Report Identifies 'Major Concern' in Otherwise Booming MA Economy

Monday, July 30, 2018

The Donahue Institute at the University of Massachusetts, named in honor of the late Maurice A. Donahue of Holyoke, who served as president of the Massachusetts Senate (1964-71) and ran unsuccessfully for governor in the 1970 Democratic primary, issues a quarterly report on the state of our economy called MassBenchmarks. The latest one came out this past Friday, July 27, describing, in unequivocal detail, a Massachusetts economy that had expanded at a “torrid pace” in April, May and June.

“The Massachusetts economy accelerated sharply in the second quarter,” the report states, “bucking the expectation of slower growth due to low unemployment and demographic constraints.” 
Here are some highlights:

-The state’s gross domestic product grew at a 7.3% annualized rate while, nationally, it increased by 4.1%.
-The number of payroll jobs expanded at a rate of 2.9%, compared to a 1.7% rate for the rest of the U.S.

-Wage and salary income, as measured by state tax collections, grew by 6.2%.

-Consumer spending grew by 6.7%, as measured by regular sales tax receipts and motor vehicle sales taxes.

-Unemployment remained at “a near historical low” of 3.5%.

Job growth in the technology and knowledge-based sectors was especially strong, the report noted, and many of the new jobs in these areas “were filled by workers who either migrated to the state or remained in the state after moving here to go to college.”
The incomes “generated by these relatively well-paid jobs,” the report said, “can be expected to boost demand for jobs in all sectors, many of them in more moderately-paid or lower-paid service roles.”

In the category of job growth, however, the report did identify a “major concern” going forward: the capacity of the state to “provide all of these new workers with adequate housing and transportation options...”  What that means, obviously, is:
If mass transit (MBTA and commuter rail) is not seriously upgraded, if traffic congestion in and around Boston is not at least somewhat mitigated, and if the supply of housing in eastern Massachusetts is not sufficiently expanded to halt the so-far-unstoppable rise in housing prices, we won’t be able to attract and keep the highly educated and skilled workforce that is now the main driver of our economy.

MassBenchmarks is published by the Donahue Institute in cooperation with the Federal Reserve Bank of Boston.

For more on the report, go to:



With Apologies to Tip O'Neill, All Politics Is Not Always Local

Friday, July 6, 2018

Tip O’Neill’s dictum notwithstanding, national issues sometimes shape local politics in significant ways.  Now is such a time in Massachusetts.

The legislature is quite late in producing a state budget for Fiscal Year 2019, which began July 1.  A big reason for the hold-up is the inability of the branches to agree on what if anything should be stated in the budget document regarding federal immigration practices.
In late April, the House produced its version of the FY 19 budget; a month later, the Senate produced its version.  The House’s contained nothing about immigration while the Senate’s had a section that would prohibit state and local police from asking a person about his immigration status.  It would also prohibit agreements under which state and county officials essentially become deputies of the federal Immigration and Customs Enforcement (ICE) agency.

In early June, a six-member House-Senate budget conference committee began working on a compromise, unified budget.  As of this moment, the committee is still chipping away at that task.
Two Thousand and Eighteen is the second year of a two-year legislative session; the legislature must adjourn by midnight on July 31 in Year 2 under a rule adopted long ago as part of a legislative reform effort. 

The July 31 adjournment was designed to keep legislators from playing politics with the budget into the fall of Year 2, when legislators who wish to remain in office must stand for re-election.   (Reps and senators have two-year terms.  Legislative elections are held in even-numbered years.)
In Year 2 there’s great pressure on the legislature to get a completed budget to the governor early enough to give legislators time to override gubernatorial vetoes and address sections of the budget the governor sends back to them with recommendations for changes.

Once the full House and full Senate have approved a conference committee budget, the governor has up to 10 days to review it, veto any items he wishes, and send back individual budget sections with recommended changes.
Overriding vetoes is straightforward, whereas governor-legislature disagreements over the objectives and nuances of various sections are complicated. 

Sometimes the legislature rejects the governor’s suggestions altogether and insists on its original language.  Other times the legislature redrafts its original language but still takes a slant markedly different from the governor’s.
All of that drafting and redrafting and all that back-and-forth end up requiring two rounds of gubernatorial review of the legislature’s budget, each of which may take up to 10 days.  

If a governor wants to run the clock on the legislature, he or she can keep the budget in play for 20 days. 
Anticipating that possibility, the legislature aims to produce a unified budget at least 21 days before it must adjourn in Year 2 so that it will have at least one day available at the end for veto overrides and final language changes.

Thus has July 10 (four days from now) become the drop-dead date for a legislative budget in Year 2. 
Members of the budget conference committee this year are Senators Karen Spilka of Ashland, Joan Lovely of Salem and Vinny deMacedo of Plymouth, and Representatives Jeffrey Sanchez of Boston, Stephen Kulik of Worthington and Todd Smola of Warren.  As the Senate and House chairs of Ways and Means, Spilka and Sanchez exercise the most sway over the process.

To put it mildly, a lot of hard-edged negotiating and old-fashioned horse trading goes on in legislative conference committees, and nowhere more so than in the budget conference committee.  It’s the toughest conference of all.  Conferees are expected to dig in and push hard to preserve their branch’s priorities in the final budget package, in the textual ways their branch has expressed those priorities.
But almost certainly Chairman Sanchez is not taking a stand against the Senate language on immigration status inquiries and ICE virtual-deputy-making because, on principle, he favors the Senate approach to these issues, and because a large proportion of the electorate in his Jamaica Plain district is strongly pro-immigrant and vehemently anti-Trump.

In an indication of how deeply this subject resonates in Sanchez’s district, his opponent for re-election in the September primary, Nika Elugardo, who is further to the left on the political spectrum than he, took the unusual step this past Tuesday of showing up at the door of House Ways and Means to try to hang it tightly around Sanchez’s neck. 
Sanchez “has the power to send this to a vote,” Elugardo told the reporters she’d summoned to the scene, implying that, if Sanchez so desired, he alone could ensure that the Senate immigration language would be in the budget coming out of conference, which would force every legislator to vote on it when the budget was put to floor votes.  The rules do not allow the conference budget to be amended on the floor.  Straight up-or-down votes are required.

Elugardo, who once worked as a senior policy advisor to Senator Sonia Chang-Diaz of Boston, asserted at the State House that Sanchez has the ability to make Governor Charlie Baker “say yes or no” on the Senate immigration language if Sanchez were only willing to insist on the language being in the budget.  This seemed an argument without a point, as the governor has already stated his intention to veto the language if it survives the conference process. 
Tellingly, Speaker Robert DeLeo was quoted by the State House News Service this week saying there’s no consensus in the House on this issue.  Having to vote on it must be a losing electoral proposition, one  way or the other, for too many reps.

My guess is the budget conference committee, warily eyeing the fall elections, will finesse the matter for the sake of most House members, not just of Sanchez. 
If, for example, there is language in the conference budget next week calling for the formation of a special commission to examine all state options for resisting Trump administration immigration enforcement actions and for the writing of an official report on those measures within, say, 45 days, that is what has happened.