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Post Office Box 1147
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Marblehead, Massachusetts 01945
▪ (781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
46 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Wednesday, September 23, 2020
The Glass Half Full
Jump directly
to CLT's Commentary on the News
|
Most Relevant News Excerpts
(Full news reports follow
Commentary)
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Despite signs
that the state's finances have not completely cratered
during the pandemic, the Senate's top budget official
said this week he anticipates tax collections in fiscal
2021 to be down $5 billion from last year, and said
lawmakers will need to dip "deeply" into the state's
$3.5 billion "rainy day" fund unless new federal aid
arrives from Washington.
The state's
uncertain financial picture could start to come into
clearer focus in the coming weeks with House and Senate
leaders, as well as Gov. Charlie Baker's administration,
preparing to outline a plan to introduce and pass a
long-term budget that would carry the state through July
of next year.
Senate Ways
and Means Committee Chairman Michael Rodrigues told
business leaders this week that "some major
announcements" would be made in the next couple weeks
about how Beacon Hill leadership wants to proceed with a
fiscal 2021 budget, as well as how to close the books on
the fiscal year that ended June 30.
Rodrigues said
he is currently working off estimates that tax
collections will be down 15 percent to 18 percent from
last year in fiscal 2021, compared to the 2.8 percent
growth rate projected in January.
"It's going to
be a tough year, but we'll get through this," Rodrigues
said....
State
government has been operating since the fiscal year
began in July on interim budgets, the most recent being
a more than $16.5 billion spending authorization that
expires on Oct. 31....
Wherever
budget writers land, the decision of how much tax
revenue on which to base the annual budget will set off
a flurry of lobbying by legislators and advocates to
either find ways to bridge the revenue gap with higher
taxes and fees, or to protect priorities from necessary
spending cuts.
State House
News Service
Thursday, September 17, 2020
Budget Chief Planning Based on
$5 Billion Revenue Drop
Rodrigues Sees October Budget, Deep Reserves Draw
A new estimate
of tax collections this fiscal year suggests receipts
won't fall as far as some experts predicted in the
spring, but will still leave lawmakers with a big budget
challenge.
In April,
forecasters told lawmakers to anticipate fiscal 2021
collections would tumble by between $4 billion and $6
billion, but an updated projection produced for the News
Service by the Center for State Policy Analysis at Tufts
University suggests a nearly $1.6 billion reduction in
anticipated tax revenues.
Evan Horowitz,
executive director of the Center for State Policy
Analysis at Tufts University, said the model used by the
center relies on U.S. gross domestic product projections
and was used in early spring to project a $700 million
revenue gap for fiscal 2020, a figure that appears to
roughly match the latest estimates.
That gave
Horowitz more confidence in the model's accuracy, he
said.
Horowitz ran
the model again using fiscal 2021 GDP projections. If
those projections hold up, he said, the state could
reasonably expect to collect $29.6 billion in tax
revenues this fiscal year, down from the state's
existing and still unrevised prepandemic estimate of
$31.15 billion.
"So that would
put tax revenues about $1.5 to 1.6 billion below that
expectation, which is obviously not great but also not
in the higher range of deficit estimates and not outside
the universe of what could be filled with money from
federal aid should that happen, or the rainy day fund,"
Horowitz said. "At this point, with the knowledge that
we have, this is the estimate that makes sense."...
Two other
experts who advised lawmakers this year did not have
updated tax estimates but told the News Service that
recent tax collections and economic performance have
provided some reasons for optimism about receipts, which
actually rose year-over-year in the first two months of
fiscal 2021.
Pandemic
impacts have hit lower income workers disproportionately
and most income taxes are paid by earners in the higher
quintile, said Massachusetts Taxpayers Foundation
President Eileen McAnneny.
"That means we
have a high unemployment number but it also means that
you don't see it reflected as much in the revenues," she
said....
Will Burke, at
the Beacon Hill Institute, said they have not rerun
their economic models but said the threat of an economic
shutdown if flu season erupts with a resurgence of
COVID-19 is a central concern.
"That's sort
of looming over the economic conditions going forward,"
Burke said.
Burke called
July a "huge month" for tax collections and took note of
the year-over-year rise in collections this summer.
State House
News Service
Monday, September 21, 2020
Smaller Budget Problem Forecast in
Tufts Center Model
Revenue Gap Will Frame Debate Over Taxes, Spending
Senate budget
chief Michael Rodrigues this week offered his take on
the slowly evolving situation, saying major state budget
announcements are about to come down and suggesting a
big draw from the state's $3.5 billion rainy day fund
will be needed to stem what he believes could be a $5
billion drop in state tax collections this fiscal year.
State
officials are still holding out hope that a stimulus
bill will emerge in Washington, but Rodrigues says
Beacon Hill may need to move ahead on a budget bill
before the election and without the assumption that
additional federal resources will be available to plug
budget gaps.
On Beacon
Hill, Democratic legislative leaders have shown little
interest in returning to formal sessions to take up some
urgent matters and, despite the relative lack of
competition in legislative elections, lawmakers remain
mostly holed up in their districts and focusing on their
own reelection campaigns, if they have opponents, or the
massive fight for the presidency between President Trump
and Democrat Joe Biden.
In the race
for the one U.S. Senate seat on the Massachusetts ballot
Nov. 3, Sen. Edward Markey, who is favored to win
against Republican Kevin O'Connor, has agreed to a
single one-hour debate with his opponent, leading
O'Connor to allege that Markey is short-changing voters
ahead of the general election after debating Congressman
Joseph Kennedy III seven times before the Sept. 1
primary election.
State House
News Service
Friday, September 18, 2020
Advances - Week of Sept. 20, 2020
Eras in
American jurisprudence are typically denoted by whoever
sits in the chief justice's chair of a particular court.
Think the
Rehnquist Court or the Marshall Court (John or
Margaret).
But from this
point forward, the next decade or longer could go down
in Massachusetts history as the time of the Baker Court.
Because few if any governors of Massachusetts since John
Hancock have had more influence over the direction of
the world's oldest continuously operating appellate
court in the Western Hemisphere....
With the shock
still not worn off, Baker said he would need some time
to think about what comes next, but there's no getting
around the fact that he must now make two more picks for
the top court. Justice Barbara Lenk has already
postponed her retirement until December, when she hits
the mandatory retirement age of 70....
Baker hasn't
been able to choose between Democrat Jake Auchincloss
and Republican Julie Hall in the Fourth Congressional
District, calling them both friends. But he dove
headlong Friday into the national political waters he
has long considered too cold to swim by endorsing
moderate Republican Susan Collins for reelection to the
U.S. Senate in Maine....
More in
keeping with Baker's modus operandi was his urging of
the Legislature to pick up the pace of their
negotiations over policing reform and climate change
legislation, which have seemingly gone dormant since the
end-of-July flurry of action.
Baker said he
wants to put his signature on those bills and more
before the end of the session, which conveniently
doesn't end until after the New Year....
State House
News Service
Friday, September 18, 2020
Weekly Roundup - The Eighth Justice
The nearly
850,000 people subsisting on unemployment aid in
Massachusetts are about to see their weekly checks
slashed by anywhere from 25 percent to 50 percent or
more, the second cut since the end of July. Worse,
without another massive financial rescue package from
Washington — and the prospects don’t look good — their
jobless benefits will begin running out completely in
December....
As of July,
the Massachusetts jobless rate was 16.1 percent, down
from a peak of 17.7 percent in June but still the
highest in the nation. The pace of hiring slowed during
the month.
Those trends
probably continued here last month, based on the already
released national jobs report for August. Hiring across
the country was better than analysts had forecast, but
employment growth cooled for the second straight month.
The US jobless rate fell to 8.4 percent from 10.2
percent in July.
It’s crucial
that Massachusetts employers are confident enough to put
more people back to work. That would blunt the impact of
the loss of billions of dollars in extra federal jobless
benefits that helped prop up the economy during the
coronavirus shutdown and Governor Charlie Baker’s
cautious reopening.
As my
colleague Shirley Leung and I explained on Sunday, that
confidence hinges on our success in containing the
coronavirus and returning to more normal work and social
routines. Sticking close to home, people are buying less
and saving more, especially those in affluent
households. Businesses are reluctant to hire until their
sales pick up.
Which means
that the loss of enhanced federal jobless benefits comes
at a vulnerable time.
