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This Week in Massachusetts – August 9, 2022

Posted on August 8, 2022

Hiring Gets Easier for Some Employers Despite Hot Job Market

Boston Globe – Some big U.S. companies say hiring is getting easier, at least by a little.

Employers in hospitality, retail, healthcare and other industries hardest hit by worker shortages over the past two years say they are seeing emerging signs that recruiting workers—and getting them to accept jobs when offered—is becoming less of a challenge, even as the overall job market remains tight.

The national hospital chain HCA Healthcare Inc., which struggled to find enough nurses and other workers throughout the pandemic, says hiring is up and turnover is down. At Uber Technologies Inc., more people are signing up to work as drivers or food couriers. Marriott International Inc., meanwhile, says it is seeing steady improvement in its hiring, with wage increases slowing, too.

Corporate leaders say the job market still favors workers over employers and that challenges remain in drawing enough staff. Still, many say the worst of the hurdles appear to be over.

“We are not running around with our hair on fire, if you will, anymore,” Bill Hornbuckle, chief executive of casino operator MGM Resorts International, told investors Wednesday, though he added that it is hard to hire for certain positions such as housekeepers and cooks.

The economy has now made up the number of jobs lost in the aftermath of the pandemic, and demand for workers is fierce. In July, employers added 528,000 jobs, far more than expected, and the unemployment rate fell to a half-century low of 3.5%. There are indications that workers are also accepting jobs more quickly, economists say, reducing some of the burdens for companies looking to fill positions.

Companies cite varying factors in explaining hiring successes. Kroger Co. told investors in June that some employees who left to work elsewhere had returned to the grocery chain. Uber, which struggled with too few drivers to meet demand over the past year, said inflationary pressures motivated more people to drive for the service. Uber ended its latest quarter with a record number of drivers, CEO Dara Khosrowshahi said last week.

“For the people who are looking for work right now, they’re very willing to take it, and that’s why you’re seeing high levels of payroll growth,” said Nick Bunker, an economist at job-search platform Indeed.

Fears of a recession or inflation also appear to be keeping some workers in their existing jobs, economists and executives say, leading to a drop in turnover in some industries—another boost for companies. The rates of quitting in both hospitality and retail have fallen in recent months from peaks earlier in the pandemic, Mr. Bunker said, though they remain elevated historically.

Amid a record hiring streak in the U.S., economists are watching for signs of a possible wave turn. WSJ’s Anna Hirtenstein looks at how rising interest rates, high inflation, market selloffs and recession risks challenge the growth of America’s workforce. Photo: Olivier Douliery/AFP

“We had this very large churn that was creating this bottleneck in jobs, and that bottleneck is being eased out,” said Bledi Taska, chief economist at Lightcast, a labor-market analytics company.

On earnings calls in recent weeks, many CEOs said that turnover ticked down. Attrition at government contractor Booz Allen Hamilton Holding Corp. has returned to pre-Covid levels, CEO Horacio Rozanski said in late July. At HCA, the hospital operator, turnover fell more than 20% in the second quarter compared with the first, CEO Samuel Hazen said. Employee retention also rose at Bloomin’ Brands Inc., parent of restaurant chains Outback Steakhouse and Bonefish Grill.

“We are seeing the staffing environment improve,” Bloomin’ CEO David Deno told analysts in late July. “We’re seeing that in our metrics and our labor metrics, be it retention, be it staffing, be it turnover.”

Some companies say they have had more success hiring recently as pandemic-related challenges, such as the closure of trade schools, eased. Last summer, the manufacturing company Graham Corp., which employs about 500 people, found it so difficult to hire welders for a facility in upstate New York that the company resorted to bringing on contract workers at elevated pay rates. “We were in a really bad spot,” CEO Dan Thoren said.

The situation is now being reversed, in part because trade and vocational schools have reopened and begun graduating welders again, he said. Graham is working to hire some of those new to the field from such schools. But it is also receiving more applications from experienced welders, too, something it largely didn’t experience even a few months ago. Mr. Thoren attributes the applications to the company’s efforts to create a desirable workplace, but also to a changing economy and job market where workers may seek greater stability.

“It is still a very tight market, but we are seeing some softening,” Mr. Thoren said. “I think people are saying, ‘OK, we’ve had a chance to try out greener pastures and we’ve done that and now we’re going to start to settle.’ ”

Some prominent employers, including Walmart Inc., Oracle Corp. and Robinhood Markets Inc., have laid off workers recently, while tech giants such as Facebook owner Meta Platforms Inc. have slowed hiring. Yet many more companies are hesitant to cut staff, economists and executives say, after doing so at the start of the Covid-19 pandemic and then finding it difficult to quickly rehire workers as needed.

