between 35% and 50% of the full
minimum wage), the final minimum wage after the phased in increase is completed
($10.50 and $11.00 per hour) and whether the minimum wage will be indexed, i.e.
tied to inflation annually, going forward.

We have expressed our displeasure with the extent of
true reforms in the unemployment insurance bills in both chambers. The savings
to employers are essentially attributable to arbitrary rate freezes over the next
few years as opposed to fundamental changes that would lower rates for the long
term. But we hope the smaller increase in the wage base (the House increased
the base to $15,000; the Senate to $21,000) and the three-year averaging of
income (the Senate) will be adopted.

Related Content: News | State | Massachusetts

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