Late last
Friday afternoon, the Baker administration said the
federal money sweetening Massachusetts unemployment
checks by $300 a week had run out....
Some employers
have argued that Massachusetts' relatively generous
payouts — the maximum weekly benefit is $825, the
highest in the country — along with the now-ended
federal bonuses, discouraged people from returning to
work because they could make more money on unemployment.
A study done by economists Simon Mongey of the
University of Chicago and Corina Boar of New York
University found that about 68 percent of workers who
lost their jobs due to the COVID-19 pandemic received
benefits that exceeded their previous wages.
The Boston
Globe
Tuesday, September 15, 2020
It won’t be long before jobless
benefits begin to run out
The
Massachusetts job market extended its recovery from the
pandemic-induced shutdown earlier this year as employers
added workers for the fourth consecutive month in August
and the unemployment rate declined sharply, the US Labor
Department said Friday.
The state’s
jobless rate fell to 11.3 percent last month from a
revised 16.2 percent in July, when it was the highest in
the country. Employers added 51,600 jobs, led by hiring
in health care and education, as well as the leisure and
hospitality sector, which was pummeled during the early
months of the coronavirus pandemic.
The
brightening jobs picture mirrored improvements seen at
the national level. US employers created 1.4 million
jobs in August, and the unemployment rate fell to 8.4
percent from 10.2 percent in July.
But the
outlook for the Commonwealth — like that for the country
— is uncertain. The pace of hiring has cooled after an
initial surge, when restaurants, stores, construction
sites, and factory floors began to reopen in May.
Moreover, the ranks of people who want a job but can’t
find one remain massive by historical standards: 401,000
in Massachusetts last month, more than double a year
earlier. And the workforce is shrinking as some
job-seekers give up their search.
“There are
still enormous numbers of people out there who are
suffering and can’t find the work,” said Thomas Kochan,a
professor at the MIT Sloan School of Management and
codirector of its Institute for Work and Employment
Research.
Governor
Charlie Baker’s decision to shut down earlier than most
states — and reopen more cautiously — slowed the spread
of the coronavirus, but that success came at a high
price: The state had the steepest unemployment rate in
the country in June, when it peaked at 17.7 percent, and
in July. The rate was 2.8 percent in March, below the
national average....
Tourist-dependent Nevada now has the highest
unemployment rate in the country, at 13.2 percent. Not
far behind was Rhode Island, where the rate actually
rose to 12.8 percent. Despite the big drop here,
Massachusetts ranked sixth highest in unemployment in a
tie with New Mexico, while Nebraska, at 4 percent, had
the lowest ratio of out-of-work residents in the
country....
Each week the
Labor Department releases a tally of people collecting
state unemployment insurance. The number of
Massachusetts residents receiving these payments has
fallen from a record of nearly 600,000 in late March to
419,000 in the week ended Aug. 15 — the same week
covered by the August jobless survey.
A broader —
and less rosy — count of Massachusetts residents who are
out of work is now possible with the start of a new
federal emergency program for gig workers, independent
contractors, and others who were previously ineligible
for state benefits. An additional 480,000 laid-off
workers in Massachusetts received federal Pandemic
Unemployment Assistance for the week ended Aug. 15.
The counts of
those receiving the pandemic aid have not been as
precise as those for state unemployment because of
inconsistencies tied to the rollout of the program and a
wave of bogus claims. Still, under federal and
Massachusetts programs combined, somewhere close to
900,000 people received unemployment in the week of Aug.
15, or nearly one-fourth of the pre-pandemic labor
force.
Other
employment measures also underscore the fragility of the
local economy. The labor pool — people with jobs and
those looking for work — shrank last month by 127,600 to
3.55 million as would-be workers gave up efforts to land
a paycheck. The labor force participation rate — the
share of working-age population employed and unemployed
— fell for the fourth time in six months and stands at
62.6 percent, compared with 67.9 percent in February.
The Boston
Globe
Friday, September 18, 2020
The state’s jobless figure
fell to 11.3 percent in August
as hiring in hard-hit industries continued to heal
It took a couple
days of calling, but the House Ways and Means Committee
eventually disclosed how committee members voted last week
on a major transportation bill containing hefty tax and fee
increases. The information, however, had some holes in it.
According to
committee spokesman Blake Webber, the vote was 22 in
favor, one against, and eight reserving their rights, or
abstaining from taking a position. Webber refused to say
how individual members voted other than Republican Rep.
Todd Smola of Warren, who was the lone no vote. He said
the committee’s policy is not to release how individual
members voted, other than those who vote no.
The Ways and
Means policy illustrates how difficult it can be on
Beacon Hill to find the answer to the seemingly
straightforward question of how a member voted on a bill
in committee. The search for that information may be
simple or it may be impossible, depending on the whim of
individual committee chairs. There is a patchwork of
different policies developed by committee chairs with no
guarantee that the public can find out how a given state
rep or senator voted on a particular piece of
legislation....
“What happens
in the Legislature, particularly in committees, is
really very much a black box, and I think that’s not in
the best interest of voters or in the best interests of
advocates,” said Mary Ann Ashton, co-president of the
League of Women Voters of Massachusetts.
During a
debate on rules governing joint committees made up of
Senate and House members at the beginning of the current
legislative session, the Senate voted to make all
committee votes publicly available on the Legislature’s
website. But the House did not agree to the amendment,
and it did not survive a conference committee.
Under the
rules that were ultimately agreed to, votes made by roll
during a committee meeting must be kept in committee
offices and made available for public inspection during
business hours. But lawmakers have interpreted that rule
to not apply to votes conducted by email, which is how
most votes are taken....
A legislative
commission was created by a 2016 public records law to
examine ways to make the legislative process more
transparent. The senators who sat on that commission
released recommendations in December 2018, and they
included posting publicly on the legislative website any
vote made by a committee, whether via email or during a
meeting. But the House members of the committee did not
sign on to those recommendations.
Senate
commission chair Walter Timilty of Milton said senators
felt that what they do “is the people’s business.” “We
all have this intent to do great things for the people
of the Commonwealth and we work for the people of the
Commonwealth. To me, it’s a natural correlation that
what we do here be out in the open,” he said.
The House
commission chair was Rep. Jennifer Benson of Lunenburg,
who has since left the Legislature. Benson declined to
talk about the commission’s conclusion, but defended the
current policy as a means of giving authority to
committee chairs. Benson said people often talk about
power being too centralized in legislative leadership,
and letting committees negotiate their own rules is a
way to distribute that power....
[Sen.] Paul
Feeney of Foxborough, the Senate chair of the Consumer
Protection and Professional Licensure Committee . . . a
[public records] commission member, said he thinks
lawmakers should be as transparent as possible, and
committee votes should be made public. But, he said,
committees have autonomy and it is not always easy to
negotiate rules between the two chairs and the members.
“The fallback
in the Legislature for a long time is you just continue
to do what you’ve been doing, which is if people call
and ask for votes, you take it on case by case basis,”
Feeney said. He said it will take “some political will”
to develop a standard system where all committee votes
are made public.
CommonWealth
Magazine
March 1, 2020
Beacon Hill’s secretive
committee voting process
A confusing hodgepodge of policies guide release of vote
tallies |
Chip Ford's CLT
Commentary
Reports that have surfaced
over the past week indicate the state's revenue
situation isn't a dire as has been forecast for months.
Of course there's a reason to keep expectations low.
The Legislature and Governor are hoping Washington will
ride in with a multi-billion dollar federal bailout.
As that seems less likely by the day it's apparently
time to face reality and settle down to agreeing on a
budget that was due by the end of last June.
The State House News Service on last
Thursday ("Budget Chief Planning Based on $5 Billion Revenue Drop")
reported:
Despite signs that the state's
finances have not completely cratered during the
pandemic, the Senate's top budget official said this
week he anticipates tax collections in fiscal 2021
to be down $5 billion from last year, and said
lawmakers will need to dip "deeply" into the state's
$3.5 billion "rainy day" fund unless new federal aid
arrives from Washington.
The state's uncertain financial
picture could start to come into clearer focus in
the coming weeks with House and Senate leaders, as
well as Gov. Charlie Baker's administration,
preparing to outline a plan to introduce and pass a
long-term budget that would carry the state through
July of next year.