While some bosses feel confident in their abilities to hire now, many also remain concerned about a shortage of workers. International Business Machines Corp. has more than four million people in a database of applicants, CEO Arvind Krishna said in a recent interview as part of a Wall Street Journal CEO Council event. “That makes us feel good that we can get enough right now,” Mr. Krishna said, before adding, “That’s an area where we’re paranoid: There’s so much competition for tech skills.”

Employers hiring for a range of roles, from hourly retail jobs to advanced technical positions, say they are noticing a change in job seeker sentiment and behavior. Samantha Hammock, chief human-resources officer at Verizon Communications Inc., said it is taking less time to fill open roles in software engineering, front-line sales and retail and other positions because fewer applicants now have multiple offers at the same time.

During earlier periods in the pandemic, Verizon often found that it would extend an offer to a candidate, only to be told that the worker was weighing three other job offers. If the candidate declined Verizon’s job, its recruiters would need to start the process over to find someone else, Ms. Hammock said. “That really does extend the time to fill” a job, she noted.

Now, as Verizon makes offers, candidates are more likely to accept them, she said, part of what she described as a softening in the labor market. In finding workers, “It is still hard, but it’s improving,” she said.

Amid a record hiring streak in the U.S., economists are watching for signs of a possible wave turn. WSJ’s Anna Hirtenstein looks at how rising interest rates, high inflation, market selloffs and recession risks challenge the growth of America’s workforce. Photo: Olivier Douliery/AFP

Infighting, Obfuscation, Delay: The Chaotic End of the Massachusetts Legislative Session

Boston Globe – A $52.7 billion budget passed weeks after the fiscal year began. A months-long tax relief effort that languished in the middle of the night. And a Democratic supermajority ceding its power to a lame-duck Republican governor, who can now veto at will without the threat of an override.

Even for seasoned lobbyists, lawmakers, and advocates used to the secretive, deadline-averse Massachusetts Legislature, the end of the formal session came as a shocking disappointment, with billions of dollars in spending and major policy proposals left on the table as legislators decamped for a five-month recess from formal duties.

The final scramble on Beacon Hill at the end of July threw into sharp relief some of the state’s more unenviable distinctions: The proud cradle of democracy is among the worst in the country on open government and meeting key deadlines.

Mass. Employers Slightly More Optimistic in July

WBUR – There’s a bit of good economic news to hang on to amid an ongoing debate about whether the U.S. is in a recession.

Massachusetts employers felt slightly more optimistic in July than they did in June, according to the newest Business Confidence Index from The Associated Industries of Massachusetts (AIM).

AIM, the state’s largest business association, asks more than 140 members how they’re feeling about the economy on a monthly basis. In July, the index was 52.8 on a 100-point scale. That’s an improvement from 50.8 in June, but it remains significantly lower than July 2021.

Chris Geehern, AIM’s executive vice president, said employers are encouraged by consumer spending, which increased by 1% nationally in the second quarter despite an overall decrease in state and national GDP.

The stock market has been inching upward since May, and supply chains are slowly improving. Business leaders may also be heartened by a strong job market.

“Usually in a recession, you’re seeing jobs numbers go down. We haven’t really seen that yet,” Geehern said. “There is this underlying strength to the job market that seems to belie this idea that we’re heading for economic catastrophe.”

On the policy side, Geehern said the business community is hoping for actions that would encourage spending despite high inflation. State business leaders supported a $1 billion state tax relief bill, which got held up during this week’s final legislative session. Now they’re hoping for a potential $3 billion tax rebate, thanks to a 1986 voter law that caps state tax revenue growth.

T Thrust into National Spotlight with Safety Incidents, Orange-Line Shutdown

Boston Herald – The state of affairs at the MBTA may have caused some resignation on the local level, but the “unprecedented” number of safety incidents has thrust the beleaguered agency into the national spotlight, according to two transportation experts.

“There have been agencies that have had multiple issues, however, the duration and number of incidents at the MBTA is unprecedented and unacceptable,” said Keith Millhouse, a past chairman of the Southern California Rail Authority board of directors.

“It’s been happening for too long, too many times. You don’t see that elsewhere.”

Carl Berkowitz, a New York-based transportation and traffic engineering expert, said he gets national transit news updates, and has “never seen so many articles coming out of Boston.” He said he doesn’t see much of anything from anywhere else.

Sales-Tax Holiday Ahead, but Some Exclusions Apply

If you are still making plans for the upcoming weekend, you might want to add some shopping to the calendar, as the state will once again hold its annual sales tax holiday.

