Worcester Business Journal

wbjournal.com | January 23, 2023 | Worcester Business Journal 21 Omnibus delivers for New England V I E W P O I N T E D I T O R I A L I n November, Congress passed and President Joe Biden signed into law a $1.7-trillion Omnibus Appropriations Bill for fiscal 2023. e bill includes landmark investments in education, health care, envi- ronmental protection, working families, and research and innovation. e New England Council believes this legislation will drive our region's economic growth. Here are a few of the biggest wins for New England. Increased Pell Grant – e Pell Grant is a key tool to expanding ac- cess to higher education, providing support for low-income students to attend college. e council has long supported increasing the maximum Pell Grant and was pleased this bill increased the maximum award by $500 to $7,395 for the 2023-2024 school year, marking the largest increase in over a decade. Federal research funding – New England is home to some of the world's leading research universities and hospitals, which conduct research on the most press- ing medical and scientific challenges. e council has long supported federal investments in research and was pleased the Omnibus included $47.5 billion for the National Institutes of Health – a 5.6% increase – and an historic 12% increase for the National Science Founda- tion to $9.9 billion. Mental health & substance abuse – e need for in- creased mental health and substance abuse services is one of the biggest challenges facing our region. Fortunately, the spending bill included billions of dollars for increased services, including $1.01 billion for Mental Health Block Grants, $385 million for Certified Community Behav- ioral Health Clinics, and $1.6 billion for the State Opioid Response Grants. Energy efficiency & renewable energy – New England is a leader in efforts to decrease emissions and develop renewable energy resources. e spending bill includes $3.46 billion for energy efficiency and renewable energy – a $260-million increase over the previous year – enabling investments in vehicle technologies, hydrogen research and development, and renewable grid integration, as well as marine, wind, and solar energy. Retirement savings – Finally, the spending bill in- cludes provisions aimed at bolstering retirement savings. e bill included legislation championed by U.S. Repre- sentative Richard Neal (D-MA), known as SECURE 2.0. is bill will expand access to retirement savings plan enrollment, allow emergency withdrawal from plans, increase the opportunity to make catch-up contributions, and support workers paying off student loan debt. Beyond these provisions, the spending bill includes in- vestments to bolster working families, expand affordable housing, and support our law enforcement, military, and veterans. We have no doubt our region's economy will benefit from the important investments this bill makes. James T. Brett is the president & CEO of e New England Council, a regional alliance of businesses, nonprofits, and health and educational institutions dedicated to supporting economic growth and quality of life in New England. BY JAMES T. BRETT Special to WBJ A T H O U SA N D WO R D S B Y R A M Ó N L . S A N D O V A L Lower Mass. cannabis tax rates James T. Brett O perating a business in the Mass. canna- bis industry is getting more difficult, and that's not good for operators or the state. Generally, the more competitive a sector is, the greater the positives: Poor opera- tors are weeded out, and competition lowers prices for consumers and leads to efficiency and innovation. Un- fortunately, the marijuana industry started off with one foot stuck in the mud, due to onerous state regulations, which will continue to hamper the market as more out- of-state competition comes online. e legal Massachusetts adult-use marijuana industry got off to a rough start in late 2016 and early 2017. is was due in no small part to the fact that key leaders – then Gov. Charlie Baker and Attorney General Maura Healey, now our governor – were strongly opposed to the ballot initiative, yet were in large part le in charge of its rollout, appointing members to the industry's oversight body, the Cannabis Control Commission, which launched the industry in a heavily regulated manner. e result was a costly and time-consuming business licensing process, which ended up being friendlier to deep-pocketed applicants and not benefiting those adversely impacted by previ- ous decades of the War on Drugs, which was the intent of the ballot initiative. In 2022, Baker signed a cannabis reform act to attempt to fix some of these problems. Today the industry is facing additional hurdles, as WBJ Staff Writer Kevin Koczwara reports in his "Prices falling, competition rising" story on page 8. Cannabis prices are nearing historic lows while the number of marijuana businesses continues to grow. Both of these are signs of a healthy market good for consumers, but they mean the industry will be less lucrative for individual operators who already have significant capital tied up through the costly permitting process. Interstate competition will soon heat up, now that Con- necticut, New York, Maine, Vermont, and Rhode Island all have legalized recreational marijuana. reatening the state's competitive position is the 20% tax on retail sales, which is comprised of a 10.75% state excise tax, a 6.25% state sales tax, and a 3% local excise tax. is is an insane rate almost no other in- dustry would tolerate. Most other Northeast states are following Massachusetts' example and using their own convoluted formulas to arrive at a 20% tax rate. Maine, however, limits its marijuana sales tax to 10% and has the lowest per capita cannabis tax collections of any state and almost half of what Mass. collects, according to the Washington, D.C. think tank Urban Institute. Back in 2016, the ballot initiative passed by voters called for a 12% tax on marijuana retail sales, which included a 3.75% state excise tax, the 6.25% state sales tax, and a 2% local excise tax. Let's aim toward that for- mula, as a starting point. Sin taxes, whether on alcohol, gambling, or cannabis, may rise above the normal rate of taxation but not so much we kill the golden goose. e heavy regulation and high taxation in the initial phases of legal Massachusetts cannabis were driven largely by fears of a significant increase in the cost of public safety and other general societal threats, none of which have come to fruition. e state and its policy- makers need to evolve their tax code to treat cannabis a little more like other legal industries. Prudent adjust- ments in the cannabis tax, over time, will help keep Massachusetts a step ahead of the competition and give operators a better chance to survive in a growingly competitive marketplace. The above Editorial is the opinion of the WBJ Editorial Board. The Viewpoint column, the A Thousand Words cartoon, and the Word from the Web commentary represent the opinions of their authors and do not necessarily reflect the views of WBJ or its staff. WBJ welcomes letters to the editor and commentary submissions. Send them to bkane@wbjournal.com. W W

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