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This Week in Massachusetts – January 18, 2023

Posted on January 18, 2023

Amid Hybrid Work and Sluggish Economy, Boston’s Office Market is Hurting

WWLP – Boston’s office market ended the year on a grim note, with vacancy rates at their highest level in three decades and still climbing, amid ongoing unpredictability about the future of office work and general economic wobbliness.

Across the city of Boston, 17.6 percent of office space sat empty in the fourth quarter, according to research from Colliers International — the highest rate in the more than three decades Colliers has tracked data, research director Jeffrey Myers said. That’s almost 12 million square feet — roughly ten Prudential Towers. In older and often-less-appealing Class B space, the vacancy rate is 23.6 percent, he said.

“This is firmly a tenant’s market,” Myers and colleague Kelly Doonan wrote in their fourth-quarter report.

And some tenants are backing away. One example: Bank of America, which did not renew its lease for 196,000 square feet at 225 Franklin St. off Post Office Square in the Financial District. Employees instead are working out of the institution’s “newly-renovated office space” at nearby 100 Federal St., a spokesperson said.

Inflation is Retreating — Though It Doesn’t Feel That Way

Boston Globe – There was more good news from the inflation front on Thursday, with consumer prices in December running at the slowest annual pace in 15 months. And compared with the prior month, prices ticked down for the first time since May 2020.

The Labor Department’s Consumer Price Index report confirmed that several factors — mended supply chains, higher interest rates, and government intervention in energy markets — have combined to ease the worst inflation crisis since the early 1980s.

For consumers, milk, gasoline, air travel, and new and used cars and trucks were cheaper last month than in November.

For Federal Reserve leaders — who are on a high-risk mission to rein in inflation without causing a recession — there is now more leeway to further slow the pace of rate hikes when they next meet on Jan. 31-Feb. 1.

And for President Biden and congressional Democrats, there’s an upbeat story to tell, especially now that the president has his own classified documents debacle to deal with.

Costs for housing, goods, and services are painfully high and overall are still moving up. For many Americans, wage growth hasn’t kept up. A drop in energy prices — made possible in part by the draining of the US Strategic Petroleum Reserve — has driven much of the recent improvement, and the decline may not continue.

That said, Thursday’s report is another step in the right direction. In the months ahead, consumers may start to feel the change that economists say is underway.

Tewksbury Day-Care Closure Shows a System on the Brink

Boston Globe – For Lindsey Schofield’s daughters, Pattikakes’ was “a magical place.” The girls could run through fields, walk in the woods, and picnic with horses on the child-care center’s grounds. Pattikakes’ also happened to be located just across the parking lot from the building where Schofield works as a music therapist for the Department of Mental Health, on the campus of Tewksbury Hospital.

But at the end of October, Pattikakes’ closed its doors. After 20 years in business, having survived the COVID shutdown and the stringent safety protocols that followed, the beloved day care was beset by surging costs, plummeting revenues, and chronic staffing shortages. Owner Patti MacGillivray, 68, was working 60 hours a week covering for absent teachers, sanitizing surfaces, and doing paperwork on nights and weekends. She had raised tuition after the shutdown and knew many families couldn’t afford another rate hike, which meant she couldn’t afford to increase wages beyond $22 an hour, or offer health insurance, to attract more teachers.

“It just got to be too much,” MacGillivray said.

The challenges MacGillivray faced are severely stressing a sector that was already in crisis when the pandemic hit, shining a harsh light on a dysfunctional system that provides a crucial lifeline for working parents. The cost for families is astronomical, and workers’ wages are abysmal, especially in an expensive state like Massachusetts.

Healey Order will Require Equity Audit

State House News – Gov. Maura Healey has said that her administration will put an emphasis on equity in all the decisions it makes and on Thursday detailed the “equity audit” that she will soon launch to “get our arms around what’s happening on equity right now.”

In her inaugural speech last week, Healey said that she would direct each agency under her administration to conduct a full equity audit. And on the livestreamed “Java with Jimmy” show with host Jimmy Hills, the governor said from her State House office Thursday morning that she plans to sign an executive order soon to “create an interagency council task force that is going to look at equity across the board, across all of our commissions and departments, and across the secretariats.”

