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Small Business Health Premiums Keep Rising More Than Others; RAM Seeks Regulatory Fairness

Recently, the Massachusetts Center for Health Information and Analysis (CHIA) presented their 2018 Annual Report. The report was widely reported in the press for showing much slower overall growth in healthcare spending: 1.6% vs. the state’s 3.1% benchmark, and recent 4 year average of 3.6% increases. Yet, totally missed by the press and general public was how the increased costs were disparately distributed among a wide variety of consumers. Dissecting how the overall healthcare “pie” is divided is extremely important for small businesses, as important questions remain whether costs are being fairly distributed across all classes of purchasers.

Commercial, fully-insured premiums increased 4.9%, yet within that market, small businesses saw an increase of 6.9%. Subsidized individuals in the Connector saw a 3.0% increase, unsubsidized individuals saw a 3.8% increase, large groups saw a 4.1% increase, and the state Group Insurance Commission (the GIC; the buying group for state & local employees) saw a 4.4% increase. Meanwhile the state’s Medicaid program saw a drop of -0.2%.

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FOR RAM, GRAND BARGAIN WAS ABOUT COST MITIGATION; FUTURE CHALLENGES NEED BROADER BUSINESS COMMUNITY SUPPORT

August 7, 2018 By Jon Hurst, President

The so-called “Grand Bargain” was signed into law in late June, and with its’ passage, three initiatives were kept off the November ballot.  One question was RAM’s rollback of the sales tax; and the other two were the $15 minimum wage and the paid family and medical leave payroll mandates. 

Make no mistake about it—without the existence of RAM’s sales tax initiative, the political pressure to remove these two costly labor mandates from the ballot would never have occurred.  The sales tax ballot initiative created the environment and the leverage to move closer to middle ground through compromise, rather than facing near certain voter passage of the labor initiatives.  Neither the Legislature nor the advocates pressing the labor mandates wanted to see a sales tax rollback with a $1 Billion price tag. 

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Changes Coming: Internet Sales Tax, $15, Paid Leave, Sunday Pay Repeal - Why We Took The Deal

June 22, 2018 BY JON HURST

This week, after 20 years of RAM work on sales tax fairness, the US Supreme Court ruled in favor of the future of our Main Streets by overturning the 1992 Quill decision on remote seller tax collection and remittance.  The South Dakota v Wayfair decision is important and welcomed as it will seek to end unequal application of state government imposed sales taxes.  Here in Massachusetts, we have always had the “New Hampshire problem,” but we also have a very tech savvy consumer, all too likely to send their vital discretionary dollars out of our local economy, to tax free sellers easily found right on their smart phones.  Thus for many years, local stores have had two strikes against them as tax free competitors have proliferated. 

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Beacon Hill Ballot Question Negotiations Underway With Tight Deadlines

May 29, 2018 by Jon Hurst, President

As RAM members know, your association has been working for almost a year to qualify a ballot initiative to roll back the sales tax to the 5% rate last seen in 2009. The measure also authorizes an annual two day sales tax holiday.
Sufficient signatures have been obtained to file with the Secretary of State by the July 3rd deadline to qualify the measure for the November ballot. But important negotiations are underway on Beacon Hill with various ballot measure sponsors in order to achieve middle ground and avoid the questions being placed before the voters. Besides the sales tax question, two payroll mandate proposals are being negotiated: the initiative to raise the minimum wage to $15 over 4 years, and another initiative to create the most costly and extensive paid family and medical leave mandate in the country.
Complicating the negotiations are pending court cases on whether a constitutional amendment to increase the state income tax by 4% for those persons earning $1 Million or more will reach the November ballot. That case is before the MA Supreme Judicial Court. And before the US Supreme Court is the landmark case on whether states can mandate out of state internet sellers to collect the sales tax from local consumers (SD vs Wayfair).
Whether RAM moves forward with the ballot question on the sales tax rollback will be based on a combination of the outcome of those court cases; as well as on the ability of negotiations to produce more reasonable payroll mandate measures; while still giving taxpayers and local small businesses some sales tax relief to incent local consumer spending rather than driving purchases to NH or to Silicon Valley.
In case we do move forward with the sales tax ballot question, investments are being made for a campaign. The 10,792 required voter signatures for the second round of qualification have been obtained and will be held for potential filing. In addition, the Beacon Hill Institute has completed a study which confirms the economic benefits of lowering the sales tax—particularly for lower income consumers and our small businesses—as well as the fact that the tax loss is far less than what opponents might suggest due to increased local investment and jobs.
What links the high and avoidable sales tax and the proposed costly state labor mandates together is that both make it harder for local sellers to attract and retain local consumer spending due to the resulting and obvious higher customer prices.
In the age of the smart phone, we must all adapt. That includes our existing and proposed laws under the purview of our public policy leaders--who are all very quick to say they support small businesses and our Main Streets. To have laws which make local consumer prices far higher than our competitors, whether through a high sales tax or through unaffordable payroll mandates, is simply antiquated, unacceptable and counterproductive state economic policy. In the 21st Century, that fact is certainly crystal clear to anyone that has ever worked to make a payroll, and to attract consumers armed with unlimited spending options.
More than ever, the employer community, labor, and elected officials should all be working together to keep consumer spending--which is 70% of our economy—right here in Massachusetts. The next few weeks will be telling as to whether that cooperation can and will happen.

