Scholarships Available through the North Central Massachusetts Chamber Foundation

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The North Central Massachusetts Chamber Foundation is pleased to announce that applications for its 2023 Scholarship program are now being accepted. Each year, the Chamber Foundation distributes approximately 25 scholarships to local high-achieving high school students in North Central Massachusetts.

Students interested in applying for a 2023 scholarship through the North Central Massachusetts Chamber Foundation should contact their high school guidance department to submit an application. Deadline for applications is Wednesday, March 1, 2023. A limited number of scholarship applicants are submitted by each school in the Chamber’s service area each year and then reviewed by a committee of Chamber members.

Since the establishment of its scholarship program, the North Central Massachusetts Chamber Foundation has awarded over a million dollars in scholarships. Many of these awards are made possible through contributions from members of the North Central Massachusetts Chamber of Commerce. Scholarships endowed through the Chamber Foundation are often named in honor of prominent members of the North Central Massachusetts business community whose philanthropy and commitment to the community have helped shape North Central Massachusetts.

The Chamber’s Foundation is a 501 (c) 3 non-profit organization focused on assisting in the betterment of the region through charitable activities. Funds raised by the Foundation are utilized primarily for education/workforce development initiatives and charitable activities in North Central Massachusetts, including scholarships to eligible applicants pursuing education and grants to support economic and community development projects.

For more information on the North Central Massachusetts Chamber Foundation’s scholarship program or a list of the named scholarships, please visit northcentralmass.com or call 978.353.7600 ext. 222.

North Central Massachusetts Chamber of Commerce Releases 2023 Public Policy Agenda

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Agenda to serve as blueprint to support strong business climate for the region

The North Central Massachusetts Chamber of Commerce unveiled its Public Policy Agenda for the new fiscal year outlining the Chamber’s legislative priorities on issues important to businesses and the advancement of North Central Massachusetts. It was reviewed and approved by the Chamber’s Government Affairs Committee and the Board of Directors.

As the Chamber advocates on behalf of businesses across the region, the agenda will serve as a blueprint outlining a platform which builds upon the area’s competitive advantages. The agenda is focused around six priority areas: economic competitiveness, small business, manufacturing, education, transportation, and real estate.

“Our Public Policy Agenda is focused on supporting a strong business climate while encouraging an already engaged business community to participate in the efforts of important, pro-business policy issues,” said Roy Nascimento, President and CEO, North Central Massachusetts Chamber of Commerce. “As we recently learned in our Workforce Development Study, the collaboration of business, government and community leaders is critical to ensure North Central Massachusetts remains a great place to live, work and grow a business, and this agenda is an important roadmap to push those efforts forward.”

“We have experienced successful advocacy efforts over the past several years, and our 2023 agenda builds off of that success,” said Travis Condon, Public Affairs Manager, North Central Massachusetts Chamber of Commerce. “As we continue to advance the issues that matter most to our members in North Central, we look forward to engaging with elected officials to be another voice to help our local businesses be as successful as possible.”

For more information or to view the Chamber’s Public Policy Agenda, please visit www.northcentralmass.com or contact Travis Condon, Public Affairs Manager at 978.353.7600 ext. 224.

North Central Massachusetts Development Corporation approves financing for Salt and Light Café

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Funding to purchase real estate for business operations in Groton

The North Central Massachusetts Development Corporation (NCMDC), the economic development arm of the North Central Massachusetts Chamber of Commerce, recently approved a $206,000 loan to Salt and Light Café to provide funding toward the purchase of property at 159 Main Street in Groton, where the business operates. This loan was in partnership with Main Street Bank and ensures employment of 3 full-time and 3 part-time jobs in the community.

The cafe was opened in 2015 by owners Josiah and Linda Coleman, who also operate Coleman Catering. Josiah serves as Executive Chef, and Linda oversees the operations for both the catering company and the café.

Located in downtown Groton, the café uses only fresh ingredients and provides a relaxing environment for guests to relax and linger while enjoying bold, eclectic dishes that fuels and inspires those served. “When we opened Salt and Light, we wanted to create an environment where customers feel welcomed as our friends,” said Josiah Coleman. “Through the support of the North Central Massachusetts Development Corporation, in partnership with Main Street Bank, we can cement our roots in downtown Groton as a place to enjoy savory cuisine with family and friends.”