Senate Ways and Means Committee
Chairman Michael Rodrigues told business leaders
this week that "some major announcements" would be
made in the next couple weeks about how Beacon Hill
leadership wants to proceed with a fiscal 2021
budget, as well as how to close the books on the
fiscal year that ended June 30.
Rodrigues said he is currently
working off estimates that tax collections will be
down 15 percent to 18 percent from last year in
fiscal 2021, compared to the 2.8 percent growth rate
projected in January.
"It's going to be a tough year,
but we'll get through this," Rodrigues said.
State government has been
operating since the fiscal year began in July on
interim budgets, the most recent being a more than
$16.5 billion spending authorization that expires on
Oct. 31....
Wherever budget writers land,
the decision of how much tax revenue on which to
base the annual budget will set off a flurry of
lobbying by legislators and advocates to either find
ways to bridge the revenue gap with higher taxes and
fees, or to protect priorities from necessary
spending cuts.
In a
subsequent report on Monday ("Smaller Budget Problem
Forecast in Tufts Center Model —
Revenue Gap Will Frame Debate Over Taxes,
Spending") the News Service noted:
A new estimate of tax
collections this fiscal year suggests receipts won't
fall as far as some experts predicted in the spring,
but will still leave lawmakers with a big budget
challenge.
In April, forecasters told
lawmakers to anticipate fiscal 2021 collections
would tumble by between $4 billion and $6 billion,
but an updated projection produced for the News
Service by the Center for State Policy Analysis at
Tufts University suggests a nearly $1.6 billion
reduction in anticipated tax revenues.
Evan Horowitz, executive
director of the Center for State Policy Analysis at
Tufts University, said the model used by the center
relies on U.S. gross domestic product projections
and was used in early spring to project a $700
million revenue gap for fiscal 2020, a figure that
appears to roughly match the latest estimates.
That gave Horowitz more
confidence in the model's accuracy, he said....
Two other experts who advised
lawmakers this year did not have updated tax
estimates but told the News Service that recent tax
collections and economic performance have provided
some reasons for optimism about receipts, which
actually rose year-over-year in the first two months
of fiscal 2021.
Pandemic impacts have hit lower
income workers disproportionately and most income
taxes are paid by earners in the higher quintile,
said Massachusetts Taxpayers Foundation President
Eileen McAnneny.
"That means we have a high
unemployment number but it also means that you don't
see it reflected as much in the revenues," she
said....
Will Burke, at the Beacon Hill
Institute, said they have not rerun their economic
models but said the threat of an economic shutdown
if flu season erupts with a resurgence of COVID-19
is a central concern.
"That's sort of looming over
the economic conditions going forward," Burke said.
Burke called July a "huge
month" for tax collections and took note of the
year-over-year rise in collections this summer.
The thing that
jumped out at me most from that second report was:
" Pandemic impacts
have hit lower income workers disproportionately and
most income taxes are paid by earners in the higher
quintile," said Massachusetts Taxpayers Foundation
President Eileen McAnneny. "That means we have a
high unemployment number but it also means that you
don't see it reflected as much in the revenues."
Most income taxes are paid by earners
in the higher quintile — a higher
unemployment number isn't reflected as much in the revenues.
Yet legislators are still counting on
the estimated $2 Billion in additional income tax revenue
with the "Millionaires Tax" constitutional amendment (aka, Graduated
Income Tax) expected to be on the 2022 statewide ballot. Who will
state government turn on to survive when the highly-mobile wealthy
decide they've had enough of being the state's cash cow, vote with
their feet, and join the growing Bay State Diaspora.
I'm still wondering how the Governor
and Legislature plan to balance the current (FY2021) operating
budget that's being funded piecemeal to keep the state running month
to month.
State House News Service on
July 28 reported ("Legislature
Accelerates Interim Approach to Budgeting; New Bill
Raises Four-Month Tab to Nearly $22 Billion"):
The
House and Senate on Tuesday quickly passed a $16.53
billion interim budget to keep the government funded
through October, a plan that would give the
Legislature and Gov. Charlie Baker more time to
understand the state's fuzzy but dire financial
picture in the middle of the ongoing pandemic. . .
. Assuming Baker signs the bill, the Legislature
and governor will have appropriated $21.78 billion
to cover spending over the first four months of the
fiscal year. At that rate of spending, the state's
budget would balloon to over $65 billion, well above
the $44.6 billion budget Baker filed in January.
Back on June 21 in
my commentary for the CLT Update ("Another Beacon
Hill Helter-Skelter Week") I observed:
Stop
and think about this. A $5.25 billion "interim
spending bill" to get the state through July, one
month. Carried through the fiscal year that would
create a $63 billion FY2021 budget for the coming 12
months. That exceeds even the $44.6 billion Baker
proposed in January, which itself was $1.3 billion
more than
last year's $43.3 budget.
Seems like I wasn't too far
off the mark with my speculation, short by just over $2
Billion back in June. With eight months remaining
in the 2021 fiscal year still ahead after the "interim
budget" expires at the end of October, and almost $22
Billion already spent in the fiscal year's first four
months, they're working toward a $66 Billion FY 2021
budget! As the State House News Service noted:
"At that rate of spending, the state's budget would
balloon to over $65 billion, well above the $44.6
billion budget Baker filed in January.")
And that $44.6 Billion
Baker proposed in January was a spending increase of $1.3 Billion
over the the previous year (that ended in June).
Last Tuesday
The Boston Globe reported: ("It won’t be long
before jobless benefits begin to run out"):
The nearly 850,000 people
subsisting on unemployment aid in Massachusetts are
about to see their weekly checks slashed by anywhere
from 25 percent to 50 percent or more, the second
cut since the end of July. Worse, without another
massive financial rescue package from Washington —
and the prospects don’t look good — their jobless
benefits will begin running out completely in
December....
As of July, the Massachusetts
jobless rate was 16.1 percent, down from a peak of
17.7 percent in June but still the highest in the
nation. The pace of hiring slowed during the month.
Those trends probably continued
here last month, based on the already released
national jobs report for August. Hiring across the
country was better than analysts had forecast, but
employment growth cooled for the second straight
month. The US jobless rate fell to 8.4 percent from
10.2 percent in July.
It’s crucial that Massachusetts
employers are confident enough to put more people
back to work. That would blunt the impact of the
loss of billions of dollars in extra federal jobless
benefits that helped prop up the economy during the
coronavirus shutdown and Governor Charlie Baker’s
cautious reopening.
On Friday The
Globe reported ("The state’s jobless figure fell to 11.3
percent in August"):
The Massachusetts job market
extended its recovery from the pandemic-induced
shutdown earlier this year as employers added
workers for the fourth consecutive month in August
and the unemployment rate declined sharply, the US
Labor Department said Friday.
The state’s jobless rate fell
to 11.3 percent last month from a revised 16.2
percent in July, when it was the highest in the
country. Employers added 51,600 jobs, led by hiring
in health care and education, as well as the leisure
and hospitality sector, which was pummeled during
the early months of the coronavirus pandemic.
The brightening jobs picture
mirrored improvements seen at the national level. US
employers created 1.4 million jobs in August, and
the unemployment rate fell to 8.4 percent from 10.2
percent in July.
But the outlook for the
Commonwealth — like that for the country — is
uncertain. The pace of hiring has cooled after an
initial surge, when restaurants, stores,
construction sites, and factory floors began to
reopen in May. Moreover, the ranks of people who
want a job but can’t find one remain massive by
historical standards: 401,000 in Massachusetts last
month, more than double a year earlier. And the
workforce is shrinking as some job-seekers give up
their search.
“There are still enormous
numbers of people out there who are suffering and
can’t find the work,” said Thomas Kochan, a
professor at the MIT Sloan School of Management and
codirector of its Institute for Work and Employment
Research.
Governor Charlie Baker’s
decision to shut down earlier than most states — and
reopen more cautiously — slowed the spread of the
coronavirus, but that success came at a high price:
The state had the steepest unemployment rate in the
country in June, when it peaked at 17.7 percent, and
in July. The rate was 2.8 percent in March, below
the national average....
Tourist-dependent Nevada now
has the highest unemployment rate in the country, at
13.2 percent. Not far behind was Rhode Island, where
the rate actually rose to 12.8 percent. Despite the
big drop here, Massachusetts ranked sixth highest in
unemployment in a tie with New Mexico, while
Nebraska, at 4 percent, had the lowest ratio of
out-of-work residents in the country....