“The sales tax holiday for 2022 will be held on Saturday, August 13 and Sunday, August 14. Retail items of up to $2,500, purchased in Massachusetts for personal use on these two days, will be exempt from sales tax,” the Department of Revenue said in a release announcing the dates.

First tried for just one day in 2004 but made into an annual full weekend holiday in 2018, the law aims to boost consumer spending for one weekend a year at the expense of millions in sales tax revenue.

The law suspends the state’s 6.25% sales tax, with some exclusions.

Purchases of cars, boats, meals, utilities, marijuana, tobacco and alcohol are still taxed. Gasoline is not subject to the sales tax and so is not affected by the holiday. Business purchases are still taxable.

Business Owners Frustrated with Hiring Bonus Program

Boston Globe – When Jordan Mackey heard this spring that the state was making $50 million available to help with hiring bonuses and training for new employees, he thought the timing couldn’t have been better.

He was getting ready to open his second Nan’s Kitchen & Market off Route 9 in Southborough, a project that had been waylaid by the COVID-19 pandemic. Mackey quickly did the math: With the promise of a $4,000 grant per new employee from the new program, dubbed HireNow, he figured he’d get at least $150,000 to help pay for training for the 39 people he planned to bring on board to staff the new restaurant and two existing ones, a Nan’s in Stow and Sobre Mesa in Sudbury.

Instead, he found out he won’t get a single dime, even though he registered in April. Because the program requires new hires to stick around for 60 days, Mackey waited to upload his first batch of requests. Too late: The program was swamped and is now closed. Mackey said he was told it would last until the end of the year.

“This grant was going to help us move quicker and create more jobs, faster,” Mackey said. “Having these funds available to help with training was an unbelievable gift. [But] we just didn’t hear anything from anybody until it was, ‘Sorry, you’re out of luck, you’re not getting any money.’”

Nan’s Kitchen & Market in Southborough is opening soon, with dozens of new hires. Owner Jordan Mackey thought he’d receive a state hiring grant but the $50 million program quickly ran out of money.

Mackey is just one of many small-business owners who received that bad news in the past two weeks. The primary culprit? Huge demand. One small-business owner who found out she will not be reimbursed for signing bonuses for three new hires was told by e-mail by a HireNow coordinator there were 13,000 hires already submitted — which would likely use up all the money. Another big group was put on a waitlist, in case some applicants are deemed ineligible or if state lawmakers approve more funding.

Regulators Say It Could Take Months to Set Operator Rules for Sports Betting

WBUR – Hold your horses, eager sports bettors.

State officials who would be in charge of licensing and regulating sports betting signaled Thursday that it may take longer for them to make sports wagering a reality in Massachusetts.

With a bill now on Gov. Charlie Baker’s desk, some proponents have expressed hopes that Bay Staters could be placing wagers in time for the start of football season.

However, the Massachusetts Gaming Commission said Thursday that if the bill is signed into law, setting up detailed rules for sports betting operators would take at least a few months. The process in other states that have already legalized sports betting has sometimes taken longer.

“I want the public to understand, as we as commissioners are starting to understand, that this isn’t something that’s going to happen overnight,” Commissioner Brad Hill said. He added, “this is going to take a little longer than people probably anticipate, and I’m OK with that because I want to do it right.”

Multiple commissioners said that they’ve been busy planning for the legalization of sports betting for months, but the Gaming Commission did not offer its own specific timeline for initiating legal betting in Massachusetts.

The formal regulatory process takes two to three months from start to finish, a commission lawyer said, and most license application processes in other states take between three and six months, a commission official said.

Boston Mayors Have Had an Open-Door Policy with Developers. Not Michelle Wu.

Boston Globe – For more than three decades, big Boston real estate developers enjoyed an open-door policy with the mayor’s office. Unfettered access flourished under Thomas M. Menino and continued under Martin J. Walsh and even during the brief tenure of Kim Janey.

Now with Michelle Wu, those days are over — intentionally so.

Since her election in November, developers have been clamoring to set up one-on-one meetings with Wu about their plans. Many have been rebuffed and redirected to meet with other members of her administration to discuss big projects that would create thousands of jobs and add millions in future tax revenue to city coffers.

What’s more, Wu has notably missed a number of high-profile ribbon cuttings and groundbreaking ceremonies — bread and butter events for her predecessors — including the June opening of Amazon’s new building in the Seaport District and an event a few days later to celebrate a deck over the Massachusetts Turnpike that will hold an office and lab tower, and hotel. Governor Charlie Baker attended both events.

Developers “are used to having the best seat at the table, and now they’re just at the table, and that’s a change for them,” said Erin O’Brien, a University of Massachusetts Boston politics professor. “The fact that they’re complaining tells you that the power dynamics in Boston are shifting. And that’s what Michelle Wu’s coalition wanted.”

