Mass Business Blog

News and Perspectives on Massachusetts Business and Economy

Big Win for Injured Workers in MA: Courts Now Allowing Compensation for Pain and Suffering Damages

On February 12, 2016, the Massachusetts Supreme Judicial Court ruled that, in third-party settlements, workers’ compensation liens will not cover damages for injured employees’ pain and suffering. The compensation for these “noneconomic damages,” which had previously been awarded to workers’ compensation insurance providers, will now be passed on to the workers. The ruling in the case—DiCarlo vs. Suffolk Construction—came as a victory for injured workers, ensuring that workers’ compensation insurance providers may not claim the entirety of a worker’s settlement with a responsible third party. The Law in Massachusetts Massachusetts workers’ compensation law entitles injured workers to compensation for medical care and lost wages. However, it does not provide compensation for pain and suffering. In some cases, a worker’s injuries at a workplace occur as the result of negligence by a third party, such as a property owner or contractor. If the third party is responsible for the injury, the injured worker can sue for damages—including compensation for pain and suffering—from the individual or party at fault. In DiCarlo vs. Suffolk Construction, the court ruled that workers’ compensation will not cover the portion of a third-party settlement intended to cover pain and suffering. What Is the Business Impact of the Court’s Decision? Third-party settlement amounts are sometimes less than the full amount of a workers’ compensation lien. An injured worker may choose to accept a compromise settlement that guarantees some compensation rather than risking a loss at trial. Prior to the DiCarlo ruling, a workers’ compensation insurance company could reduce its lien and allow an injured worker to keep some portion of a third-party settlement; the law, however, did not mandate such a lien reduction. From now on, an injured worker will now receive the portion of a third-party claim set aside for pain and suffering, with the remainder of the settlement used to defray legal expenses and any...

How Legislation Is Fighting Airbnb in Massachusetts

Airbnb is an online community that connects short-term renters to people with space to rent. The company began in 2008 as “Air Bed and Breakfast” and was imagined after its founders rented out airbeds in their home. Six years since its humble beginning, Airbnb has shortened its name and inflated its offerings to include small rooms for international travelers, villas for high-end business travelers, and just about everything in between. The company makes it easy to find both simple spaces and those with all the comforts of home. Hosts can post pictures and descriptions of the spaces they have available; travelers can then reserve those spaces on Airbnb’s secure website. Airbnb Offers an “Authentic Experience” for Travelers There are many benefits to using a service like Airbnb, including the opportunity to meet people from around the world without having to pay for an expensive hotel room. Airbnb hosts also tend to provide more personalized services (e.g., welcome baskets and access to cooking- and crafting supplies) that outclass those offered by most hotels. Airbnb is becoming a popular resource for small towns around the world that hope to attract tourists but have limited lodging options. Building a new hotel can cost between $300,000 and many millions of dollars, so smaller towns simply can’t afford lodging for the tourists they hope to attract. Airbnb and other short-term rental companies offer a less-expensive alternative to hotels. Short-Term Rentals Prompt Legislative Concerns for MA Despite the benefits of the service, some legislators are expressing concerns about Airbnb. In Massachusetts, state representatives Aaron Michlewitz and RoseLee Vincent have tried to introduce legislation that would be among the strictest in the country for short-term rentals. The measures would legalize the rental process but impose strict safety and registration requirements, as well as a 5% tax on rentals (to match the tax for hotel rooms). The...

Common Core Standards Are Questioned in Massachusetts Education

  A spirited group of MA citizens, End Common Core MA, hopes to eliminate Common Core standards from the commonwealth’s education system. The MA state attorney general has officially declared the potential vote to be constitutional—a significant leap toward End Common Core MA’s goal. The group’s next (grueling) step is to gather 65,000 signatures for their cause, which will guarantee their question a spot on the November 2016 ballot.   Common Core Standards for College- and Career-Readiness in Massachusetts The Common Core State Standards (CCSS) are a set of academic standards for kindergarten through 12th grade; they specify what students should be able to do by the time they reach each specific grade. The history of the CCSS can be traced back to 2008, when former Arizona Governor Janet Napolitano made it her goal to initiate a set of national educational standards. Napolitano and her team had two primary objectives in creating the CCSS. First, they hoped to make American students career- and college-ready; the theory is that students who meet the CCSS will be prepared for both paths. The second objective was to use the CCSS to compare US student achievement against that of the rest of the world. There is no explicit federal mandate to adopt CCSS, but the Department of Education has created incentives for states to adopt it by including Common Core as a criteria in applications for federal grants. Over forty states, including Massachusetts and the District of Columbia, have adopted some aspect of the CCSS since it was first offered.   Against the Common Core Standards Opponents of the CCSS say that the standards represent a “one-size-fits-all” approach to education and focus too much on assessment and testing preparation at the expense of genuine learning. Valerie Strauss, for example, said in a letter published in the Washington Post: When I read that math...

Worcester Named Most Business-Friendly City in Massachusetts

Massachusetts Small Businesses Make a Remarkable Turnaround in Just a Year Business confidence in Massachusetts cities continues to grow . . . and you may not believe which city is at the top of the list. A recent survey of small business owners in New England ranked Worcester, Massachusetts, as the most business-friendly city in the state. When pinned against all cities in New England, Worcester was second only to Manchester, New Hampshire. Worcester’s rise above regional hubs such as Boston and Providence caps a remarkable turnaround for the city. Business leaders agree that Worcester’s business climate is much-improved—the city received an overall grade of “B-” this year despite a lowly grade of “F” last year. Worcester, MA Is Positioned to Expand Across All Business Sectors Worcester and other mid-sized cities serve as a complement to Boston’s hub of finance, education, government, and professional services. They provide a hospitable climate for smaller businesses and manufacturers that may not be able to afford or be recognized in a larger city. Steve Rothschild, considered a small-business mogul in Worcester for his work with Applied Interactive, Bulbs.com, and Furniture.com, says that “Worcester is a great place to run a business because there is a well-educated workforce, an easy commute for employees, and low-cost commercial real estate.” Worcester is particularly well-positioned because it has the history and infrastructure of a manufacturing hub but also a large service economy. The city boasts nine institutions of higher education and five major hospitals. Unlike many mid-sized cities that have struggled with population decline, Worcester has had steady population growth for the past three decades. Per capita income and education levels are on par with the state average. The combination of a well-rounded economy and an educated and skilled workforce allows Worcester to expand in many different sectors. Improvement in Business Confidence “Grade” in Worcester, MA, Mirrors...