In addition to providing food, the café also boasts a small retail boutique area with items for sale from local makers, artists, farms and businesses.

As a microloan lender, NCMDC can provide loans to small businesses up to $250,000 for working capital, real estate, equipment, inventory, expansion and working with our banking partners to provide gap financing for the final piece of a project.

For more information about the NCMDC loan programs, please call 978.353.7607 or visit NorthCentralMass.com or ChooseNorthCentral.com.

Fresh food, cold beer, a friendly staff and a great location are the main ingredients in the success of the Gardner Ale House & Moon Hill Brewing Company

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Fresh food, cold beer, a friendly staff and a great location are the main ingredients in the success of the Gardner Ale House, according to owner Rick Walton.

When asked what separates the Gardner Ale House from the competition, he noted “Our food is prepared fresh, not frozen or processed and we make our own beer. Our staff is super friendly and our location in downtown Gardner feels like the center of action – a Main St. kind of feel.”

Founded in 2006, Walton’s popular establishment at 74 Parker St. in Gardner now employs 85 people and is a thriving part of downtown Gardner.  He feels one of the most special aspects of doing business in North Central Massachusetts is that customers don’t have to deal with large crowds or noises of the city.

“Our modest size city is just right for our restaurant and the people in the area; some coming from a bit far away,” he said. “North Central MA is just more laid back. COVID didn’t hit us as hard as it hit the cities because of our lower population density and more spread out living situations.”

Walton noted the Ale House is very involved in many community activities.

“We pretty much involve ourselves in anything going on in the city (Gardner IS a city, by the way.),” he said.  “And the city and it’s organizations come to us for beer, food, donations of gift cards, senior center activities. We pretty much do it all. And we put on the biggest party for the city called Oktoberfest & the Chair Luge. So much fun! The list goes on…”

While COVID may not have hit the Ale House as hard as other establishments, Walton still said it forced them to change how they operate the business.

“Customers are harder to come by so we have to become even more attractive than we already are,” he said. “That means more consistency with food and service. It means tightening our belts, reducing waste even more – getting the most out of every dollar. It means making it easier to get food for takeout. We need to be like the chains with takeout!”

Walton added they are improving lighting, music, furniture. “The whole vibe is nicer,” he said.  “We were forced to take our already excellent restaurant and brewery and make it even better! And it is working, but it is a slow climb. The future looks bright because we are so much better than ever before.”

He also noted the Ale House’s staff is a very important part of why they are even better.  “Everybody in the company is important and listened to. Condescending to another employee just doesn’t happen and is not allowed. We aren’t too serious: The culture is to respect each other, work hard and enjoy your job. We can’t be 100% in this, but we try. It might sound dreamy, but we believe you shouldn’t be in a job you don’t like. So, our culture puts employees first. In that way, customers get the best possible service and experience.”

When he is hiring staff, Walton looks for “honesty, a good work ethic and a willingness to learn.”  “If you can be like that, he said, “we’ll teach you the rest!”

Word of mouth is a critical way for The Ale House” to promote itself.

“We promote ourselves through our community involvement, through Word of Mouth, heavy use of social media and through collaborations like the Brew Barn and Cidery at Red Apple Farm in Phillipston,” Walton added.  “I think Word of Mouth builds our customer base reliably, but social media gets the word out to that base and that is critical.  We also have a rewards program and a newsletter in which I am allowed to be a bit silly.”

Walton said he listens to everyone for ideas.  “We casually take in the competition to see how they do things,” he noted. “We aren’t too proud to borrow! A very big influence is each other. So many people in this company have left their mark on us with ideas, methods and best practices.”

He concluded the biggest influence of The Ale House is the guests’ input.  “Guest feedback is largely positive,” Walton noted, “which gives us the impetus to continue along our way and negative feedback is critical to improving our way forward.”