Baker Has Busy Week Ahead with Dozens of Laws to Consider

Boston Herald – Gov. Charlie Baker will have another busy week considering all the last-minute legislation passed by lawmakers during last Sunday’s all-nighter that closed out formal sessions on Beacon Hill.

Last Friday, “Governor Baker signed 10 pieces of legislation,” Terry MacCormack, the governor’s press secretary, said in a statement. He had signed a dozen more, including the state budget, the day before.

On the bills now remaining, the administration would not say whether it planned to sign, veto or amend the Legislature’s work. Baker has told reporters in the past that he prefers not to get ahead of the lawmakers and his team’s standard response, that they will carefully review the legislation, was again issued on Sunday.

Baker has until Wednesday to sign or amend an $11.3 billion infrastructure and climate bond bill.

The bill directs $400 million toward the struggling MBTA and also invests $275 million in a proposed East-West rail line to link Western Massachusetts with Boston.

Baker’s intentions are, as ever, unclear. He filed the original bond bill in March with a price tag of $9.7 billion. The out-going governor has been clear that he wants to make use of as much of the federal government’s money in the Bipartisan Infrastructure Law as possible while those funds remain available.

There is some chance Baker changes the bill to chase more of those federal dollars, which House Speaker Ron Mariano, at a June Chamber of Commerce meeting, suggested the governor wanted to do since he wasn’t seeking a third term and it was his last chance to leave a legacy.

By Thursday the governor will have to decide on bills pertaining to clean energy and offshore wind, equity in the cannabis industry, regulating sports wagering; updating information technology for the judiciary; addressing barriers to mental health care, as well as dozens of bills related to local matters in cities and towns.

The mental health bill is a priority of both Mariano and Senate President Karen Spilka, and would require insurance coverage for mental health screenings and same-day psychiatric appointments.

Sports betting cleared the Legislature in the waning moments of the session after lawmakers finally found a compromise on Mariano’s pro-college betting stance and Spilka’s insistence to leave college sports out, as requested by a group of the state’s leading colleges and universities. In the end, an agreement was struck to allow betting on big-time national games and tournaments but prohibit betting on Bay State schools.

Baker could sign the bill as written, or amend it, but can only use his line item veto power on spending bills.

Health Care

Pediatricians Discard Vaccine Doses for the Youngest Amid Lack of Demand

Boston Globe – When COVID-19 vaccines for children under 5 finally rolled out in June, doctors expected to face hesitant parents. Surveys had predicted that only one in five would jump at the chance to vaccinate their littlest children right away.

But in the six weeks since, the uptake has proven even weaker than feared.

Nationally, as of figures reported on Aug. 3, 3.83 percent of children age 6 months until 5 years had received at least one dose of vaccine. In Massachusetts, which provided more current data, the number was 11 percent, one of the highest rates in the nation but still lower than any other age group in the state.

Seizing every opportunity to vaccinate, doctors are opening 10-dose vials during regular office visits, knowing they probably won’t use all the vaccine and will have to throw some out. Once a vial has been punctured, its contents must be used or discarded within 12 hours.

“It feels yucky. I hate waste,” said Dr. Wayne Altman, a family physician in Arlington. His practice has had a comparatively high uptake of vaccine, with about one-quarter of eligible patients getting it. Still, he has not once used up every dose in a vial.

Dr. Lloyd D. Fisher, a Worcester pediatrician, said he has also opened vials knowing he might have to discard as many as nine of the 10 doses.

‘Crisis Pregnancy’ Clinics Suddenly at Center of Abortion Debate

Commonwealth Magazine – The organization has operated quietly for three decades, headquartered today in a nondescript brick storefront along Revere’s main street. “Your Options Medical” advertises the sign on the clinic, a faith-based nonprofit that operates four centers in Massachusetts focused on counseling pregnant women.

While the clinic’s staff say they discuss the range of choices women have, there’s little doubt that continuing the pregnancy and giving birth is the option they hope women will exercise. The organization, described by its director as “life-affirming,” is one of several groups operating “crisis pregnancy centers” in Massachusetts that suddenly find themselves at the center of the debate over abortion unleashed by the Supreme Court’s ruling in June that overturned the landmark 1973 Roe v Wade case that established a constitutional right to abortion.

As the battle over abortion quickly shifted to become a state-based debate, these clinics run by pro-life advocates are suddenly drawing attention, even in a state that has some of the nation’s strongest laws protecting the right to an abortion. State and municipal leaders in Massachusetts who support abortion rights are discussing ways to regulate these clinics, often through bans on deceptive advertising practices. Part of their concern is that as more women come to Massachusetts from states where abortion is illegal seeking abortion care, they could be deceived into visiting a crisis pregnancy center instead.

