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This Week in Massachusetts – March 21, 2023

Posted on March 21, 2023

AIM Vice President Opposes Raising Corporate Tax

Boston Globe – (Sam Larson is Vice president of Government Affairs at Associated Industries of Massachusetts)

In today’s extremely mobile economic climate, states with the competitive edge get the businesses. If policymakers want to grow the economy and attract employers to Massachusetts, they should not raise the corporate income tax to 9.5 percent. The Commonwealth is in competition with 49 other states to grow and retain businesses and we need to start acting like it. Past economic performance will not guarantee future results.

Regardless of how you may feel about tax policy, the hard reality is that other states want our businesses to relocate, and they are providing ample incentives to draw them away. Governor Maura Healey herself said at the January Associated Industries of Massachusetts Executive Forum, “We need tax reform. We need tax relief. Making Massachusetts more competitive and attractive means doing just that.” Relief means reducing taxes, not increasing.

Massachusetts Hospitals Pay $1.52 Billion in Temporary Labor Costs

WGBH – Massachusetts hospitals paid a staggering $1.52 billion last year to hire temporary hospital workers, mostly “travel nurses,” amid a labor shortage that contributed to record financial losses for many institutions.

The exponential growth of labor costs is included in a new report issued by the Massachusetts Health and Hospital Association on Monday. The report shows in fiscal year 2019, prior to the pandemic, hospitals spent $204 million on temporary staff. That number skyrocketed in FY2022 to $1.52 billion — a 610% increase.

“It is staggering,” said Daniel McHale, vice president of healthcare finance at MHA. “And … it’s not unique to Massachusetts.”

McHale, who helped prepare the report, cited a Massachusetts Center for Health Information and Analysis report that found four in five hospitals lost money during the last fiscal year.

“The net result is financial losses for hospitals,” he said. “So, we’ve had the worst kind of financial performance in many years, even during the pandemic years.”

Another MHA report, issued in October, estimated that there are 19,000 vacancies at hospitals across the state. Nurses have gone on strike across the country to protest low staff-to-patient ratios and poor working conditions, from the monthslong strike at St. Vincent’s Hospital in Worcester to New York City, where 7,000 nurses walked off the job in January.

Throughout the pandemic, many hospitals hired registered nurses and other hospital staff through “traveler” agencies to fill gaps — temporary gigs that often paid much higher hourly salaries than what staff nurses and clinicians earned. It’s a dynamic that can create resentment among staff nurses, on top of the burden to hospital budgets, as GBH News previously reported.

T Continues to Dangle $10,000 Sign-On Bonuses to Hire Dispatchers

WBUR – With train service still running at diminished levels, staffing efforts in the MBTA’s operations control center have plateaued since December, and the agency will continue to offer a $10,000 sign-on bonus through June to try and attract the dispatchers critical to reversing months-long service cuts.

Officials on Thursday reported a significant year-over-year boost in hiring across the MBTA, which like many other transit agencies has struggled with major workforce challenges since COVID-19 hit, while simultaneously indicating that they are still short on heavy rail dispatchers and bus drivers.

As of Jan. 26, the T had 27 Orange, Red and Blue Line dispatchers working in its operations control center, MBTA Chief Human Resources Officer Tom Waye said at a workforce subcommittee meeting. That’s the same number of dispatchers described as on the job in each update since early December.

Waye’s presentation said the MBTA is “targeting two additional full-time dispatchers and five spare dispatchers,” up from the one full-time dispatcher and five spare dispatchers he cited as the goal last month.

The starting salary for a heavy rail dispatcher is $106,267.

MBTA managers have not made clear what staffing milestones they need to achieve to reverse the weekday service cuts to the Red, Orange and Blue Lines that the MBTA implemented in June, when the Federal Transit Administration said the shorthanded dispatcher workforce represented a safety problem.

Adding another layer to the issue, MBTA spokesperson Joe Pesaturo said last week that “restoring heavy and light rail service levels is largely dependent on the availability of motor persons to operate the trains.”

Massachusetts, California Moving in Different Directions on Gig-Worker Issue

Commonwealth Magazine – Massachusetts and California for now are on different tracks when it comes to classifying gig workers as independent contractors or employees. Whether the question is tangled in west coast courts or marching up Beacon Hill, it’s not going away in either state any time soon.