 

January Edition of Good Morning North Central Features Diana DiZoglio, State Auditor Elect for the Commonwealth of Massachusetts and Christine Abrams, CEO of Commonwealth Corporation

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The next edition of the North Central Massachusetts Chamber of Commerce’s popular Good Morning North Central breakfast program is scheduled for Thursday, January 12, 2023, from 6:45 a.m. to 8:30 a.m. and will take place at Great Wolf Lodge, 150 Great Wolf Drive, Fitchburg, MA. The January edition is sponsored by Resource Management, Inc.

The Good Morning North Central breakfast series is the Chamber’s longest running program. The breakfast series started in 1984 and has evolved into a high-profile, fast-paced and educational morning program geared towards executives, senior managers, professionals and business owners from throughout North Central Massachusetts. Over the years, speakers have included governors, senators, prominent business and civic leaders, authors and celebrities.

The featured speakers for the month of January are Diana DiZoglio, State Auditor Elect for the Commonwealth of Massachusetts and Christine Abrams, President and CEO of the Commonwealth Corporation.

Diana DiZoglio was elected as the new State Auditor for the Commonwealth of Massachusetts in November, 2022 and will begin serving in this role on January 18, 2023. The Massachusetts State Auditor is a statewide elected office responsible for conducting audits, investigations, and studies to promote accountability and transparency of how tax dollars are spent, improve performance, and make government run better. A student of Massachusetts public schools, Diana attended Middlesex Community College and later Wellesley College. After serving in the Legislature as an aide, as Chief of Staff for the 12,000-member Professional Fire Fighters of Massachusetts, and years of work for local nonprofits and community organizations, Diana won her first race for public office in 2012. Diana served three terms as State Representative for the 14th Essex District. In 2018, she was elected to the State Senate for the 1st Essex District, serving two terms, and in 2022 was elected to be the next Massachusetts State Auditor.

Christine Abrams was selected as the President & CEO of Commonwealth Corporation in April, 2020. Commonwealth Corporation (CommCorp) is the quasi-public agency that is responsible for administering and delivering a wide range of publicly and privately funded workforce programs. She has more than thirty years of progressive financial and organizational leadership experience with Fortune 100 companies, startups, and non-profit organizations. Previously, Christine was Senior Director of Sales, Americas, and Australia for Instant Services at IGT. In this role, she helped build key partnerships and worked collaboratively with manufacturing, operations, R&D, finance and IGT corporate to achieve profit and market share goals significantly outpacing the industry averages. Prior to that, Christine served as the SVP of Sales and Marketing Chelsea based Signature Bread and as Director of Sales at General Mills Inc where she was named a Women of Influence in the Consumer Foods Industry. Christine was elected by her peers as the Chair of the Northeast Network of Executive Women. She served on the board for the Garden of Peace and was recently elected to the Garden’s Advisory Committee and served as Vice President of DOVE’s Board of Directors.

The cost to attend the event is just $30 for Chamber members/$45 non-members and includes breakfast. Pre-registration is required. For more information or to register, please contact Kathleen Deal at 978.353.7600 ext. 235, kdeal@northcentralmass.com or register online.

Register Here

North Central Massachusetts Chamber of Commerce leads effort to install welcome signage at Leominster Connector

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Sign provides recognition of civic pride for residents and visitors alike

The North Central Massachusetts Chamber of Commerce today announced it has sponsored the construction of a new welcome sign for the City of Leominster located on the Leominster Connector.

The new sign is part of a project to construct welcome signs at key gateways in communities in the region to boost civic pride and serve as a positive first impression for visitors. The project was partially funded by a grant secured by the Chamber.

The signs were designed and produced by Add-A-Sign in Leominster and represent the region’s traditional New England style. The Leominster welcome sign includes a carving of the City of Leominster’s seal and is painted in the proud city colors of blue and gold. In addition to Leominster, similar welcome signs have also been installed at key gateways in Fitchburg, Gardner and Westminster. Each sign is carved with the community’s seal and painted to match their official colors. Additional signs will be constructed for other communities in North Central Massachusetts as funding becomes available.

“One of the goals of our regional economic redevelopment plan, One North Central, was to capitalize on our region’s unique locations,” said Roy Nascimento, President and CEO, North Central Massachusetts Chamber of Commerce. “Each city brings a distinctive experience to the region and with this project, those entering Leominster will learn about the city while receiving a warm welcome as they arrive.”