Sen. Elizabeth Warren held a public event in Boston with abortion rights groups after the Supreme Court decision where she called crisis pregnancy centers “deceptive outfits that front for groups that are trying to harass or otherwise frighten people who are pregnant to keep them from seeking an abortion.”

Sustainability, Climate and Energy

US Senate Passes Democrats’ Climate, Healthcare and Tax Bill

WASHINGTON—The Senate passed a bill spending hundreds of billions of dollars on climate and healthcare programs while raising taxes on large, profitable companies, as Democrats unified around elements of President Biden’s agenda after a year of frustrated efforts to advance a broader package.

The legislation, which passed the Senate 51-50 on Sunday with a tiebreaking vote by Vice President Kamala Harris, offers tax incentives for reducing carbon emissions, seeks to allow Medicare to negotiate the price of some prescription drugs, allots roughly $80 billion to the Internal Revenue Service and extends subsidies for health insurance under the Affordable Care Act.

Along with a new 15% corporate minimum tax, it creates a 1% excise tax on companies’ stock buybacks and sets aside roughly $300 billion toward reducing the deficit.

Senate passage of the bill through the evenly divided chamber is a victory for Democrats that seemed improbable just weeks ago, after talks fell apart between Senate Majority Leader Chuck Schumer of New York and key centrist Sen. Joe Manchin of West Virginia before quickly reviving. Every Republican lined up against the bill, meaning any one Democratic defection could have sunk the effort in the Senate.

“It’s been a long, tough, winding road, but at last, at last we have arrived,” Mr. Schumer said after passage of the bill, dubbed the Inflation Reduction Act.

The deal is the product of difficult negotiations among Democrats to translate their control of Congress and the White House into progress on a series of longtime policy ambitions before the midterm elections, when inflation and the economy are set to be top of many voters’ minds.

The package will still need to clear the narrowly Democratic House in a vote scheduled for Friday. Speaker Nancy Pelosi (D., Calif.) and progressive caucus leader Pramila Jayapal (D., Wash.) have backed the proposal, putting it on course for likely approval.

Republicans argued that the climate and tax package would do nothing to cool inflation and would hurt the economy, and that tax increases on corporations would hit households as well.

“This bill is going to mean more taxes, more spending, higher prices—right in the middle of a combination of an inflation time and a time of recession.” Sen. John Barrasso (R., Wyo.) said during the bill’s consideration.

During a marathon session that lasted all night, culminating in final passage Sunday afternoon, Republicans offered a barrage of amendments to the legislation. Over 15 hours, they sought to add immigration restrictions, limit its tax policies and change its energy provisions. Democrats defended the bill against changes from many of the GOP amendments, as well as from changes within their own ranks, largely lining up to preserve the bill as it was written.

Democrats used a special process called reconciliation, which allows bills to advance with a simple majority rather than the 60 votes typically needed in the Senate. But reconciliation mandates that provisions in the legislation be strictly related to the budget. Those rules pushed Democrats to drop an effort to limit the rate of price increases for drugs in the commercial market.

Reconciliation also requires lawmakers to undergo the open-ended amendment process, when lawmakers made a final change to the legislation. On Sunday afternoon, Democrats scaled back the corporate minimum tax to shield individual companies operating under the umbrella of a single owner, a step that would help the private-equity firms that own such companies.

The series of last-minute changes to the text means Congress’s nonpartisan scorekeeper didn’t produce a final analysis of the bill’s budget impact. Democrats have said earlier versions would raise roughly $740 billion in revenue and spend roughly $430 billion of that over a decade.

Mr. Biden, whose approval rating has been stung by rising inflation, praised passage of the bill, saying it fulfills his pledge to lower costs for families and not raise taxes on households making under $400,000 a year.

“It required many compromises. Doing important things almost always does,” the president said, urging the House to pass the bill quickly so he could sign it into law.

The proposed taxes wouldn’t raise taxes directly on middle-class households, but higher business taxes can add costs elsewhere that affect individuals. That can include smaller profits for shareholders or lower wages paid to workers. Experts disagree about how much of corporate tax increases is passed on to shareholders or workers.

The bill’s prescription drug plan would for the first time empower Medicare to negotiate the prices of a limited set of drugs selected from among those that account for the biggest share of government expenditures, long a goal for lawmakers. It would also cap out-of-pocket drug costs for Medicare beneficiaries at $2,000 a year beginning in 2025, and starting next year mandate free vaccines for Medicare enrollees. It would cap insulin costs for Medicare patients at $35 a month starting next year.