For a time, it looked like Massachusetts and California were on the same path. Both have a specific test in state law to determine whether someone is an independent contractor and therefore exempted from an array of benefits and protections. Lawsuits in each state, arguing that treating rideshare and app-based delivery workers as independent contractors violated the law, prompted record-setting ballot campaigns to settle the question.

In 2020, voters in California approved a ballot question backed by Uber, Lyft, and other platforms that would allow the companies to classify their gig workers as independent contractors rather than employees.

Massachusetts seemed poised to follow California’s lead in 2022, when a similar coalition gathered signatures for a similar ballot question. Rideshare companies, gesturing at California’s referendum, said the Massachusetts question’s passage would mean voters and drivers overwhelmingly wanted to retain flexibility through independent work, but labor unions argued it was an attempt to circumvent employment protections by throwing hundreds of millions of dollars into a misleading campaign.

Fed Spotted Big Problems Before Collapse of Silicon Valley Bank

Boston Globe – Silicon Valley Bank’s risky practices were on the Federal Reserve’s radar for more than a year — an awareness that proved insufficient to stop the bank’s demise.

The Fed repeatedly warned the bank that it had problems, according to a person familiar with the matter.

In 2021, a Fed review of the growing bank found serious weaknesses in how it was handling key risks. Supervisors at the Federal Reserve Bank of San Francisco, which oversaw Silicon Valley Bank, issued six citations. Those warnings, known as “matters requiring attention” and “matters requiring immediate attention,” flagged that the firm was doing a bad job of ensuring that it would have enough easy-to-tap cash on hand in the event of trouble.

But the bank did not fix its vulnerabilities. By July 2022, Silicon Valley Bank was in a full supervisory review — getting a more careful look — and was ultimately rated deficient for governance and controls. It was placed under a set of restrictions that prevented it from growing through acquisitions. Last autumn, staff members from the San Francisco Fed met with senior leaders at the firm to talk about their ability to gain access to enough cash in a crisis and possible exposure to losses as interest rates rose.

It became clear to the Fed that the firm was using bad models to determine how its business would fare as the central bank raised rates: Its leaders were assuming that higher interest revenue would substantially help their financial situation as rates went up, but that was out of step with reality.

How City and State Officials Braced for the Worst after Silicon Valley Bank Failure

Boston Globe – The texts and e-mails began trickling into state economic secretary Yvonne Hao last Thursday morning. Her friends in the startup and venture capital world, where she had spent most of her career before joining Governor Maura Healey’s administration, worried that Silicon Valley Bank might be in trouble.

SVB had been the main bank for PillPack, the high-flying online pharmacy where Hao served as chief financial officer and chief operating officer, before the Somerville startup was sold to Amazon in 2018.

By Friday, federal regulators had shuttered SVB, making it the second-largest bank failure in US history. Hao’s first reaction bordered on disbelief.

“If you’re from the venture startup world, Silicon Valley Bank is pretty ubiquitous, and never did I think that a) it would fail and that b) it would fail so quickly,” she said. “From there, it was kind of all hands on deck.”

As the bank’s customers desperately tried to pull their money out, Hao ― along with city and state officials ― scrambled to come up with contingency plans to help the scores of Massachusetts startups, nonprofits, and other businesses that had money tied up in SVB. Many had to pay bills and meet payroll in the coming days.

Led by Hao, officials worked all weekend on a Plan B. Ultimately, the Federal Deposit Insurance Corporation engineered a rescue, by guaranteeing all deposits, even those in excess of the agency’s $250,000 guarantee.

But that was far from a sure thing last Friday, so city and state officials did what they could in an effort to mitigate the potential financial disaster. They cobbled together about $50 million in emergency loan funds and lines of credit, and engaged Attorney General Andrea Campbell’s office to determine whether it was possible to waive state-mandated penalties for employers who could not meet payroll. The short answer: No, but the attorney general had wiggle room when it came to enforcement.

A Boston Startup Taught AI to See Like Humans. Now, Big Brands are Using It to Sell.

Boston Globe – If you’re shopping for a cold drink online, picture these options: An aerial view of a High Noon hard seltzer can over ice. A White Claw on a ledge by a pool. A sideways can of Truly on a wood table.