“Leominster is truly a gateway city to the North Central Massachusetts region and the new signage will serve as a great way to show our visitors what Leominster is all about,” said Mayor Dean J. Mazzarella, City of Leominster. “We are proud of our heritage in Leominster, and we are grateful for the opportunity to share the story of our legacy through the welcome sign.”

The Community Leadership Institute (CLI) class of 2023, chose My Turn, Inc. of Fitchburg as a community service project for the holiday season.

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The Community Leadership Institute (CLI) class of 2023, chose My Turn, Inc. of Fitchburg as a community service project for the holiday season. Since 1984 My Turn, Inc. has focused on “the forgotten half”, the economically, socially and educationally disadvantaged youth in poorer neighborhoods and communities. There are currently, 35 individuals actively participating in this program.

A group from the CLI class of 2023 organized the fundraiser and set a goal of $4,000 in order to purchase items for the participants for the holiday season.  With a “gofundme” campaign and donations from  Fidelity Bank, Leominster Credit Union, IC Credit Union, Rollstone Bank, Enterprise Bank and AIS a total of $4,099.95 was raised in just 3 weeks!

On Friday, December 16th, several individuals from the CLI class gathered to wrap gifts to prepare for drop off at My Turn. With the generous donations, we were able to purchase items in need such as  grocery and gas gift cards, warm winter attire, blankets, phone chargers, hygiene products, and much more. The gifts were delivered to My Turn where manager of north central Massachusetts Programs, Nicole Conroy, expressed her heartfelt gratitude for the endless bags of gifts we put under the tree, “All that you all have done is so very appreciated. The students were all so appreciative. I had two in tears over the thoughtfulness and generosity. These are all low income, young moms who go without so they can provide toys for their kids at Christmas. It was incredible for them to receive items for them”.

To learn more about the Community Leadership Institute contact Kat Deal at kdeal@northcentralmass.com

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Opportunity Knocks in North Central: How Will You Answer?

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As employers in North Central Massachusetts continue to struggle to find skilled labor, the North Central Massachusetts Chamber of Commerce recently announced a study aimed to offer suggestions to balance the labor market now and into the future.

The North Central Workforce Study was prepared by the UMass Donahue Institute’s Economic and Public Policy Research Group, a leading provider of applied research to help clients make more informed decisions about strategic economic and public policy issues. Focusing on workforce growth barriers and solutions, including barriers related to geography, skills, structure and work/life balance, the study includes short-, mid- and long-term recommendations focused on growing the region’s workforce.

“This project has very tangible recommendations and sets North Central up as a thought leader in this space,” said Dr. Mark Melnik, Director, Economic and Public Policy, UMass Donahue Institute. “The chamber is thoughtful about the characteristics of the region and the needs of the businesses. They are one of the first out of the gate in the state to acknowledge the workforce challenges their region is facing and have a strong desire to learn how to change those challenges into opportunities.”

With the collaboration of regional business and education leaders and workforce development experts, the study revealed two classes of workers who are not being fully utilized within the current workforce, but who have skills local employers need.

“Hidden workers” are identified as applicants who are screened out of consideration for jobs or those who have no choice but to remain out of the workforce due to barriers out of their control, and “future workers” are those workers who will be in the labor force in the future due to age, location, technology and other factors.

“Similar to many other areas of the Commonwealth, North Central Massachusetts is feeling the impacts of stagnant labor force engagement beyond the effects of the pandemic shutdowns,” said Roy Nascimento, President and CEO, North Central Massachusetts Chamber of Commerce. “Our region is particularly susceptible to labor force shrinkage due to our aging population and slower population growth, but also because groups of our hidden and future workers within the region have other needs which are not being met by the current labor market here. In fact, some workers are finding the job search to be just as difficult as it was before the pandemic began. The barriers and recommendations in the plan will require all different community stakeholders in North Central to work together to meet the regions’ work force needs.”

While the study revealed many workers are willing and ready to work, barriers facing today’s workers, including where they live, what skills they have and spoken (and unspoken) rules and regulations, can limit a person’s ability to obtain a job.

