“‘Shut up,’ they explained.” House Leaders Put Welfare and Local Aid Off Limits for Upcoming Budget Debate

The House won’t be holding its debate on the annual budget for a couple of weeks, but they set the ground rules for it yesterday.

House leadership has been imposing various constraints on the budget debate for the past dozen years or so. The most significant of these is the “Consolidated Amendment” process, under which the House Ways and Means Committee groups the amendments (which last year totaled 897) into subject matter areas and then, after meeting with interested Reps in a side room near the House Chamber, drafts a single amendment for that subject matter area incorporating some –but certainly not all — of the amendments filed.

Some years, the “Holland Amendment” has been in effect. This rule, named for Iris Holland, a Representative from Longmeadow and advocate of fiscal restraint, required that any amendment exceeding $100,000 had to be offset by savings from some other area of the budget.

This year, there’s no Holland Amendment, but, for the first time in my memory, the budget ground rules include a prohibition on amendments pertaining to two subject matter areas — welfare and local aid (the money paid by the state to cities and towns for schools, police, fire protection and other services).

House leadership defends its rule by pointing out that the issue of welfare was debated already this session and is now in Conference Committee, and the House voted unanimously on a local aid resolution earlier this year, so the members have had their say on that issue as well.

But the Republican members of the House, all of whom opposed the new prohibition, are pretty steamed about it. We can expect to hear repeated denunciations of this latest lack of transparency, especially because local aid and welfare have typically been the favorite subjects of the minority party’s budget advocacy. Increasing aid to cities and towns, besides being universally popular, is also a useful proxy for decreasing spending on state programs. And these reps of late have been obsessed with welfare fraud, which they enjoy using to monopolize the budget debate with long and loud condemnations of what they claim is the chief source of the state’s fiscal woes. (Please try to pay no attention to the fact that the welfare program accounts for less than one percent of the state budget.) Now that welfare is off the table, they will be in a frantic search for new scapegoats.

What to think of the new ground rules? Although as a general matter, more transparency is certainly preferable to less, the “torch and pitchfork” caucus has been hijacking the budget debate for years now, so I’m in favor.

Coming Wednesday 4/2: House Debate on Minimum Wage (AND Unemployment Insurance AND Domestic Workers)

On Wednesday, the House Ways and Means Committee released its bill covering not only the minimum wage but also unemployment insurance and protections for domestic workers. Amendments to the bill were due on Friday in preparation for debate this coming Wednesday.

By Friday’s deadline, a total of 99 amendments had been filed. Among the subjects of greatest interest,

  • Tipped minimum wage: Amendment 88, sponsored by Democrat Tricia Farley-Bouvier of Pittsfield and 40 co-sponsors, would raise the tipped minimum wage to $5.25, half of the regular minimum wage of $10.50 proposed by the House bill.
  • Providing for future automatic increases in the minimum wage by tying it to the Consumer Price Index: Amendment 50, sponsored by Democrat Russell Holmes of Mattapan. This amendment has no-cosponsors, which likely means that the word went out that minimum wage indexing is DOA in the House and members’ time would be used more productively on other subjects.

It is still entirely unclear what will happen after the House passes its bill. Even though both the House and Senate will have acted on both the minimum wage and unemployment insurance, their bills will be like “ships passing in the night,” because, as reported earlier, the House declined to use either the minimum wage or unemployment insurance bills passed by the Senate and instead is starting at Square One with an entirely new bill. No House-Senate conference committee will be appointed to work out the differences until this standoff  is resolved. (A HT to Brian from Health Care for All, who points out that the U.S. Congress, not widely known as a model of cooperation, has found a way of resolving these conflicts.)

More on the amendments filed:

  • The majority (55) were filed by the distinct minority (31) of House Republicans. They include the cuts to Unemployment Insurance eligibility and benefits that many businesses have been asking for.
  • The restaurant industry is very well represented among the Republican amendments, with proposals including an exemption from any minimum wage increase, and the establishment of a “meals tax holiday” in July. (The most alarming of the restaurant amendments, entitled “Equity for Restaurants,” would take away the authority of the Board of Health to revoke a restaurant license for health code violations, granting only the lesser authority to impose a series of fines, increasing as the number of violations total six in a six-month period. Note to self: find out which restaurants are pushing this amendment and don’t eat there.)
  • DINO award to Representative Paul McMurtry (D-Dedham) for sponsoring an amendment to establish a two-tier minimum wage, one for adults and one for teenagers, and for suggesting that the concerns expressed by former Representative and Boston Mayor Marty Walsh about the need for more jobs for teenagers would be alleviated by this proposal.
  • The amendment topic on which there’s the most bipartisan agreement is a proposal to increase the state’s Earned Income Tax Credit, under which the state’s taxpayers help low-income working families by providing them with an annual subsidy at tax time. The GOP’s rather surprising enthusiasm for the idea is the result of gubernatorial candidate Charlie Baker’s endorsement. He’d rather boost this anti-poverty program instead of increasing the minimum wage. (Is it me, or is it true that the only time that Republicans are interested in having government help the poor is when it appears that private business is going to be asked to do so?)