Each week the Labor Department
releases a tally of people collecting state
unemployment insurance. The number of Massachusetts
residents receiving these payments has fallen from a
record of nearly 600,000 in late March to 419,000 in
the week ended Aug. 15 — the same week covered by
the August jobless survey.
A broader — and less rosy —
count of Massachusetts residents who are out of work
is now possible with the start of a new federal
emergency program for gig workers, independent
contractors, and others who were previously
ineligible for state benefits. An additional 480,000
laid-off workers in Massachusetts received federal
Pandemic Unemployment Assistance for the week ended
Aug. 15.
The counts of those receiving
the pandemic aid have not been as precise as those
for state unemployment because of inconsistencies
tied to the rollout of the program and a wave of
bogus claims. Still, under federal and Massachusetts
programs combined, somewhere close to 900,000 people
received unemployment in the week of Aug. 15, or
nearly one-fourth of the pre-pandemic labor force.
Other employment measures also
underscore the fragility of the local economy. The
labor pool — people with jobs and those looking for
work — shrank last month by 127,600 to 3.55 million
as would-be workers gave up efforts to land a
paycheck. The labor force participation rate — the
share of working-age population employed and
unemployed — fell for the fourth time in six months
and stands at 62.6 percent, compared with 67.9
percent in February.
A CLT member
who is an economist pointed out to me in a phone call
how important the labor force participation rate is
while determining unemployment numbers. If someone
is out of work and seeking employment they are included
in the unemployment rate. If they are unemployed
and have given up seeking a job they are not
included in the unemployment rate:
What Is the Labor Force Participation Rate?
The Labor Force
Participation Rate is a measure of an economy’s active
workforce. The formula for the number is the sum of all
workers who are employed or actively seeking employment divided
by the total noninstitutionalized, civilian working-age
population. [The civilian noninstitutional population
refers to people 16 years of age and older residing in the 50
States and the District of Columbia who are not inmates of
institutions (penal, mental facilities, homes for the aged), and
who are not on active duty in the Armed Forces.]
Here are the
monthly labor force participation rates in Massachusetts
since the China Covid-19 Pandemic arrived:
While the
official unemployment rate in Massachusetts is
decreasing, as you can see in the above Federal Reserve
Bank chart, so too is the labor force participation rate
— which automatically
reduces the unemployment rate as fewer are actually
seeking jobs.
In its
"Advances — Week of Sept. 20,
2020" the State House News Service noted on Friday:
On Beacon Hill,
Democratic legislative leaders have shown little interest in
returning to formal sessions to take up some urgent matters and,
despite the relative lack of competition in legislative
elections, lawmakers remain mostly holed up in their districts
and focusing on their own reelection campaigns, if they have
opponents, or the massive fight for the presidency between
President Trump and Democrat Joe Biden.
The News
Service further noted in its Weekly Roundup:
More in keeping with Baker's
modus operandi was his urging of the Legislature to
pick up the pace of their negotiations over policing
reform and climate change legislation, which have
seemingly gone dormant since the end-of-July flurry
of action.
Baker said he wants to put his
signature on those bills and more before the end of
the session, which conveniently doesn't end until
after the New Year.
On July 29, as the deadline
for this year's legislative session was two days away,
the Legislature extended its session until January (See
State House News Service's Weekly Roundup
— "Deadline?
What Deadline?") Since then very little if
anything has been done that wouldn't have been done had
the formal session ended on July 31.
In the CLT Update of August 16
I wrote:
There's nothing
like a deadline to focus attention, and there's nothing like
extending a deadline to feed procrastination. Remember a
month ago when everything on Beacon Hill was about getting so
much accomplished before the July 31 recess deadline? Now
that they've agreed to ignore their own rule and remain in
session interminably the pressure is off the pols; it's back to
business-as-usual. Nothing has come out of any of the
numerous conference committees, and nothing likely will until
the next deadline, after they are safely re-elected.
During an off-the-record
Zoom conference conversation last week with a Republican
state representative, I predicted that nothing would
happen with any of the major bills now in conference
committees until after the November election, until
legislators have been safely re-elected. Then when
any of the five committees report out a bill it will be
slammed through the Legislature for the traditional
rubber-stamp vote then whisked over to the governor.
He confirmed that this is his expectation as well
— and wryly added that he
wouldn't be surprised if another pay raise was slammed
through as well. I hope he was joking, but nothing
surprises me anymore.
For those unfamiliar with the
Legislature's joint conference committee process in Massachusetts,
I've included a CommonWealth Magazine analysis from March 1 on how
they work in Massachusetts, and what we're up against.
("Beacon Hill’s secretive committee voting process
— A confusing hodgepodge of policies
guide release of vote tallies" by Shira Schoenberg) I expect
you'll find it at least interesting, if not discouraging.
|
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Chip Ford
Executive Director |
|
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Full News Reports Follow
(excerpted above) |
|
State House
News Service
Thursday, September 17, 2020
Budget Chief Planning Based on $5 Billion Revenue Drop
Rodrigues Sees October Budget, Deep Reserves Draw
By Matt Murphy
Despite signs that the state's finances have not completely
cratered during the pandemic, the Senate's top budget
official said this week he anticipates tax collections in
fiscal 2021 to be down $5 billion from last year, and said
lawmakers will need to dip "deeply" into the state's $3.5
billion "rainy day" fund unless new federal aid arrives from
Washington.
The state's uncertain financial picture could start to come
into clearer focus in the coming weeks with House and Senate
leaders, as well as Gov. Charlie Baker's administration,
preparing to outline a plan to introduce and pass a
long-term budget that would carry the state through July of
next year.
Senate Ways and Means Committee Chairman Michael Rodrigues
told business leaders this week that "some major
announcements" would be made in the next couple weeks about
how Beacon Hill leadership wants to proceed with a fiscal
2021 budget, as well as how to close the books on the fiscal
year that ended June 30.
Rodrigues said he is currently working off estimates that
tax collections will be down 15 percent to 18 percent from
last year in fiscal 2021, compared to the 2.8 percent growth
rate projected in January.
"It's going to be a tough year, but we'll get through this,"
Rodrigues said.
The Westport Democrat made his comments Tuesday on a webinar
hosted by Associated Industries of Massachusetts for its
membership as part of a new "Commonwealth Conversations"
series produced by the business trade group.
"Within the next couple of weeks we're going to be making
some major announcements relative to putting to bed,
finally, the FY21 budget and to close out FY20," Rodrigues
told the business leaders, indicating the announcement would
include a "more formal schedule" for budget deliberations.
State government has been operating since the fiscal year
began in July on interim budgets, the most recent being a
more than $16.5 billion spending authorization that expires
on Oct. 31. The Legislature, however, extended formal
legislative deliberations beyond July, knowing lawmakers
would have to return to the State House this year to take up
a spending bill for the remainder of the fiscal year.
Wherever budget writers land, the decision of how much tax
revenue on which to base the annual budget will set off a
flurry of lobbying by legislators and advocates to either
find ways to bridge the revenue gap with higher taxes and
fees, or to protect priorities from necessary spending cuts.
Brooke Thomson, executive vice president of government
affairs, moderated the discussion with Rodrigues and noted
"rumors" of a revenue shortfall of between $3 billion and $6
billion. In financial disclosure documents state officials
have estimated the revenue shortfall at between $2 billion
and $8 billion.
"We've been using a $6 billion revenue shortfall for just
rounding, simple back of the envelope math, but as we dig
deep into it it's probably going to be closer to about a $5
billion revenue reduction," Rodrigues said.
The other major wildcard in the state's unprecedented
budgeting process this year has been whether Congress would
deliver additional federal relief to state and local
governments. The House has passed a $3.4 trillion stimulus
bill with more than $800 billion for state and local
governments, but the relief package has stalled and
bipartisan efforts at compromise have failed to lead to a
breakthrough, although talks continue.
"The latest news out of D.C. is not optimistic," Rodrigues
said. "We've been pretty much told you can pretty much
forget about having anything passed by Congress before the
Nov. 3 election, which means we're going to go into the FY21
budget probably counting on zero dollars of federal support,
dipping deeply into the stabilization account, but doing so
responsibly knowing that FY22 is going to be just as bad as
FY21 and we can only spend that money in the savings account
once."
