Massachusetts lawmakers ended the formal portion of their 2023-2024 session by passing two bills that will have a significant impact on the state economy – a $5.16 billion housing bond bill and a wage equity/transparency law. But a multi-billion economic-development measure failed to gain consensus. 

A fourth bill with implications for business, a tax reduction and reform, passed Beacon Hill in 2023 and took effect this year. 

Marathon negotiations produced no agreement on bills pertaining to health care, energy and increasing the commercial tax rate in Boston. 

AIM’s Government Affairs team led the effort to ensure that the opinions of employers from throughout Massachusetts were considered during these debates. The association was pleased to support the final versions of the housing and wage-equity bills. Governor Maura Healey signed both bills into law. 

The Legislature will continue to conduct informal sessions through the end of the year, but important bills generally do not pass in these sessions because a single legislator can block passage. Bills that are not adopted during the two-year session must be re-filed and go through the legislative process again during the next session.  

Here is the rundown of bills that matter to employers: 

Tax Reduction/Reform 

The first major tax reduction in more than a decade provides some $561 million in relief this year through a reduction in the short-term capital gains tax rate from 12 percent to 8.5 percent, exemption of estates worth less than $2 million from the estate tax and transition to single-factor apportionment for all businesses. The reform is expected to return $1 billion to corporate and individual taxpayers by Fiscal Year 2027. 

Affordable Homes Act 

AIM members have expressed concern that the soaring cost of housing in Massachusetts is driving employees to pull up stakes for less expensive regions of the country. The housing bond bill passed by the Legislature strikes a delicate balance by making investments that will help reduce the prohibitive cost of housing in the state without imposing anti-competitive taxes. Lawmakers deserve tremendous credit for omitting from the bill a proposed transfer tax on real estate transactions worth more than $1 million, a policy that would have the opposite effect of increasing housing in Massachusetts. The bill will broadly legalize Accessory Dwelling Units, which are smaller housing units typically built in the backyard or basement of a single-family home. The ADU provision was a priority of the AIM Government Affairs team all session.  

Frances Perkins Workplace Equity Act 

AIM led negotiations with wage-equity advocates on a compromise bill that puts Massachusetts in the forefront of paying workers fairly without punitive measures against employers. The compromise requires employers with 25 full-time workers or more to disclose salary ranges in job postings and protects an employee’s right to ask for salary ranges in the workplace. The bill also mandates that organizations with 100 or more full-time employees submit to the state copies of their federal equal employment opportunity reports about workforce demographics. The state will aggregate the data by sector and publish the results annually so it can track inequities by race and gender. 

Fiscal Year 2025 State Budget 

Governor Healey signed a $58 billion state budget for the Fiscal Year that began July 1 after vetoing some $317 million in spending. The blueprint increases spending by roughly $1.8 billion, or 3.5%, compared to the one signed by Governor Healey last July. The FY25 spending plan contains no tax increases and does not draw from the Commonwealth’s $9 billion Rainy Day Fund. It will make community colleges tuition-free for all Massachusetts residents, a provision that will dramatically impact enrollment and reshape how the state’s 15 community colleges structure their course offerings. 

Here are the bills that were not approved: 

Economic Development  

An economic-development bill valued at anywhere from $2.9 billion (Senate) to $4.1 billion (House) would have provided funding and tax credits for life sciences, climate tech and other industries.  The measure would also have established a $10 million-per-year statewide internship tax credit, provided $400 million to the Mass Works Infrastructure Program, and reformed the Economic Development Incentive Program. Governor Maura Healey has called for the Legislature to call a special session to consider the bill, and legislative leaders have indicated they will do so if they reach agreement. 

Health Care 

Both branches of the Legislature passed health-care bills that aimed to reform hospital oversight (in particular to prevent a repeat of the Steward Health crisis), create prescription-drug oversight and reporting requirements, and create increased transparency in the health-care system. The Senate pushed for pharmaceutical manufacturing reforms whereas the House focused on licensing and regulating pharmacy benefit managers (PBMs). Additionally, both branches worked on legislation to address private-equity interests in health care and to increase Health Policy Commission (HPC) and Center for Health Information and Analysis’ (CHIA) oversight of various health-care entities. The language to achieve those goals, however, was different enough to cause the two branches to come to an impasse.  

Energy  

Energy bills passed in both chambers would have reformed the process for approving new energy infrastructure for projects generating clean electricity in the state — cutting the time to less than half of the current rate, while adding assurances to consider the needs of environmental justice communities and the environment.  The Senate sought a broader bill that would allow for the decommissioning of ageing gas infrastructure without repairing or rebuilding, ban the ability of third party competitive electric suppliers to sell directly to residents, update the state’s bottle bill, and more.  The House, meanwhile, pushed for a bill that would call for the procurement of additional clean energy, including long-duration battery storage, and introduce measures to boost the availability of electric vehicle chargers in the state. Although the siting and permitting reform in both bills was pre-conferenced and agreed upon by both branches and the administration, the remaining differences in the two bills were too far apart for a compromise to be reached. 

PFAS 

The legislature passed a last-minute bill that will ban the sale of personal protective equipment containing perfluoroalkyl or polyfluoroalkyl substances  (PFAS) to be used by firefighters in Massachusetts by January 1, 2027. The bill does not prohibit or otherwise regulate the sale or manufacturing of any other products that contain PFAS. However, the AIM Government Affairs team anticipates there will be several initiatives to ban additional products containing PFAS next session.