The Black Friday Mass Exodus

How’s that 6.25% sales tax looking now?

Massachusetts’ loss is Juliana Aquino’s gain. The 27-year-old mother of two could have done her Black Friday shopping at the Wal-Mart Supercenter in Methuen, where she lives. Instead, she made a 15-minute trek into New Hampshire, where there is no such thing as a sales tax.

“I come here all the time, even though there’s one closer,’’ Aquino said at 5 a.m. yesterday, pushing a shopping cart loaded with four flat-screen TVs. “I come up here even to buy groceries.’’

Massachusetts shoppers are fleeing the state’s rising sales tax in droves and shopping in New Hampshire. Fueled by necessity – and in some cases anger – customers said they were heading over the border to save money and score deals. Cars with Massachusetts license plates clogged the roads and lots across Salem. And through the early evening yesterday, the Mall at Rockingham Park in Salem and Pheasant Lane Mall in Nashua – both just a few miles over the border – reported spikes in traffic over last year, according to Laurel Sibert, a spokeswoman for Simon Malls, which runs both shopping centers.

“The New Hampshire malls have definitely benefited from the sales tax increase in Massachusetts,’’ Sibert said.

No surprises here… the reason why Black Friday is such a big hit with shoppers is because prices are lower; why can’t Beacon Hill figure this out?

Bob Bliss, a spokesman for the Massachusetts Department of Revenue, said in an August interview with the Globe that the net revenue gains from the sales tax hike outweigh the $48 million in expected losses from sales diverted to New Hampshire, the Internet, or reduced demand. Officials at the Massachusetts Department of Revenue could not confirm projected losses in tax revenue from people going to New Hampshire yesterday. But a recent report by the department showed that Massachusetts’ tax revenues for the first half of November totaled $41 million, equal to collections over the same period last year.

So long as there is still a majority of Massachusetts residents being screwed by the increase in the sales tax, they are still happy. Thanks a lot.

Anyone who can, keep sticking it to them. Cross the border and free yourself of the overbearing tax burden that has been bestowed upon us by the same elected officials you keep voting for.

Losing our economic edge… to Michigan!?

A recent Boston Globe article highlights the cut-throat competition in which states are engaging to attract new green-tech businesses. No surprises here – states, like cities and towns, want to see job-growing, revenue-generating firms open up shop inside their borders.

What’s alarming is that Massachusetts-based businesses aren’t being targeted by the usual suspects – California, North Carolina, New Jersey, etc – but by Michigan, a severely economically-depressed state that I wouldn’t have imagined could come close to matching what Massachusetts has to offer.

It seems Michigan’s leaders have seen the writing on the wall and are offering businesses extremely generous incentives and tax breaks to relocate there. Michigan Governor Jennifer Granholm is quoted in the Globe article as saying that she’s doing “what you’ve got to do’’ in order to close the deals her state so desperately needs.

The Globe article paints a stark picture:
Michigan is emerging as one of Massachusetts’ fiercest competitors in the race to become a hub for clean technology companies. And Massachusetts, despite being the birthplace of many of these technologies and the companies they spawn, is losing ground to Michigan’s money and determination.

Our elected leaders on Beacon Hill must improve the climate for business here in Massachusetts, or we’ll continue to lose out to other states. For starters, we need to reform our ridiculously expensive unemployment insurance system and repeal the recently imposed sales tax increase. We shouldn’t be giving Massachusetts-based businesses a reason to pack up and move to Michigan… or any other state.

Globe article is available here: Michigan luring Bay State business.

Scare Mongering?

Can’t Gov. Patrick ask his buddy in the White House for help?

Massachusetts Gov. Deval Patrick says the state is on track to be $600 million in the red this fiscal year. The governor is planning another round of spending cuts to balance the budget.

Patrick was legally required to assess this shortfall by Oct. 15. The $600 million figure is how much the state thought it was going to get in revenue this fiscal year that it now thinks it won’t get due to sagging sales tax and other revenues. Legally, he has until the end of the month to say exactly what cuts would cover that projected shortfall.

Gov. Deval Patrick faces reporters during a news conference in Boston on Thursday. (AP)
“There are no quick fixes,” Gov. Patrick said, “No easy choices. And no low hanging fruit.”

Over the next two weeks, the governor wants his staff to make those hard choices more clear. Patrick is going to press unions to make concessions; he wants government executives to take furloughs; 2,000 state jobs may have to go.

Patrick said that, as much he doesn’t want to cut human services, he’s going to have to. “There are some things we do in state government that we’re not going to be able to do anymore,” he said.

Exactly what things will be named by the end of the month. One thing is clear: municipal funding is on the chopping block. The governor is asking state lawmakers to give him the authority to cut state aid to cities and towns.

UPDATE: More from the Globe, Boston Herald, Michael Graham and Holly Robichaud.

SECOND UPDATE: From the AP.

Climate Change

Will the Bay State economy improve next year?

After examining the state’s slide into a recession last
year and the emerging prospects for recovery taking root this year,
The Beacon Hill Institute at Suffolk University today released its
revised forecast of Massachusetts state tax revenues for fiscal year
(FY) 2010 and a new forecast for FY2011.

The Institute’s forecasts for state tax revenues are:
• For FY 2010 (ending June 30, 2010): $18.545 billion, a 1.6%
increase over FY2009; and
• For FY 2011 (ending June 30, 2011): $19.211 billion, a 3.6%
increase over FY 2010.

David G. Tuerck, Executive Director of the Beacon Hill Institute (BHI)
and Chairman of the Department of Economics at Suffolk University,
and Paul Bachman, BHI Director of Research, presented the forecast
in testimony before the legislature’s Updated Consensus Revenue
Hearing. The hearing took place on the heels of falling September tax
revenues which came in $243 million below estimates used for the
current budget.

“With the national economy in recession, Massachusetts has not been
spared a dramatic loss in tax revenues,” said Tuerck. “Job losses will translate into continued lower personal income tax revenue for the Commonwealth in FY 2010,” said Tuerck in his testimony. “However, the evidence from recent data, combined with the recently enacted
sales tax increase, suggest that overall revenues will increase slightly in FY 2010.”

UPDATE: More from the AP and Reuters.

SECOND UPDATE: From the American Spectator and Globe.

THIRD UPDATE: More from the New York Post, Boston Herald and Joan Vennochi.

Re-elect Deval…

…If you’re out of your mind!

The Bureau of Labor Statistics released it’s state-by-state economic data for the month of August on Friday. Massachusetts unemployment rose from 8.8% in July to 9.1% in August. In the past month Massachusetts has shed an additional 10,494 net jobs. While we are in a national and international economic recession, under one party Democratic rule Massachusetts continues to do one of the worst jobs at handling the recession.

Massachusetts new tax hikes including the sales tax hike went into effect on August 1, 2009. In the first month Massachusetts the unemployment rate rose faster than any other New England state. In Vermont unemployment went down for the third month in a row. Net job loss in Massachusetts exceeded the other 5 New England states combined.

Since January of 2007 when Deval Patrick became Governor and joined the Democratic super majorities in the state legislature unemployment has risen from 4.6% to 9.1%.

UPDATE: More from the Globe, New York Times and Michael Graham.