After this week’s debate, stay tuned to see if the House and Senate reach agreement on any of the many issues now in play.

Yesterday’s Minimum Wage Fracas – What Was THAT About?

UPDATE, March 25: Forecast for minimum wage bill: mainly preposterous, with gusts reaching absurdity.

After last week’s scrapped takeoff, House Representative Tom Conroy announced today that the House will release its bill dealing with the state minimum wage and the unemployment insurance system very soon. The new House bill will add yet a third issue to the mix — workplace protections for domestic employees.

The Senate has already acted on the first two issues (minimum wage and unemployment), but it hasn’t acted on the workplace protections issue. The procedural result of the action the House is planning to take will, like the bill the House hoped to launch last week, “reset the process” and will require the Senate to act again on minimum wage and unemployment. But this time, the House will not need to go through the Labor Commmittee, because the workplace protections bill is no longer in that Committee. Instead it is in the House Ways and Means Commmittee and will apparently serve as the vehicle for the House to act on all three issues at once.

After charging that the Senate rather than the House is the true “obfuscatory body” here, Representative Conroy added that “this process issue should not get in the way of politics.”

OK, here’s another suggestion – how about not letting this political issue (of the sibling rivalry sort) get in the way of helping people?

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ORIGINAL POST, March 21

If you’re following the campaign to increase the state’s minimum wage, yesterday was something of a head-scratcher.

A quick recap – in November, the State Senate passed a bill that largely tracked the minimum wage increase proposal that is making its way to the statewide ballot in November. The Senate bill would increase the minimum wage to $11 over three years, increase the minimum wage for tipped workers to 50 percent of the regular minimum wage, and provide for automatic increases in the minimum wage in the future by tying the wage to the Consumer Price Index. In response, House of Representatives Speaker Bob DeLeo pronounced the Senate bill too unfriendly to the state’s business interests and proposed pairing any minimum wage increase with changes to the state’s unemployment insurance (UI) system to reduce those business costs. Many in the business community want to see those cost reductions come in the form of eligibility and benefits cuts to unemployed workers who file UI claims.

Yesterday began with a post to BlueMassGroup by House Labor Committee Chairman Tom Conroy introducing the House proposal. It would increase the minimum wage to $10.50 over three years, slightly less than the Senate proposal, and it would not make future increases automatic. The UI changes in the House bill would not have included any cuts to benefits or eligibility (as the employers were undoubtedly hoping), but instead would have reallocated the costs among employers, with employers whose workers used the UI system more often (the so-called “frequent fliers”) paying more than employers whose workers rarely used it. As it happens, the Senate passed a UI bill in February that took a very similar approach to reallocating the costs of the system.

So, in substance, it is fair to say that the Senate and the House were reasonably close on the minimum wage and unemployment insurance. The differences, one might think, could be worked out in the conference committee process.

But there was a big problem yesterday, and it was procedural, not substantive. The House wanted its bill to originate in the Labor Committee. That would have meant that the bill would then go to the House for passage and then over to the Senate. But what about the bills — both minimum wage and unemployment insurance — that the Senate has already passed? They are both sitting in the House awaiting action. If the House started the process over by having the Labor Committee act, then the Senate would have to schedule new debates and essentially re-do the work it has already done — a penalty for having acted first.

And that’s pretty much the point. House leadership hates it when the Senate goes first. Under the State Constitution and by tradition, the House goes first on any bills that raise tax revenue and on the annual budget. The House seems to feel that example should be followed in all cases, even in those cases where the deadline for the joint committees to have finished their work has passed. As it happens, that day was the day before yesterday. After the deadline has passed, a committee can take action only if both the House and Senate agree, and yesterday the Senate declined to let the Labor Committee do so.