As Massachusetts businesses have slowly reopened as part of
Gov. Baker's phased approach to rebuilding the economy
without jeopardizing public health, tax collections have
defied the most pessimistic of projections from early in the
pandemic when economist were warning of upwards of $8
billion in losses.
Through August, tax collections for the first two months of
fiscal 2021 were up 3.1 percent over last year, and
Rodrigues said delayed income tax collections for 2019 that
will be credited back to fiscal 2020 were "what we expected"
on both the personal and corporate side.
"We are anxiously waiting our September numbers. September
is a big month in the tax world. It's when all the estimated
filings are done and it's the end of the first quarter of
the fiscal year," Rodrigues said. "September numbers are
going to be important and then we will get down to more
public work."
Senate President Karen Spilka said Wednesday that Rodrigues
has been meeting weekly with House Ways and Means Chairman
Aaron Michlewitz and Administration and Finance Secretary
Michael Heffernan, and Rodrigues confirmed that the three
talk "regularly" as they have monitored economic and tax
activity.
Neither Michlewitz nor Heffernan could not be reached for
comment on Thursday about Rodrigues's remarks, and a
Heffernan spokesman said work on budget planning is
continuing.
Rep. Todd Smola, the ranking Republican on the House Ways
and Means Committee, last week called it a "coin flip"
whether Democratic leaders would push for a budget vote
before the election, or try to pass another short-term
spending bill.
Rodrigues, however, seemed inclined to want to try to pass
an annual budget next month, and then turn his attention
toward fiscal 2022, and planning for the next budget that
Baker must file in January.
"Our goal is by the end of October to pass an FY21 budget
and also we still have to close out FY20," Rodrigues said.
Getting a budget proposed, amended and passed in each
branch, and reconciled by the end of October will be a big
lift, as the process for passing a budget usually takes
several months.
Baker's annual budget proposal filed in January before the
pandemic took hold called for $44.6 billion in spending,
with tax collections anticipated to grow by 2.8 percent to
$31.15 billion.
Even if the revenue losses are smaller than once
anticipated, Thomson said there's no question that federal
relief will be needed to spare businesses from higher
operating costs as they struggle to get back on their feet.
The unemployment trust fund, Thomson said, is projected to
be at a $3 billion deficit in 2020, and that total will
increase to $6 billion in 2021 and $6.6 billion in 2020. AIM
has been advocating for unemployment insurance relief at the
federal level, Thomson said.
Rodrigues, who described himself as the "UI nerd" of the
Senate, also said the unemployment insurance liability for
employers is his "biggest concern right now" for the
employer sector, with costs expected to climb next year
nearly 60 percent.
The chairman, however, did not indicate whether he would
support a freeze in rates if Congress doesn't allocate
funding to help, instead pointing out that the Legislature
passed a bill to protect employers hit hardest by job losses
during the pandemic from being penalized when rates do
increase.
State House
News Service
Monday, September 21, 2020
Smaller Budget Problem Forecast in Tufts Center Model
Revenue Gap Will Frame Debate Over Taxes, Spending
By Michael P. Norton
A new estimate of tax collections this fiscal year suggests
receipts won't fall as far as some experts predicted in the
spring, but will still leave lawmakers with a big budget
challenge.
In April, forecasters told lawmakers to anticipate fiscal
2021 collections would tumble by between $4 billion and $6
billion, but an updated projection produced for the News
Service by the Center for State Policy Analysis at Tufts
University suggests a nearly $1.6 billion reduction in
anticipated tax revenues.
Evan Horowitz, executive director of the Center for State
Policy Analysis at Tufts University, said the model used by
the center relies on U.S. gross domestic product projections
and was used in early spring to project a $700 million
revenue gap for fiscal 2020, a figure that appears to
roughly match the latest estimates.
That gave Horowitz more confidence in the model's accuracy,
he said.
Horowitz ran the model again using fiscal 2021 GDP
projections. If those projections hold up, he said, the
state could reasonably expect to collect $29.6 billion in
tax revenues this fiscal year, down from the state's
existing and still unrevised prepandemic estimate of $31.15
billion.
"So that would put tax revenues about $1.5 to 1.6 billion
below that expectation, which is obviously not great but
also not in the higher range of deficit estimates and not
outside the universe of what could be filled with money from
federal aid should that happen, or the rainy day fund,"
Horowitz said. "At this point, with the knowledge that we
have, this is the estimate that makes sense."
Horowitz said the center chose GDP as a baseline for its
economic model in part because it involves measures of
income and spending, and in Massachusetts the state income
and sales taxes are anchors of the state tax base. He said
models that rely on jobless rates have been "quite
misleading" during the current crisis because income
supports to the unemployed and the temporary nature of
furloughs are unique to the COVID-19 response.
Two other experts who advised lawmakers this year did not
have updated tax estimates but told the News Service that
recent tax collections and economic performance have
provided some reasons for optimism about receipts, which
actually rose year-over-year in the first two months of
fiscal 2021.
Pandemic impacts have hit lower income workers
disproportionately and most income taxes are paid by earners
in the higher quintile, said Massachusetts Taxpayers
Foundation President Eileen McAnneny.
"That means we have a high unemployment number but it also
means that you don't see it reflected as much in the
revenues," she said.
Income withholding numbers have been surprising given record
unemployment, she said, but that's due in part to the
federal income supports in place in recent months for the
jobless, and those levels of aid are dissipating as talks
drag on over a possible new round of federal aid and
economic stimulus measures.
McAnneny said the foundation is waiting to revisit its
revenue estimate until tax collections in September are
clear, since that's a big month for estimated payments and
corporate tax collections. The state is due to report
September revenues in early October.
Looking back at the roughly $700 million revenue gap in the
fiscal year that ended June 30, McAnneny said the deficit
could be covered by drawing from the state's $3.5 billion
rainy day fund or using special borrowing powers authorized
by the Legislature, but also mentioned a third option.
While Gov. Charlie Baker has not revised state revenue
estimates during the pandemic, which would have forced him
to make budget adjustments, McAnneny said she believes there
has probably been a reduction in spending and state health
care costs have declined because MassHealth patients have
avoided visiting hospitals and doctors.
"There could have been measures taken by the executive
branch to reduce spending," she said. "It doesn't mean they
haven't been managing to a lower number."
Alan Clayton-Matthews, a Northeastern University economics
professor and senior editor at MassBenchmarks, said
estimates offered in mid-April predicting the most
staggering revenue implosions did not take into account
impacts of aid authorized in the CARES Act and other
stimulus measures already taken by the federal government.
In April, Clayton-Matthews estimated that state tax revenues
in fiscal year 2021 would come in around $26.1 billion. He
said stimulus measures have aided consumer spending and low
interest rates have boosted the stock market, but, like
others, Clayton-Matthews flagged virus trends and additional
federal stimulus measures as the big wildcards.
"The rebound started earlier than I expected but it's losing
more steam than I think I would have expected,"
Clayton-Matthews said, citing more downside risks than
upside risks in the current climate.
Will Burke, at the Beacon Hill Institute, said they have not
rerun their economic models but said the threat of an
economic shutdown if flu season erupts with a resurgence of
COVID-19 is a central concern.
"That's sort of looming over the economic conditions going
forward," Burke said.
Burke called July a "huge month" for tax collections and
took note of the year-over-year rise in collections this
summer.
During previous budget crises, governors and legislators
have touted their rapid responses to the changing
circumstances as indicative of their willingness to tackle
problems head on. This year's crisis has come with the
opposite response -- Baker did not make any formal changes
to the fiscal 2020 budget in the spring and the Legislature
opted to postpone its usual spring budget debate while
collecting more information. Budgeteers say the state's
delayed tax-filing deadline and uncertainty over federal aid
levels warrant the go-slow approach.
While no new forecasts or budget timetables have emerged
from the House or the Baker administration, Senate Ways and
Means Committee Chairman Michael Rodrigues last week told
business leaders he expects a $5 billion revenue tumble this
fiscal year and said lawmakers will need to dip "deeply"
into state reserves unless new federal aid arrives from
Washington.
Expressing pessimism about the near-term prospects for more
federal aid, Rodrigues speculated about tackling a fiscal
2021 budget in October, with scheduling plans coming soon.
Days later, however, Senate President Karen Spilka expressed
optimism about the federal aid outlook, saying she thinks
Congress might "pull it out of the hat just before the
election to swoop down and say, 'See, we were able to do it,
look at what a great job we're doing.'"
