Committee Hears Testimony on Credit Card Surcharge Legislation
On July 24th, the Committee on Consumer Protection and Professional Licensure heard testimony on several legislative proposals that would allow retailers in Massachusetts to impose a surcharge on customers who choose to pay for their purchases with a credit card. Massachusetts is one of only a few states that specifically prohibits this practice. This legislation would require the retailer to post a public notice of the surcharge which must be uniform and applied to all customer transactions. The MRLDA submitted testimony to the committee in support of these proposals as did the Retailers Association of Massachusetts, the Massachusetts State Automobile Dealers Association, and the Mass Restaurant Association. American Express opposed the legislation and urged retailers instead to offer discounts to encourage consumers to use cash. We noted that credit card processing fees are in most instances the third highest expense for a retailer following payroll and health care costs. The committee has refused to endorse this proposal in the past by citing what they believe would be a removal of an important consumer protection. The Committee on Financial Services is considering a separate bill that would authorize the Legislature to conduct a study of this issue so that they can report back to the Legislature with their recommendations for further action. That bill remains in the Committee pending a final vote.
Budget and Tax Reform Bills Remain Stalled
The approval of the annual state budget is now over four weeks past due the July 1st deadline and the companion tax reform legislation also remains stalled in a House–Senate conference committee. The legislative leadership has not identified the source of the disagreement between the two branches on the stalled budget negotiations but the revenue collections for this calendar year are significantly below what they were when the Governor filed her budget recommendations on March 1st. It appears the legislature will not agree on a tax relief proposal until the final cost of the budget is determined. The Senate opposes the House’s plan to reduce the short-term capital gains tax from 12 to 5 percent. House Speaker Ronald Mariano recently signaled that he would be willing to drop that tax reduction if it would lead to a final resolution with the Senate.
Massachusetts Unemployment Rate Stands at Record Low
The Executive Office of Labor and Workforce Development reported that the unemployment rate in Massachusetts was 2.6 percent, a percentage point below the national average and the lowest rate recorded in four decades. The study found the labor participation rate to be 65 percent. This data confirms the struggles that all employers across the state that are enduring to hire qualified employees for their job openings. The data shows that employers have added over 96,200 new jobs in the last year. However, the state also lost 4,500 jobs in June, the first monthly decline since September of 2022. In January of this year the ratio of unemployed persons per job opening in Massachusetts was 0.5 which means that for every two job openings, there is one unemployed person who could be available to fill the job. A recent report found that the number of jobs in Massachusetts is expected to increase by 21 percent by 2030, while the workforce is expected to increase by only 1.5 percent.