Election Cycle Opens Door For Business To Raise Its Voice
With Deval Patrick leaving office in less than 17 months as he winds up his second and final term as governor, there may be an opening for Bay State businesses to make their concerns heard by Patrick's would-be successors.
Since coming to office in 2007, Patrick has placed a high priority on economic growth, especially for what are seen as industries of the future, such as clean energy and biotech. To many business owners, though, being a Democrat binds Patrick to an approach to government spending that has been seen as out of touch with today's reality. While Patrick's scorecard from business is a mixed bag, the state's economy has performed well, especially compared to those of other New England states, during his tenure. However, his last big push for an outsized tax increase has left his final grade in doubt: Will he return to his pragmatic, effective self? Or will he retreat and continue his quixotic campaign to raise significantly more revenue?
With less than 15 months before voters elect new statewide officeholders, business leaders must keep the pressure on elected officials to advance their interests — because with the recent slippage in our better-than-average unemployment rate, the Massachusetts economy risks giving up its leadership position and returning to the pack.
Today, there's no greater rallying point than the recent extension of the state's 6.25-percent sales tax to computer and network services, a levy that was dropped into a transportation bill late last month. The sequence of events surrounding that legislation's creation and passage was so quick that even state revenue officials have yet to fully grasp the tax and how it should be applied, leaving a large swath of employers both confused and angry.
It would not be a surprise if the recent uprising over that tax extension leads to its repeal — and it should, because the potential drag on the growing technology industry is the last thing we need for an industry that is a key component of our future growth.
While repealing the added levy on computer services is the galvanizing issue of the day, also looming are four initiative petitions that have been filed with the attorney general's office for legal review, a critical step before they can be cleared for placement on the November 2014 election ballot:
Raising the minimum wage to $10.50 an hour. Earlier this year, lawmakers considered raising the wage from $8, arguing that it hasn't been adjusted for inflation since 1968. But business groups, led by the Retailers Association of Massachusetts, lobbied hard against it, and lawmakers took the issue off the table.
Making casino gambling illegal. Businesses appear to be divided on this issue, with those who like the potential addition of jobs and expenditures from casinos on one side, and those who fear losing revenue on the other. At least one license, for a slots parlor, will be awarded before November 2014. What would a ballot question do to derail this already-moving train?
Rolling back the state sales tax to 5 percent as of Jan. 1, 2015. That's where it was before it was raised to 6.25 percent in 2009, after the Great Recession had caused a drop in state revenue. Proponents of a rollback have long argued that it would help Massachusetts businesses be more competitive with neighboring states like New Hampshire, which has neither a sales tax nor income tax.
Halting future increases in the state's gasoline tax that are indexed to inflation. The tax recently rose 3 cents per gallon to fund transportation infrastructure improvements. Since indexing would free future legislatures from voting on additional gas tax increases, this initiative would re-impose that level of government responsibility that any tax-raising initiative should have.
This election cycle is shaping up as one that could define public policy on Beacon Hill toward business that will stay with us for years to come. Business interests cannot let this opportunity to be heard pass them by. This applies especially to the technology industry, a critical component of the state's economic picture that clearly wasn't forceful enough in fending off the computer services tax.
The next year will prove critical to Massachusetts as it tries to sustain the economic growth that outpaced that of many other states after the recession. To accomplish that, business interests must ensure that Beacon Hill does not go off the reservation, and that it maintains a healthy balance of commercial interests and those of the people they employ. Likewise, business interests will have to get out in front, and speak loudly and clearly about their views on pending ballot initiatives.
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