"I don't see how the federal government cannot provide more
assistance to the states," Spilka said. "If we don't get
assistance, our unemployment rate will go up even higher and
this is true in all states, there will be more layoffs that
states will have to figure out ways for revenue."
State law encourages executive and legislative branch
leaders to agree on a single estimate of state revenues for
budgeting purposes. While only a few top officials are
involved in making the revenue projection, the revised
fiscal 2021 estimate will be critical because it will set
the boundaries of the coming debate over tax hikes, spending
cuts, reserve fund use and other measures that will need to
be worked into a state spending plan for the latter half of
this budget year.
The annual budget was due July 1, but to get through the
first four months of fiscal 2021 state government has
instead been operating on interim budgets, which lack the
spending directives that characterize the usual
line-item-filled state budgets.
State House
News Service
Friday, September 18, 2020
Weekly Roundup - The Eighth Justice
Recap and analysis of the week in state government
By Matt Murphy
Eras in American jurisprudence are typically denoted by
whoever sits in the chief justice's chair of a particular
court.
Think the Rehnquist Court or the Marshall Court (John or
Margaret).
But from this point forward, the next decade or longer could
go down in Massachusetts history as the time of the Baker
Court. Because few if any governors of Massachusetts since
John Hancock have had more influence over the direction of
the world's oldest continuously operating appellate court in
the Western Hemisphere.
Baker had already appointed five of the seven justices on
the Supreme Judicial Court when Chief Justice Ralph Gants --
a Gov. Deval Patrick appointee -- tragically died on Monday,
a little over a week after suffering a heart attack and
undergoing surgery. Despite the health setback, Gants
expected to make a full recovery, and had only slowed down
his work at the SJC, not put it on hold.
The court has not elaborated on when or how that prognosis
changed, but on Monday it shared the news that the chief
justice had passed at the age of 65. He was mourned by the
legal community as a giant of his profession and a true
champion for justice and civil rights.
"You spend any time at all around him, and the guy was alive
-- and I mean really alive in every sense of that word --
which is why I think, for those of us who have worked with
him and know him, this is such a shocking and in some ways
overwhelming event," Baker said.
With the shock still not worn off, Baker said he would need
some time to think about what comes next, but there's no
getting around the fact that he must now make two more picks
for the top court. Justice Barbara Lenk has already
postponed her retirement until December, when she hits the
mandatory retirement age of 70.
One of Baker's picks could become the next nominee for chief
justice, or the governor could elevate a justice from the
ranks of the SJC to succeed Gants as chief. Regardless, the
governor will be under tremendous pressure to improve the
diversity of the court, both racially and experientially.
Associate Justice Kimberly Budd is the only member of color
on the court.
While no one could have seen Gants' death coming, few didn't
see Michelle Wu's mayoral campaign on the horizon. And yet,
it still has Boston political circles abuzz. Will Marty
Walsh seek a third term? Who else might run? Andrea
Campbell? Will Joe Biden win, and if so will he take Marty
with him?
None of those questions had ready answers this week when Wu
made her campaign official after Walsh spilled the beans
last week. And she immediately turned her attention to
bridging the fundraising gap with Walsh, sending out a
series of emails looking to bolster her campaign account
that had just $346,592 to the more than $5.5 million pile of
cash Walsh sits on.
If the Roundup had to guess, Walsh can probably count on an
endorsement from the enduringly popular Gov. Baker if he
decides to seek a third term. But with Baker holding out on
a possible third term for himself, it was a more imminent
political contest gaining his attention this week.
Baker hasn't been able to choose between Democrat Jake
Auchincloss and Republican Julie Hall in the Fourth
Congressional District, calling them both friends. But he
dove headlong Friday into the national political waters he
has long considered too cold to swim by endorsing moderate
Republican Susan Collins for reelection to the U.S. Senate
in Maine.
Collins has trailed in recent polls to Democrat Sara Gideon,
the Maine speaker of the House, in a race Democrats view as
central to their efforts to regain control of the Senate.
Baker appeared in one of a series of ads cut by a Jewish
Republican super PAC that also featured fellow moderate
Maryland Gov. Larry Hogan and former Connecticut Sen. Joe
Lieberman.
"As governor of Massachusetts, I work with both parties to
get things done. Susan Collins does that in the Senate,"
Baker said on video. "She's pro-environment, pro-women,
pro-Maine. We need more leaders like Susan. I hope you
reelect her."
That Baker supports Collins is not the surprise. She's
probably the exact type of Republican you'd expect the
governor to back. It's his decision to stray from his own
backyard and insert himself into a Senate race in another
state, and one with the national spotlight shining brightly
on it.
More in keeping with Baker's modus operandi was his urging
of the Legislature to pick up the pace of their negotiations
over policing reform and climate change legislation, which
have seemingly gone dormant since the end-of-July flurry of
action.
Baker said he wants to put his signature on those bills and
more before the end of the session, which conveniently
doesn't end until after the New Year. Just give him a day or
two for the soreness to wear off from his flu shot, the
vaccine that is currently and will definitely still be
available before Election Day and should be taken by
everyone this year to stave off the dueling virus seasons,
officials said.
House Speaker Robert DeLeo this week also labeled campus
sexual assault legislation as something he would like to
take up in the extended formall session period, giving new
hope to advocates for that bill amidst wariness from some
legislators about starting to pick up non-pandemic related
bills from the pile of unfinished legislation for the
session.
Most agree, however, that at some point this fall the
administration and the Legislature are going to have to come
to an agreement on a spending plan for fiscal 2021, and
Senate Ways and Means Chairman Michael Rodrigues said this
week to expect "major announcements" in the next couple of
weeks about what that process will look like.
Rodrigues told business leaders that he anticipates a $5
billion revenue shortfall in fiscal 2021, and believes the
state will need to draw "deeply" on its $3.5 billion "rainy
day" fund.
The extensive use of reserves, of course, could be avoided
if Congress would send more relief to the states, but the
stalled progress on the next coronavirus relief package in
Washington, D.C. continued to be a source of endless
frustration for Massachusetts leaders.
Not even an attempt at compromise by the bipartisan Problem
Solvers Caucus - a nearly $2 trillion stimulus framework -
could thaw relations between Democrat and Republican
leaders, with eight House committee chairs, including U.S.
Rep. Richard Neal, saying it left too many needs unmet.
And the list of articulated needs seems to keep getting
longer.
The MBTA faces a budget deficit of $300 million to $600
million next year, according to Transportation Secretary
Stephanie Pollack and T General Manager Steve Poftak. Poftak
said ridership is "climbing gently," but has yet to scale
back to even a quarter of what it was before the pandemic.
Poftak joined other national transit agency leaders and
advocates in calling on Congress to include $32 billion for
public transit in the next stimulus bill, which can be added
to the pile of requests for everything from unemployment
support to child care funding.
Though still higher than the national average, the state's
unemployment rate fell nearly five points in August to 11.3
percent, according to the Executive Office of Labor and
Workforce and Development, and Massachusetts no longer
claims the highest unemployment rate in the county.
That distinction now falls to Nevada.
STORY OF THE WEEK: Chief Justice Gants (1954-2020) mourned.
The Boston
Globe
Tuesday, September 15, 2020
It won’t be long before jobless benefits begin to run out
By Larry Edelman
Back to school is underway (kind of) and the leaves are
starting to flash some fall color. Before you know it we’ll
blow through Halloween and barrel headlong toward
Thanksgiving and Christmakwanzakah.
Of course, the tack of the coronavirus pandemic will
determine just how happy the holidays are. A big unknown is
how much time we’ll be able to spend with family and friends
outside our COVID bubbles with the virus lurking in the
epidemiological shadows.
But there’s also this: Will we be in any mood for
celebrating if unemployment persists at record levels?
The nearly 850,000 people subsisting on unemployment aid in
Massachusetts are about to see their weekly checks slashed
by anywhere from 25 percent to 50 percent or more, the
second cut since the end of July. Worse, without another
massive financial rescue package from Washington — and the
prospects don’t look good — their jobless benefits will
begin running out completely in December.
More on that merry scenario in a moment.
On Friday, we’ll get an update on the local job market with
the Labor Department’s state-by-state report on employment
conditions in August.