The Push for a Graduated Income Tax in Massachusetts

Raise Up Massachusetts, a coalition representing religious leaders, liberal community organizers, and unions, is advocating a constitutional amendment to raise income taxes on the state’s wealthiest residents. The proposal, which would affect those earning more than $1 million annually, would reportedly bring in additional revenue of up to $1.4 billion per year. The Massachusetts Communities Action Network, one of the coalition’s co-chairs, has indicated that the additional revenue would be earmarked for education and transportation, two areas where a number of needs have gone unmet over the past decade. Raise Up Massachusetts has previously lobbied the state legislature to raise the minimum wage and was successful with a ballot initiative that required employers to provide earned sick time to their workers. The constitutional amendment process, however, will take three years and will most likely face fierce opposition for anti-tax groups. All Massachusetts residents currently pay a flat 5.15% income tax that will reportedly decrease to 5%. The “Fair Share Amendment,” as it’s called by its proponents, would raise taxes to 9% for those earning more than $1 million annually. The 9% rate would only apply on income over $1 million. Approximately 14,000 tax payers would be affected by the proposal, which comes at a time when legislators are renewing efforts to require those with higher income to take a greater responsibility in the taxation process. The “Fair Share” moniker comes from the fact that low and middle income taxpayers contribute more of their disposable income under a flat-rate system than the most affluent taxpayers. Proponents say the increased taxes could fund road and bridge reconstruction, investment in the MBTA and other regional transit bodies, and education funding— particularly for early intervention and post-high-school initiatives. Since 2002, state funding for education has failed to keep up with inflation, resulting in cutbacks in many school districts. Opponents say that the proposal, if...

New England States Explore Energy Alternatives

Energy is expensive everywhere. However, while it may not be widely known elsewhere around the country, it is certainly no secret to those of us living here in Massachusetts that the commonwealth ranks as one of the most expensive when it comes to energy costs. With this in mind, state legislators and energy companies are making a concentrated effort to procure alternate sources of energy to augment current supply. Officials from the state’s utilities and energy boards hope to source renewable energy from northern regions of the U.S. and Canada while simultaneously opening channels of less expensive natural gas via pipelines from both southern and western areas. As part of this “diversified” solution, supplies of Canadian hydroelectric power already being generated will be imported while northern New England continues to develop wind farms on a mass scale. National Grid, a provider of both gas and electric services in the Commonwealth, issued statements saying that both energy sources should be approved. Marcy Reed, the president of National Grid Massachusetts recently stated: “We say we need both pipelines.” National Grid normally “stockpiles” imported liquefied natural gas that is shipped in through port facilities. However, the gas was traded on a global market last year, and New England was the highest global bidder for those natural gas supplies. According to various sources, during the last three winters since 2011-2012, New England paid $1.6 billion to $3.8 billion higher wholesale electricity costs than has been typical. The Joint Committee on Telecommunications, Utilities and Energy is getting ready to hear from clean energy industry officials and those representing energy derivatives from power plants.  Committee Co-Chairman Sen. Benjamin Downing, pointed out that utility companies believe a lack of capacity in gas pipelines is the main culprit behind rate hikes during recent winter months and say there is an urgent need for natural gas flowing into the state from external sources. According to Matthew Beaton, the Secretary...

Some MA Business Owners Urging Delay of Sick Time Law

In November of 2014, by a margin of 19 percent, voters in Massachusetts clearly expressed their wishes that a statewide provision be implemented requiring all employers to offer sick time. Every employer in the state will soon be required to offer either paid or unpaid sick time, depending on their number of employees. In each case, employees will be required to accrue the time with their hours worked, one hour for every thirty. This sick time is to be available to all employees, whether full or part-time. The regulations are expected to be issued by the Attorney General’s office in mid- June and the law is set to go into effect this July. However, some employers are concerned, saying that the compressed time frame simply doesn’t allow businesses enough time between that publication date and the implementation of the earned sick time law. This is the primary complaint being voiced by most businesses. Without those regulations in place for use as a guideline, they say, businesses will be unlikely to be able to fully comply with the new law quickly enough. There are also concerns about businesses modifying existing sick time policies to match up with the new regulations, particularly given that most are likely in the middle of their fiscal year. Representatives from both camps are now asking that the date for implementation be pushed back to January of 2016 On the other side of the argument are proponents of the new law, like Raise Up Massachusetts, who want the law to go into effect as it was originally intended – on the very same timeline chosen by voters. They claim that the people have shown that they want this law and that this matters more than any difficulties businesses may face as a consequence of implementing the new law....

Baker Being Urged to Replace MBTA Board

Based on findings recently  issued  by a panel he appointed in February to investigate blizzard-related system shutdowns, Governor Charlie Baker is now being urged to find new leadership for the beleaguered MBTA. including asking for the resignations of the entire MassDOT Board of Directors. In a press conference, Baker stated there was a need to improve the fiscal responsibility and the performance of the transit system. One recommendation includes creation of a five-member “Fiscal and Management Control Board.” Over the next three to five years, this board would supervise the MBTA’s finances, develop goals, restructure the MBTA, and “reinvent the labor-management and contract relationships.” Of the five board members, the governor would appoint three and the Senate President and the Speaker of the House of Representatives would each select one. This board would be given the mission to “aggressively” pursue these and other objectives, ultimately choosing a new CEO for the transit system.Baker shared the recommendations of this panel with the state legislature, saying they were “interested in the findings.” He also said that MassDOT board members are aware of the findings.The report includes recommendations to crack down on fare evasions and to add more advertising and concessions in stations. Interestingly, the report also suggested the state should assume debt payments for the Big Dig, in exchange for which the state would no longer cover shortfalls in the operating budget of the transit authority.Portions of the report have been leaked to the media over the past several days. One uncomfortable finding was that the average MBTA worker was absent 57 days a year. Perhaps more disturbing, the MBTA did not utilize up $2.2 billion in possible grants and bonds between 2010 and...

