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Discussions on Minimum Wage, Sales Tax Hit Impasse

June 8, 2018
by Matt Murphy
STATE HOUSE NEWS SERVICE
 
STATE HOUSE, BOSTON, JUNE 7, 2018....The behind-the-scenes talks to strike a deal on Beacon Hill to keep several initiatives off the ballot this fall have apparently reached a "standstill," raising the likelihood that voters could have to decide whether it's a good time to both raise the minimum wage and lower the state's sales tax.
 
Raise Up Massachusetts, the coalition of labor, faith-based and community groups behind a push to raise the minimum wage, told House Speaker Robert DeLeo and Senate President Harriette Chandler on Thursday that it is increasingly skeptical that a "grand bargain" can be struck with retailers, who have pitched a $1.2 billion sales tax cut.
 
In a letter to the Democratic leaders posted on its website, Raise Up accused the Retailers Association of Massachusetts of insisting on "anti-worker changes" and said those requests are holding up any potential compromise.
 
The retailers, meanwhile, said they are not yet ready to walk away from the bargaining table despite the fact that a recent poll found strong backing for their initiative petition to reduce the 6.25 percent sales tax to 5 percent, with 67 percent in favor compared with 22 percent opposed.
 
"The Retailers Association of Massachusetts remains focused on supporting our small retail businesses, as well as seniors and low income families, by seeking a reduction in the highly regressive sales tax and the establishment of a permanent sales tax holiday," RAM President Jon Hurst told the News Service in a statement.
 
Retailers have long argued that wage laws in Massachusetts, along with competition from online retailers, put them at a competitive disadvantage. The concessions sought by the retailers' trade group, according to Raise Up, include a sub-minimum wage for teenagers and repeal of the law requiring time-and-a-half pay on Sundays.
 
"Policies such as a sub-minimum wage for teens or the elimination of Sunday time-and-a-half pay would hurt some of our most vulnerable workers and their families, and we cannot support or accept them," the coalition wrote.
 
The Raise Up petition advancing toward the ballot would raise the minimum wage from $11 to $15 in annual increments. Officials within the coalition said it has made "considerable concessions" to the Retailers Association in the interest of striking a deal, but has drawn a line in the sand over the teen wage and Sunday bonus pay.
 
"Policies such as a sub-minimum wage for teens or the elimination of Sunday time-and-a-half pay would hurt some of our most vulnerable workers and their families, and we cannot support or accept them," the coalition wrote.
 
Businesses with seven or fewer employees are currently exempt from the Sunday wage laws, but insiders familiar with negotiations said Raise Up has offered to go along with an increase to at least 25 employees and to spread out the implementation of the $15 an hour minimum wage over five years, instead of four.
 
Hurst declined to discuss specifics of the negotiations, including the opposition's claim that he is demanding a teen wage and repeal of the Sunday wage law in order to strike a deal. "With 3 ½ weeks of negotiating time to go, we remain focused on reaching a compromise that is fair to all parties and will provide much needed support to our Main Streets, our small businesses, and our economy," he said in a statement.
 
Raise Up Massachusetts has been engaged for months in talks with business leaders, lawmakers and retailers in hopes of reaching a compromise that would allow three potential ballot questions to be resolved in the Legislature without going to the ballot in November. Those three questions include the $15 an hour minimum wage, mandated paid family and medical leave for workers, and the sales tax cut with an annual sales tax holiday attached.
 
Gov. Charlie Baker has avoided getting directly involved and has also refused to take a public position on the ballot proposals, instead expressing his desire for what he calls a "grand bargain" in the Legislature to avoid the ballot campaigns.
 
Raise Up told Chandler and DeLeo in the letter that talks with Labor Committee Chairmen Rep. Paul Brodeur and Sen. Jason Lewis, Associated Industries of Massachusetts and other business groups over paid family leave have led to agreement on "most aspects" of a program that it thinks could pass the House and Senate.
 
"We are very close to resolving the remaining provisions," the coalition wrote.
 
A spokesman for A.I.M. declined to comment on the Raise Up letter, citing an agreement reached at the start of negotiations to keep deliberations private.
 
Jesse Mermell, the president of the Alliance for Business Leadership, also declined to discuss specifics of the negotiations, but having been involved in the paid family and medical leave talks, she said that after starting with some 40 policy points to negotiate she can now "count on one hand the number of provisions we have left to go."
 
"I think we are really close," Mermell said. "I think everyone's cautiously optimistic that we're going to get there."
 
On the issue of the minimum wage and the sales tax, however, Raise Up said the retailers' association is using the threat of a sales tax cut ballot questions to "gain concessions on regressive policies that would never pass the Legislature."
 
"If we cannot reach agreement with the Retailers Association on all three ballot questions, we believe it is time for the Legislature to move forward and pass paid family and medical leave and a $15 minimum wage, with no teen sub-minimum wage or changes to Sunday time-and-a-half," the group wrote. "We are continuing to gather the signatures needed to take both of our questions to the ballot and are fully prepared to win them there if necessary."
 
One person familiar with the negotiations, but who doesn't represent either the coalition or the retailers, said he would not bet on the two sides reaching agreement. "Certainly there's time for the parties to put their heads back together, but it looks like both of those two questions are going to the ballot," he said.
 
All groups with proposed ballot questions have until July 3 to collect their second round of 10,792 signatures to qualify for the ballot, leaving just a few more weeks for the parties to reach a breakthrough before ballot questions could be locked in for November.
 
While the Raise Up coalition thinks it's possible that they could persuade the Legislature to take up paid family and medical leave and a minimum wage bill without a so-called "grand bargain" to keep the sales tax reduction question off the ballot, that remains to be seen.
 
Neither DeLeo's nor Chandler's office offered comment on the letter they received Thursday, but Brodeur and Lewis, the co-chairs of the Joint Committee on Labor, issued a joint statement urging parties to keep talking.
 
"The parties have been negotiating for several months. We are prepared to consider proposals at any time and encourage representatives from the business community and Raise-Up to continue talking with a goal of coming to an agreed-upon resolution to all matters under consideration," the two Democrats said.
 
Hanging over all of these talks is the expected decision from the Supreme Judicial Court over whether a constitutional amendment to impose a 4 percentage point surtax on income over $1 million can proceed to the ballot.
 
The decision could come any day, and Hurst has long said that if the court were to knock the millionaire's tax off the ballot he might be willing to back off his sales tax question.
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