“The outcome and the purpose of this is to break down barriers, to make sure that those who have been marginalized for far too long, those who are suffering disproportionate and disparate impacts across any number of realms, are — first off, you’ve got to see it, right. To do something about something, you actually have to recognize that there is a something there that’s wrong,” she said. “I mean, we know it, right? But making sure we have that intentionality around a look. And then we can make sure that we’re working every day on the policies to address those disparities.”

Healey ticked through a litany of ways in which equity could be measured in the audit: “we can measure that in terms of ridership on transportation, public transportation, health outcomes, who’s using what in terms of government services … environmental justice, climate impacts … what’s happening with respect to housing security, food security, and back to representation, what’s happening in terms of actual numbers of people working where or appointed where.”

Ninety-One Tech Companies Have Laid Off Workers in First Two Weeks of 2023

MassLive – In the first two weeks of 2023, 91 tech companies have laid off more than 24,000 employees, according to tracking site layoffs.fyi.

The website has tracked tech company layoffs since the start of COVID-19, according to the website. In 2022, 1,024 tech companies laid off 154,336 employees. An additional 24,151 employees have been laid off in the first 16 days of 2023.

Some of the biggest recent layoffs include Twitter, Amazon and Salesforce. But tech layoffs are happening across the U.S., including Massachusetts.

On Jan. 12, Definitive Healthcare in Framingham laid off 6% of its workforce, or 55 people. The day before Embark, which offers dog DNA tests, laid off workers. And Whoop laid off 4% of its workers this year, according to Business Insider.

Mayor Wu Creates Office to Help City’s Youngest Residents

Boston.com – Boston Mayor Michelle Wu took her latest steps to invest in the city’s youth on Thursday.

Wu announced in a press conference the creation of the Office of Youth Engagement and Advancement, or OYEA, an office tasked with promoting youth voices in city decision-making and ensuring positive youth development. Wu also announced that the city will be giving $1.5 million in Youth Development Fund grant awards to 60 nonprofit organizations.

“We know that a healthy city is one that doesn’t just understand the importance of empowering its young people, but takes action to invest, and to do so with urgency,” Wu said.

The Office of Youth Engagement and Advancement will partner with Boston Public Schools and community centers and will be tasked with ensuring young people’s voices are heard in city decision-making and positive youth development, coordinating youth programming, and conducting a youth survey and summit.

Warren, Markey Outline ‘Repeated Failures’ in MBTA Oversight

Boston Herald – Senators Elizabeth Warren and Ed Markey demanded “answers and accountability” from the Department of Public Utilities in a new letter, which outlines the agency’s “repeated failures” in providing effective safety oversight of the MBTA.

The eight-page letter, sent to DPU Chair Matthew Nelson, is framed as a follow-up to the two senators’ federal oversight hearing on “mismanagement” and safety failures at the MBTA and its state safety oversight authority.

At an October Senate hearing in Boston, and in response to questions that followed from Warren and Markey, Nelson “made a series of promises and commitments about DPU efforts to improve its oversight” of the MBTA, the letter states.

“It is critical that the DPU keep these promises and provide transparency about its progress in doing so,” the letter said, “particularly since MBTA’s safety and performance problems have persisted in the wake of the hearing.”

At the hearing, Nelson said the DPU was working to increase its resources to conduct more field work and auditing of the MBTA, and beef up staffing in its rail transit division, the letter stated.

What it Takes to Streamline State Regulations

Commonwealth Magazine – To judge the Boston Globe’s op-ed page, public officials, environmental advocates, and business leaders all seek permitting reform, some for protection of a warming planet, and others for provision of a hot meal downtown.  Rather than advocating for a third category of favored cause or constituency, I suggest some principles for regulatory reform that can work for all.

Regulatory reform is often referred to as “streamlining.” That word does a lot of work: to streamline is not to dam, divert, or dredge a river; it is to remove those obstacles that cause turbulence in the waters’ flow.  In less metaphorical terms, proper regulatory reform results in more protection and less process. In more practical terms, it allows the Commonwealth to build what needs to be built and to save what needs to be saved.

To realize these matched-pair goals requires regulations to adhere to five principles, captured by the acronym S.P.A.C.E. – Simplicity, Predictability, Accountability, Consistency, and Even-Handedness.  To be truly streamlined, to avoid unnecessary turbulence, our regulatory processes should give this SPACE to regulated entities unreservedly, while still protecting special spaces and places unfailingly.