Real-time sales tax proposal must be rejected

May 1, 2018 By Bill Rennie, RAM Vice President

Many in the business community were pleased to see that painstaking policy work undertaken by Speaker Robert DeLeo and Chairman Jeffrey Sánchez of the House Ways and Means Committee had resulted in the removal of a real-time sales tax provision from an earlier version of the state budget currently being debated in the state house. They propose instead to create a bipartisan and commission to study the feasibility of a monthly estimated sales tax payment structure. This eminently sensible approach allows a thoughtful review of Massachusetts’ sales tax collection system, and removes the need for the immense technological overhaul real-time sales tax would require.

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National Report Shows ORC and Return of Stolen Merchandise on the Rise

November 28, 2017   By Ryan Kearney

A report recently released by the National Retail Federation found that organized retail crime (ORC) and return fraud continue to be on the rise across the country. This troubling news for the retail industry and honest consumers came just days after the Massachusetts House of Representatives agreed with the Senate to increase the felony threshold found in a number of the state’s property crimes which are commonly utilized by retailers, law enforcement and prosecutors to curtail such professional criminal behavior. In light of these findings during the holiday shopping season, the Legislature should strongly reconsider finalizing these changes to the felony thresholds.

At the current felony threshold level of $250, Massachusetts retailers already experience significant losses due to theft with an estimated $1 billion in merchandise stolen from their stores annually—a cost ultimately paid for by honest consumers. The majority of these losses are attributed to professional criminals who see theft as a low risk, high reward activity due to weak property crime laws. The proposed increases— $1,500 in the Senate and $1,000 in the House—would further weaken these criminal laws by removing the threat of meaningful criminal penalties from an expanded number of serious theft incidents.



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Sales Tax Initiative Leveraging Debate on How Government Affects Sales and Operating Costs on Main Street

October 24, 2107  By Jon Hurst, President

The Retailers Association of Massachusetts has been investing considerable time and resources this fall to qualify a ballot initiative to reduce the sales tax rate back to the 2009 level of 5.0%, as well as to authorize an annual August two day sales tax holiday.  Our membership polling clearly showed overwhelming support for the Association to take this rare step.  As an industry, we have not used the ballot initiative mechanism since 1994, when the voters approved a RAM sponsored measure to make Massachusetts the last state in the nation to allow stores to open on Sunday mornings, and on the three summer national holidays. 

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Increasing Felony Threshold For Larceny Represents a Dramatic Raise for Thieves

October 11, 2017  by Ryan Kearney

Massachusetts Senate leadership recently released a criminal justice reform package which seeks an eighty-four percent increase in the felony threshold for the crimes of larceny and credit card fraud—from the current level of $250 up to $1,500. An increase of this size would be detrimental to the ability of retailers, law enforcement and prosecutors to protect against theft and essentially results in dramatic raises and incentives for professional criminals operating in the Commonwealth.

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Moving Ahead on Sales Tax Ballot Question

Moving Ahead on Sales Tax Ballot Question

RAM’s membership overwhelmingly decided this week to move forward with an effort to put a sales tax ballot question before the voters that would reduce the state sales tax to 5% and mandate an annual sales tax holiday.

