#2024-2, January 12, 2024

Massachusetts Bankers Association Testifies in Support of Financial Literacy

Earlier this week, the Association was pleased to submit testimony in support of legislation that would further enhance and encourage the implementation of financial literacy and personal finance curriculum in Massachusetts public schools.

The legislation calls for the implementation of a standalone financial literacy class that would cover topics including earning and spending income, local, state and federal taxes, balancing checkbooks and budgeting, using credit and making investments, and much more. The curriculum would also mix classroom teaching with experiential learning and provide students with the skills and know-how to approach financial decisions in a financially astute manner.

The 2023 National Report Card on State Efforts to Improve Financial Literacy in High Schools published by the Center for Financial Literacy has given Massachusetts a grade letter “F” for financial literacy from 2017 – 2023. Furthermore, Massachusetts is currently projected to be one of only four states with the same letter grade by 2028. Our New England neighbors fared much better with Connecticut, New Hampshire, and Rhode Island projected to reach a grade letter “A” by 2028, while Maine and Vermont are projected to achieve “B” and “C” grades respectively. 

The Association and member banks across the Commonwealth have been at the forefront providing financial education services to various audiences, including students, for many years, and understand the importance of providing such education, especially at an early age. While these programs offer significant value to those who partake, students are not required to take financial literacy and personal finance classes. Compared to other states around the country, at least twenty-five states require a financial literacy class to graduate from high school and at least forty states require financial literacy standards for grades 9-12  -- Massachusetts requires neither.

We believe Massachusetts should join that growing list and incorporate financial literacy curriculum into K-12 education. We look forward to working with the bills’ sponsors and the Massachusetts Legislature to implement financial literacy and personal finance curriculum in Massachusetts public schools. To read our testimony, click here.

Special thanks to Association Member banks Cape Cod 5, Country Bank, Institution for Savings, Middlesex Bank, and Rockland Trust who provided oral and written testimony in support of the legislation.

Worcester Telegram & Gazette’s Kinga Borondy has more on Wednesday’s hearing here.

To watch Wednesday’s hearing, click here.

Supreme Judicial Court Amends Rules of Professional Conduct Regarding Disposition of Unidentified or Unclaimed Funds in IOLTA Accounts

Yesterday, the Massachusetts Supreme Judicial Court (SJC) issued an order amending Rules 1.15 and 1.15A of the Massachusetts Rules of Professional Conduct to establish procedures for lawyers to follow when they discover that the owner of funds in an IOLTA account cannot be identified or located, and to provide for the transfer of those funds to the Massachusetts IOLTA Committee. The new amendments will become effective on September 1, 2024.

Below is the press release provided by the SJC on the amendments to Rule 1.15 and 1.15A:

“Under Rule 1.15 of the Massachusetts Rules of Professional Conduct, lawyers who have a law office in the Commonwealth must deposit trust funds in a pooled IOLTA account if the funds are nominal in amount or to be held for a short period of time. Interest or dividends paid by banks on these IOLTA accounts are transmitted to the IOLTA Committee, which in turn distributes this income to the Massachusetts Legal Assistance Corporation and other charitable entities as directed by the SJC. 

The new amendments have been adopted in response to the SJC's decision in Matter of Olchowski, 485 Mass. 807 (2020). In Olchowski, the SJC concluded that the disposition of unidentified or unclaimed trust funds held in an IOLTA account is not governed by the Massachusetts abandoned property statute, G. L. c. 200A. Instead, the court decided that such funds should be transferred to the IOLTA Committee for disposition, and it directed the SJC Standing Advisory Committee on the Rules of Professional Conduct to propose amended rules regarding when and how these transfers should be made. The Standing Advisory Committee in turn published two successive draft proposals for which it sought and received public comments before making a final proposal to the SJC that incorporated changes responsive to a number of the public comments.”

To read the order amending Rules 1.15 and 1.15A, click here.

The Association submitted comments in support of the IOLTA Committee’s submitted proposals on the SJC’s Standing Advisory Committee on the Rules of Professional Conduct’s proposed amendments to Rule 1.15 of the Massachusetts Rules of Professional Conduct, which can be found here.

We are reviewing the amendments and will update you on the changes as necessary.

Massachusetts FY24 Revenues Roughly $1 Billion Short of Projections, Budget Cuts Imminent

Earlier this week, it was reported that after six consecutive months of missed revenue projections, the Commonwealth is running roughly $1 billion below revenue benchmarks. Governor Healey and her Administration announced roughly $375 million in budgetary cuts known as 9C cuts, which gives the Governor the authority to make certain unilateral cuts to the current budget. The Administration stated that the cuts will not have an impact on education or local aid, and that no layoffs are expected.

The Association has been in contact with the Governor’s Administration to provide any information and resources they may need. Governor Healey is expected to release her Fiscal Year 2025 budget in the coming weeks. We will keep you posted on any developments going forward.

To read more about the revenue projections and related news click the links below:

• Spending cuts, new outlook reshape budget landscape (msn.com)
• Healey defends “absolutely essential” tax cuts | WWLP
• December Revenue Collections Total $3.776 Billion | Mass.gov
• State tax revenues coming in much lower than forecast - CommonWealth Beacon

Massachusetts Taxpayers Foundation Virtual Open House & FY2025 Budget Briefing

The Massachusetts Taxpayers Foundation is hosting a Virtual Open House where attendees will learn how MTF’s research and events in 2023 impacted policy decisions throughout the Commonwealth. The event will also feature an in-depth overview of the Healey-Driscoll Administration’s Fiscal Year Budget proposal.

The Open House will be Friday, January 26th 10:00 – 11:00 a.m. To register for the event, click here.

Massachusetts Among Top States in Outbound Migration in 2023

United Van Lines, the moving company that has conducted its Annual National Movers Study for 47 years, recently unveiled its findings showing that Massachusetts experienced the “seventh highest level of outbound movement for its residents” in 2023 and is the only New England state that saw more folks moving out of than into. The survey indicated that for Massachusetts, “the percentage of outbound movement was 56.6%, whereas the percentage for inbound movement was 43.4%.” The top reasons for moving out of Massachusetts were for employment and family matters. To read more about the survey, click here.

In related news, MassEcon hosted its 2024 Economic Outlook Forum earlier this week, which featured an Economic Overview Presentation, presented by Dr. Mark Melnik, Director of Economic Public Policy & Research at UMass Donahue Institute. In his presentation, Dr. Melnik stated that while Massachusetts has “experienced a strong recovery from the pandemic” there remains various concerns and issues that could hinder continued economic growth, including but not limited to, domestic outmigration and an aging workforce. To view Dr. Melnik’s presentation, click here.

To read more about the Dr. Melnik’s presentation, click here.

Massachusetts Tax Collections “Millionaire’s Tax” Expected to Generate $1.5 Billion This Year

The Commonwealth expects to collect roughly $1.5 billion this year from the 4% surtax on income over $1 million, which will be largely allocated to education initiatives and transportation projects. The 4% surtax, commonly referred to as the “Millionaire’s Tax” was passed as a ballot initiative by voters in November 2022, which amended the Massachusetts Constitution to include the tax change.