Boston to Investigate Gender Wage Gap

On Tuesday, Boston Mayor Martin J. Walsh jumped head first into the bickering swirling around the issue of the gender wage gap. He did so by announcing that the city is getting set  to study the wages of male and female employees at dozens of  local companies. This is the first attempt by any major U.S. city to quantify the gender wage gap by scrutinizing actual salary data. Addressing an audience at the inaugural Boston Women’s Venture Capital Summit in the Seaport on Tuesday morning, Walsh said, “We know that the wage gap continues to be an issue all across this nation, and it’s time to stop talking about it and start taking action.” Many of the state’s largest employers, including Putnam Investments and Blue Cross Blue Shield of Massachusetts, have agreed to anonymously provide wage information, broken down by gender, race, job category, and length of employment. Evelyn Murphy, former lieutenant governor and member of Boston’s Women’s Workforce Council, said, “This is the game changer. Prior to now, this has been all so secretive. Some companies just don’t want people to know [salaries]. And you can understand why. But on the other hand it means there’s been no collaboration to get at the inequities that are really there.” “We’re not trying to punish companies, we’re trying to have people understand where they’re at,” said Megan Costello, executive director of the Mayor’s Office of Women’s Advancement. So, how do you convince a major corporation to peel back the lid on sensitive salary information when competitors would so clearly benefit from having access to that data? By keeping it anonymous, that’s how. Even when the aggregate salary information is made public, the companies attached to specific data will not be revealed. Tuesday morning, Walsh also made it clear that he is determined to lead by example. The mayor says he observed a...

Berkshire County Rep. Proposes Change to Minimum Wage for Tipped Workers

Representative Tricia Farley-Bouvier of Berkshire County, Massachusetts has presented a bill that, if passed, would gradually increase the minimum wage for tipped workers in the state until they are paid the same as other minimum wage workers. This is an addition to the current law, which will increase minimum wage for tipped workers to $3.75 per hour from the current $2.63 by 2017. Standard minimum wage for those employees who do not receive tips was raised to $9 in January. Massachusetts currently defines tipped employees as those who earn more than $20 per month in tips and who, with minimum wage plus tips, make at least $9 per hour. While employers are legally required to make up the difference for tipped workers who do not reach the $9 per hour threshold, restaurant worker advocates say that many avoid actually doing so. This is especially true for restaurants that employ large numbers of undocumented workers. The bill is supported through the Restaurant Opportunities Center (ROC) of Boston advocacy group’s “One Fair Wage” campaign, which seeks to end wage theft by employers. According to research by the Economic Policy Institute, this type of theft results in employee loss of more than $50 billion per year. Beyond the wage theft issue, many labor and gender relations experts believe that a landscape in which employees must work for tips leads to a culture of sexual harassment by customers. According to a report by the ROC, 78 percent of women and 55 percent of men who work in restaurants report experiencing this type of harassment. Their research also shows that restaurant servers, who are traditionally tipped employees, are three times more likely than other types of workers to live in poverty. As expected, restaurant owners argue that moving away from the current system would make it difficult for them to create jobs because of the resulting economic...

Gains Reported in State’s Human Services Sector

A new research study released by the Donahue Institute at the University of Massachusetts in conjunction with UMass Dartmouth has revealed that human services sector employment in the Bay State increased nearly 48 percent during the years spanning 2003-2011, a fact many in the industry will surely find to be a source of encouragement. In addition, the report indicated that the 145,000 members of that sector generated disposable income in an amount ultimately responsible for a $3.4 billion statewide economic impact in 2011 alone. The study had been commissioned by The Providers’ Council, a leading association for community-based groups across the Commonwealth. Creation of the report was overseen by David Jordan, CEO of Seven Hills Foundation, together with fellow Providers’ Council committee members who had been charged with the task. Formally released at the Statehouse, the report also declared that the 145,000 jobs comprising the human services sector equated to 5 percent of the total jobs within the state, and that this sector had increased in size more rapidly than anticipated. Other key findings in the report include the fact that, despite sector growth, state budgetary allocations for spending on human services shrunk from 11.8 percent in FY 2003 to just 9.8 in FY 2014, something fiscal watchdogs are likely to applaud. Also of note was the discovery that out of all industries represented within Massachusetts, human services included the highest rate of employees with a defined disability, at 6.5...

Will the MBTA Cause the Demise of 2024 Boston Olympics?

At a Suffolk University panel convened in Boston on March 17th, there was a discussion regarding two closely related subjects: improved infrastructure and the possibility of hosting the world’s Olympic Summer games in 2024. This past December, Boston Mayor Marty Walsh said that the Olympics “allows us the opportunity to really talk to our partners in the state and federal government about upgrading the infrastructure that we have.” Additionally, a study by the state earlier in the year found that an Olympic bid would indeed be feasible. The only problem? After a tough winter– as you may have heard, Boston had record snowfall at 107.6 inches– is estimated that the MBTA system has a backlog of $6.7 billion in needed work. With this amount of money needed, there aren’t many options. One option would be to raise revenues or taxes. This could help not only solve existing problems, but tackle ones related to having a robust infrastructure for the upcoming Olympics. Current No Boston Olympics organizer and former MassDOT officer Chris Dempsey said that the pro-Olympics movement has objected to this. Another option would be to simply address one issue or the other, leaving the other for future resolution. For better or worse, the Olympics would probably go by the wayside if it came down to this. While the Olympics could bring in extra revenue, it also can be a strain on the city, one that is not absolutely necessary. The train stations that are already starting to undergo improvements include the Red and Orange line trains, along with the Government Center station. Incidentally, these renovations would also be needed if the Olympics were to take place. The expansion of South Station and upgrades on the JFK/UMass station would also be nearly necessary to host the Summer...

Study Says a Carefully Planned Boston Olympics Could Bring in Billions

As Boston prepares its bid for the 2024 Summer Olympic Games, supporters and detractors have come out of the woodwork. However, according to a study done by The Boston Foundation and the UMass Donahue Institute, the Olympics could bring up to $4 billion to the state’s economy. According to the study, the bulk of the revenues generated would come from the creation of 4,100 construction jobs during each of the six years needed to ready the city. In addition, the city could see increased revenue during the Olympic Games themselves with tourists adding an estimated $300 million. In addition, the study estimates that another 4,300 temporary jobs will be created just for the span of the Olympics.While the report outlines the economic benefits of having the Olympics in Boston, it also cautions against overspending with the warning that it would offset the economic benefits the Games would bring. Historically, other cities have exceeded their budgets for preparing for the Olympic Games by an average of 252 percent. The report points out that the International Olympic Committee has always exposed the host city to all financial obligations that come with hosting the games. While the report outlines the economic benefits of having the Olympic Games in Boston, it also raises substantial questions about the fiscal viability of having an Olympic-sized budget for the games. In addition to concerns with overspending, the report also points out shortfalls in public transportation and infrastructure that would need to be addressed. The report drew no conclusions as to the likelihood that Boston would receive a disproportionate amount of public money to improve its infrastructure. The study was also unable to determine how extensive these improvements would actually...

