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Snow can’t chill employer confidence By ANDRE MAYER blog.aimnet.org Epic snow and cold did little to chill the optimism of Massachusetts employers as business confidence surged in February for a sixth consecutive month. The Associated Industries of Massachusetts Business Confidence Index (BCI) rose 1.7 points to 59.8 on a 100-point scale - a total gain of 9.8 points since the same month in 2014. The increase reflects growing employer bullishness about the state and national economies, as well as their own growth and hiring plans. “A year ago the Index was at an even 50, which is neutral on our scale,” said Raymond G. Torto, Chair of AIM’s Board of Economic Advisors (BEA) and Lecturer, Harvard Graduate School of Design. “Since then, employers have concluded that economic growth, though uneven, is well established and sustainable. As a result, the Index is at its highest level since October 2006 (59.9), before the Great Recession, and is approaching 60 – a reading we have not seen in 10 years (62.3 in February 2005).” The AIM Index, based on a survey of Massachusetts employers, has appeared monthly since July 1991. It is calculated on a 100-point scale, with 50 as neutral; a reading above 50 is positive, while below 50 is negative. The Index reached its historic high of 68.5 on two occasions in 1997-98, and its all-time low of 33.3 in February 2009. Analysts say the confidence numbers foreshadow accelerating economic growth in 2015. Employer confidence about conditions six months from now rose two full points to 62.1 in February, while readings of sales and employment activity also increased. “For the previous six months, employers who report adding staff outnumber those with decreases by about two-to-one (31% - 16%), but for the next period the ratio is better than four-to-one (37% - 8%),” said Michael A. Tyler, CFA, Chief Investment Officer, Eastern Bank Wealth Management, a BEA member. “A determination to bring on additional personnel is in itself a very strong indication of employer confidence.” The sub-index for national conditions, a laggard through the recovery, is now well above 50, at its best level since August 2007, before the recession. The indicator of state conditions is just below 60, at its highest point since December 2000, before the prior downturn. “Massachusetts employers believe that business conditions are generally good, and will continue to improve,” said Fred Breimyer, regional economist at the FDIC. “Their optimism, though certainly restrained by the experience of severe recession, is now firmly established, and amply supported by trends in the economy.”
Westfield Republicans host Lincoln Day Brunch State Representative Susannah Whipps Lee, Senate Minority Leader Bruce Tarr, State Senator Don Humason and former State Senator Mike Knapik at the Westfield Republican Committee Lincoln Day Brunch on Saturday, February 21 at the East Mountain Country Club. Sen. Tarr and Meteorologist Nick Morganelli were featured speakers at the annual event.
Budget proposal targets ‘Unsustainable’ spending growth By BRAD MACDOUGALL blog.aimnet.org What does the proposed state budget filed today by Governor Charlie Baker mean for Massachusetts employers? The bottom line is pretty simple – state spending is growing at twice the rate of tax revenue and that trend is unsustainable. The new administration must therefore make difficult choices to close a projected $1.5 billion budget shortfall for next fiscal year just weeks after addressing an unexpected $750 million gap in the current budget. It’s something that that the CEO of almost every member company of Associated Industries of Massachusetts has had to do at one time or another. Secretary of Administration and Finance Kristen Lepore said the administration will not raise taxes or fees, nor tap the state’s rainy day fund, meant for fiscal emergencies. At the same time, the allocation of scarce budget resources provides an insight into the new governor’s long-term priorities, from having state employees pay an increased share of their health insurance premiums to increased aid to cities and towns. “For two consecutive years, our spending growth has outpaced our revenue growth. After over $1 billion in budgetary reductions last year, state spending still grew at 7.8% more than the year before, while tax revenue only grew at 4%. This is simply an unsustainable path for Massachusetts - we must live within our means,” the governor said in his budget message. “This proposal keeps spending growth around 3%, and allows us to begin to address long-term structural changes and reduce our reliance on one-time revenue. We protect our rainy day fund, because in a largely healthy economy it is clear our issues are based on a need to prioritize spending and make state government more efficient. We also avoid layoffs through an early retirement package that will reduce the size and cost of the state workforce.” Fiscal discipline and predictability are welcome themes for Massachusetts employers who, according to the Massachusetts Taxpayers Foundation, pay approximately $150 million more in taxes each year than they did a decade ago. CEOs expect the