As of July, the Massachusetts jobless rate was 16.1 percent,
down from a peak of 17.7 percent in June but still the
highest in the nation. The pace of hiring slowed during the
month.
Those trends probably continued here last month, based on
the already released national jobs report for August. Hiring
across the country was better than analysts had forecast,
but employment growth cooled for the second straight month.
The US jobless rate fell to 8.4 percent from 10.2 percent in
July.
It’s crucial that Massachusetts employers are confident
enough to put more people back to work. That would blunt the
impact of the loss of billions of dollars in extra federal
jobless benefits that helped prop up the economy during the
coronavirus shutdown and Governor Charlie Baker’s cautious
reopening.
As my colleague Shirley Leung and I explained on Sunday,
that confidence hinges on our success in containing the
coronavirus and returning to more normal work and social
routines. Sticking close to home, people are buying less and
saving more, especially those in affluent households.
Businesses are reluctant to hire until their sales pick up.
Which means that the loss of enhanced federal jobless
benefits comes at a vulnerable time.
Late last Friday afternoon, the Baker administration said
the federal money sweetening Massachusetts unemployment
checks by $300 a week had run out.
The press release from the state Department of Unemployment
Assistance said the last of six weekly bonuses — funded with
$44 billion diverted from the Federal Emergency Management
Agency to state unemployment programs around the country —
was on its way to eligible recipients.
“FEMA has informed DUA that no additional . . . payments
will be available beyond the 6 weeks already allotted,” the
Department of Unemployment Assistance advised.
Read: “Don’t blame the governor when you can’t pay the
bills.”
It was the second time in seven weeks that Congress stood by
as supplemental jobless benefits expired, even though a
record number of Americans were out of work because of the
pandemic. A $600-a-week payout disappeared at the end of
July after Senate Republicans blocked a bill that would have
extended the payments as part of a $3 trillion financial
rescue package. The GOP wants a much smaller relief package.
President Trump tapped a FEMA disaster relief fund for money
to cover the $300 weekly bonus. It was a short-term fix, but
better than nothing. Massachusetts recipients got $1.8
billion they otherwise would not have seen.
“Unemployed workers facing large cuts to their benefits will
face unsustainable credit card debt at best, and food
insecurity, housing instability, unmet medical needs, and
more at worst,” said Indi Dutta-Gupta,co-executive director
of the Georgetown Center on Poverty and Inequality.
Now what?
Basic unemployment checks will continue as they always have
— at the level calculated by the state for each individual
applicant based on past income. The average payment in July
was $400 a week, down from $525 a week in January as more
lower-income workers lost their jobs.
Some employers have argued that Massachusetts' relatively
generous payouts — the maximum weekly benefit is $825, the
highest in the country — along with the now-ended federal
bonuses, discouraged people from returning to work because
they could make more money on unemployment. A study done by
economists Simon Mongey of the University of Chicago and
Corina Boar of New York University found that about 68
percent of workers who lost their jobs due to the COVID-19
pandemic received benefits that exceeded their previous
wages.
But Mongey and Boar concluded, as have other studies, that
despite the extra $600 in federal aid, most laid-off workers
preferred to have a job.
In Massachusetts, benefits under state unemployment
insurance are currently capped at 26 weeks. More than
387,000 people received state benefits in the first week of
September.
Jobless claims began to surge in the third week of March,
and for laid-off workers who applied back then, state
payments will start running out at the end of next week.
However, a federal program set up by Congress, called
Pandemic Emergency Unemployment Compensation, provides 13
additional weeks of benefits. The last payments available
under this program are set for the week ending Dec. 26, even
if recipients haven’t gotten all 13 weeks.
Once those checks end, there is a final extension. In
periods of high unemployment in Massachusetts, another 13
weeks of benefits are available. For workers laid off in the
awful weeks of March and April, the extended benefits will
begin to run out at the end of March 2021.
A larger group of people are receiving Pandemic Unemployment
Assistance, or PUA, a program established by Congress during
the COVID outbreak to provide aid to those who typically
didn’t qualify for state unemployment insurance. About
460,000 gig workers, independent contractors, and others in
Massachusetts received PUA benefits for the week ended Aug.
22.
The state began approving PUA claims at the end of April,
but payments were retroactive for people put out of work as
early as the last week of January.
PUA provides up to 46 weeks of coverage, but payments also
will end Dec. 26 regardless of when recipients began
collecting.
“I am extremely worried that everything is set to end at the
end of December, when I don’t see a lame-duck Congress and
possible lame-duck administration being any more willing to
negotiate than they are now,” said Michele Evermore, senior
researcher and policy analyst at the National Employment Law
Project in Washington, D.C. “That could mean another
stalemate and people running out of benefits during the
holidays.”
There are really just two ways to avoid this train wreck.
Either the economy recovers at an astonishing rate, putting
a lot more people back to work, or Republicans come to their
senses and agree to a rescue bill that’s large enough to
make a difference.
Which Christmas miracle do you want to bet on?
The Boston
Globe
Friday, September 18, 2020
The state’s jobless figure fell to 11.3 percent in August
as hiring in hard-hit industries continued to heal
By Larry Edelman
The Massachusetts job market extended its recovery from the
pandemic-induced shutdown earlier this year as employers
added workers for the fourth consecutive month in August and
the unemployment rate declined sharply, the US Labor
Department said Friday.
The state’s jobless rate fell to 11.3 percent last month
from a revised 16.2 percent in July, when it was the highest
in the country. Employers added 51,600 jobs, led by hiring
in health care and education, as well as the leisure and
hospitality sector, which was pummeled during the early
months of the coronavirus pandemic.
The brightening jobs picture mirrored improvements seen at
the national level. US employers created 1.4 million jobs in
August, and the unemployment rate fell to 8.4 percent from
10.2 percent in July.
But the outlook for the Commonwealth — like that for the
country — is uncertain. The pace of hiring has cooled after
an initial surge, when restaurants, stores, construction
sites, and factory floors began to reopen in May. Moreover,
the ranks of people who want a job but can’t find one remain
massive by historical standards: 401,000 in Massachusetts
last month, more than double a year earlier. And the
workforce is shrinking as some job-seekers give up their
search.
“There are still enormous numbers of people out there who
are suffering and can’t find the work,” said Thomas Kochan,a
professor at the MIT Sloan School of Management and
codirector of its Institute for Work and Employment
Research.
Governor Charlie Baker’s decision to shut down earlier than
most states — and reopen more cautiously — slowed the spread
of the coronavirus, but that success came at a high price:
The state had the steepest unemployment rate in the country
in June, when it peaked at 17.7 percent, and in July. The
rate was 2.8 percent in March, below the national average.
Now the recovery in Massachusetts is catching up with other
parts of the country. The percentage-point drop in
unemployment here was the biggest among states, and the 1.6
percent increase in jobs was near the top.
Tourist-dependent Nevada now has the highest unemployment
rate in the country, at 13.2 percent. Not far behind was
Rhode Island, where the rate actually rose to 12.8 percent.
Despite the big drop here, Massachusetts ranked sixth
highest in unemployment in a tie with New Mexico, while
Nebraska, at 4 percent, had the lowest ratio of out-of-work
residents in the country.
While widely followed, the unemployment rate — which is
based on a household survey that is prone to substantial
revisions from month to month at the state level — is just
one way to track the health of the job market and doesn’t
provide a complete accounting.
Each week the Labor Department releases a tally of people
collecting state unemployment insurance. The number of
Massachusetts residents receiving these payments has fallen
from a record of nearly 600,000 in late March to 419,000 in
the week ended Aug. 15 — the same week covered by the August
jobless survey.
A broader — and less rosy — count of Massachusetts residents
who are out of work is now possible with the start of a new
federal emergency program for gig workers, independent
contractors, and others who were previously ineligible for
state benefits. An additional 480,000 laid-off workers in
Massachusetts received federal Pandemic Unemployment
Assistance for the week ended Aug. 15.
The counts of those receiving the pandemic aid have not been
as precise as those for state unemployment because of
inconsistencies tied to the rollout of the program and a
wave of bogus claims. Still, under federal and Massachusetts
programs combined, somewhere close to 900,000 people
received unemployment in the week of Aug. 15, or nearly
one-fourth of the pre-pandemic labor force.