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HEY BIG HEALTHCARE, PAY THE SALES TAX LIKE THE REST OF US!

May 17, 2017  By Jon Hurst
 

As the fiscal year 2018 state budget gets closer to implementation on July 1, it is becoming clearer that employers will be asked in some way to help fund a state Medicaid budget gap.  The MassHealth budget has exploded under a combination of ACA related costs, mixed up consumer incentives, and a lack of provider expense control.  And until the state can institute some guardrails, and move some over to more appropriate and affordable options, it appears that employers will be asked to fund some of the increased costs over a two year period. 

Important discussions on the economic impact to small businesses have lowered the dollar ask and have allowed for discussions of better taxing plans, but still absent from the negotiations is skin in the game from the providers themselves.  A proposal to cap commercial rate increases for the big, high cost providers was lost in the flood of unparalleled political power by “non-profit,” non-taxpaying healthcare providers.   They aren’t shy about asking for more money from consumers, employers and taxpayers, but ask them to pay taxes or reduce their expenses, and they pull out all the stops to deflect the conversation.

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Smart Tax Policy Protects the Home Team

April 28, 2017 by Jon Hurst

"Don’t tax you, don’t tax me, tax the fellow behind the tree;” so said former Louisiana Senator Russell B. Long when describing “tax reform.”  This is a pretty clear description of the political process behind tax debates at the state and federal levels.  And this message is worth keeping in mind as we face major tax changes and debates over the next year on Capitol Hill concerning the Border Adjustment Tax; and on Beacon Hill and the state ballot on the so-called Millionaires Tax.

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Voter's Views on Sales Tax Provide Food for Thought

By Jon Hurst, President 

The Retailers Association of Massachusetts recently conducted public opinion polls by Princeton Research Associates to determine the views of voters and consumers in the Commonwealth about the state sales tax and about the fairness alternatives.  The results are interesting.  Following are the highlights.

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The False Promise of “Real Time” Sales Tax Remittance

March 20, 2017 by Bill Rennie

Much has been said and written about Governor Baker’s $300 million employer Medicaid tax proposal, which when fully annualized over the course of the year projects out to more than a $600 million tax increase on employers, and rightly so, as that is a big number.  Less attention has been paid to another proposal in the budget that is also meant to generate significant revenue from employers by adopting what the Governor describes as a “Sales Tax Modernization Timing Change,” more commonly referred to as “real-time” sales tax collection.  The Administration counts on this change to bring in $125 million in the next fiscal year – another big number.  However, like the proposed Medicaid tax, the “real-time” proposal is flawed.

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Healthcare Is An Expense Problem, A Law Problem, Not A Revenue Problem

January 26, 2017 by Jon B. Hurst, President

ObamaCare (ACA) is under the microscope for repeal and replacement this year in Washington DC.  And here in Boston, yet another state commission on healthcare provider prices is grappling with the fact that in the 11 years since we passed RomneyCare, our healthcare costs have annually increased about 4 times the rate of inflation.  Unfortunately for Main Street, those increases haven’t been spread equally either—small businesses and their employees have seen far higher premium increases than those experienced by big business or big government programs. 

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MA Holiday Sales Disappoint with 1% Drop

January 9, 2017  By Jon Hurst

Despite seeing consumer confidence levels unmatched for the last 15 years, retail sales in Massachusetts dropped 1% among the 4000 members of the Retailers Association of Massachusetts this holiday season (Nov-Dec).  The RAM survey exclusively measures small, locally based sellers, and does not reflect either national chains or online sellers.  RAM had previously projected a 3.9% increase over the prior year.  The disparity in the projection coupled with the strong consumer confidence levels raises the question whether consumers truly spent less this holiday season, or sent more of their dollars out of state to online sellers.

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Shop Like Jobs Depend On It -- Because They Do! #BuyInMA

The retail sector is the most competitive industry on the planet, which translates into the slimmest of profit margins for employers.  Competition from sellers across the street, in the next town, next state, or from across the country on the internet has only become more keen due to the unlimited power and information consumers can receive right on their smartphone.

That competition has created many admirable efforts to urge local spending and remind shoppers to visit our Main Streets.  From Shop Local, to Small Business Saturday, to RAM’s December BuyInMA local radio ad campaign, efforts are growing, but we must sustain our focus.
  
