What's ahead in state government this week
First Day Hikes in Brewster and Waquoit; Commercial wind energy leases;
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The Massachusetts minimum wage rises Jan. 1 to a highest-in-the-nation $10 an hour and the state income tax will simultaneously fall to 5.1 percent from 5.15 percent, delivering tax relief to workers while putting a dent in state revenues at a time when collections are growing modestly. Meanwhile, thousands of bills filed in January 2015 when the Legislature opened its two-year session will remain in place in the new year thanks to a "carryover" reform that is marking its 20-year anniversary. The 1996 reform was part of a package that introduced the modern-day legislative cycle requiring the Legislature to end its formal sessions by the third Wednesday in November in the first year of a biennial session, and by July 31st in the second year. The session schedule change eliminated lame-duck sessions like the ones that occurred in December 1994 when lawmakers approved a 55 percent pay raise for themselves, which was immediately followed by the quiet passage of a capital gains tax cut, giving the impression of a quid pro quo for Gov. William Weld, who proposed the pay hike. The schedule change has left the Legislature with 18 months of formal sessions in the two-year cycle while technically maintaining the Legislature's status as a full-time body by filling the remaining weeks in with informal sessions. While intended to facilitate a better structuring of the workload, legislative leaders since 1996 have often left work on major bills until the second year of the session, and more specifically to the final days of July in the even-numbered, election years.
CARRYOVER RULE TURNS 20
The 1996 carryover reform sharply curtailed administrative and other work associated with refiling and rehearing bills after the end of the first year of the biennial session, but there's still an unsettled disagreement about the flow of bills. House leaders resisted a Senate push this year to force joint committees to report bills out earlier in the second year of the two-year session - the current deadline is March 16, 2016. Senators say they have to wait too long for an opportunity to debate priorities because bills can be held in House-controlled joint committees for more than 14 months and then get released just as the budget cycle is dominating bandwidth between April and July. But the process and access to bills is only one consideration. Legislative leaders in 2015 made incomplete or no progress on major issues identified as priorities by leaders and others in both branches, such as public records reform, solar energy policy, charter school expansion, and opioid abuse - issues that remain on the to-do list when January rolls in along with six non-budgetary policy initiatives that voters are threatening to put on the 2016 ballot unless their demands are met in the Legislature.
MASSACHUSETTS, CALIFORNIA WILL HAVE HIGHEST MINIMUM WAGES IN 2016
Massachusetts and California on Jan. 1, 2016 will be tied at $10 an hour for the highest state minimum wages, according to a national business group. The Massachusetts wage floor is rising from $9 an hour under a 2014 law that also requires the minimum wage here to increase to $11 an hour on Jan. 1, 2017, the last of three scheduled increases. According to Business for a Fair Minimum Wage, a network of business organizations and owners who favor higher minimum wages, workers in 14 states will experience minimum wage hikes in the new year. The group wants Congress to raise the $7.25 an hour federal minimum wage, which has been at that level since 2009, to at least $12 an hour by 2020. Washington state has had the highest minimum wage recently, but will remain at $9.47 in the new year. New York's minimum wage on Dec. 31 is set to rise to $9, or $9.75 for employees of fast food chains except New York City where it will go to $10.50. Connecticut's minimum wage will increase to $9.60 on Jan. 1, 2016 and to $10.10 on Jan. 1, 2017, according to the group, which says Rhode Island and Vermont are also poised to revise their minimum wages to $9.60 on Jan. 1, 2016. The group says the federal minimum wage of 1968 was worth $10.94 cents in today's dollars. The Massachusetts Budget and Policy Center estimates that 450,000 working people in Massachusetts will receive a hike in the minimum wage on Jan. 1.
INCOME TAX RATE FALLS TO 5.1 PERCENT
Massachusetts taxpayers will experience a collective $152 million in tax relief in fiscal 2017 based on a reduction in the state income tax rate from 5.15 percent to 5 percent that takes effect Jan. 1. For state budget writers, they'll have $152 million less on the revenue side as they look to develop a spending bill this winter and next spring. A 2002 law that froze a voter-approved law calling for a 5 percent income tax rate established a series of triggers to facilitate rate reductions. The trigger requires growth in inflation-adjusted baseline revenues to exceed 2.5 percent from one fiscal year to the next. The income tax rate has been ratcheted down, from 5.3 to 5.15 percent, in 0.05 percent increments since 2011. The aggregate revenue impacts of those rate cuts were $54 million in fiscal 2012, $114 million in fiscal 2013, $184 million in fiscal 2014, $327 million in fiscal 2015, $413 million in fiscal 2016, and $565 million in fiscal 2017. At a revenue hearing this month, Senate budget chief Karen Spilka estimated state revenues have been reduced by nearly $2 billion every year since 2000 due to the voter law that started the income tax rate reduction from 5.95 percent. Spilka estimated the Jan. 1 rate reduction will save taxpayers an average of $30 per year.