Other employment measures also underscore the fragility of
the local economy. The labor pool — people with jobs and
those looking for work — shrank last month by 127,600 to
3.55 million as would-be workers gave up efforts to land a
paycheck. The labor force participation rate — the share of
working-age population employed and unemployed — fell for
the fourth time in six months and stands at 62.6 percent,
compared with 67.9 percent in February.
Hiring is being driven by companies bringing back workers
who were furloughed or fired earlier in the year. Employers
in education and health services added 17,400 jobs in
August, though the sector remains down 60,700 jobs over the
past year. The leisure and hospitality industry expanded by
13,100 jobs, but the year-over-year decline was a staggering
146,000 positions, or 39 percent of the total.
“My sense is that the movement is a lot of people getting
called back. Finding a new job is still hard,” said Andrew
Stettner, who studies the labor market as a senior fellow at
the Century Foundation.
The key question is whether Massachusetts employers will
pick up hiring now that COVID-19 infection rates are among
the lowest in the country and expanded jobless benefits have
run out. The state has clawed back about 40 percent of the
690,000 jobs that were cut in March and April.
“We need more support,” Stettner said, referring to the
failure of Congress to agree on a new financial rescue
package. “We are in a very deep hole for the next nine
months or a year.”
CommonWealth Magazine
March 1, 2020
Beacon Hill’s secretive committee voting process
A confusing hodgepodge of policies guide release of vote
tallies
By Shira Schoenberg
It took a couple days of calling, but the House Ways and
Means Committee eventually disclosed how committee members
voted last week on a major transportation bill containing
hefty tax and fee increases. The information, however, had
some holes in it.
According to committee spokesman Blake Webber, the vote was
22 in favor, one against, and eight reserving their rights,
or abstaining from taking a position. Webber refused to say
how individual members voted other than Republican Rep. Todd
Smola of Warren, who was the lone no vote. He said the
committee’s policy is not to release how individual members
voted, other than those who vote no.
The Ways and Means policy illustrates how difficult it can
be on Beacon Hill to find the answer to the seemingly
straightforward question of how a member voted on a bill in
committee. The search for that information may be simple or
it may be impossible, depending on the whim of individual
committee chairs. There is a patchwork of different policies
developed by committee chairs with no guarantee that the
public can find out how a given state rep or senator voted
on a particular piece of legislation.
“What happens in the Legislature, particularly in
committees, is really very much a black box, and I think
that’s not in the best interest of voters or in the best
interests of advocates,” said Mary Ann Ashton, co-president
of the League of Women Voters of Massachusetts.
During a debate on rules governing joint committees made up
of Senate and House members at the beginning of the current
legislative session, the Senate voted to make all committee
votes publicly available on the Legislature’s website. But
the House did not agree to the amendment, and it did not
survive a conference committee.
Under the rules that were ultimately agreed to, votes made
by roll during a committee meeting must be kept in committee
offices and made available for public inspection during
business hours. But lawmakers have interpreted that rule to
not apply to votes conducted by email, which is how most
votes are taken.
In Senate-only committees, votes are posted online. For
example, the Senate Ways and Means Committee posted on the
bill’s web page how each member voted on a recent
controversial bill to allow the use of automated traffic
cameras. For House-only committees, the rules say a
committee vote will be recorded and made public only if a
committee member requests it at a meeting.
House Speaker Robert DeLeo’s spokeswoman did not respond to
requests for comment on the House’s opposition to making all
committee votes public.
Most substantive policy issues in the Legislature are dealt
with by joint committees of both House and Senate members.
CommonWealth called the House and Senate co-chairs of 15
joint policy committees and requested vote counts for a bill
that was recently reported out of that committee, either
favorably or unfavorably. Staff in most – but not all –
offices provided the overall vote tallies, some after
multiple phone calls. Some revealed how each member voted,
others would only release some or none of that information.
The Election Laws Committee was the one committee that
refused to provide any information on how members voted, on
a bill that would let residents vote early in municipal
elections. The bill was sent to study, effectively killing
it, but no information was provided on the vote total or how
individual members voted.
MaryRose Mazzola, chief of staff to Senate chair Barry
Finegold of Andover, said Finegold and House chair John Lawn
of Watertown agreed not to make individual votes public
unless members are informed in advance. As a result, she
said she could not reveal the vote total for the early
voting bill. “Individuals don’t expect them to be made
public,” Mazzola said.
Asked about the policy, Lawn said the committee members
decided to keep their committee votes private, but anyone
who is interested can always ask individual members how they
voted. “Each individual committee member can make their vote
public as they wish,” Lawn said. “You can ask anybody for
their vote.”
On the other hand, the Joint Committee on Labor and
Workforce Development readily provided information on its
recent move send to study a bill that would allow for a teen
wage that is below minimum wage. A spokeswoman for Senate
chair Pat Jehlen of Somerville quickly forwarded a record of
the committee poll, showing how each member voted.
In the Public Health Committee, Senate chair Jo Comerford’s
office referred questions about votes to House chair John
Mahoney’s office. Mahoney’s staff director said the usual
practice of the committee is not to release information
about individual votes. But, he said, if a vote is
unanimous, the committee will generally provide it. Asked
about a favorable recommendation on a bill restricting the
use of flame retardants, he said 14 committee members voted
for it and two members did not vote. He declined to name
those two members.
Asked about a favorable vote on a consumer rights bill, a
staffer for Paul Feeney of Foxborough, the Senate chair of
the Consumer Protection and Professional Licensure
Committee, referred questions to House chair Tackey Chan of
Quincy. The aide to Feeney said the committee staff operate
under the House chair and keep the committee’s records.
Chan’s staff provided the vote total of 15-0 and gave the
names of the two members who abstained from taking a
position.
At the Transportation and Judiciary committees, Senate staff
also deferred to the House chair, who provided vote totals
and the names of members who dissented from the majority
vote.
But at the Education and Housing committees, the Senate
chairs did not defer to their House counterparts. They
provided the vote totals and a breakdown by individual
members.
Jonathan Cohn, head of the issues committee for the liberal
organizing group Progressive Massachusetts, voiced dismay at
the lack of transparency and said he has also had mixed
experiences – able to get vote totals from some committees,
but not from others.
“The problem with the system as it exists is that
legislators are able to kill bills giving everyone clean
hands afterwards,” Cohn said. “It’s people’s jobs to take
votes. They should be willing to defend those votes to their
constituents.”
According to Cohn’s research, 26 states make committee votes
public on a legislative website.
A legislative commission was created by a 2016 public
records law to examine ways to make the legislative process
more transparent. The senators who sat on that commission
released recommendations in December 2018, and they included
posting publicly on the legislative website any vote made by
a committee, whether via email or during a meeting. But the
House members of the committee did not sign on to those
recommendations.
Senate commission chair Walter Timilty of Milton said
senators felt that what they do “is the people’s business.”
“We all have this intent to do great things for the people
of the Commonwealth and we work for the people of the
Commonwealth. To me, it’s a natural correlation that what we
do here be out in the open,” he said.
The House commission chair was Rep. Jennifer Benson of
Lunenburg, who has since left the Legislature. Benson
declined to talk about the commission’s conclusion, but
defended the current policy as a means of giving authority
to committee chairs. Benson said people often talk about
power being too centralized in legislative leadership, and
letting committees negotiate their own rules is a way to
distribute that power.
“I think it’s really important to keep power decentralized
and out among the members and the committees,” Benson said,
adding that most committees do make vote totals public, upon
request.
Feeney, a commission member, said he thinks lawmakers should
be as transparent as possible, and committee votes should be
made public. But, he said, committees have autonomy and it
is not always easy to negotiate rules between the two chairs
and the members.
“The fallback in the Legislature for a long time is you just
continue to do what you’ve been doing, which is if people
call and ask for votes, you take it on case by case basis,”
Feeney said. He said it will take “some political will” to
develop a standard system where all committee votes are made
public.
A group of open government advocates submitted testimony to
the public records commission urging lawmakers to publicize
all votes. Deirdre Cummings, legislative director of
MASSPIRG, a consumer group that signed onto the testimony,
said lawmakers are elected to make decisions on public
policy, and the public has an interest in seeing how their
officials vote throughout the legislative process.
“The lawmakers are elected by the public to debate and
support or oppose policies before them, and the only way
that the public can evaluate how effective they are at their
jobs and the issues they care about is if we have access to
information like votes on policies,” Cummings said. |
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