The message from House Speaker Robert DeLeo and Senate President Harriette Chandler was clear: They wanted the business, labor, and progressive leaders they had called to the State House to solve a multi-pronged problem for them — a problem that could both blow a hole in the state’s budget and, some fear, hurt its business climate.
In short, the two legislative leaders tasked the group with hammering out a compromise that lawmakers could pass, thereby derailing three of the questions headed toward the November ballot. That trio: a measure to hike the minimum wage to $15 an hour by 2022, another to require Massachusetts companies to offer 16 weeks of paid family leave and 26 weeks of medical leave, and a third to cut the state sales tax from 6.25 percent to 5 percent. Estimates of the lost revenue of the last are $1.2 to $1.3 billion.
All this plays out against the backdrop of another matter that may be on the ballot: a proposed constitutional amendment that would raise $1.9 billion or so by imposing a 4 percent income tax surtax on earnings above $1 million a year.
In the room last week: Deb Fastino and Lew Finfer, cochairs of Raise Up Massachusetts, the union-progressive-religious coalition behind the three ballot questions, and Tim Foley and Chris Condon from the Service Employees International Union, a crucial part of that coalition; Jon Hurst, president of the Retailers Association of Massachusetts; John Regan, executive vice president for government affairs at the Associated Industries of Massachusetts; J.D. Chesloff, executive director of the Massachusetts Business Roundtable; and Christopher Carlozzi, Massachusetts director of the National Federation of Independent Business; plus a handful of legislators, including House majority leader Ron Mariano.
Several political realities will likely set the contours for the negotiations.
First, Hurst and his retailers have considerable leverage here, since it’s their sales-tax-cut question that spurred the two legislative leaders to set these negotiations in motion. Why? Because if that question passes, and the millionaires tax is knocked off the ballot by the legal challenge currently before the Supreme Judicial Court (or if it stays on the ballot but loses), state coffers would be $1.2 billion or so poorer
Second, if the millionaires tax survives this court challenge, it’s politically easier for the Retailers Association of Massachusetts to push ahead with its sales tax cut. If both pass, state government would still see a net revenue gain of at least $600 million, while the association would achieve significant sales tax relief. Which means that if the SJC keeps the millionaires tax on the ballot, the retailers group could then demand more in return for abandoning its ballot question. Contrariwise, if the SJC smites the millionaires tax, the retailers, frustrated but responsible political players, would likely be more amenable to cutting a deal.
The retailers association’s ballot question has given it real clout — clout it isn’t likely to bargain away cheaply, particularly since Hurst thinks the retail sector’s concerns too often get short shrift on Beacon Hill. Indeed, he says the impetus for the ballot question came when, in the space of a few weeks in 2016, lawmakers exempted fulfillment centers (things like Amazon’s Fall River distribution warehouse) but not retailers from paying time and a half for Sunday and holiday work, and then spurned the association’s request to continue the sales-tax-free summer weekend that retailers have used to promote sales.
The retailers’ must-have conditions for a deal, Hurst says, are eliminating time and a half pay on Sunday and holidays — something in effect only here and in Rhode Island — and at least some sales tax relief. Labor is said to be adamant about the minimum wage hike, but open to a (time-limited) training wage and willing to negotiate on Sunday and holiday time and a half. Other business groups are more concerned about the costs of the paid leave ballot question than the prospect of another sizable minimum wage hike.
So the players are now at the table, preparing for a political poker game. It will begin in earnest as soon as the Supreme Judicial Court’s ruling on the millionaires tax clarifies just what the stakes will be.