Baker Takes On Skills Gap

Massachusetts Governor Charlie Baker has assigned three of his top deputies to oversee an effort that would better align the state’s education and workforce training systems with the needs of employers. The decision underlines the skills gap as a remaining obstacle to real economic growth. Baker signed an executive order formally establishing a “Workforce Skills Cabinet”, which will develop goals, objectives and metrics with the input of individuals, businesses, government agencies and community-based organizations and advocacy groups. The Cabinet will be responsible for implementing by region the various suggestions for improving vocational and educational opportunities within the state, reporting their progress back to the governor. The Workforce Skills Cabinet will be chaired by Labor and Workforce Development Secretary Ron Walker. Walker, a Democrat, was a cofounder of Next Street, a merchant bank that provides capital to entrepreneurs in urban areas. Baker said he anticipates that Walker will bring “the new, innovative approach he took in his role at Next Street” to his new position. “I share the governor-elect’s emphasis on connecting education to work, his commitment to workforce development, and look forward to helping carry out his mission to make Massachusetts a great place to live and work in every region of the Commonwealth,” Walker said in a statement. The inability to locate and hire skilled employees was by far the top concern expressed by Massachusetts employers last year.Over the coming months, Walker will be collaborating with Education Secretary Jim Peyser and Economic Development Secretary Jay Ash to create an effective plan to address the disconnect between available jobs and skilled workers by the summer. “More than anything, we need to make sure we find a way to link our workforce to job opportunities that exist out there for our citizens. These are inseparable goals and critical strengths for the commonwealth to continue to be successful over time,” Baker...

Baker Takes $750M from MassHealth with New Budget

On Wednesday, March 4th, Governor Charlie Baker filed a $38.1 billion budget proposal which includes recommendations for increased spending on objectives like local aid, transportation and higher education. The budget also proposes cutting more than $750 million from MassHealth to help fill a projected deficit of $1.8 billion. For his first budget, Baker says he inherited a gaping shortfall in the available sources of revenue required to continue funding state government at the current level of service. The gap, officials say, was caused by an 8% increase in spending within the current budget year and reliance on one-time sources of up to $1.2 billion in funding. Baker will file two pieces of companion legislation with the budget, including a bill to establish an early retirement program. The second bill entails his proposals for a tax amnesty program for first time filers, a gradual elimination of the film tax credit program, and an expansion of the earned income tax credit to 30 percent of the federal credit. Without withdrawing from the state’s savings, increasing taxes or raising fees, Baker’s budget proposes to limit growth in spending by 3 percent, or $1.1 billion. It would also reduce the state’s reliance on one-time sources of funding by half. MassHealth, one of the largest expenses in the state budget, will grow by $950 million. This will represent a 5.6 percent increase in the nearly $14 billion Medicaid program, which provides healthcare to 1.7 million low and moderate income residents. MassHealth had been expected to grow by 16 percent in fiscal 2016. However, Baker’s administration have budgeted $761 million in net savings back to the state, which includes $400 million in cuts at MassHealth after a redetermination process for 1.2 million subscribers. Budget officials have stated that chiropractic benefits would no longer be covered, though adult dental coverage and coverage for autism services to 10,000...

Worcester Chamber to Host Debate of Boston Olympics Bid

The Worcester Regional Chamber of Commerce is about to host a debate discussing the pros and cons of Boston winning its bid to host the 2024 Olympics Games. The debate will be held as two separate functions, and is intended to discuss the possible implications for Worcester should Boston become the host city. Representatives from the Boston 2024 Partnership, sponsors for the bid to bring the Olympics to Massachusetts, as well as their opponents, No Boston Olympics, will present their arguments to chamber members. This debate will address the potential impacts of Boston becoming the host city and Worcester’s potential level of involvement should that occur. The discussion will begin on Tuesday, March 10, with opening statements from Richard Davey, former state transportation secretary and CEO of the Boston 2024 Partnership group. He will be discussing the partnership’s plan to run a cost-effective event using private funds, existing facilities and temporary venues. He will also discuss the organization’s belief that hosting the Olympics will greatly contribute to the commonwealth’s long-term growth. On Friday, March 13, the debate will continue with statements from Chris Dempsey and Kelley Gossett, co-chairs of No Boston Olympics. The group believes that a pattern of overspending, years of construction, and few proven economic benefits for past host cities, make hosting an undesirable choice for Boston. They will discuss their view that the state should maintain its budgetary focus on schools and rebuilding transportation infrastructure. A first time bidder in the Olympics, Boston beat out other major cities such as Los Angeles, San Francisco and Washington D.C. to become the official U.S. entrant. While its bid is heavily dependent on the use of existing facilities such as Gillette Stadium and the TD Garden, several venues would have to be constructed before Boston could host an international event on the scale of the Olympics.  This list would...

Baker Resists Tax Hike for “T”

Charlie Baker thinks the issue of the how to fix the lingering issues related to the financially-troubled MBTA transit system in Boston is still up in the air.  During a February 19 appearance on WGBH Public Radio in Boston, Governor Baker said that, while all options are being evaluated, the issue of raising taxes to solve the issue is one he’s reluctant to consider. Campaigning for his recent election, Baker said he would not raise fees or taxes and that he was in favor of repealing a law that linked the gas tax to the inflation rate. Conservatives groups have pushed for the MBTA to be placed into receivership. Baker noted that the city of Chelsea, a fiscal control board in Springfield, and the Lawrence Public Schools all successfully emerged from receivership. However, he said he was not yet ready to consider that option for the transit system.One suggestion that has periodically come up as a potential solution was for the MBTA to transfer some of its debt to the state. That debt was related to the agreement made a quarter-century ago that committed the state to expanding the transit system at a cost of an estimated $3 billion. According to Baker, the operating budget for the MBTA has risen by 50 percent over the past seven to eight years, and that commuter rail operations were significantly increased despite a drop in passenger trips.  Baker also noted that since 2000, the MBTA has grown faster than any other mass transit system in the country, despite the population remaining at virtually the same level.The situation has become much more pronounced in the past few months due to the mountains of snow covering the region. Full service has been forced to shut down during successive major storms. Baker stated that much of his senior staff has been working on transit issues and expects the...