Taxation

‘Taxachusetts’ Revived in New England After Millionaire Surtax

Bloomberg – Tax advisers have long said it’s inadvisable to die in Massachusetts — one of the least generous states for estate levies — but now it may also be worth thinking twice about living there.

At least that may be the case for those anticipating earning over $1 million anytime soon.

Massachusetts voted in favor of imposing a 4 percentage point surtax on taxable incomes more than $1 million after a closely fought campaign. The levy, approved by 52% of voters in November, kicked in at the start of this year.

“Certainly, some of our clients have talked to us about how do they leave the state,” John Capone, managing partner for the Boston hub at accounting giant KPMG, said in a recent interview. “That certainly is something that we knew was going to have an impact.”

The surtax revived memories from decades ago when the tax burden was so high that citizens’ groups dubbed the commonwealth “Taxachusetts.” Back in the 1970s, the share of income going to state and local taxes amounted to almost 14%, the third-highest in the nation.

Springfield Plans to Trim Next Year’s Taxes with Treasury Note Returns

MassLivev – Mayor Domenic J. Sarno said the city plans to invest almost $45 million of its money into federal Treasury notes and use the returns to lower residents’ tax bills next year.

Thanks to the Federal Reserve’s inflation-fighting moves, the one-year U.S. Treasury interest rates have increased about ten-fold from where they hovered at the beginning of 2022, the city said.

A year-long, $45 million investment from the city’s stabilization reserve account into Treasury notes that have an interest rate of about 4.68% would bring the city more than $2 million in returns, city officials said at a press conference Thursday.

“It’s really unprecedented,” Sarno said. “This money comes off the interest of the money that we’re putting into our Treasury bills. We make over $2 million and it’s dedicated directly for the (fiscal year) 2024 budget as one of the many different avenues we will go down to continue tax relief.”

Sarno added the city is the first in the state to use high interest rates to lower its residents’ tax bills.

During the news conference, Sarno said that this plan has been in the works for a few months after City Council Attorney Michael Fenton reached out to his administration. Sarno also credited the work of Chief Administrative Officer Timothy J. Plante and Treasurer Stephen Lonergan.

Sarno said the move is not a response to City Council’s request to suspend the trash fee for fiscal year 2023, which City Councilor and mayoral candidate Justin Hurst proposed.

Health Care

Governor Healey and Senate President: Addressing Hospital Staff Shortages Is a Priority

Framingham Source –  MetroWest Medical Center in Framingham has diverted ambulances for the past three consecutive weekends, due to a shortage of nurses and staff in their labor & delivery unit. The chair of the department recently submitted his resignation, too.

Last month, the Tenet Healthcare-owned hospital combined the ICU/CCU & CVU united due to a shortage of nurses and staff.

Yesterday, Governor Maura Healey visited Framingham for the first time since taking the oath of office.

In her inauguration speech Gov. Healey said “Our health system is the envy of the world. Yet our hospitals are desperate for staff. Patients are boarding in emergency rooms — spending hours and days in an agonizing wait for care.”

SOURCE asked the Governor what her administration can do to combat the health-care worker shortage, and what the Massachusetts Department of Public Health can do to ensure that critical care services are available.

“One, I think it does speak to the real issues around workforce. We know a lot of industries, a lot of professions have really suffered in terms of workforce shortages. We certainly have seen that most acutely when it comes to health care. And I think that’s what you’re seeing here and in other places, a real workforce shortage issue. So, it is something that we are going to prioritize and work with others on because it’s so important to the health and wellbeing of our residents, to our communities and really to this state,” said Healey.

Children’s Tylenol and Motrin Shortage ‘Extremely Challenging’

Boston Herald – As Bay State families desperately search for cold and flu medicine for their children, Massachusetts congressional members are pushing for answers from Johnson & Johnson about the major shortage.

Local residents are facing a shortage of infant and children’s Tylenol and Motrin amid this challenging cold and flu season, which has been compounded by a surge of RSV and COVID, the lawmakers wrote to Johnson & Johnson CEO Joaquin Duato on Thursday.

“As the manufacturer of both of these products, Johnson & Johnson has a critical role to play in addressing this shortage,” wrote the four legislators — Rep. Ayanna Pressley, Sen. Elizabeth Warren, Rep. Katherine Clark, and Rep. Lori Trahan.