Subsidies for purchasing health insurance through the ACA, which Democrats passed into law in 2021, would continue through 2025, under the bill, an extension that will cost $64 billion.

On climate, the bill’s tax incentives aim to channel billions of dollars to wind, solar and battery developments that put clean power onto the grid. Consumers could receive subsidies for certain windows, heat pumps and other energy-efficient products, as well the extension of a $7,500 tax credit to buy electric vehicles.

Those investments could help cut greenhouse-gas emissions 31% to 44% below 2005 levels in 2030 in the U.S., compared with 24% to 35% under current policy, according to Rhodium Group, an independent research firm. At the insistence of Mr. Manchin, the legislative package also provides support for traditional sources of energy such as oil, gas and coal along with nuclear power. Democrats also committed to take up legislation later this year that would streamline permitting processes for energy projects.

Talks with Mr. Manchin blew up multiple times before restarting and ultimately leading to the deal. Democrats also had to keep on board Sen. Kyrsten Sinema of Arizona, an iconoclastic pro-business lawmaker who repeatedly forced the party to scale back its plans to raise taxes.

After eyeing last year as much as $3.5 trillion in spending on a bevy of programs—including child care, community college and paid leave—Democrats settled on a fraction of that. Mr. Manchin threw much of Mr. Biden’s agenda into doubt last year when he blocked a roughly $2 trillion package that had passed the House, repeatedly arguing against a large-scale spending bill that he feared could make inflation worse.

Over the course of seven months in 2022, Democrats carefully tried to re-engage with Mr. Manchin. Messrs. Manchin and Schumer closed in on a package that focused on raising taxes, bolstering energy and climate programs and lowering healthcare costs.

As they kept most Democrats out of the loop on the negotiations, Mr. Schumer said one of his top aides kept Ms. Sinema abreast of the talks.

But in mid-July, Mr. Manchin began to have doubts about the legislation as inflation continued to rise to even higher levels. Mr. Manchin told Mr. Schumer that he could agree to soon pass legislation that only lowered drug costs and extended ACA subsidies, putting the tax increases and climate programs in danger. When that stance was reported in the news media, many Democrats and Republicans took that to mean the talks on any package were over.

“I was sort of surprised and frankly, he knows this, I was upset. I thought we had come pretty close to an agreement,” Mr. Schumer said in an interview. Mr. Manchin has said the two men agreed to give talks another shot after their tempers cooled.

Messrs. Manchin and Schumer began talking again secretly, without informing any other lawmakers or the White House, announcing an agreement within days. Democrats, resigned to the very narrow deal focused on prescription drugs and healthcare, suddenly again had a chance of approving major financing for combating climate change.

Once Democrats had a deal with Mr. Manchin, Mr. Schumer still had to work out a final set of issues with the caucus’s other traditional holdout: Ms. Sinema. She opposed a proposed increase in taxes on private-equity managers’ carried-interest income, a provision that Mr. Manchin had sought.

“He very very wisely and unselfishly said, ‘Look I can’t get everything I want either, so we’ll have to drop it.’ Sen. Sinema felt strongly it shouldn’t be in,” Mr. Schumer said.

The talks with Ms. Sinema, which continued right up until the final vote, also led Democrats to repeatedly scale back the 15% minimum tax on large, profitable corporations. Not only did they relax the measure on Sunday, they had also previously altered it to allow companies to continue to accelerate depreciation for tax purposes. Some manufacturers had warned that denying or deferring accelerated depreciation could negatively impact their businesses.

To add revenue back into the bill after dropping carried interest and paring back the corporate minimum, Democrats added in the 1% excise tax on stock buybacks. They also extended limitations on deductions for business losses by two years.

Because Democrats at various points throughout the year had faced the possibility of not passing any package, they have largely celebrated the deal, even if it is more limited than some of their initial hopes. Sen. Bernie Sanders (I., Vt.), a leading progressive in Congress who caucuses with Democrats and voted for the bill, had called on Democrats to expand the legislation on Saturday as he argued the bill doesn’t address housing, child care and other major issues.

Sen. Sherrod Brown (D., Ohio), in opposing a Sanders amendment to expand the child tax credit, said the party must focus on passing the core package.

“This is a fragile arrangement,” he said

Climate Scientists Predict Boston Could See Up to 18 Days of High-Tide Floods

MassLive – Due to years of rising sea levels, Boston may see up to 18 days of high-tide flooding by the end of 2022, according to a report by the National Oceanic and Atmospheric Administration.