From a lack of affordable housing adjacent to jobs and transportation from where affordable housing is available, to current skills that no longer align with industries in the area and overly aggressive online applicant filters that may discriminate an applicant’s past, the challenges facing today’s workforce are unique to those of years past.

“We are definitely seeing transportation challenges,” said Robin Therrien, Career Transitions Specialist, Shriver Job Corp., located in Devens, and who recently attended the Manufacturing Bus Tour hosted by the Chamber. “Not everyone is from the larger areas, like Fitchburg and Leominster, and we have students who live outside of these areas seeking opportunities, but there is no affordable housing and transportation to get them to these areas.”

Jeffrey Roberge, Executive Director at MassHire North Central Workforce Board agrees. “Transportation is an issue, especially for those people who live in rural areas of the region,” he said. “But the silver lining here is that several stakeholders in the region are constantly looking at ways to get people to the jobs here and have a commitment to the workforce system to develop transportation services for the workforce.”

Roberge pointed to the Montachusett Area Regional Transport (MART), which is looking at modified plans to support workforce development. “We are fortunate to have our local transit authority recognize workforce development as a priority, and I know they are looking at bus routes to better align with shift schedules.”

To combat transportation issues, the study recommends employers implement ride share programs, which are similar to a carpool system among fellow employees, and encourage companies to coordinate a van system, which helps workers complete the last mile to and from public transportation locations to the company location. Roberge said this type of system has experienced much success in the Boston area.

But transportation isn’t the only challenge employers are facing when hiring workers. The study revealed the most diverse set of issues faced by both workers and employers relates to work/life balance, such as prioritizing shift times, benefits, and location over things such as industry, company or position in the company.

“The future is hybrid and preliminary data has shown there hasn’t been reduced production of work when people are working from home,” added Roberge. “While certain industries have more challenges with a hybrid work schedule, such as manufacturing and health care, I think employers really need to think about aligning schedules and shifts with what their industry can handle and provide remote or hybrid opportunities as much as possible. I don’t think we will ever go back to the traditional workday of being in the office eight hours a day, five days a week.”

The study recommends multi-purpose solutions for North Central related to work-life balance, including a shorter work week, flexible working agreements, the expansion of benefits to include childcare, more permissive policies for time-off requests, incentives for career advancement and rewards for longevity, incentives for employees who have a healthy work/life balance, and coordination with other community stakeholders to increase the supply of childcare, among others.

The study also explored a variety of solutions to engage hidden and future workers into the labor force, such as through the creation of innovative training and credentialing programs, and fostering relationships with local community colleges, businesses and prisons.

“North Central’s workforce is aging and slowed population is projected to continue,” said Nascimento. “In order to meet North Central’s workforce needs, employers, educational institutions and workforce development agencies must collaborate to identify overlapping strategies to help enhance the engagement of these groups in the labor force.”

Local institutions, such as Mount Wachusett Community College and Fitchburg State University, currently collaborate with employers to coordinate programs geared toward community and employer needs. For example, in collaboration with employers, Mount Wachusett Community College began developing a new Veteran Worker’s Initiative that assists local veterans with the transition from military skills to college/civilian skills. This program connects regional employers to students on campus, hosts panel discussions with organizations that educate employers on how to be responsive and sensitive to veteran needs and utilizes the college’s career services by connecting students with business partners in the area.

“We have so many great partners and we want the industry professionals in our area to be involved with educating the future workforce,” said Kijah Gordon, Director of Workforce Access and Education, Mount Wachusett Community College. “We are taking a step back from traditional programming and really looking at what our employers need to fill their open positions.”

At Shriver Job Corp., which serves those between the ages of 16 to 24, programs are offered to students who may not have had a good support system throughout their lives and who may not have life skills that make them attractive to employers. “Our students are not all at-risk youth,” said Denise Schultz, Work-based Learning Specialist, Shriver Job Corp. “The truth is we have good kids who might not have the best focus, but who are committed to learning a skill so they can be contributing members in their communities while also building a good life for their families. We want to work with local employers on filling their open positions and they just need to let us know what they need so we can help find the right fit.”

