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and the
Citizens Economic Research Foundation
Post Office Box 1147 ●
Marblehead, Massachusetts 01945 ●
(508)
915-3665
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
44 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Saturday, May 12, 2018
Where's Charlie?
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In front
of a crowd of Republican convention delegates Saturday, Gov.
Charlie Baker scored applause when he said he is in favor of
lowering the state sales tax. But after being asked by
reporters on two separate occasions, Baker still has not
staked out his precise position — including the amount by
which he wants to see the sales tax drop and whether he
supports the proposed ballot question pushed by retailers
frustrated with Beacon Hill.
Asked Monday whether he supports the proposed ballot
question that would cut the sales tax rate from its current
6.25 percent to 5 percent, Baker's response was instead to
restate his observation that the Legislature could take
action to avoid the question going to voters in November.
State House News Service
Monday, April 30, 2018
Baker suggests mashup to tackle all ballot questions
Gov. Charlie Baker gave voice Monday to a potential
"grand bargain" addressing issues raised by ballot
questions, but leaders of the House and Senate said reducing
the sales tax, the topic of one question, is not in the
cards this year.
"I don't think our bodies are going to agree on a
lowering of the sales tax. We're concerned about revenue,"
Senate President Harriette Chandler said after a meeting
with Baker and other legislative leaders.
"In the last couple of months, I do not see that as an
issue that will come before the House," said House Speaker
Robert DeLeo, whose House rejected a bid to lower the sales
tax during its April budget debate....
Baker has said he supports a sales tax reduction without
saying if he supports a ballot question backed by the
Retailers Association of Massachusetts to drop the tax rate
from 6.25 percent to 5 percent.
Tax collections 10 months into fiscal 2018 are up $1.7
billion, or 8.1 percent, over the same period last year. The
Senate plans to release its fiscal 2019 budget bill on
Thursday.
State House News Service
Monday, May 7, 2018
Sales tax cut not on radars of legislative leaders
Gov. Charlie Baker is the CEO of the commonwealth, with
the strongest gubernatorial approval rating in the nation.
Yet ask his views on the most important revenue questions of
the year — questions on taxes that are headed to the
November ballot — and his answers are vague, his stance
evasive.
Perhaps this is why his approval is so high, despite his
being in one of the bluest states of the union?
Like most Republicans, Baker doesn’t want to raise taxes,
and has said recently that he supports lowering the state’s
sales tax — by an unspecified amount. Like a good pragmatist
looking to avoid the ballot questions entirely, he
encourages “legislative compromises” over the next two
months. On this last point, we wholeheartedly agree.
Compromise is needed, and these ballot questions are
dangerously worded. But where does the man in the state's
corner office actually stand on these questions?
Less than six months before Election Day, Baker won't
commit specifics to the questions that could bring about
some of the most sweeping changes in years for businesses
and the state's economy. Still unanswered, for example, is
the question of what Baker thinks of the so-called
"millionaire’s tax," an unconstitutional money grab that
threatens, at worst, to chase the Bay State’s wealthiest
residents out of state. At best, it will hurt the hiring
plans and economic vitality among the state's strongest
privately held companies. Also left wanting is his
leadership on yet another proposed hike of the minimum wage
and the mandating of paid medical leave.
The absence of Baker’s voice on such important issues
strikes us as an abdication of leadership at a time when
businesses need such leaders....
On behalf of the business community, we urge Baker to use
the power of his office now — before voters head to the
beaches for the summer — to put forth his vision for
business and economic growth. Working toward a legislative
solution is fine, but it’s a safe bet that some, if not all,
of these questions won’t be fully resolved by the July 1
deadline to put questions on the ballot. The governor's
failure to speak up — and soon — amounts to a tacit
endorsement of the questions as written. Gov. Baker owes it
to the business community to explain his opinions on the
ballot questions while those opinions still have a chance to
make a difference.