Worcester Groups Pitch Transportation Solutions – Seek Backers

In an effort to provide much-needed transportation solutions in Worcester, seven groups provided ideas for a National Science Foundation program. This program, which was also shared with the cities of San Diego and Chicago, seeks to provide solutions to the cities’ transportation issues that arose out of growing populations. Some of the innovative ideas included skyline transportation and environment scanning apps. The groups present labored over their proposals for ten months. Though there was a grant program, the groups involved share the creative credit. Participants in the program suggested that the groups might benefit from partnering with businesses. The Art of Science Learning as well as Worcester’s Incubator for Innovation sponsored the event. Worcester’s focus was on transportation while San Diego handled water resources and Chicago handled urban nutrition. Professionals, students and a healthy cross-section of people from around Worcester were represented. One of the interesting things about the program is that each of the represented groups presented a unique approach. One idea was to make the bus system more demand-driven than it is presently. One of the groups crafted a middle school curriculum about transportation. Another came up with the idea of converting volunteer service hours into usable bus passes. One proposed program uses predictions about walking patterns to determine which sidewalks and walkways to repair. Another proposes helping patients coordinate bus trips according to their appointments. One of the things that participants took away from the experience was that, if the desire actually existed, the community could adopt these options immediately, with experts predicting better momentum for the work will make a...

Baker Announces New Business Posts

Nominations for vital business posts were recently announced by the incoming Baker administration. The candidates chosen are well-known and , as a result, their nominations have been met with little fanfare but, more importantly, little protest. Baker named John Chapman as his new Undersecretary for Consumer Affairs and Business Regulations. This is a key position for Chapman, as it represents a substantial promotion for the Cape Cod based Republican who first appeared on to the radar of most party voters last year when he challenged William Keating for a seat in Congress. Positions previously held by Chapman included postings as Commissioner of the Department of Industrial Accidents, as well as Undersecretary for the Office of Economic Development. Both of these positions were held during the administration of the former Governor, Mitt Romney. Meanwhile, in a true milestone in the history of Massachusetts state politics, the administration has announced that its nominee for Assistant Secretary of Business Development will be Nam Pham. Mr. Pham, a Vietnamese American, is currently serving as the outgoing director of VietAID, the largest community development foundation focused on the needs of American citizens of Vietnamese descent. Pham has been a long time political ally of Baker. Both of the nominees will serve under the supervision of Housing and Economic Development Secretary Jay Ash. More information on these new postings is expected to be released...

Baker Chooses Lepore For Top Finance Post

Governor-elect Charlie Baker  has named Kristen Lepore as the head of his finance office. Currently, Lepore is the Vice President of Government Affairs at the Associated Industries of Massachusetts. Previously, Lepore was the Deputy Chief of Staff to Governor Cellucci and the Director of Fiscal Policy in Cellucci’s Executive Office for Administration and Finance. President George W. Bush chose Lepore as New England’s regional rep for the United States Department of Education. In 2012, Lepore joined the Associated Industries of Massachusetts. During her time with A.I.M., Lepore has gone up against changes to the Massachusetts health insurance rating system from the Affordable Care Act. Baker has his first annual spending bill due in just three months and the budget shortfall from mid-2014 is still not entirely sorted out. It’s possible that one of Lepore’s first duties will be to fix the budget gap that’s been determined at $329 million by Governor Deval Patrick. Patrick took care of part of the gap with reductions in executive spending, but earlier in November, he filed a bill that called for an additional $57 million in cuts. At this point, it’s unclear if the House and Senate will try to close the gap before the end of 2014 or if they’ll wait for Baker to be sworn...

Final Weeks for Governor Patrick to be Marked by Wind Energy Auction

Massachusetts Governor Deval Patrick is not resting on his laurels for his final weeks in the corner office. On the contrary, he is advocating for a large auction for offshore wind development. Patrick has reportedly told public relations executive Helene Solomon that the federal government would be auctioning off a substantial area south of Martha’s Vineyard. Once developed, this location could potentially provide power to as much as 60 percent of Massachusetts homes. Along with federal officials Sally Jewell and Walter Cruickshank, Secretary of the Interor and Acting Director of the Bureau of Ocean Energy Management, respectively, Patrick announced in June that there will be approximately 742,000 acres off the shore of Massachusetts that could be up for lease for commercial wind energy use. This is expected to be one of the largest offshore wind projects in federal waters. Massachusetts Environmental Affairs Secretary Maeve Vallely Bartlett has recommended that the federal agency lower the minimum bid from $2.00 per acre of the tract to just $1.00 because these areas are quite large and quite deep, which could be a deterrent to developers. She has also recommended other cost savings, such as lowered rent and fees for operating the site. Support of wind energy projects such as this one is not new for Patrick, who also supported the Cape Wind energy project that was planned for an area in the waters of Nantucket Sound. Unfortunately, that project, while still ongoing, still faces opposition and has not gained much...

New Massachusetts Energy Chief Says State Can’t Rest in Push for Renewable Energy

Bespectacled Maeve Bartlett stood behind a glossy black podium at the DCU Center and made a bold claim: The Commonwealth of Massachusetts is, she said, the national leader in meeting the challenges of climate change and adopting renewable energy technologies. Numero uno. The criteria: megawatts. In 2007, Massachusetts had 3 megawatts of solar capacity and 3 megawatts of wind capacity. Operating at full power, these renewable energy plants could power 3,000-5,000 modern homes – small peanuts in a state with 6.7 million people. But then Governor Deval Patrick and his administration passed three clean energy laws: the Green Jobs Act, the Green Communities Act, and the Global Warming Solutions Act. Businesses came a-dashing. Today, the state boasts 643 megawatts of solar capacity and 103 megawatts of wind capacity, and in 2014, Clean Edge ranked Massachusetts the leading state for clean energy policy and eco-energy investments per capita. Barlett, formerly the agency undersecretary, was recently appointed to lead the final seven-month charge as head of the Executive Office of Energy and Environmental Affairs. She hopes to implement such plans like the Cape Wind project, secure hydroelectric contracts and construct more than 300 urban parks. During her speech at the DCU Center as part of the eighth annual Massachusetts Energy Summit, Barlett said that the state could not rest in its push for renewable energy. The state hopes to eventually secure 30 percent of its power from clean energy sources. Such grandiose plans represent big bucks. The Massachusetts clean energy sector is a $10 billion industry, with employment expected to surpass 100,000 jobs in early 2015. The sector has seen double-digit job growth for three consecutive years. At the recent Clean Energy Annual Jobs Report, Governor Patrick reported, “We have long believed that a strong commitment to investing in clean energy would not only provide significant environmental benefits, but would also serve as an...

