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State Policy Update Sept. 8th

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FOOD AND BEVERAGE

Sugar Tax:

Pennsylvania:  Philly.com reports, “After citing reports of layoffs and reduced hours for employees in the beverage industry, Philadelphia City Controller Alan Butkovitz announced Wednesday that he will survey businesses in the city to assess the economic impact of the city’s tax on sweetened drinks. “We will be analyzing if there has been any impact to businesses’ revenues, sales, changes in regular operations, and the future outlook,” Butkovitz said in announcing the survey, which will involve 1,000 businesses of different sizes.”  However, “Mike Dunn, a spokesman for Mayor Kenney, said he was skeptical about the survey’s impartiality. He said he hoped the study would take into effect the positive effects of the tax, including a possible reduction in health-care costs as less soda is consumed, the pre-K program funded by the tax that has created new jobs, and the benefits for parents who are able to return to work because their children are enrolled in pre-K.”  The Mayor was also skeptical and critical of the recent study released by Stanton that found both beverage and total store sales declined inside the city after the tax went into effect.  “It’s time for the city to stop burying its head in the sand and repeal a tax that is costing local supermarkets hundreds of thousands of dollars a month – threatening efforts to expand grocery access in food deserts and putting hundreds of jobs at risk,” Anthony Campisi, a spokesman for the Ax the Philly Bev Tax Coalition, said. “The mayor needs to finally admit that this tax is having severe negative consequences.”

Oregon:  Portland Tribune reports, Matt Brown, the St. Helens City Council’s Finance Director, first introduced implementation of a local 1- to 2-cent per ounce excise tax on sugar-sweetened beverages, like soda, as a revenue-generating idea for the city in March. In May, the Public Health Foundation of Columbia County presented to the St. Helens City Council on the health threats posed by sugary drinks and the rising childhood obesity rate in the US and advocated for implementing a sugary sweetened beverage tax.  The city has not taken any formal action to implement the tax, but Brown has been researching how it could be structured. If the St. Helens City Council approves a sugar-sweetened beverage tax, it's possible only large distributors and retail shops would have to implement the tax, according to one plan developed by city staff. Brown said he will likely ask the City Council to consider implementing the tax only at retailers that meet an annual gross revenue threshold, and also exempt self-distributors from the proposed excise tax.

IllinoisForbes reports, Billionaire Michael Bloomberg is spending millions to rescue Cook County’s soda tax.  “Bloomberg, who was unsuccessful banning super-sized sugary drinks in New York, is coming to the rescue of an embattled soda tax already implemented and generating revenue in Cook County, Illinois.  Bloomberg this week launched a new $3 million television advertising blitz in the Chicago media market heading into the Labor Day weekend in support of the penny-per-ounce "Cook County sweetened beverage tax." The latest investment by Bloomberg, who has already spent $2 million in advertising to support the soda tax, comes ahead of a potential repeal vote before the Cook County Board in two weeks.”  But, “In Cook County, which includes Chicago and its nearby suburbs, the tax hasn’t been popular among retailers, convenience stores and some merchants.  The Illinois Manufacturers Association released a poll showing “nearly 87% of a random sample of likely voters” disapprove of the soda tax . The business lobby said “the tax not only is burdensome for consumers, it reinforces Cook County’s reputation as a difficult place to conduct business.”

LABOR

Wages:

‘Fight for 15’ Activists Call for Increase in Minimum Wage:  Fox News reports that minimum wage activists across the country rallied on Labor Day calling for a $15 minimum wage.  “Fast food workers in 300 cities nationwide are expected to come out both in support of wage hikes and in opposition to Republican governors in swing states seeking reelection.  "In 2018, the worst Republican governors are all up for reelection. Let's throw them out," one group wrote in their rally announcement.”  Rallies in the U.S. took place in large cities like Miami, Chicago and Arizona.  Economists, however, have been cautious when approaching the $15 minimum wage issue. A 2015  University of New Hampshire study found that nearly three-quarters of economists in the U.S. oppose a  $15 federal minimum wage, citing concerns that such a salary increase would force a lot of small  businesses to close. 

Arizona:  A Maricopa County Superior Court judge ruled against the state, nullifying the Arizona wage and benefits preemption law on constitutional grounds. The 2016 preemption law prevented localities from passing minimum wage and employee benefit laws that differ from the statewide rules. The judge found that the new preemption law stood in conflict with an existing law that requires 3/4 majority vote in the legislature to overturn a voter-approved initiative, and the recently passed preemption law failed to meet that standard.  This decision creates the possibility that an Arizona city or town or other political subdivision could enact a more generous paid sick leave law.  The State must decide whether to appeal the decision.

Massachusetts:  State Attorney General Maura Healey approved that the statewide ballot in November 2018 could include questions on at least a $15 per hour wage and paid family and medical leave if supporters get the signatures of 64,750 registered voters by December and convince the legislature to approve the measures by May 2018.  If the Legislature says no, supporters would have until June 2018 to get an additional 10,792 signatures.