EXPANDED EARNED INCOME TAX CREDIT
More than 400,000 lower-income families and workers will see a larger tax break in the new year, with the state earned income tax credit expanding on Jan. 1. The maximum value of the credit will rise to $1,442, an increase of $502. According to the Massachusetts Budget and Policy Center, between 430,000 and 440,000 filers claim the state EITC each year, receiving a total of $125 million to $135 million in credits. The increase brings the state-level credit to 23 percent of the federal credit, up from 15 percent. Both Gov. Charlie Baker and Senate President Stanley Rosenberg have said they want to see further increases in the EITC, potentially in the coming year. The higher 23 percent match rate will bring the cost of the program to $200 million, according to MassBudget.
FISCAL 2016 BUDGET FIXES - ANOTHER PROJECTED BUDGET GAP
The state on Jan. 1 hits the midway point of fiscal 2016 and Administration and Finance Secretary Kristen Lepore has said probable budget adjustments will be announced sometime after the holidays. The Baker administration is tracking underperforming non-tax revenues and spending that is on track to exceed amounts included in the fiscal 2016 budget. The administration's solutions could involve unilateral budget cuts or recommendations for savings initiatives that could require legislative approval. Looking ahead, the Massachusetts Taxpayers Foundation has estimated a budget gap of between $795 million and $1.056 billion for fiscal 2017. The gap is based on a 4.13 percent growth in revenues, and is driven largely by the usual spending demands in areas such as health care, the MBTA, pensions, debt service and education aid combined with the use of more than $600 million in one-time funds during fiscal 2016. Baker aides and legislative leaders have been cautioning about difficult budget choices in the weeks before budget debates gather momentum.
LOTTERY'S FORAY INTO FANTASY SPORTS
By the end of the week, the Massachusetts Lottery plans to publish a request for information (RFI) seeking more intel on the online fantasy sports industry. Last month, Treasurer Deborah Goldberg and the Lottery announced that they would issue a RFI to try to quickly better understand the online fantasy sports industry and marketplace in hopes of developing a similar game for the Lottery. Goldberg at the time compared the sudden growth of fantasy sports to a "tidal wave" and said it raised competitive concerns for the Lottery. Once the RFI is published, Lottery officials said, the response period will last at least 45 days.
SUNDAY, DEC. 27, 2015
DELEO ON "KELLER": WBZ-TV's Jon Keller welcomes House Speaker Robert DeLeo as a guest on "Keller at Large." DeLeo plans to discuss 2015 and 2016 on Beacon Hill as well as his "no new taxes" pledge. (Sunday, 8:30 a.m., WBZ-TV Ch. 4)
MONDAY, DEC. 28, 2015
BIG THREE MEET: A leadership meeting between Gov. Charlie Baker, Senate President Stan Rosenberg and Speaker Robert DeLeo has been scheduled. (Monday, 2 p.m., Speaker's Office)
HOUSE AND SENATE: Both branches meet in informal sessions at 11 a.m.