Clinton: ‘I want the public to see my email’ She calls on the State Department to release her emails
MASSACHUSETTS BUSINESS CONFIDENCE INDEX
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government to conduct its financial affairs in the same responsible manner as the corner grocery store, the young biotechnology company or millions of citizens managing the household budget. “The 4,500 member companies of Associated Industries of Massachusetts typically pay more attention to the budget as a proxy for the ability of state government to manage its affairs, rather than to individual line items,” said John Regan, Executive Vice President of Government Affairs at AIM. “The governor’s proposed budget takes constructive steps toward ensuring that the commonwealth lives within its means.” The projected shortfall for Fiscal Year 2016 is driven by two factors, according to the Taxpayers Foundation. The first is a significant increase in costs for items and programs considered nondiscretionary — such as Medicaid, the state-federal health program for poor and disabled people, and pensions — just to keep the same level of service next year. The second is the state’s heavy reliance on one-time sources of money — pots of cash that are tough or impossible to tap again — this fiscal year. Those sources of money total about $1 billion and include tax settlements with corporations, a temporary diversion of tax revenue intended for the state’s rainy day fund, and casino licensing fees. Here are the key elements of the Baker budget proposal: • A $34 million increase, or 3.6%, in unrestricted local aid to $980 million • A $105.3 million increase in Chapter 70 funding, which increases funding for all 321 school districts • A phase in of the Earned Income Tax Credit to 30% of the federal limit while phasing out the Film Tax Credit • Funding local aid by 75% of revenue growth, a 3.6% increase • Increasing transportation spending by 20%, including $187 million, or a 53% increase, in direct aid to the MBTA • An early retirement incentive program to responsibly reduce the state’s administrative spending
By GABRIEL DEBENEDETTI Politico.com After two days of silence, Hillary Clinton weighed in on the controversy surrounding her use of a personal email address during her tenure as secretary of state late on Wednesday night, saying she had asked the State Department to release her emails. “I want the public to see my email,” she tweeted after spending the night at a gala for her family’s foundation. “I asked State to release them. They said they will review them for release as soon as possible.” Clinton has in recent days faced serious scrutiny for her use of personal email accounts for State Department business, which was first revealed by the New York Times. Republicans have piled on, accusing Clinton of wanting to hide her communications while her allies insist her email use followed federal government rules. The former first lady and senator did not address the swirling questions at a gala in Washington on Tuesday, despite the hopes of some of her allies as the news made headlines and led cable news segments. Wednesday’s late-night tweet, which came at 11:35 p.m. Eastern time, was her first public remark on the topic. “The State Department will review for public release the emails provided by Secretary Clinton to the Department, using a normal process that guides such releases,” State Department spokeswoman Marie Harf emailed reporters shortly after Clinton’s tweet. “We will undertake this review as quickly as possible; given the sheer volume of the document set, this review will take some time to complete.” Earlier on Wednesday, a panel led by House Republicans probing the 2012 attack in Benghazi, Libya, subpoenaed Clinton’s records and sent instructions to the State Department
and to Internet providers to ensure that no records were deleted. The department had already received a slew of Freedom of Information Act requests for Clinton’s communications by Wednesday, and at least one lawsuit was pending, seeking Clinton’s full cache of emails. Harf said Wednesday that the personal emails Clinton provided to the department will from now on be subject to every FOIA request it receives. Clinton’s allies, including a network of outside groups designed to defend her, have pointed out repeatedly that she has handed over some 55,000 pages of documents to State — but critics have emphasized that her own staff was in charge of deciding which emails to provide. The Clinton camp has not provided details of how those decisions were made. And with Foggy Bottom in charge of reviewing which communications to release, the onus is on the department to determine whether they contain classified information.