Massachusetts Task Force Challenges Companies To Promote Women

A state task force was established by Massachusetts Governor Deval Patrick to encourage the hiring of female employees in the Commonwealth. The task force is suggesting that companies permit more flexible scheduling, and hire and promote female workers to higher positions. Almost half of the employees in Massachusetts are women, and nationwide they are either the only or main breadwinner in approximately 40 percent of families with children under the age of eighteen. It is a well-known statistic that women earn almost 25 percent less than male employees, and many find it difficult to juggle home and work due to inflexible work schedules. These have been ongoing problems for years, but the newly created task force is trying to change that. Rachel Kaprielian is the Secretary of Labor and Workforce Development. She wants businesses to change outdated policies and become more family friendly, with the understanding that doing so benefits everyone desiring more time with their loved ones. Governor Patrick recently started a one-year internship program for women after noticing a shortage of females in administrative positions and on the boards of private companies in the state. Fourteen women have been hired for executive positions at the state level. Bentley University and Governor Patrick’s administration are challenging Massachusetts companies to hire more female workers and use their talents more effectively. Companies accepting the challenge will assign an administrator for the program, agree to hire women, increase the number of females at the executive level and narrow any wage gaps between male and female employees. The task force also wants the Governor’s administration to look into paid family leave. Currently, almost three million workers in the state are not compensated when they miss work to take care of babies or other family members. The task force is also targeting schools to encourage female students to learn science, technology, engineering, and mathematics (STEM) to...

Improvements to South Station Could Boost Framingham/Worcester Rail

According to Massachusetts Transportation Secretary Richard Davey, Boston’s South Station is “becoming a choke point in the system and an obstacle to expanded service.” Davey placed a request with lawmakers on October 9 asking them for help with negotiating a deal that has the potential to allow the expansion of South Station. Before the MBTA can add an additional seven tracks to the existing 13, it must first purchase property owned by the U.S. Postal Service. This piece of land has been the topic of discussions for years. The property is critical for the expansion of the station in its efforts to provide prompt service to commuters traveling through South Station. The U.S. Postal Service and South Station “have yet to strike a deal,” said Davey, who will be leaving his post as transportation secretary at the end of October. He has asked Transportation Committee chairmen Sen. Thomas McGee (D-Lynn) and Rep. William Straus (D-Mattapoisett) for assistance with coming to an agreement. Davey also mentioned that the office is interested in purchasing property that once belonged to the Spaulding Rehabilitation Hospital. This purchase would enable the expansion of the North Station rail lines with two new tracks and a center platform. Following the signing of a transportation bond bill in April, the Patrick administration re-engaged with the Postal Service, offering to build a $350 million mailing facility in the Boston Seaport District. “Frankly, we’re a little stuck,” Davey admits. “We’ve made a number of different proposals that we thought were compelling, that made the Post Office whole.” The Postal Service has expressed concerns that the new Seaport land would depreciate, resulting in a lower price if it should attempt to sell the property in the...

MA Senate Passes $80 Million Spending Bill

An $80 million spending bill was recently approved by the Massachusetts State Senate to end the 2014 fiscal year. The bill will allow select state agencies to spend money from the 2014 fiscal year in the 2015 fiscal year. Five million dollars was also included to reimburse cities for expenditures from extreme weather conditions. While several riders ended up attached to the bill, a rider to authorize the sale of the state transportation building in Boston was stripped. This rider originated in the House and would have allowed the Massachusetts Department of Transportation building on Tremont Street to be sold to the highest bidder. The Senate was wary about moving forward with the sale. After the Senate passed the spending bill, Democrat Senate Ways and Means Chairman Stephen Brewer said, “We will have an ongoing discussion about that. I am not going to prejudge where anything ends up.” A myriad of other items were also included in the bill. There was a section on a commission to address sex offenders, a section on prescriptions written by nurse practitioners or physicians assistants, a section regarding Taunton State Hospital, the crafting of a new unemployment table, a section on the Cambridge Public Health Commission, and sections on home energy assistance to low-income families. There was also a specific section that earmarked two million dollars to cover the restoration costs of the Mayflower II. A section could also be found that allowed the building of a three million dollar public safety building in Senator Brewer’s hometown. The bill seems to effectively dispense with the budget surplus, estimated to be at twenty-five million dollars, amassed by the Patrick Administration as a result of tax collections that greatly exceeded revenue estimates made for the 2014 fiscal year. The Senate and the House orchestrated no debate or public explanation of the bill. Senator Brewer stated he is...

Ebola and the Economy

Unless you’ve been under quarantine for the past few weeks, you know that Ebola has once again reared its ugly head, causing widespread concern – bordering on panic in some quarters – about the possibility of a global pandemic. How realistic a possibility is this?  Could it actually happen? Frankly, it’s still too early to say one way or the other. However, it’s not too soon to make some basic predictions about how some businesses will be affected should matters get much worse. Dr. Bruce Aylward is the Assistant Director General for the World Health Organization (WHO). He recently announced that organization’s prediction that the number of cases is expected to top 9000 by the end of this week, and the fatality rate of the current outbreak has risen from just under 50% to over 70%. When asked how the situation might evolve over the next 60 days, he warned: “We anticipate the number of cases occurring per week by that time to be somewhere between 5,000 and 10,000 per week.” As in previous instances of global health scares, airlines, theaters, sports arenas, and other locations where large “fraternities of strangers” gather are sure to be the first to suffer the economic consequences of a population frightened into isolation. Participating in purely recreational activities will be weighed against the fear of contagion, and attendance is sure to plummet.  Schools, churches, and other venues where attendance is “less voluntary” will follow suit in very short order if the outbreak is not quickly reigned in. The WHO announced yesterday that the Ebola epidemic had officially been halted in Nigeria, Africa’s most populous country.  Sadly, Liberia, Sierra Leone, and other nations in the region remain mired in the misery of a highly-contagious, incurable, deadly viral outbreak, and new cases are popping up around the globe on a daily basis.  Should this situation...