In an effort to facilitate the collaboration between employers and educational institutions, the Chamber recently hired a Talent and Education Initiatives Program Manager to support the development, retention and attraction of a qualified labor force. “By working with employers, regional partners and educational institutions on developing strategies and programs to build and strengthen our current and future workforce, it was important for us to have a team member focused on these efforts to help strengthen the collaboration,” added Nascimento.

“Terry Young (the Chamber’s Talent and Education Initiatives Program Manager) is doing a great job recruiting for our program,” added Gordon. “The future for us is working with the high schools on how to make our programming more appealing to students.”

While collaboration will be key to growing the labor force in North Central, the study concludes that employers need to make working easier by overcoming the identified barriers.

“What stood out to me about the region was the level of collaboration between higher education and businesses combined with a strong Chamber of Commerce,” said Melnik. “There is really good DNA in the region for collaboration and forward thinking, and the people who we spoke with (as we developed the study) realize that timing for this work is important as the issues at hand will only become bigger if they are not addressed.”

Nascimento agreed the region is unique because the collaboration among its businesses, educators and other key stakeholders is already strong. “The Chamber of Commerce is in a unique position to gain trust from businesses and locals with a goal of establishing connections necessary to better meet worker needs and ultimately bring additional people into the labor force,” said Nascimento. “It is our hope that by commissioning the North Central Workforce study that all stakeholders will have a shared roadmap to overcome the challenges and set forth a bright future for employers and workers alike in the region.”

While the study outlines challenges and opportunities to overcome them, many people are bullish on the region’s workforce development, including Roberge.

“We have a vibrant workforce development system, and the outlook is bright as we have solutions to combat our challenges,” said Roberge. “We are very lucky that our businesses, educators, career centers, social service agencies and many others are talking with each other toward a common goal of making North Central a place to live, work and raise a family. We know what we need to do, and we have a community of engaged and committee people to do it.”

Read the North Central Workforce Study in its entirety here.

Healey Adds Hao, Snyder To Developing Cabinet

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Source: State House News Service
Author: Colin A. Young

One day before she is to be sworn into office, Gov.-elect Maura Healey continued to flesh out her Cabinet by naming her secretaries of economic development and of technology services and security, but major administration roles remain unfilled by Healey, who has also not appointed a communications team.

Yvonne Hao, Healey’s pick to lead the Executive Office of Economic Development, co-founded and held top roles at the investment firm Cove Hill Partners and was an operating partner at Pillar Ventures. She also served as chief operating officer and chief financial officer for PillPack, an online pharmacy that was acquired by Amazon in 2018, and previously worked at Bain Capital and McKinsey & Company.

In an anticipated reorganization proposal, Healey plans to split the existing Executive Office of Housing and Economic Development into two distinct Cabinet posts, and on Wednesday said that Hao will be the first woman and person of color to lead the state’s chief economic development secretariat. Healey made housing a major platform of her campaign but has not yet named her secretary of housing.

“Massachusetts is a national leader in the innovation economy, and the next Secretary of Economic Development has an opportunity to not only maintain that leadership role, but also grow our economic competitiveness,” Hao said.

Last month, Healey told GBH Radio that in addition to assembling her Cabinet and administration, her “top priorities are affordability and making sure that Massachusetts is a place where if you live here, you can stay here; if you come here to study or to work, you can stay here; if you’re an employer here or a business here, you can stay here and grow here.”

Hao has been active in the Bay State business community, serving on the boards for CarGurus, Flywire, Gentherm, ZipRecruiter and Bose. She is also vice chair of the board of trustees of Beth Israel Lahey Health, and is a trustee emerita for Williams College, her alma mater. Hao lives in Williamstown and Cambridge.

Jason Snyder, tapped Wednesday to run the Executive Office of Technology Services and Security, has spent about 10 years at Harvard University, serving as its chief technology officer since 2015. He has some familiarity with state government, though — he was chief technology officer for Massachusetts throughout Gov. Deval Patrick’s two terms in office, the Healey team said.

Before that, he worked 13 years at CSC Consulting Group. Snyder graduated from Rensselaer Polytechnic Institute and lives in Reading.