“Families in the Commonwealth are relying on access to ibuprofen and acetaminophen in order to care for their babies,” the lawmakers added. “In recent public statements, Johnson & Johnson reported an increase in production to meet growing demand. However, our constituents are still visiting store after store only to find empty shelves.”

The congressional members asked for information from Johnson & Johnson to better understand the scale and scope of the shortage. The data they’re seeking is key for collaborating with hospitals, community health centers and other health care providers to support local families, they said.

“While medical providers are doing their best to triage in-person care and provide guidance on at-home remedies for monitoring and treatment, there is no doubt that these medicines are essential,” the legislators wrote.

More People Than Ever Buy Insurance on Healthcare.gov

WBUR – The Affordable Care Act health insurance marketplaces just hit a record: Nearly 16 million people signed up for the insurance also known as Obamacare.

That is about a million more people than signed up for ACA health insurance last year, and enrollment is still open on Healthcare.gov and in most state marketplaces until Sunday, January 15. (Enrollment is open until January 31 in California, Washington, D.C., New Jersey, New York and Rhode Island. In Massachusetts, it is open until January 23.)

What’s driving the upward trend? The big reason is that the plans are cheaper for people than they used to be. The federal government has pumped billions of dollars in recent years into subsidies to keep costs down for consumers. Health officials say 4 out of 5 enrollees qualify for plans that cost $10 or less per month. And 5 million people who are uninsured qualify for zero dollar premium plans, according to a recent analysis from the Kaiser Family Foundation.

Another reason why more people are signing up is likely because there’s more logistical help. The Affordable Care Act created a program of “navigators” – people across the country who are trained to help consumers understand their options and get signed up for a health plan. It’s a service paid through government grants.

Where Health Insurance Premiums are Rising and Falling

Axios – The cost of health care has been rising for years, but where you live heavily influences how much you pay, data compiled by consumer research company ValuePenguin shows.

Private health insurance premiums are increasing in 36 states next year, with the cost of an individual health insurance plan for a 40-year-old on a silver plan increasing by 4% to an average cost of $560 a month.

In Georgia, health insurance costs will jump more than 20%, but will cost a 40-year-old buying a silver plan $474 a month.

Those in Wyoming will see the highest costs, with the same level plan going up 15% to a cost of $882 a month.

Meanwhile, in New Hampshire, costs for that same plan will increase by 3% next year but will be the lowest in the nation at $372 a month.

Insurers Are Fighting To Protect Their Medicare Fraud

Lever News (Opinion)This year, for the first time, a majority of seniors eligible for Medicare will be on privatized Medicare Advantage plans. Now, the insurance companies raking in giant profits from these for-profit plans are mounting a pressure campaign and planning to sue the government to protect years of overpayments they’ve extracted from Medicare.

cash cow for big insurers, the for-profit version of Medicare has not been a great deal for the American public. Medicare Advantage plans cost the government more per beneficiary than traditional Medicare, and often wrongfully deny care.

What’s more, federal audits have found Medicare Advantage plans systematically overbilling the public — mostly by billing as if patients are sicker than they really are, a scheme known as “upcoding.” Officials estimate the private plans collected $650 million in overpayments from 2011 to 2013.

Diversity, Equity and Inclusion

Boston Development Would Include Partnership with Historically Black College

Boston Herald – A development team that bid on land near the Boston Convention Center is looking to bring the footprint of a historically Black college into Massachusetts for the first time, through a partnership with Pensole Lewis College of Business and Design.

Pensole Lewis College, based in Detroit, would have space in, and a relationship with, another “first-of-its-kind in Boston,” a Black Chip Art Gallery, “where lesser-known artists of color will be able to display their work,” said Tavares Brewington, founder of Street2Ivy, who partnered with Cronin Development on this proposal.

Pensole, Michigan’s only historically Black college or university, was founded by the self-described most prominent Black footwear designer in the world, D’Wayne Edwards, who was the lead designer of the Nike Jordan brand. The college had failed financially, Brewington said, until Edwards was able to reinstate it with the support of investors last year.

It’s now looking to expand its footprint to Boston, according to Cronin’s bid submission.