Representative Conroy, understandably upset at losing the opportunity to move his bill forward, accused the Senate of pettiness. But from the Senate’s point of view, the problem is that the House so rarely goes first these days. All the committees, including the Labor Committee, include more House members (who number 160 in total) than Senate members (who number 40 in total), so the House completely controls the committee process. (You could make the argument that because Senators represent four times the number of people that House members represent, the committee membership really ought to be adjusted. But it hasn’t happened.)

So in order to preserve the Senate’s opportunity to act, they adopted Rule 19, which allows them to introduce and act on a bill that has not yet been through the committee process. The Senate used that rule to introduce and pass both its minimum wage and unemployment insurance legislation.

So what happens now? The Senate could agree to let the Labor Committee act, which would mean re-doing their work after the House has finished and postponing the final resolution of these issues. With only four months left in the legislative session and much, much more work to be done, one might wish for a simpler way out of this impasse, and fortunately one exists. The House can use the bills that the Senate has already passed as their vehicles for acting on minimum wage and unemployment insurance. We’ll see if — and when — they do.

UPDATED – Get Ready: More Minimum Wage and Unemployment Insurance Talk

After a very slow start in 2014, the minimum wage debate is heating up again.

Tomorrow, U.S. Labor Secretary Tom Perez will be in town to talk about President Obama’s plans to raise the federal minimum wage, and House Speaker Robert DeLeo will be addressing the Boston Chamber of Commerce. The speculation is that the Speaker will be affirming his support for making any increase in the state’s minimum wage contingent on changes to the Unemployment Insurance program that would restrict workers’ eligibility and benefits.

Meanwhile, the Massachusetts High Technology Council, which has been one of the most vocal supporters of changes to the UI system, sent a memo to Legislators yesterday renewing its prior demands for eligibility and benefits cuts, and adding a new one: a two-tier minimum wage, under which only adults would see an increase to $10 per hour and teenagers would continue to earn the current $8 rate. (A quick tutorial on the teen minimum wage is here).

The employer community is also very eager to see legislation passed that would freeze their UI payments for the coming year, blocking a scheduled increase. The Senate included that provision in the UI bill it passed in November, which is awaiting action in the House. The House for its part included it in a supplemental budget passed last month (the Senate did not include the provision in its supplemental budget). Today, the House and Senate agreed on a compromise budget, which will be on the Governor’s desk soon, and the employers are undoubtedly dismayed to see that the freeze was not included.

The suspense builds…
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UPDATE: March 13, 1:00 PM. From the Speaker’s remarks today (text of his prepared remarks is here:
Minimum wage proposal:
$9.00 on July 1, 2014
$10.00 on July 1, 2015
$10.50 on July 1, 2016
No indexing to inflation.

Tipped minimum wage proposal:
$3.00 (presumably on July 1, 2014)
$3.35 (presumably on July 1, 2015)
$3.75 (presumably on July 1, 2016)
No indexing to inflation.

Lower minimum wage for teenage workers not mentioned.

UI Proposal:
The changes the Speaker mentioned in his address to the Boston Chamber do not include either of the significant changes to eligibility or benefits being advocated by employers (reduction of maximum duration of benefits from 30 to 26 weeks; increase in amount of time needed to work to qualify for UI from 15 to 20 weeks). His proposal would freeze the UI rate for the coming year (which is pretty universally agreed upon), and appears to adopt some version of the Senate’s reworking of employer costs so that employers whose employees collect UI frequently would pay more than employers whose employees collect less often. His proposal does not appear to increase the amount of wages on which employers pay UI taxes, as the Senate bill does, which would leave the UI financing system vulnerable to being underfunded. The Speaker’s proposal also includes some changes to reduce UI costs for cities and towns (not for employers generally) that Governor Patrick recommended in January.

Overall, it’s hard to imagine that the Massachusetts High Technology Council and other employer groups are thrilled with this proposal (but the Senate bill is still a better approach).

The Phantom Gourmet’s Not-So-Phantom Agenda (Field Notes from the Minimum Wage Debate)

You’ve probably seen the Phantom Gourmet television show.

Phantom

It’s a half-hour of infomercials for local restaurants, and it’s actually kind of enjoyable. I have learned useful information, like where the best meatballs in Medford are, and I have come to accept my Pavlovian response to a televised plate of onion rings.