Gov. Charlie Baker in 2017 created the Executive Office of Technology Services and Security (and its corresponding Cabinet secretary position) based on the former Massachusetts Office of Information Technology.

“The Commonwealth of Massachusetts does incredible work day in and day out to deliver critical services to residents, but we need to make sure that everyone is able to access those services,” Snyder said. “I’m honored to have the opportunity to serve in the Healey-Driscoll Administration and look forward to the work ahead to make sure that our technology is resilient, secure and accessible to all.”

Cybersecurity has been a growing focal point for state government in recent years, especially since the COVID-19 pandemic changed the ways that businesses operate and people interact, leading to even greater reliance on digital technologies but also opening up opportunities for cybercriminals. Last month, Baker signed an executive order to create the Massachusetts Cyber Incident Response Team, tasked with preparing for, responding to and recovering from cybersecurity threats at a time when officials say public agencies are facing heightened risks online.

Healey has still not built out her entire Cabinet and major posts are still unfilled, including the positions overseeing health and human services, public safety and security, housing, and labor and workforce development.

Here is the Cabinet that Healey has so far announced: Matt Gorzkowicz as secretary of administration and finance, Patrick Tutwiler as education secretary, Gina Fiandaca as transportation secretary, Rebecca Tepper as secretary of energy and environmental affairs, Melissa Hoffer as a Cabinet-level climate chief, Hao as economic development secretary, and Snyder as secretary of technology services and security.

Record State Savings Balance Creeping Closer to Legal Limit

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Source: State House News Service
Author: Colin A. Young

Beacon Hill seems to have more money than it knows what to do with these days, and lawmakers could soon have even fewer options at their disposal.

Surging state revenues have in recent years fueled sizeable surpluses and allowed the Baker administration and Legislature to pump the state’s Stabilization Fund up to new heights. But similar to the way that fiscal year 2022 revenues were capped by Chapter 62F, leading to taxpayer rebates totaling nearly $3 billion, the Stabilization Fund’s balance is getting closer than it has in at least 20 years to a cap of its own — one that would trigger another lesser-known tax rebate mechanism in state law.

As of the end of fiscal year 2022 on June 30, Massachusetts had stashed away in the Stabilization Fund about 75 percent of what it is legally allowed to, according to the year-end financial report released last week by the state comptroller.

Massachusetts injected $2.311 billion into its Stabilization Fund during fiscal year 2022, bringing the rainy day fund’s balance to a historic high of about $6.938 billion, according to the comptroller. And the fiscal year 2023 budget that Gov. Charlie Baker signed in August would put the Stabilization Fund on track to reach yet another record high of roughly $8.4 billion by next summer, his administration has said.

The law that lays out the parameters of the Stabilization Fund stipulates that “[i]f the amount remaining in the fund at the close of a fiscal year exceeds 15 per cent of the budgeted revenues and other financial resources pertaining to the budgeted funds, as confirmed by the comptroller in the audited statutory basis financial report for the immediately preceding fiscal year, the amounts so in excess shall be transferred to the Tax Reduction Fund.”

For fiscal year 2022, the Stabilization Fund cap was $9,312,616,000 as calculated by Comptroller William McNamara’s office in the Statutory Basis Financial Report published last Friday. And the balance of the Stabilization Fund when fiscal 2022 ended was $6,937,864,000 — or 74.5 percent of the allowable balance.

While there is still room for more savings, the fund’s balance is closer to the limit than it has been at any point over the last 20 years and the balance has been increasing at a much faster rate than the cap.

The last time that the Stabilization Fund ended a fiscal year with a balance less than it had one year prior was fiscal year 2014, when the balance was equal to about 23.5 percent of the statutory cap. Since then, the fund’s balance has grown more than 455 percent — from about $1.248 billion to roughly $6.938 billion. Over the same period, the cap — which is based on tax revenues, federal grants and reimbursements, and more — has increased 75 percent, from $5.320 billion to $9.312 billion.

Starting in fiscal 2015, the Stabilization Fund began to grow, slowly at first. Its balance increased just 0.32 percent that year, then 3.12 percent in fiscal 2016 and 0.71 percent in fiscal 2017. Each fiscal year since, the fund’s balance has grown by a greater percentage than has its upper limit imposed by the cap.

