Berman & Company


BPAA News Brief - January 16, 2017

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Wage Bills Introduced in State Legislatures: As the state legislatures begin to convene for the 2017 session, we're already seeing a new round of minimum wage bills being introduced. Legislation has been introduced in as many as 20 states, including Illinois, Virginia, Missouri, Connecticut, Delaware, North Dakota, and Hawaii. Berman and Company will be assessing these proposals and working with state bowling center associations to push back against these threats.

Congress Takes Major Step Towards Obamacare Repeal: As POLITICO reported on January 13, both the Senate and the House passed legislation setting the nation's budget, setting up a way for the GOP to repeal the controversial Affordable Care Act. While this step is significant, Republican lawmakers have not pulled together the "replacement" to the healthcare bill that has expanded the number of insured Americans. President Elect Donald Trump, who was a strong critic of the ACA, this weekend vowed that the replacement plan would provide "insurance for everybody."

Fallout from Philly Soda Tax Continues: We reported last week about how customers has "sticker shock" over the implementation of the city's 1.5 cent-per-ounce tax on sodas and other sugary beverages. Money Magazine now reports how much "people really, REALLY hate [the] new soda tax."

Kansas Governor Proposes Doubling the Alcohol Tax Rate: With the state facing a massive budget deficit, the state's Governor has once again proposed a large increase in both alcohol and cigarette taxes. Under his proposal, the tax on adult beverages would increase from 8 percent to 16 percent, and it's expected to generate $107 million over two years. The state's beer wholesaler association has pushed back against the tax hike, arguing the increase would send more businesses out of the state. Last year, a similar proposal to raise so-called "sin" taxes in Kansas did not pass.

Local $15 Wage Proposals Stumble: Some localities are cooling to the idea of a $15 an hour. In Cleveland, city officials who were facing a local ballot measure to phase in a $15 minimum wage asked state lawmakers to pass legislation banning municipalities from setting their own minimum wage. That legislation was signed in late December, and the ballot measure has been withdrawn. The city officials were concerned that the high minimum wage would undermine the city's economic recovery.

In Montgomery County, Maryland, a bill to require $15 by 2020 will be considered on Thursday. The nine member council is split five-to-four on the proposal, with the minority calling for a study to learn about the effect of the region's recent wage increases before raising the wage even more (the county's wage is already $10.75 and will go up to $11.50 mid-year). If it passes, the County Executive has indicated he may veto the measure.

New York's Response to Wage Hike: As businesses in upstate New York with ways to absorb the increase in the minimum wage, The Berman and Company-managed Employment Policies Institute has tracked what many businesses have done, explaining the choices employers face in cutting jobs, raising prices, or even moving their business in this column in the New York Post.

Is Big Soda Becoming Big Tobacco? One of the members of the food police, the Center for Science in the Public Interest, has filed a lawsuit against the American Beverage Association and Coca-Cola for false advertising. In a move that takes a page out of the playbook used to attack tobacco companies, CSPI accuses the soda industry of "deceptive advertising and promotions" and links drinking soda to multiple health concerns.

Consequences of New Wage Rates Continues to Mount: Since the beginning of the year, when 42 states and localities raised their minimum wages, we've seen a consistent stream of articles about what businesses are doing in response:

· In San Diego, some customers disliked a surcharge designed to offset the recent minimum wage hike, while customers at another coffee shop will soon start seeing prices go up 2-3 percent on certain items.

· A Spokane, Washington, restaurant owner explains that the economic impact of the state's $11 minimum wage “is probably more complicated than the average voter gave it credit for,” and talks about the challenges of raising prices in a competitive environment.

· A state business group in Massachusetts surveyed business owners about a $15 wage hike and found that the wage would affect 71 percent of the respondents -- all of whom would have to boost their earnings to compensate for the wage hike. One respondent noted, "Each dollar increase costs our company $1.5 million per year."

· In Maine, the owner of a diner located near the New Hampshire border cut staff, reduced employee hours, and took a second job to adjust to the wage increase. (Legislators may take action this session to adjust the recently-enacted wage hike.)

· In Flagstaff, Arizona, a yogurt shop and a restaurant attributed their business closures to the new minimum wage hike.

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