WORKFORCE INVESTMENT: The Workforce Investment Opportunity Act Job Seeker & Employer Sub-Committee holds a performance measurements workgroup meeting. RSVP to Marilyn Boyle at mboyle@detma.org or 617-626-5721. (Monday, 1 p.m., 19 Staniford St., 1st floor, Boston)
TUESDAY, DEC. 29, 2015
OFFSHORE WIND COMMENTS: The Bureau of Ocean Energy Management will receive comments on its renewable energy effort up until Tuesday. The bureau says it has issued nine commercial wind energy leases and generated more than $14.5 million from offshore wind leases. DONG Energy is hoping to build a windfarm off the Bay State's southern coast. (Tuesday)
FATTMAN FUNDER: Sen. Ryan Fattman hosts his annual "End of the Year" reception at the Tatnuck Country Club in Worcester. "Together we have much to be grateful for - from the resurgence of Republican ideas in Worcester County to flipping this Senate seat for the first time since 1938!" Fattman wrote on the event's Facebook page. (Tuesday, 6 p.m., Tatnuck Country Club, 1222 Pleasant St, Worcester)
WEDNESDAY, DEC. 30, 2015
DPU HEARING - COLUMBIA GAS: Department of Public Utilities will hold a public hearing on the petition of Bay State Gas Company d/b/a Columbia Gas of Massachusetts for approval of a storage contract with Enbridge Gas Distribution, Inc. (Wednesday,2 p.m., One South Station, 5th floor, Boston)
THURSDAY, DEC. 31, 2015
BOSTON FIRST NIGHT/FIRST DAY: Boston will ring in 2016 with its annual Boston First Night/First Day celebrations. The tradition includes dozens of performances, highlights local artists, and features several firework shows including one over Boston Harbor timed exactly the moment the new year begins. The Boston Public Library, Copley Place, Copley Square, Old South Church, Prudential Center, and Boston Common are among the locations where events will be held. Boston First Night/First Day events will begin Thursday and wrap up January 1. Schedule:http://www.firstnightboston.org/schedule/ (Thursday, 12 p.m.)
ENERGY FACILITIES SITING PETITIONS - DEADLINE EXTENSION: The deadline to file petitions to intervene as a party or limited participant in NSTAR Electric Company's proposed new transmission line project was originally scheduled for Thursday, but the Energy Facilities Siting Board is bumping that date back to Jan. 13. The proposal involves a 115kV new transmission line between Walpole and Holbrook, a new switching station in Sharon and modifications to existing substations in Walpole and Holbrook. According to the board, the deadline extension is in response to requests from speakers at a public comment hearing held at Stoughton High School on Dec. 16, who expressed concern the holiday season would make meeting the deadline difficult. (Thursday)
FRIDAY, JAN. 1, 2015
FIRST DAY HIKES: The Department of Conservation and Recreation will host about a dozen guided hikes in state parks on New Year's Day as part of a nationwide effort to promote outdoor activity and the country's parks. The initiative began at the Blue Hills Reservation in Milton in 1992. DCR rangers and naturalists will be on hand to discuss the state's natural and cultural features during the hikes, which average one to two miles. Last year, more than 41,000 people participated in the guided hikes and covered more than 79,000 miles on 997 hikes across the country, according to the National Association of State Park Directors, and 2016 will be the fifth year that all 50 states participate. DCR is offering hikes in Dorchester, Uxbridge, Saugus, Topsfield, Milton, South Carver, Hull, Brewster, Waquoit, Lanesborough and Turners Fall. The guided hikes begin at either 10 a.m., 12 p.m. or 1 p.m., depending on the location. Details about hike locations, difficulty, length, terrain, and tips regarding proper clothing are listed on DCR's website atwww.mass.gov/dcr. (Friday, Various times, Various locations)
BEATON HIKES BLACKSTONE: Secretary Matthew Beaton participates in the Department of Conservation and Recreation's First Day Hike program at the Blackstone River & Canal Heritage State Park. (Friday, 1 p.m.,287 Oak Street, Uxbridge)
DCR COMMISSIONER HIKES THE BLUE HILLS: Department of Conservation and Recreation Commissioner Leo Roy participates in the First Day Hike program at Blue Hills State Reservation. (Friday, 1 p.m., 840 Hillside Street, Milton)
DDS EMPLOYEE AND VENDOR FINGERPRINT CHECKS: Current employees and job applicants to the Department of Developmental Services and approved DDS contractors will be required to undergo fingerprint background checks starting Friday, under a law passed in 2014. Regulations for the checks, including procedure and scope, are in the works. Public comments on those regulations are accepted through Jan. 14; two hearings have been scheduled for Jan. 12 and Jan. 14. (Friday)
ETHANOL TRAINS: A response plan for incidents stemming from rail transport of ethanol is due from the Massachusetts Emergency Management Agency. The agency is required to outline development of a regional foam response task force, identify evacuation routes and chart needed improvements along the rail corridor. The requirement, included in the fiscal 2015 budget, stemmed from an effort to block ethanol trains from running to Global Petroleum's facility in Revere. The fuel has been shipped to the facility by barge. The budget rider also created a moratorium on waterfront licenses for new rail facilities related to ethanol storage or blending in the cities nearby Chelsea Creek until Jan. 1, 2017. (Friday)
SATURDAY, JAN. 2, 2015
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