A Boston startup says it can explain which picture will appeal most to millennial women — the High Noon image — and it can do the same for middle-aged men, college students, or first-time homebuyers, as well as for products from motorcycles to sneakers to toothbrushes.

As more consumer decisions happen online, sales have become dependent on the way products are photographed, as opposed to how they appear on a store shelf. Different variations of product images, no matter how big or small, can attract — or repel — potential buyers.

“When you think about the digital economy … it runs on images,” said Boston tech entrepreneur Jehan Hamedi, who has worked in artificial intelligence and consumer sentiment for the past decade. “It is powered by trillions of commercial images that showcase products, showcase brands.“

Hamedi figured retailers would be interested in software that could evaluate online images in a way that allowed them to anticipate which ones would drive the most sales among different audiences.

“To predict what someone wants to see, I realized you needed to come up with a way to see through somebody’s eyes at scale,” he said.

Over several years, Hamedi developed an artificial intelligence engine that he claims can do just that. It “knows” which photos will appeal to specific groups of people and, even more importantly, why.

Hamedi launched a company, called Vizit, around the technology in late 2021 and raised $10 million from investors last fall. Today, big brands including L’Oreal, Keurig, and the maker of M&M’s and Orbit gum use the software to make marketing decisions.

Health Care

Medical Residents at Mass General Brigham Could Soon Unionize.

Boston Globe – Medical residents and fellows at the state’s largest health system are preparing to unionize, frustrated that their salaries have not kept pace with the rising costs of housing and child care. If successful, the effort would create one of the largest unions of medical residents and fellows in the country, part of a wave of such unionizations.

More than 2,500 residents and fellows at multiple Mass General Brigham hospitals would join the Committee of Interns and Residents, or CIR, at the Service Employees International Union, including trainees at Massachusetts General Hospital, Brigham and Women’s Hospital, Mass Eye and Ear, Newton-Wellesley Hospital, Salem Hospital, and Spaulding Rehabilitation Hospital Boston.

Organizers say they hope to file paperwork and hold an election to solidify the union before the end of the academic year in June.

Representatives from CIR-SEIU said its membership has ballooned by more than 50 percent since 2020, to 25,000 members, as the pandemic put unprecedented strain on hospital staff. The union added 4,700 members in the last 11 months alone. Membership currently includes Stanford Health Care, University of California, San Francisco Medical Center, Montefiore Medical Center in New York, and Children’s National Medical Center in Washington, D.C.

In Massachusetts, Boston Medical Center and Cambridge Health Alliance have been unionized for several years.

Abortion Pill Lawsuit Could Change How the FDA Approves Drugs

WBUR – A Texas lawsuit attempting to ban pills used in medical abortions could have an impact on how the FDA approves medicines as a whole.

“To the extent that all of these things become a political question or a judicial question rather than a question of science and medicine, we’re in a very dangerous place,” physician Amanda Banks says.

The uncertainty could throw the pharmaceutical market into chaos.

“For the industry, the results could be catastrophic. For patients, it stands to be even more so,” Banks adds.

Coalition Targets Pharmacy Benefit Managers

State House News – A new group of patient advocates, business leaders and independent pharmacists will wade into debate this term over the role of pharmacy benefit managers at a time when prescription drug prices are on the rise.

Taking aim at a topic where lawmakers have been unable to achieve consensus, founding organizations launched the “Patients Not PBMs” coalition on Thursday and said they would work together to press for legislation to subject the industry subset to additional transparency.

Policymakers and regulators have long weighed reforms to oversight of pharmacy benefit managers, which negotiate between drug manufacturers, pharmacies and health plans.

“The time has come to simplify the pharmacy benefit, including reimbursement to pharmacies, and to increase transparency so that PBMs cannot manipulate the system to their own advantage at the expense of employers and patients,” Massachusetts Independent Pharmacists Association Executive Director Todd Brown said in a statement. “By holding PBMs’ feet to the fire, we can do just that.”

Members of the Patients Not Profits coalition include the Cambridge Chamber of Commerce, Lupus Foundation of New England, RARE New England, Diabetes Patient Advocacy Coalition, Patient Pocket Protector Coalition, Institute for Pediatric Innovation, and PhRMA.

Opponents contend that PBMs serve as “middlemen” and drive up overall health care spending — a trend state government has struggled to control — while directing patients toward larger retail pharmacies with which they are aligned.