Worcester Chamber Says ‘No’ to All Four Ballot Questions

In November, voters across the Commonwealth will have the option to cast their vote for or against four positions that could impact business across the state. Recently, the Worcester Regional Chamber of Commerce met to discuss each of these questions in detail and to develop a policy to assist its members with a better understanding of how their vote would impact the business environment in the community and beyond. The chamber ultimately took a negative position for each of the questions on the ballot, stating that the proposed initiates would be detrimental to business. In 2013, a law was passed tying the Massachusetts gas tax to the rate of inflation. This means the tax automatically adjusts every year without the legislature having to vote on it. This ballot question would repeal that automated yearly increase. The chamber noted that the additional gas tax will help fund needed infrastructure repairs throughout the state and are therefore against repealing the law. In 1983, Massachusetts instituted a 5-cent deposit on soda and beer bottles and cans. This question asks if that deposit requirement should be extended to include water, juice, and sports drink containers as well. The chamber stated that this proposed change would have a negative financial impact on bottlers, distributors and retailers who sell these drinks, and are therefore against the measure. In 2011, the Massachusetts legislature chose to allow casino gambling in Massachusetts. However, several citizens groups have come out strongly against legalized gambling and this question allows voters to express their opinion on the topic. While repealing the law may not impact Worcester, the chamber believes that the proposed initiative would limit job growth on a statewide scale. The fourth question involves a proposal to alter how businesses provide paid and unpaid sick time to their staff members.  The measure would tie the number of sick days to the number of hours worked....

Candidates for Top Office Go Silent on Non-Competes

Both major-party candidates for governor, Charlie Baker and Martha Coakley, should have been in the hot seat on non-compete clauses this past Monday. After all, they were in Cambridge speaking with an audience of young, tech-oriented, startup-minded, entrepreneurial spirits.  But if anyone was looking for answers, a strong stance, or even a reasonably thorough discussion on the matter, they will just have to wait because both Coakley and Baker went with “wait-and-see” positions on the topic. Non-competes have become a hot button topic in the business community and subsequently spilled into the political ring. While the non-compete has been included in many agreements between employer and new hires, its function has gradually come into question, with a growing sector of the business community considering the non-compete clause as stifling. Employers continue to insist it’s necessary for protecting trade secrets. Candidate Baker offered an opinion that hints he believes there is room for compromise. It’s a safe position that gives both sides hope. Meanwhile, candidate Coakley took an even weaker slant, saying she is open to looking at change, waiting to hear from all parties. This despite the fact that the opinions of both sides’ is not merely a matter of public record, but quite a volatile one. That both candidates can take such a position is discouraging. It is well known employers want to leave things as they are while employees are growing increasingly tired of the stifling nature of the non-compete clause, saying that it limits their opportunities to grow and stops them from moving to a competing company or starting a business of their own in the same field. With all the publicity surrounding current legislative attempts to outright ban the practice of non-competes, one has to wonder how two candidates vying for the corner office could take such non-committed approaches. Of course, playing it safe is the norm in politics, not the exception. Neither candidate wants to openly...

GOP’s Baker Unveils Economic Development Plan

Charlie Baker, Republican candidate for governor of Massachusetts, unveiled his economic and development plan Wednesday. The candidate claims that the plan will help build better schools, create jobs, and help to strengthen local communities. Included in the plan are several proposals that would use tax credits to incentivize the hiring of veterans or those on welfare, as well as plans to help small employers with the upcoming rise of the minimum wage to $11 per hour by the year 2017. Baker also claimed that his plan would cut business fees, help provide affordable housing, and further open the process for bidding on public projects to minority-owned businesses. While Baker’s plan has been estimated to cost up to $300 million year, he said that it would overall be “a small price to pay” and the lost revenue could be easily covered. He added, “We’ve got a $38 billion budget. Tax and other revenues grow by about $1 billion a year. I think we can figure it out.” Democratic candidate Martha Coakley already announced that her administration would offer up to $500 million for economic development over the course of the next decade if elected governor. Of that $500 million, Coakley stated that $400 million be used on major infrastructure projects. The rest would be set aside for grants to find further strategies for economic development. Coakley has also pledged to cut the waiting list of those applying for subsides for pre-kindergarten education. Baker stated that early education shouldn’t be the only focus for the state. Baker said, “The important thing we need to do with respect to expanding pre-K is we need to make sure that those kids are going into schools where they’re going to continue to get the education they need.” He added, “You can’t think about pre-K without thinking about K-8 as well. Those two have to be...

Should Cape Wind Receive $150 million Federal Loan Guarantee?

The U.S. Department of Energy has announced that it will grant a $150 million loan to advance the Cape Wind energy project in Massachusetts, provided backers can secure an additional $2.6 billion in financing. If successfully built, Cape Wind will consist of 130 wind turbines capable of producing 360 megawatts of electrical power. The project has been controversial since its inception. Cape Wind has been praised by supporters as having the potential to transform Eastern Massachusetts into a national hub for wind power production. Backers say that Cape Wind is a model for wind projects being considered in other parts of the country. Wind power is often cited as a key component of “clean energy” alternatives to fossil fuels, and is praised for producing very little pollution while being endlessly renewable. Greater use of wind power would reduce reliance on fossil fuels, while construction of the wind turbines is estimated to create about 400 jobs. An additional 50 permanent operational jobs will be created once construction is completed. Not everyone is impressed. Critics point out that the number of jobs divided by the money spent means that each job will be created at a cost of over $300,000 apiece. Some suggest that is too much money for too few jobs. Critics also point out that even with government subsidies, wind energy is more expensive to produce than more traditional energy sources. Fisherman have complained that the wind turbines will upset their fishing opportunities by restricting access to areas that are now available for fishing. Meanwhile, free market conservatives argue that the project represents a potentially disruptive intrusion into the energy market that will have unintended consequences. Despite the offer of the Energy Department money, it remains to be seen whether the rest of the $2.6 billion in financing will come together in order to trigger the $150 million loan,...

Did the $525,000,000 Massachusetts Poured Into Biotech Generate 571 or 17,994 Jobs?