This holiday shopping season is going well and we need to carry that momentum into 2017.  If we all want a vibrant and thriving downtown in our hometowns across the Commonwealth, we all need to do our part.  Keep beating the Shop Local drum.  Talk to the small business owners in your town and listen to their concerns – they are closest to the consumer and really do have their finger on the pulse of the local economy.  They employ your family, friends and neighbors and are a vital component to the health of your local economy and your community. 
 
Shop and spend at your local retailer…shop like jobs depend on it, because they do.   
 
Happy holidays and best wishes in the New Year!
 
From your friends at,
 
The Retailers Association of Massachusetts

PROTECT CONSUMER CHOICE – VOTE NO ON QUESTION 3

NOV. 3, 2016 • BY BILL RENNIE

With early voting now a reality in Massachusetts, voters across the Commonwealth have already begun to make their decisions behind the ballot curtain. One of the questions they are being asked to decide is Question 3, An Act to Prevent Cruelty to Farm Animals.

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RAM MEMBER SURVEY SHOWS BEACON HILL PENNYWISE, POUND FOOLISH ON SALES TAX HOLIDAY

OCT. 17, 2016 • BY JON HURST

The results of our member survey are in, and it is clear that the Beacon Hill leadership decision to forego the Sales Tax Holiday this past August resulted in dramatic drops in local sales and hours worked, with no clear benefit to the state in increased taxed collections. This is no surprise to anyone who understands consumers and the rapidly changing marketplace driven by mobile commerce. RAM firmly believes the real winners of not holding the Massachusetts Sales Tax Holiday were the tax-free mobile commerce sellers.

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RAM PUTS SPOTLIGHT ON STORE CLOSURES WITH DARKSTOREFRONTSMA.COM

SEP. 26, 2016 • BY JON HURST
When corporate jobs leave the state for lower cost locales, it is front page news. If a hospital seeks to close a facility with empty beds, picket lines go up and politicians go on attack. If a hot new technology firm offers to locate a handful of jobs in exchange for tax breaks, the government welcome mat is rolled out.
Unfortunately, when a store or restaurant goes dark, little notice is taken except by the former customers and employees.

Consumers, elected officials, community leaders all talk about the importance of supporting small businesses and maintaining our historic, vibrant Main Streets. Yet what are they doing when it comes to really protecting, promoting and preserving local stores, and the delicate local shopping environments in which they operate? In a period of severe competitive pressures from mobile commerce growth, can we say that our government officials at the federal, state and local levels have really backed up their Main Street rhetoric with action? And are consumers really putting their money where it counts in order to keep those stores, restaurants and jobs in their towns?

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JUDGING THE 2015 - 2016 LEGISLATIVE SESSION - AN INCOMPLETE GRADE

AUG. 2, 2016 • BY JON HURST
As is often the case, the recently concluded formal session of the Legislature featured some wins—mostly in the defeat of costly employer measures—but some losses, primarily the continuation of existing discriminatory policies, which either result in lower sales, or higher costs for local sellers.

One important win was the passage of a measure to keep the state’s innovative Small Business Health Insurance Cooperatives operating and serving employers of 50 and under. RAM operates one of the existing three co-ops in the state, and thanks the Legislature--in particular the House of Representatives--for recognizing the costly, discriminatory and unfair application of health insurance rates under federal ACA rules. In the Economic Development bill passed Sunday, an important section sponsored by Representative Kate Hogan (D-Stow) allows for new financial incentives to use wellness and provider transparency tools through small business cooperatives. In reaction to double digit premium increases for small employers following the passage of “RomneyCare,” the Legislature in 2010 authorized group purchasing through non-profit cooperatives with upfront premium discounts. Yet, those savings are evaporating under preemptive ACA requirements on state rate setting. The ACA required phase out of state rating factors, means no upfront premium flexibility remains to award employees for using wellness programs, or to shop around for the low cost, high quality healthcare providers—common practices for large employers. The new state legislation moves upfront premium incentives to the end of the insurance contract period in the form of rebates, which remains legal under federal rules. The section also encourages the Baker Administration to seek an Innovation Waiver from the federal government under the ACA to seek more flexibility and fairness for Massachusetts small businesses and their employees. Without rate flexibility and consumer financial incentives, small business health insurance premiums are more accurately labeled healthcare taxes.

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