Advocates Push Healey for More Latino Representation

Boston Globe – While commending Governor Maura Healey’s commitment to equity and hiring of diverse senior officials, leaders in the Latino community are also calling attention to the fact that the administration has not yet named a Latino to a Cabinet-level position.

“Historically, Latinos haven’t been as equally represented in the inner circle of higher leadership, in any sector not just government,” said Phyllis Barajas, the founder and CEO of Latino mentoring and leadership program Conexión. “It takes intentionality to do so, and it takes time.”

As Healey considers her final Cabinet picks and staffs up her nascent administration, some Latino advocates are pushing the new governor to ensure her administration reflects the population it serves.

Leaders including Barajas have crowd-sourced and created a list of more than 140 qualified candidates for roles in the administration using an online form. A statewide coalition has been communicating directly with Healey’s and Lieutenant Governor Kim Driscoll’s staff since December. And last Monday, the state’s Latino Advisory Commission penned a letter urging the administration to consider qualified and diverse candidates for top jobs.

In a statement, a spokesperson for Healey pointed out five members of the administration’s senior staff who identify as Latino, and said the administration is also creating a position in the governor’s press office that will focus on multicultural media.

Healey Tells MLK Breakfast Audience about Equity Plans

Boston Herald – Perhaps not wanting to overshadow the subject of the moment, the governor didn’t use her appearance at an annual event dedicated to the life and work of the Rev. Dr. Martin Luther King Jr. to announce any new policy proposals.

Instead, the 73rd Governor of Massachusetts used the meeting as an opportunity to further spread word of a plan she unveiled last week, one which she says will help her understand how well the government she now leads is working for its most vulnerable residents.

“I believe that Massachusetts’ greatest strength is our people,” Gov. Maura Healey said. “But there is so much more that we can do to help people in this state. People who have been held back for far too long: people of color, people with disabilities, veterans, women, our LGBTQ+ residents and so many who continue to face barriers.”

The first openly gay person and first woman elected to lead the Commonwealth, who took the stage briefly during the 53rd Annual Martin Luther King Memorial Breakfast in Boston Monday, said she will order the formation of an assessment task force to measure the work of state programs and see how well they are responding to the needs of traditionally marginalized communities.

Sustainability and Climate

Despite Delays, Hydro-Quebec Still Ready to Honor its Massachusetts Contract

Commonwealth Magazine – It’s been 3 ½ years since Massachusetts utilities negotiated a massive power purchase agreement with Hydro-Quebec, and the electricity still isn’t close to flowing because of repeated delays in building a transmission line from the Canadian border down through Maine.

Hydro-Quebec officials say they are ready to deliver the power as soon as the transmission line is completed, but an upcoming change in administration at the Quebec-owned company and competing interests within the province itself are raising questions about the province’s ability to deliver down the line.

The Massachusetts contract with Hydro-Quebec is crucial to the state’s efforts to tackle climate change. Offshore wind is the homegrown industry grabbing all of the attention, but hydroelectricity from Quebec is the steady, reliable base on which Massachusetts can build a green electricity supply.

The contract with Hydro-Quebec promises a steady stream of electricity that should reduce the need for power generated by fossil fuels. The power comes from a series of 28 dammed reservoirs, and is not subject to daily fluctuations in wind or sunshine.

Groups Band Together To Focus On Energy, Cost Of Living

State House News –  Business-minded, small-government groups from each New England state think it’s critical to “start working together as a region” to address cost of living issues, high energy prices and economic competitiveness.

The groups met at the Hampshire House in Boston on Tuesday to discuss bringing more natural gas to the Northeast states and relying on nuclear energy, rather than wind and solar renewable alternatives, to prevent energy shortages and bring down home heating costs.

“There might be an environmental left movement out there, but there’s a freedom, pro-energy movement forming here in New England as well,” said Mike Stenhouse, founder and CEO of “free-enterprise public policy think tank” Rhode Island Center for Freedom and Prosperity.

Leaders of the groups also advocated generally for broad-based tax cuts, including calls from the Massachusetts Fiscal Alliance to eliminate the estate tax and inventory tax completely, and “soften” the corporate tax.

Attendees included representatives from the Massachusetts Fiscal Alliance, the New England Legal Foundation, Maine Policy Institute, Ethan Allen Institute in Vermont, Rhode Island Center for Freedom and Prosperity, the Yankee Institute in Connecticut, the Josiah Bartlett Center for Public Policy in New Hampshire, Americans for Prosperity, and WindAction Group.