Yes? No? Maybe? The state of Massachusetts has spent $525 million encouraging the development of the state’s biotech industry, just over half of the $1 billion budgeted for this purpose. This public investment is being applied to grants, tax breaks and business loans for companies planning on moving to Massachusetts or expanding their operations in the state, and is intended to encourage a healthier state economy. But, just how many jobs are really being created by this taxpayer investment? One academic study by Pioneer Institute claims that Massachusetts’ $525 million directly created only 571 new jobs in life science industries. This figure applies to a period starting in 2009 and ending in 2013. In contrast, consider a study from Northeastern University that claims that between 2006 and 2012, life sciences and related industries added 17,944 jobs in the state. While Northeastern’s period of study doesn’t exactly match Pioneer Institute’s, the astounding variance of the results illustrate that questions remain about public investment Massachusetts biotech industry. Questions need to be answered. Should the government of Massachusetts take tax dollars collected from businesses and individuals and give them to other businesses? Should government be picking industry winners and consequently with businesses that pay taxes but don’t receive tax breaks and cash investment by government losers? If government should take money from some businesses and give it to other businesses, should the alleged investment be made from politicians who are being lobbied by special interests or independent professionals? Creating new jobs isn’t the only way public incentives can aid select businesses and potentially the economy of Massachusetts. Specifically for a more complete picture of how biotech incentives are working, other questions should be answered. For example, one could ask how much private capital biotech firms have attracted and what kinds of returns backers have seen on their investments. It is also useful to ask how much extra tax revenues the state may see from capital gains. Until questions like these are answered, it will remain impossible to know just...

Is Refugee Resettlement Good for Mass. Businesses?

There has been a lot of controversy lately about the effectiveness of refugee resettlement programs that the federal government employs to settle refugees in the United States. Earlier this month, Dominic Sarno, mayor of the Massachusetts city of Springfield, wrote to prominent Massachusetts politicians urging a moratorium on resettlements in Springfield, claiming that the refugees have overwhelmed the ability of social services to meet their needs. Other New England mayors in Maine and Rhode Island have expressed similar complaints. But what effect do these immigrants have on Massachusetts’ businesses? From this narrower perspective, the issue becomes more complex. Here are some of the ways that refugees can have an impact on the businesses in the communities in which they relocate: Customer Base Obviously, any increase in the population of a community increases the size of the customer base that businesses have to draw on. When refugees first arrive in a community, the relocation agencies and social welfare programs provide them with money. Coming almost always from a poverty-stricken background, these refugees have to buy many basic goods and services. Therefore, at least initially, the refugees cause a surge in economic activity for the businesses in the communities in which they relocate.   Crime The financial aid that refugees receive lasts only so long. According to the government, about 75% of refugees become self supporting within a year of arriving in the United States. Unfortunately, the remaining refugees sometimes fall back into poverty and become problems to law enforcement. The resulting crime can be directed against the business community.   Employment Those refugees who get jobs are usually good workers, often more eager to please and willing to do difficult or unpleasant tasks than native workers. Therefore, refugees often become hard-working members of the local labor pool and are valuable employees to many businesses. Although some refugees can be a...

Worcester on the Affordable Care Act

Recently a panel was held in Worcester to discuss health care reform. Secretary of administration and finance, Glen Shor acted as the keynote speaker and spoke positively on the Affordable Care Act (ACA). He claimed it would help break down barriers to health care, along with assisting Massachusetts in receiving extra federal Medicaid reimbursements, that are issued to help cover uninsured or low-income patients. There is still plenty of room for improvement, and Shor is quoted saying, “Positive does not mean perfect.” Other speakers on the panel include Patrick Farrell, Peter J. Martin, Jack Myers and Jean Yang. Topics were covered such as small businesses incentives to provide health care and how company culture relates to health care. Peter Martin was optimistic stating that Massachusetts has  “a relatively easy path ahead of us.” Employers are encouraged to keep up with the law as it changes and take a look at what others in the industry are offering. Read more on the affordable care act panel here....

Millbury competes for state’s only casino

Recently, representatives from Mass Gaming & Entertainment LLC (MGE) unveiled their plans for a $200-million slots parlor on McCracken Road in Millbury. The plan will compete with other towns in Massachusetts for the state’s only slots parlor, including nearby Leominster. With traffic already a major concern due to the Shoppes at Blackstone Valley, MGE quickly addressed the issue, saying the project will “improve traffic in the area.” According to MGE’s plan, the casino will bring 400 permanent jobs to the town and its design will incorporate elements of Millbury architecture. The developer plans to seek LEED Gold certification in using environmentally sustainable building practices and materials. Residents in Millbury will vote on September 24 to determine if MGE can submit a final proposal. Read the full article in the Worcester Business...

Millions in Massachusetts State Tax Credits To Life Science Companies

The 2012 Mass Tax Credit Transparency report revealed that about $17 million was awarded to life science companies. In total $159.2 million in state tax credits were issued this year, with 11% going to life science companies. The $17 million was distributed to 28 different companies to improve life science research and investments The largest category in the life science is the research credit, which received just under $7 million. This is due to the yearly increases in expenses in the state. $1.8 million of that seven went to Biogen Inc., a biotechnology company, that manufacturers drugs for the treatment of multiple sclerosis as well as other diseases. Shire Human Genetic Therapies Inc. was awarded $3 million, the largest amount for investment tax credit. In 2010 Shire began a $400 million venture into Lexington Technology Park. Along with investment and research credits, job credits were also awarded. Enough was issued to create at least 50 total new full-time jobs in the state of Massachusetts.   Read more details about the tax credits to life sciences companies here....

MassWorks Infrastructure Program Enters New Round

Applications opened earlier this summer for the MassWorks Infrastructure Program – a program available for eligible public entities in need of funding to support economic development and job creation. The program opens a short window (September 3, 2013 – September 13, 2013) for entities to submit their applications for grant consideration. Grants offered this year will support housing or commercial growth opportunities that help support Massachusetts sustainability. In 2012, the Patrick Administration awarded $38 million to 26 MassWorks Infrastructure projects. Last year’s grants supported projects requiring infrastructure upgrades or expansions in order for new growth to take place. This year Gregory Bialecki, a spokeswoman for the Housing and Economic Development Secretary, announced that there is roughly $25 million available for projects. In past years, funding ranged from $200,000 to $10.1 million.   To read the full article, click here....

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