Budget and Taxation

Implementing Immigrant License Law Will Cost $28 Million Under Healey Plan

Boston Herald – The governor’s budget predicts the state will spend $28 million implementing a new law that will allow illegal immigrants to obtain a license to drive.

But the Registry of Motor Vehicles will need an infusion of cash to pull it off by July 1 start date, Gov. Maura Healey’s budget states.

“In support of this new law, (the budget) adds $28 million in funding to expand service hours at select RMV locations, add new customer service representatives and road test examiners to support additional applicants, and bolster support staff to ensure records and credentials are properly vetted and processed,” a budget briefing released by Healey’s office reads, in part.

The Work and Family Mobility Act, passed into law by the Legislature in early June of 2022 over the veto of former Gov. Charlie Baker, will allow immigrants who cannot demonstrate their legal status to nevertheless use documentation from their home country to apply for and receive driver’s license.

Diversity, Equity and Inclusion

Healey Named among USA Today’s Women of the Year

Boston Herald – It’s maybe a bit of a layup for the newspaper, but USA Today has announced that the former point guard turned attorney general and now Gov. Maura Healey made the cut as one of their Women of the Year.

“Healey, the first woman and openly LGBTQ person to be elected as Governor in Massachusetts history, is being recognized for being a trailblazing leader for LGBTQ+ rights, reproductive rights as well as for championing for justice and equality,” a spokesperson for the Gannett owned newspaper said with the announcement.

After nomination by readers, USA Today staff and a panel of experts, the honor is presented to women “who have broken barriers, including the stratosphere, to make significant change in their communities and around the world,” according to the company.

Healey’s selection for the honor comes alongside that of former First Lady Michelle Obama, former Supreme Court Associate Justice Sandra Day O’Connor, actress and philanthropist Goldie Hawn and her foundation, the women of the 118th U.S. Congress, and NASA Astronaut Col. Nicole Mann, among others.

Women’s Caucus Lays Out Objectives For New Session

State House News – Now counting nearly one-third of the Legislature as members, the Massachusetts Caucus of Women Legislators on Monday identified its top five legislative priorities and laid out the three overarching priorities that will guide its work for the new two-year session.

Promoting economic opportunity for women and eliminating barriers, dealing with racial and gender disparities in health care, and empowering women in government are the strategic objectives of the caucus, which now includes 63 members of the House and Senate.

With its five main priorities and a slate of 20 other bills it endorsed, the caucus said it hopes this session to make progress on issues that disproportionally impact women, including postpartum depression care, access to menstrual products and child care options for women running for office.

“We are proud of the expansive yet focused work of the Women’s Caucus and are grateful to our colleagues for participating in this process to refine our priorities,” said caucus co-chairs Sen. Joan Lovely of Salem and Rep. Hannah Kane of Shrewsbury. “The Caucus is a unique entity on Beacon Hill — representing over 31% of the full legislature, with a bipartisan and bicameral group of members, we are particularly poised to effectively tackle the issues facing women and girls in the Commonwealth. We are excited to work to advance our strategic and legislative priorities this session.”

A process that involved Lovely, Kane, Reps. Jessica Giannino, Vanna Howard and Meghan Kilcoyne, and Women’s Caucus Executive Director Nora Bent settled on five priority bills, which the caucus had no order of prioritization.

Sustainability and Climate

Wu Announces Steps to Cut Oil and Gas from Boston Buildings

Boston Globe – Mayor Michelle Wu said she is working to adopt a new climate-friendly building code that would strongly discourage the use of fossil fuels in new construction in Boston.

The move, which must be approved by the City Council, would make Boston by far the largest city in the state to implement the code since it was finalized by the state energy department late last year as an option for communities looking to reduce greenhouse emissions.

Fossil fuels burned for heat and appliances in buildings account for nearly a third of emissions statewide and nearly 75 percent of Boston’s emissions. The specialized code stops short of banning the use of fossil fuels in new buildings but adds costly, climate-friendly requirements for developers wanting to install gas connections, like solar panels and additional electric wiring.

In announcing her hopes for the new code, Wu also said she is designating $10 million to help affordable multifamily buildings become more energy efficient.

