Massachusetts relief bill coming together to aid workers, businesses

By Katie Lannan

MARCH 8, 2021…..Top legislative Democrats on Monday sketched out the broad outlines of legislation they said they’d pass quickly, perhaps this week, to provide relief to workers and businesses still facing the economic strains of the COVID-19 pandemic.

Senate President Karen Spilka, House Speaker Ronald Mariano and Ways and Means Committee Chairs Rep. Aaron Michlewitz and Sen. Michael Rodrigues said the bill they’d agreed upon includes measures around paid leave, exemption from taxes for forgiven Paycheck Protection Program loans and unemployment insurance rate relief.

The measure, the details of which were not available Monday, “strikes a balance to ensure that businesses can continue to move forward while protecting those working hard to keep the economy going,” they said.

The legislation, according to the statement, would ensure workers can access paid leave — with reimbursement for employers — if they contract COVID-19, are ordered to quarantine, or need time off to get vaccinated. It would waive penalties for missed tax payments on unemployment insurance benefits received in 2020 and “provide targeted tax relief to unemployed workers whose income falls below 200 percent of the poverty line.”

The Raise Up Massachusetts coalition, which has been advocating for emergency paid leave, plans to review the bill to ensure that it provides at least 40 hours of job-protected emergency paid sick time for all Massachusetts workers.

“Ensuring that frontline workers can afford to stay home if they have symptoms or have been exposed to COVID-19 will be critical to preventing additional surges and finally ending the pandemic,” SEIU Local 509 President Peter MacKinnon said in a statement from the coalition.

The bill would freeze the unemployment insurance rate schedule for 2021 and 2022, limiting employer payment increases, and it would also authorize state borrowing “secured by a temporary employer assessment” to keep the UI trust fund solvent. Employers are on track to see their UI rates increase from an average of $539 per employee to $866 this year without legislative action, and keeping the previous rate schedule in place would bring this year’s contribution to $635 per employee instead.

For small businesses organized as pass-through entities, the proposal would exclude forgiven Paycheck Protection Program loans from taxable gross income. Congress in December agreed to exempt the forgiven loans from federal taxation, but without action from lawmakers, a subset of those grants to small businesses that do not pay corporate taxes but pass revenue through to owners as income would still be taxed at the state level.

Earlier Monday, several Republican lawmakers and one Democrat, Dracut Rep. Colleen Garry, called on their colleagues to act swiftly to exclude forgiven PPP loans from state taxes, saying small businesses — including bars and other entities that the state has not cleared to reopen — still face significant economic pressure as they adhere to pandemic-related restrictions.

Rep. David DeCoste said bills have been filed in both branches, by Democrats and Republicans, with the goal of providing PPP tax relief to small businesses. He and other speakers on the press call hosted by the Massachusetts Fiscal Alliance said it was important to pass such a bill by next Monday, a business tax-filing deadline.

“I think we’ve got good momentum, and we just want to keep that momentum up because otherwise we will once again be socking our smaller businesspeople who have been through a really tough going on 13 months now, with one more obstacle to, really, in many cases, their survival,” said DeCoste, a Norwell Republican.

The statement from Democratic leaders said lawmakers would “act expeditiously” to get the bill to Gov. Charlie Baker’s desk and a House official said there are plans to take up the bill this week. Both branches are set to meet again this week in informal sessions, the House on Wednesday and the Senate on Thursday.

Baker and officials in his administration have expressed interest in at least some of the measures that would be contained in the new bill.

The governor has filed his own bill (H 55) that would freeze UI rates at their current level to limit the increase facing employers and authorize up to $7 billion in borrowing, backed by an employer assessment, to replenish the UI trust fund and repay federal loans.

That bill is before the House Ways and Means Committee. So far this session, bills passed by the House and Senate have often advanced to the floor through the Ways and Means Committees without first being subject to a public hearing.

Last week, at a hearing on Gov. Charlie Baker’s $45.6 billion budget plan for next year, Administration and Finance Secretary Michael Heffernan said Baker’s office is involved in talks with state and federal lawmakers about changing the laws to waive taxes on all state-issued relief payments and some federal PPP grants.

Also last week, the House and Senate minority leaders, Rep. Brad Jones of North Reading and Sen. Bruce Tarr of Gloucester, sent letters to Mariano, Spilka, Rodrigues and Michlewitz, urging quick passage of Baker’s UI bill and a suite of bills that would exempt PPP money from state taxes.

Each letter was signed by more than 45 other lawmakers, including members of both parties.

Tarr said Monday that lawmakers should “be leaving no stone unturned in moving forward to try to assist the businesses that we need to help to be able to continue to survive.”

“We have seen casualties in the business community already from the pandemic, and we need to do whatever we can to minimize that and to mitigate the damage that would otherwise be done,” he said during the press call.