The Phantom Gourmet folks are certainly among the most enthusiastic supporters of the local restaurant industry, and their cheerleading certainly does not stop with their TV show. Their industry trade group, the Restaurant and Business Alliance, is not shy about sampling from the state’s wide buffet table of benefits to businesses — catering, for example, is among the lengthy list of services for which movie companies can claim a state film tax credit (now we taxpayers can not only pay Tom Cruise’s salary, but we can feed him, too). The Alliance would also like a meals tax holiday weekend to encourage restaurant patrons to get out and spend some money during this particularly bad winter. As the Phantom company president puts it,

“When a waitress loses a Saturday night to a snow storm, she can’t just catch up the next day. If politicians really care about the 300,000 hospitality employees, they will pass a Meals Tax Holiday to stimulate their tips and business.”

Which brings us to the Phantom’s number one legislative priority these days — the defeat of proposals to increase the minimum wage, particularly the minimum wage for tipped workers, which is $2.63 per hour, the same as it’s been since 1999. (Yes, restaurant owners are supposed to ensure that all their workers receive at least the regular minimum wage of $8.00 per hour by making up the difference, but starting at $2.63 makes it impossible for most restaurant workers to escape poverty.)

You will notice a common theme in the Phantom’s legislative advocacy — if politicians really care about restaurant workers, they will make sure that the laws they write benefit restaurant owners. Here’s the company president again, this time railing against a minimum wage increase:

“This is a dangerous, reckless bill….[it] will cause layoffs and force small businesses to fold. There are 700,000 adults on welfare and unemployment. It’s wrong to focus on people WITH jobs than those WITHOUT jobs, so that politicians can pontificate and moralize, hurting hard-working owners and employees, without understanding the damaging effect.”

I think the Phantom may have become a little unhinged here — I’m not sure exactly what point is being made. (For one thing, there are not 700,000 adults on welfare and unemployment in Massachusetts — that number, wherever it comes from, certainly includes all household members and includes receipt of food stamps as a form of welfare.) I would also bet that the Phantom has failed to recognize that more than a few of the adults who are receiving government benefits are restaurant workers earning $2.63 per hour, a small enough wage to qualify for food stamps. A job (including a restaurant job) is not necessarily a ticket out of poverty — although it should be.

Another Month, Another Lawsuit: Maybe the Gambling Industry in Massachusetts Will Just Destroy Itself

From the excellent Mark Arsenault of the Globe, we learn of another lawsuit (to be filed tomorrow) in the great stampede for casino gambling licenses in Massachusetts.

This time the aggrieved party is a jilted Palmer landowner.  And the claim is that casino developer Mohegan Sun, after entering into a contract to locate a casino on Palmer land, engaged in “secret talks” with Suffolk Downs about locating a casino there instead, then intentionally ran a “lackluster” campaign in Palmer for the necessary approval of its voters. In November, Palmer voters rejected the casino proposal, and now the landowner is preparing to sue Mohegan Sun for breach of contract.

This brings to at least three the number of lawsuits to which the casino industry, itself not yet born (no casino has opened and no license has even been awarded), has given birth. In addition to the Palmer litigation, casino developer Caesars Entertainment is suing Gaming Commission chairman Steve Crosby over a claimed conflict of interest, and casino backers are seeking to keep the entire question of casino gambling from being put to the voters in the November statewide election.

All this contentiousness somehow brings to mind the image of the mythological Ouroboros, the serpent that destroys itself by eating its own tail.

220px-Serpiente_alquimica

(We can dream, can’t we?)

Boston Business Journal “Hearts” Most Admired (or is it Most Notorious?) Businesses

The folks at the Boston Business Journal held a Valentine’s Day party today to present awards to some of the area’s “most admired businesses.”

Just who was doing the admiring of these businesses was not exactly clear. Nor were the reasons behind all the admiration. In fact, some of the businesses getting the awards were in the headlines recently and really wish they hadn’t been.

Liberty Mutual, for example, which in 2011 accepted $46 million in tax breaks to build its new headquarters in Boston and spent $4.5 million renovating the CEO’s bathroom, was honored for “meeting clients’ ever changing needs since 1912″ (and for keeping up with the latest in high-end plumbing fixtures).

State Street Bank, which in 2012 received a $11.5 million tax break to construct a new office building, then laid off 260 more employees — for a total of more than 1200 in three years — was honored for being “a global force dedicated to finding better ways” (of shrinking payroll costs).

And Deloitte, which only two days ago was confessing to a Legislative Committee that the system it designed to manage the state’s unemployment benefits system and for which it has been paid $46 million, still has “more than 100 defects” seven months after its launch, was honored for “helping clients solve their toughest problems” (evidently, the first 100 don’t count).

Maybe next year, the Boston Business Journal ‘s Valentine’s Day event will include awards for public relations firms that excel at transforming notoriety into admiration. It’s a tough job, but somebody’s got to do it.