Page 12 - BusinessWest January 6, 2021

Editorial
TNew Year, Same Challenges
he calendar no longer says 2020. 2020 proves this.
And that’s a really good thing. Over the past 10 months or Yes, some businesses have been lost, mostly in the retail and
BusinessWest
PUBLISHER
John Gormally [email protected]
•••••
EDITOR
& ASSOCIATE
PUBLISHER
George O’Brien
[email protected]
•••••
SALES MANAGER
& ASSOCIATE
PUBLISHER
Kate Campiti [email protected]
•••••
SENIOR WRITER
ADVERTISING CONSULTANTS Kate Campiti [email protected]
Kathleen Plante [email protected]
•••••
ART DIRECTOR
Mike Nasuti [email protected]
•••••
SENIOR GRAPHIC
DESIGNER
Danielle Fox [email protected]
•••••
MARKETING &
EVENTS DIRECTOR
Jennifer Godaire [email protected]
•••••
OFFICE MANAGER
Cindy Sears [email protected]
Entire contents of this publication are Copyright
©2021, and cannot be reprinted in whole or part without special written per- mission by the publisher. Yearly subscription price is $45.00. BusinessWest assumes no responsibility for mistakes in advertise- ments, but will make corrections if written notice is received within 7 days of publication date. BusinessWest reserves the right to reject an advertise- ment it deems misleading or inappropriate.
1441 Main Street Springfield, MA 01103 (413) 781-8600 Fax (413) 781-3930
so, those four numbers became synonymous with pandem- hospitality sectors, and the losses have not been insignificant.
ic, challenge, uncertainty, and more challenge. Turning the calen- Meanwhile, a number of mainstay businesses have been battered
dar over helps psychologically, but it doesn’t change the equation. Not yet, anyway.
In fact, as the experts interviewed for our Economic Outlook section indicated (see stories beginning on page 14), while there is indeed a light at the end of the tunnel, there is still quite a bit of tunnel to get through. If this is the beginning of the end (of the pandemic), the end is still a ways off.
And, in some ways, there’s a good chance things will actually get worse before they get better, because, as some experts noted, the relief that many companies received through stimulus initiatives will not be there, or there to the same extent, like they were in 2020. So many businesses will be facing a reality check, and a scary one at that.
But if 2021 looks daunting in many respects, we can look back at 2020, not for painful memories, or only painful memories, but also for inspiration.
Indeed, as we’ve written on several occasions, the best thing about 2020, from our respective, was the manner in which the business community responded to a crisis truly without precedent. Going back to the middle of last March, we wrote about how busi- ness owners in this region had been through a lot over the past few decades — recessions, including a ‘great’ one; a tornado; the sud- den quiet after 9/11; Springfield’s fiscal meltdown; and so much more. We wrote that this pandemic would be unlike any of those and would test the mettle of this region in ways we could not have imagined.
We were right about that, but we were also right when we said this region was up for the fight. It was, and it is, and a look back at
Opinion
and bloodied — MGM Springfield, the Basketball Hall of Fame, the Springfield Symphony, the Thunderbirds, Union Station, UMass Amherst and all the colleges and universities, every restaurant and performance venue in the region ... the list goes on.
But they are still standing, and, in the meantime, a large army of small businesses have responded with imagination, perseverance, and the entrepreneurial spirit that has defined the region for more than 250 years.
We’re told many of these stories over the past nine months, and they have been inspirational. Businesses that found themselves struggling, through no fault of their own, discovered ways to pivot, find new revenue streams, and, in some rare cases, actually expand and grow their businesses.
If there was any bright spot to 2020 — and there were not many
— watching this collective display of courage and determination
wasit. •••••
Freeze Unemployment Tax Rates for 2021
BAy Brooke Thomson ssociated Industries of
Massachusetts (AIM) has worked
tirelessly with elected officials on both the state and federal levels
to moderate a potentially disastrous 60% increase in unemployment insur- ance rates next year and to keep the Unemployment Insurance Trust Fund on sound financial footing.
Last month, Gov. Charlie Baker took a major step toward addressing that issue
by filing timely legislation to ensure a two- year schedule freeze and provide the ability to bond the remaining trust-fund deficit and allow it to be rebuilt over time.
Meanwhile, AIM continues to support efforts by the Massachusetts Congressional delegation to persuade Congress to provide additional resources for the state’s Unem- ployment Insurance Trust Fund. The $900 billion economic stimulus bill recently approved in the U.S. Congress does not provide money for state UI systems, though it does revive the Paycheck Protection Pro- gram with $284 billion to cover a second round of PPP grants to especially hard-hit businesses.
Massachusetts businesses now need elected officials to stabilize the state’s unemployment-insurance system by freez- ing the statutory rate and allowing Massa- chusetts to authorize bonding.
A day before Baker filed his rate-freeze bill, AIM provided a statement to the entire Massachusetts Legislature calling for a freeze on employer UI tax-rate schedules to shield Massachusetts employers from the upcoming rate spike, which is tied by statute to the overall condition of state UI Trust Fund.
Given the unforeseen economic shut- downs brought on by the COVID-19 pan- demic beginning in March, the Massa- chusetts Department of Unemployment Assistance projects that the fund, primar- ily financed by direct and reimbursing employer contributions, will be in the red by $5 billion at the end of 2022 and remain insolvent by about $3 billion as far out as 2024.
These initial numbers, left unchecked, would trigger an increase from the current 2020 employer tax rate of Schedule E, or $539 per employee, to Schedule G, about
$866 per employee, reflecting an almost 60% increase.
Baker’s bill would freeze the employer tax rate at Schedule E for the next two years, slowing annual employer contribu- tion growth to $635 in 2021 and $665 in 2022.
AIM thanks Gov. Baker for filing this legislation, and we appreciate the speedy action that the House and Senate have taken throughout this pandemic with leg- islation to stabilize the unemployment- insurance system for employers and employees.
We urge the House and Senate to take urgent action on this proposed legislation to freeze rates and fund the system through bonding, which will ensure that all claims are paid to individuals, that the trust fund is stabilized with a low-interest loan, and the Commonwealth is able to avoid a statu- torily triggered unemployment-insurance tax-rate hike in first months of 2021. v
Brooke Thomson is executive vice president for Government Affairs at Associated Industries of Massachusetts.
And now that the calendar has turned to 2021, nothing has real- ly changed. The operating environment is as challenging as ever, and even moreso for most hospitality businesses, now that winter has set in.
The next few months may be the most difficult yet, but we are confident that those same qualities that helped businesses ride out 2020 will enable them to continue the ride — until the day when ‘normal’ returns and the predicted pent-up demand will provide a much-needed lift to ventures across all sectors.
As the new year begins, the light at the end of the tunnel is still a ways off. But at least we can see it. v
Joseph Bednar [email protected]
12 JANUARY 6, 2021
OPINION
BusinessWest