“What is abundantly clear is that all of our challenges and opportunities are interrelated,” she said at a Thursday news conference. “Making our buildings more energy efficient doesn’t just help us preserve our planet. It also improves indoor air quality, lowers operating costs, and reduces the energy costs burden for residents so that all of our housing is more affordable.”

Healey Wants to Dedicate Funds to Make State ‘Global Leader’ in Clean-Energy Economy

Herald NewsGov. Maura Healey is proposing to dedicate 1% of the state’s budget to help make Massachusetts a “global leader in transitioning to a clean-energy economy.”

It’s a first in state history, she said, and she chose New Bedford to announce the proposal Thursday morning at the Massachusetts Clean Energy Center’s New Beford Marine Commerce Terminal.

That 1% in dedicated funding would go to the state Executive Office of Energy and Environmental Affairs.

She also unveiled a proposal to triple the Massachusetts Clean Energy Center’s budget to further that effort, including in the pursuit of wind energy.

“One day we will power our lives with wind energy, and become a world leader in off shore wind technology. That’s what our budget seeks to do,” she said.

The New Bedford Marine Commerce Terminal, which was completed in 2015, is the only United States port built expressly to support the offshore wind industry.

“New Bedford made history with the construction of the Marine Commerce Terminal and will make history once again when New Bedford, Massachusetts becomes the global capital of the offshore wind industry,” Healey said.

National Grid Proposes Big Electric Rate Decrease in Massachusetts

WBUR – After a winter of sky-high electricity prices, National Grid announced on Thursday that it’s seeking a big rate decrease for its Massachusetts customers.

In a filing with the Department of Public Utilities this week, the company proposed decreasing the basic supply rate — the raw cost of the electricity you use — by 58% beginning May 1.

If approved next week, the average consumer who uses 600 kilowatt-hours of energy per month would see their bill decrease by about $115, the company says.

“We’re pleased that these new electric rates will provide some relief for customers,” said National Grid spokesperson Bob Kievra. “We certainly recognize that high energy costs have posed a real challenge for many of our customers this winter.”

Massachusetts ratepayers who are on the basic supply rate with utilities like National Grid and Eversource see the the cost of electricity change twice a year. To calculate rates, utilities estimate how much power they’ll need for the next six month period, and then sign contracts with various suppliers.

Utilities do not make a profit on the electricity they provide you, so the price they pay in the market is passed on directly to you. They make their money by building poles and wires, and delivering electricity to your home.

Offshore Wind Projects Face Uncertainty with Existing Contracts

Cape Cod Times – As the state readies to review another round of offshore wind development bids, Avangrid Renewables reports it is staying on course to end its current contract and take its chances with seeking a new one — the best route, the company says, to navigate a maelstrom of economic challenges that make the present agreement untenable.

The move makes uncertain the company’s 1,200-megawatt Commonwealth Wind project. The project, the most ambitious yet proposed for wind lease areas south of Martha’s Vineyard, is targeted to become operational in 2028.

“We remain committed to delivering clean offshore wind energy to help Massachusetts meet its climate goals, as demonstrated by the current construction of Avangrid’s Vineyard Wind 1 project, which is on track to deliver energy by the end of 2023,” the company said.

The Commonwealth Wind project is troubled by supply chain issues, rising costs tied to the war in Ukraine, inflation, rising interest rates, and burgeoning worldwide interest in offshore wind development, the company said.


State to Launch Nine New Early College Programs

Boston Globe – Following a unanimous vote on Wednesday by the state’s Early College Joint Committee, Massachusetts will expand early college programs with nine new partnerships this fall.

Early college programs allow high school students to earn college credits while attaining their high school diploma, and some students earn enough to receive an associate degree.

The state Executive Office of Education also announced on Thursday that the University of Massachusetts Boston will be the first UMass campus to receive an early college designation, which means the university will now permanently offer early college programs to three schools in Boston: Boston Community Leadership Academy, Fenway High School, and New Mission High School.

The expansion also includes early college partnerships with Athol High School, Mount Wachusett Community College and Fitchburg State University; Drury High School and Massachusetts College of Liberal Arts; Revere High School and North Shore Community College; and Veritas Prep Charter School, Springfield Technical Community College and Worcester State University. Additionally, Brighton High School and Malden High School will be partnering with Bunker Hill Community College.