TASK FORCE STARTS WITH DEBATE OVER DEFINITION OF RETAIL
By Colin A. Young
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, OCT. 2, 2017...A new state task force studying the retail sector and the challenges presented by the ubiquity of online commerce is planning to visit businesses around the state to identify ways to help local retailers become more competitive.
The work of the Senate Task Force on Strengthening Massachusetts Local Retailers will begin in earnest with a public hearing at the State House on Nov. 6, at which a handful of experts selected by the task force will provide context and analysis on the Massachusetts retailers.
The task force will travel to Cape Cod on Dec. 4 to visit businesses and hear from employers, spend a day talking with business owners in the Merrimack Valley on Jan. 8 and then travel to the western part of the state on Feb. 5 to learn more about retail there.
The 13-person task force met for the first time Monday and reviewed its charge to review "challenges faced by local retailers in a changing economic environment increasingly dominated by large online sellers; closures of local retail establishments, affecting local economies and property tax bases; initiatives taken by local retailers to increase or maintain their market share; and actions by state and local governments to encourage purchasing from local retailers."
"We understand that the retail industry has been challenged, probably like we've never seen before, mostly because of online retailing but for a whole host of other reasons," Sen. Vinny deMacedo said. He said he is looking forward to "having a conversation, working together and getting ideas of how we can help prop up this industry because it is such an important industry ... how can we make sure that we are proactive and we do not allow this to just fall apart before our eyes without addressing it."
A business owner himself, deMacedo operates a gas station in Plymouth. "Fortunately, you still can't buy that online yet," he said.
Among the first orders of business for the task force on Monday was to settle on a working definition of retail and which businesses would be the focus of the task force's work.
Sen. Michael Barrett said a lot of the storefronts in his district are occupied by bank branches and insurance or realty offices. Do those count as retail even though they are offering a service more so than a product, he asked.
Sen. Julian Cyr said he thinks the collection of sales or meals tax is a key characteristic of a retail business, though others noted that a clothing store is decidedly retail but does not collect the state sales tax in the same way as other businesses.
Sen. Jason Lewis raised the point that by setting too narrow of a definition, the task force could unintentionally exclude consideration of things like entertainment venues that draw people to downtowns and business districts and often help retailers attract customers.
Ultimately, the task force decided not to settle on a firm definition, but rather to agree to a frame of thinking that revolves around traditional brick and mortar retailers.
"We are going to be broad in our discussions. We are going to focus on what we might think of as more traditional retail, but we're not going to exclude talking about any sort of service providers that provide foot traffic -- a person, people -- coming into whether it's our downtowns, or our malls, or where our retail establishments are," Sen. Michael Rodrigues, the task force's chairman, said.
The Senate formed the task force at the end of July, just before the Legislature left Beacon Hill for the summer without a vote on having a sales tax holiday, a weekend that retailers say is important to driving traffic to their shops.
Senate President Stanley Rosenberg said Monday that Senate Minority Leader Bruce Tarr proposed the task force in a meeting that Gov. Charlie Baker and House Speaker Robert DeLeo also attended. Tarr and Rosenberg decided to move ahead with the idea as a Senate task force "when there was no uptake on it," Rosenberg said.
"This is a segment of our economy which has received too little attention in recent years as we have been so focused on high tech and life sciences and some of the big, emerging industries and yet the backbone of any community and Main Street are our retail operations," Rosenberg said.
The task force took shape as the Retailers Association of Massachusetts prepares to move forward with a potential 2018 ballot question reducing the state sales tax to 5 percent and instituting an annual sales tax holiday.
Competing against tax-free sellers in New Hampshire and online, store owners have had to budget in a minimum wage increase, rising health care costs and some of the highest energy costs in the United States. And activists are gearing up to raise the minimum wage to $15 per hour via the 2018 ballot.
RAM President Jon Hurst, who sits on the Senate's retail task force, said Monday that his members want two things: higher sales and lower costs. Hurst said he is optimistic that the task force will be able to identify and advocate for ways that Massachusetts can make life slightly easier for retailers.
"The trouble is we've kind of been going in the wrong direction on these matters. Sales are dropping or flat and the costs are up," Hurst said. "There might be some positive things that the state can do ... and there are some things we can do positively and negatively on affecting their cost of operations."
The task force is charged with reporting its recommendations by June 1, 2018.