High-tide flooding is typically when tides rise from 1.75 to two feet above the daily average high tide, causing for ocean water to spill onto roads and streets, the report says.

In 2021, the NOAA predicted that Boston would see 11 to 18 days of high-tide flooding. The prediction ended up being high as there were only seven days of flooding in the city from May 2021 to April 2022. The report also predicts that by 2050 the city will experience 45-90 days of flooding, however, now the NOAA says the city will only see up to 70 days of flooding.

“The frequency of high tide flooding across the country continues to increase,” The report says. “This year, due to lingering climatological effects from La Niña and Earth’s location in the perigean cycle, coastal areas aren’t predicted to experience a record number of flood events compared to last year.”

Climate and Tax Bill Is Big Win for Serial Green-Home Remodelers

Boston Globe – Americans looking to make energy-efficient home improvements are poised to receive millions of dollars in savings after a broad spending package was approved by the Senate on Sunday.

The spending package, dubbed the Inflation Reduction Act of 2022, reshapes tax credits on home improvements. The legislation has a $1,200 annual tax credit for green remodeling, up from what had been a $500 lifetime cap.

The potential tax savings for homeowners thanks to the expanded credit under the energy bill would be an estimated $1.6 billion in 2023 alone, up from an estimated $253 million in 2022 for the old credit, according to Congressional Budget Office estimates.

The 10-year budget estimate is $14.5 billion.

“Taxpayers can budget out different energy-efficient upgrades over a 10-year period. Insulation one year. Windows and doors another year,” says Vincent Barnes, senior vice president of policy and research at the nonprofit Alliance to Save Energy in Washington, D.C.

As part of the deal, the old $500 tax credit, which expired at the end of 2021, is reinstated for 2022. The new revamped tax credit would then be effective Jan. 1, 2023 through 2032. There is a higher $2,000 credit limit for heat pumps and biomass stoves.

The home-improvement measure is called a 25C tax credit, so-called after the section of the tax code where it launched in 2006. At that time, it was labeled a “nonbusiness energy property credit.” Now it has been rebranded as an “energy-efficient home-improvement credit.”

Mr. Barnes says the prior credit didn’t provide much incentive for homeowners to make energy-efficient investments. Roughly 1.2 million taxpayers claimed the credit in 2019, compared with 6.7 million in 2009 and 7.2 million in 2010, when it was temporarily expanded to $1,500 over the two years under the American Recovery and Investment Act of 2009.

The benefit for homeowners isn’t just tax savings.

The idea is that by making energy-efficiency improvements to their homes, taxpayers will save on energy costs, lower demand on the grid and reduce carbon emissions, says Mr. Barnes. The residential sector accounts for 21% of total U.S. energy consumption, according to the U.S. Energy Information Administration.

Some public-finance specialists say that the credits amount to a windfall for taxpayers who would have made energy-efficient home improvements anyway, and the incentive favors middle- and upper-income taxpayers. A 2018 Congressional Research Service paper showed that taxpayers with income of $200,000 and above received on average a credit that is approximately seven times the average credit received by taxpayers with income of $30,000 and below.

The energy bill provides nearly $9 billion in consumer home-energy rebates geared mostly toward lower-income households that state officials will dole out.

The bill, which will now head to the House for approval, also makes changes to the current tax credit for installing residential solar, small wind or geothermal systems. It postpones reductions to the value of the credit and includes a credit for battery-storage systems. For those projects, taxpayers would be able to snag a 30% credit through year-end 2032, retroactive to Jan. 1, 2022.

Under the expired energy-efficient home-improvement credit reinstated for this year, the tax credit is equal to 10% of what is spent on improvements, up to the $500 lifetime cap. Under the revamped credit effective Jan. 1, the credit jumps to 30% and the limit changes to $1,200 annually. This means you could claim a 30% credit on the first $4,000 you spend on energy-efficient home improvements each year.

A credit, unlike a deduction, reduces your tax bill dollar-for-dollar. Taxpayers can’t carry over unused credits to future years. The improvements have to be made to a primary residence, not a second home.

There are still sublimits each year for certain items—$600 for some air conditioners, water heaters or boilers, $600 for windows and skylights, $250 for any exterior door, and $500 for multiple exterior doors. Given the limits, the max credit on a $4,000 window job would be $600. A homeowner could put in new windows and a new water heater in one year and get the full $1,200 credit.

Generally, products must meet certain Energy Department energy star or International Energy Conservation Code standards.

Homeowners can also get a home energy audit, and take a credit of up to $150.

To claim the credit, taxpayers must attach IRS Form 5695, residential energy credits, to their 1040 tax return. Starting in 2025 taxpayers will have to include product identification numbers for certain items.