Michigan:  Bloomberg BNA reports, leadership of Michigan One Fair Wage Ballot Committee Alicia Renee Farris stated, “Michigan voters may see a $12 minimum wage proposal on the 2018 ballot if a coalition of restaurant workers, employers, and other advocates collect enough signatures.”  Michigan's hourly minimum is $8.90 and rises to $9.25 in January. The proposed ballot measure would bump the minimum wage to $12 an hour by 2022. Wages would rise to $10 in 2019, $10.65 in 2020, and $11.35 in 2021, Farris said.  “We've got some serious issue. Tipped workers are about three times as likely to live in poverty and nearly two times as likely to rely on food stamps.” The ballot committee officially launched its campaign Sept. 7, but it will need 252,523 valid voter signatures to get the proposed ballot in front of lawmakers, according to state requirements.”  The Michigan Chambers of Commerce has been vocal in its criticism against raising MI’s minimum wage.  Read more about MI’s ballot and minimum wage fight at:  https://www.usnews.com/news/best-states/michigan/articles/2017-09-07/group-announces-michigan-ballot-drive-for-12-minimum-wage.  

Missouri:  Local Kansas City news reports, “Hundreds gathered in Kansas City yesterday to send a message about raising the minimum wage.  Many residents want the minimum wage increased to $15 an hour.  Earlier in August, lawmakers in Kansas City approved a minimum wage increase but a new state law stopped it from going into effect.  The law says the local government can't require a wage that's higher than the state's minimum.  Yesterday, workers walked out of their jobs to take part in the strike.  They are also looking for a union to help them.  Fran Marion says, "A union would help us a voice on our job. it would help us little people be heard, better health care, women to have the same pay as men or at least, bridge that pay gap to where we can be equal to men, paid maternity leave, the union is very key as well."  Kansas city was not the only place workers were rallying for better wages.  Workers in Boston, Chicago, and Los Angeles also went on strike for better wages.”   

Employers and Salary History:

Illinois:  IL Governor Bruce Rauner vetoed legislation that would have banned employers from asking job applicants questions regarding their salary history or from considering past salaries as a factor in hiring decisions or salary offers.   The Chicago Tribune reports, in late August, Rauner “vetoed Illinois' No Salary History bill, which seeks to narrow the pay gap between men and women by keeping too-low salaries from following women as they move from job to job. A wave of similar laws have been adopted in states and cities across the country, including Massachusetts, Oregon, Delaware, New York City and San Francisco.”  The bill passed the House 91-24 and the Senate 35-18, with one Senate member voting present. A veto override requires 71 votes in the House and 36 in the Senate. “In a message issued with his veto, Rauner said the "gender wage gap must be eliminated" and suggested that Illinois model a bill after a law in Massachusetts that gives employers a bit more wiggle room.  Like the Illinois bill, the Massachusetts law makes it unlawful for an employer to seek a job candidate's compensation history, including pay and benefits, unless it is a matter of public record or the applicant is a current employee applying for another position within the company. The measures don't prohibit candidates from volunteering the information.  But the Massachusetts law, which goes into effect next July, allows employers to seek pay history after they have offered a candidate the job and salary — which, on the plus side, could allow employers to increase an offer to make it more appealing, but, on the down side, could reduce an employee's raise or bonus down the road if it is revealed he or she was earning much less before.”

Paid Medical and Family Leave:

New York:  The National Law Journal reports on the most recent updates in New York’s Final Regulations for its paid family leave law, including on collective bargaining agreements, employee contributions, interaction between qualifying leave and benefits in 2017 and 2018, waivers of PFL, coverage outside New York calculation of daily benefits, and interaction with NYC’s Earned Sick Time Act.  It notes, “While the Final Regulations did clarify some outstanding questions, many questions remain, particularly pertaining to the practical logistics of implementing the Law, such as the tax treatment of deductions and benefits, paystub requirements, certain differences between requirements that pertain to self-funding employers and those employers intending to obtain an insurance policy, and what forms and procedures will apply.”  Additionally, the NY State Department of Taxation and Finance released guidance on the tax implications of the paid family leave benefits and contributions.

Food and Beverage

Menu Labeling: 

New York: Politico reports, “The New York City health department backed off its promise to begin enforcing new menu labeling rules, agreeing [in late August] to postpone implementation until the federal Food and Drug Administration completes its review of the regulation.  The deal, which preserves the status quo, is a victory for the National Restaurant Association and the National Association of Convenience Stores, which sued the city to stop enforcement of the new rules. It also demonstrates how hard it can be for even the most liberal administrations to buck President Donald Trump and the federal government.” “The rules at the center of the dispute — which have pitted the de Blasio administration against industry groups, the U.S. Attorney’s Office and the Food and Drug Administration —  require chain retailers with more than 15 locations to provide upon request a slew of new nutritional information including calories from fat, total fat, saturated fat, trans fat, cholesterol, sodium, carbohydrates, dietary fiber, sugar and protein. Chain convenience stores and some grocery stores would be required to post calorie information about prepared foods. Under the new rules, menus must also say: "2,000 calories a day is used for general nutrition advice, but calorie needs vary," and "Additional nutritional information available upon request." The rules have technically been in effect in New York City since May, though the health department has not fined anyone for failing to comply. The fines would range from $200 to $600. While the FDA pushed back its implementation date, Mayor Bill de Blasio decided to move ahead anyway, saying he could no longer wait for federal action and urged other cities to follow his lead. None did. “Predictably, the mayor’s decision sparked a legal challenge brought by the National Restaurant Association, National Association of Convenience Stores and the Food Marketing Institute, which argued that New York City's move violates the Nutrition Labeling and Education Act by preempting the federal government. The FDA earlier this month filed a statement of interest opposing the city… As part of the agreement signed Friday, the case remains pending. The city can continue to enforce the calorie counts on menu boards but won't enforce any new requirements. The associations promise to encourage their members already complying to keep doing so; a small gesture given what was at stake before the court.”

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