Boston-Area COVID Wastewater Levels Plunge but ‘Numbers Remain High’

Boston Herald – The Boston-area COVID wastewater levels have taken a plunge after a recent surge amid the highly contagious XBB.1.5 omicron variant, as the state reported a 7% dip in new virus cases over the last week.

While the Boston-area viral sewage levels have fallen, local health officials are reminding residents that the key COVID data indicators remain high.

The virus wastewater data has helped predict COVID waves throughout the pandemic. The Boston-area COVID wastewater levels had been spiking in recent weeks during the holidays, but the data took a downward turn over the last week.

The seven-day average in the south-of-Boston region has fallen to 1,501 viral copies per milliliter, which is down from 2,009 viral copies in the report last week. The average on Thanksgiving was 721 viral copies.

The north-of-Boston region’s seven-day average has dropped to 986 viral copies per milliliter, a significant decrease from 2,023 viral copies on New Year’s Day. The average on Thanksgiving was 483 viral copies.

Boston Launches COVID-19 Wastewater Surveillance Program

Boston.com – Boston is launching its own efforts to monitor levels of COVID-19 in the city’s wastewater, a step officials say will boost their ability to respond to the ongoing challenges presented by the virus.

The move comes as city officials have raised concerns about rising cases and about the Centers for Disease Control and Prevention raising Suffolk County’s community risk for COVID-19 from medium to high.

The Boston Public Health Commission said Wednesday the wastewater surveillance program will use samples gathered at 11 manholes across the city in order to get “more localized estimates” of how much of the virus and its variants are circulating across Boston’s neighborhoods.

Having 11 testing sites at manholes in Boston’s neighborhoods — Brighton, Back Bay, Charlestown, Dorchester, East Boston, Hyde Park, Jamaica Plain, Mattapan, Roslindale, Roxbury, and South Boston — will allow for a “detailed understanding of how COVID-19 is affecting different neighborhoods,” according to the commission.

“This data will enable BPHC to respond to the COVID-19 pandemic with more precise interventions for communities with high or rising levels of virus,” the commission said.

Previously, the city relied on the COVID-19 wastewater data generated by the Massachusetts Water Resources Authority.

State Lawmakers Asking the Department of Public Utilities for Answers on High Costs

Spectrum News – In response to projections about higher energy costs Massachusetts, several state lawmakers have sent letters to the Department of Public Utilities asking them to reassess how the utility rates are set in the state.

The most recent letter can be found here. Representatives are awaiting a response from the DPU.

This comes after an original letter sent on October 11, 2022 asking the DPU to halt the widely reported January 2023 rate increase. The department replied on October 26, 2022.

The department’s original response outlined steps the DPU has taken for customers and lower energy costs and identified contributing factors to winter prices.

Utility companies said rates are controlled by the prices they can find on the global market, which are at a historic high.

“The fact in the matter is the system is broken here in Massachusetts,” State rep. John Barrett (D-Berkshire) said.

“If there’s a way to lower these rates in a very timely manner, I think it’s important that it gets done,” State Sen. Paul Mark (D-Berkshire) said.

In the letters, lawmakers are focusing on the state agency, asking them to do more to get utility companies to lower costs. But, an Eversource spokesperson said the key is understanding how the process of setting the rates works, and they’re controlled by the prices utility companies can find on the global market.

Education

Massachusetts Attorney General Tells Supreme Court Student Loan Forgiveness is Legal

MassLive – The Attorney General’s Office of Massachusetts filed a legal brief with the Supreme Court on Wednesday in support of the Biden administration’s attempts to cancel federal student loans, according to a news release.

The Massachusetts AG’s office said it is leading a coalition of 22 attorneys general in filing an amicus brief in two Supreme Court cases involving the debt cancellation plan: Biden v. Nebraska and Department of Education v. Brown.

In August, the Biden administration unveiled a forgiveness program for federal student loans that was later blocked from providing borrowers with relief after a federal court in Texas put the program on hold in November.

The debt forgiveness plan called for canceling $10,000 in debt for those making less than $125,000 or households with less than $250,000 in income. Pell Grant recipients, who typically face the most financial hardship, would get an additional $10,000 in debt forgiven.