Taxation and Budget

Could Lawmakers Return in a Special Session?

Boston Herald – There’s talk on Beacon Hill of lawmakers picking up the gavel again in a formal “special session” in order to take up the $4 billion economic development bill that fell to the cutting room floor during last week’s end-of-session scramble.

“I think it’s really important that the Legislature do all it can to relieve the economic hardship specifically that families are experiencing,” Secretary of State candidate Tanisha Sullivan said Sunday on WCVB. “Coming back into session would allow them to ensure that we could hopefully advance childcare credits for families, help ensure families can get some tax credits and refunds into their pockets when they need it most.”

A return isn’t just a theoretical idea, it’s one that sources say was floated well before they gaveled themselves into a corner on Aug 1.

Lawmakers were supposed to have finished business the day before.

They sent Gov. Charlie Baker dozens of bills, but their plan to provide tax relief to residents and send low income earners $250 each was suddenly stymied by an all-but-forgotten 1986 law which requires excess revenue — maybe $3 billion this year — be sent back to taxpayers.

Now legislators are faced with the hard choice of providing permanent economic relief to residents in the form of tax cuts or complying with the will of voters from 1986. Lawmakers had briefly discussed changing that law to push out their tax plan, but eventually came down on the side of sending taxpayers their money under the 1986 law.

Returning under the special session rules isn’t too hard, in theory. Both chambers would need to submit a letter signed by a simple majority to their chamber’s clerk — that’s 21 members of the Senate and 81 members of the House of Representatives — and then the matter is voted on.

Getting that many lawmakers together right now may be hard, however.

Several the Herald tried to reach Sunday indicated by autoreply or voicemail they were already on vacation.

What’s in Democrats’ Big Bill? Climate, Health Care, Savings.

Boston Globe – Not as robust as the proposal President Joe Biden once envisioned to rebuild America’s public infrastructure and family support systems, the Democrats’ compromise of health care, climate change and deficit-reduction strategies is still a substantial undertaking.

The estimated $740 billion package — passed Sunday by the Senate and heading to the House — is full of party priorities. Those include capping prescription drug costs at $2,000 out of pocket for seniors, helping Americans pay for private health insurance and what Democrats are calling the most substantial investment in history to fight climate change, some $375 billion over the decade.

Not as robust as the proposal President Joe Biden once envisioned to rebuild America’s public infrastructure and family support systems, the Democrats’ compromise of health care, climate change and deficit-reduction strategies is still a substantial undertaking.

The estimated $740 billion package — passed Sunday by the Senate and heading to the House — is full of party priorities. Those include capping prescription drug costs at $2,000 out of pocket for seniors, helping Americans pay for private health insurance and what Democrats are calling the most substantial investment in history to fight climate change, some $375 billion over the decade.

Could Tax Cap Influence Fight over Millionaire Tax?

Commonwealth Magazine – The resurfacing of the long-dormant tax cap after 35 years was enough to kill the Legislature’s $1 billion tax relief initiative. Now some are wondering whether the cap can also put a dent in the momentum behind a constitutional amendment appearing on the November ballot to create a millionaire tax.

The tax cap limits how much tax revenue Massachusetts can collect and requires the state to return to taxpayers any amount collected above the cap.

The cap is being triggered this year for the first time since 1987, and some analysts say a millionaire tax, which could boost tax revenues by as much as $2 billion a year, could help trigger it again in the coming years.

Eileen McAnneny, the president of the Massachusetts Taxpayers Foundation, said she thinks it’s possible. And she questioned whether it made sense to impose what she considers a politically risky tax on millionaires when the cap is simply going to return a large portion of the revenue the tax will yield back to taxpayers.

“If the state is in a position to give back billions of dollars, then it probably has sufficient revenue,” she said. “Is the millionaire tax really necessary?”

Andrew Farnitano, a spokesman for the Fair Share coalition working to pass the millionaire tax, said the group has been looking at the issue. “We are trying to figure out exactly what this means,” he said.

But Farnitano said the tax cap is not a major concern because the millionaire tax is a long-term initiative. He said it’s about providing more revenue for education and transportation in the state and making the tax system more progressive by assessing a 4 percent surtax on income over $1 million.

“The Fair Share Amendment is not about one budget or one economic cycle. It’s for the long term,” he said.

Budget analysts are uncertain whether the tax cap is going to become a recurring phenomenon, but the cap’s formula provides some clues.

The tax cap is calculated by multiplying the average of the growth in wages and salaries over the previous three years by the “allowable revenue” from the previous year. If actual tax revenues exceed that amount, the excess must be returned to taxpayers on a proportional basis, meaning those who pay more in taxes get more back.