Fiscal year 2018’s nearly 54 percent increase in the balance far outpaced the 6.44 percent increase in the cap. The 71 percent growth in the Stabilization Fund balance in fiscal 2019 (compared to 6.44 percent growth in the cap) brought the fund to about 50 percent of its legally-allowable maximum. Fiscal 2020 was more reserved — 2 percent growth in the cap and 2.24 percent growth in the fund’s balance.

But even as state revenues have skyrocketed in the last two years, the Stabilization Fund’s balance has still grown faster than its ceiling. Fiscal 2021 saw a 20 percent increase in the cap — the largest one-year increase since the cap was raised in the early 2000s from 10 percent to 15 percent of budgeted revenues — and 32 percent growth in the fund’s balance. And fiscal year 2022 generated a 9 percent increase in the cap but a nearly 50 percent increase in the Stabilization Fund’s balance.

If or when the statutory 15 percent cap is reached, any additional money that would normally be bound for the Stabilization Fund — like excess capital gains revenue — goes instead into the Tax Reduction Fund, which sends money back to taxpayers through a one-time increase in the personal exemption.

Since its creation in 1986 as a companion to the Stabilization Fund, taxpayers have received three tax cuts through the Tax Reduction Fund, according to News Service reporting. The cuts came through one-time increases in personal exemptions on 1996, 1997 and 1998 tax returns.

The first tax cut was worth $150 million, the second came in at $91.8 million, and the third and most recent cut was worth $208.8 million, the News Service reported in 2001, citing a deputy state comptroller.

Massachusetts was limited to holding a maximum of $543 million in the Stabilization Fund in fiscal year 1996, but tax revenues helped to propel it well beyond that figure, triggering the automatic tax cut. Gov. William Weld, who was locked into a hot U.S. Senate race against John Kerry at the time, announced in June 1996 that there would be a roughly $150 million tax cut coming when people filed their taxes the following year. That cut meant $105 for a single filer or $135 for married couples, the News Service reported at the time.

“I would much rather see some harried parents enjoy a night out than see government engorge itself on the public’s tax dollars,” Weld said when he announced the tax cut.

Current lawmakers, who were blindsided by the governor’s late July Chapter 62F revelation, may have avoided a possible Stabilization Fund cap issue when they made what McNamara last week called one of the “more unusual transfers” as they closed the books on fiscal year 2022. Instead of being transferred into the Stabilization Fund as would normally be the case, the final close-out budget passed by the Legislature and signed by Gov. Charlie Baker directed the state’s year-end $4.8 billion surplus to instead be deposited into a Transitional Escrow Fund to be reappropriated in fiscal year 2023.

Secretary of Administration and Finance Michael Heffernan said the escrow account “acts almost as a stabilization fund on top of the Stabilization Fund.”

Massachusetts is far from the only state where a similar story is playing out.

Together, states had a record $136.5 billion in savings by the end of fiscal 2022, the National Association of State Budget Officers said. An October report from the Pew Charitable Trusts found that state savings accounts hold enough money in reserve to run government operations for a median of 42.5 days, a new high and up from a median of 28.9 days in fiscal 2019, just before the pandemic-fueled recession.

At least three states — Connecticut, Iowa and Oklahoma — were projected to have already maxed out their rainy day funds once the final accounting on fiscal year 2022 was completed, Pew said. In those cases, money that otherwise would have flowed into savings will be diverted to other purposes, as would be the case if Massachusetts were to hit its Stabilization Fund ceiling.

And while the COVID-19 years have proved to be a boon for state savings accounts despite initial forecasts for steep losses, Pew said that it expects that states will soon have to slow down on stashing money away.

“Budget surpluses and related gains in states’ rainy day funds during fiscal years 2021 and 2022 are not expected to continue to the same degree in fiscal 2023. Higher-than-forecasted tax revenue growth, historic federal aid, and record financial reserves have buttressed states’ fiscal positions over the past two budget years,” Pew said in its October report. “However, policymakers now face an inflection point as they reckon with several looming challenges, including weakening economic growth amid tightening monetary policy and historically high inflation, and a tapering of federal aid.”