A Boston Business Journal editorial
Wednesday, May 9, 2018
Baker must take stronger stance on ballot questions
The board of the Retailers Association of Massachusetts
met Wednesday and authorized the group to proceed with the
second round of signature gathering to qualify its proposed
question reducing the sales tax to 5 percent for the
November ballot.
The organization representing hundreds of small business
in Massachusetts has proposed to cut the sales tax from 6.25
percent to 5 percent in 2019, and implement a permanent
summer sales tax holiday.
After clearing the initial, and larger, signature hurdle,
the group must collect an additional 10,792 signatures by
the first week in July to qualify for the ballot.
State House News Service
Wednesday, May 9, 2018
Retailers pushing ahead on signatures for sales tax cut
The Senate Ways and Means Committee on Thursday
unanimously approved a $41.42 billion fiscal year 2019
budget proposal, touting the spending plan's "robust and
critical investments" in education, an "innovative approach
to drug pricing" and a focus on children.
The fiscal 2019 budget plan (S 4) represents a 3 percent
increase in state spending over the current year's budget
and is based on the consensus revenue agreement that state
tax revenue will grow by 3.5 percent in fiscal 2019,
significantly less than tax revenue growth so far this
fiscal year.
Senate Ways and Means Chairwoman Karen Spilka, who is
expected to ascend to the Senate presidency in July, said
the budget plan recognizes "that when all people in the
Commonwealth are given the opportunities to participate in
Massachusetts' economy -- as well as the tools to succeed --
we all benefit." ...
The release of the Senate budget, which will be debated
beginning May 22, comes at a point when it appears the state
is more flush with cash than in the past two fiscal years.
Since the passage of federal tax reform in November, tax
collections have spiked, leaving the state with $809 million
more this fiscal year than it had anticipated. The size of a
potential state budget surplus, and of supplemental spending
needs, remains unclear....
The Senate's budget includes about $61 million more in
spending than Gov. Charlie Baker's budget plan (H 2) and $97
million less in spending than the budget (H 4401) amended
and adopted by the House....
While the budget includes no new broad-based tax
increases, the Senate joined the governor and House in
proposing to increase the state earned income tax credit
from 23 percent to 30 percent of the federal credit, which
will help many low-to-middle income families. The governor's
budget office has pegged the cost of the expansion at $65
million annually beginning in fiscal 2020.
The Ways and Means Committee budget also seeks to do away
with a restriction that prohibits families from receiving an
extra $100 per-month cash assistance for a baby conceived
while the family was receiving public assistance, as the
House did with an amendment to its budget last month. The
current cap denies benefits to 9,400 children in
Massachusetts, according to the Massachusetts Law Reform
Institute.
The Senate's proposal takes a different tack than the
House, though. The House made the change effective July 1,
2019, pushing the need for funding into fiscal year 2020.
The Senate proposes to lift the cap effective Jan. 1, 2019
and includes $5.5 million to fund the expansion of benefits
for the second half of the fiscal year. The annualized cost
of the expansion is expected to be roughly $13 million....
MassHealth, the state's behemoth Medicaid program, is
funded to the tune of $16.12 billion in the Ways and Means
Committee budget -- accounting for nearly 40 percent of the
spending plan....
While Senate leaders touted areas of investment on
Thursday, the Massachusetts Taxpayers Foundation recently
cautioned that a growing portion of state revenues are being
consumed by a few priorities, leaving a lot less money for
lawmakers to invest in programs important to their
constituents.
Fixed obligations to non-discretionary spending in areas
like MassHealth, debt service and pensions accounted for 55
percent of tax revenues in fiscal 2007, but accounted for 73
percent in fiscal 2017, the foundation said.
State House News Service
Thursday, May 10, 2018
Senate's $41.4 Bil budget includes expansion of low-income
tax credit
The MassGOP convention was a place for Baker to test his
old tax relief reflexes before the Republican base before
going back to his safe space in the State House where he can
focus on the things he really cares about getting done, like
a housing production bill. He still won't commit to a
preferred tax rate.
Lt. Gov. Karyn Polito, who in 2010 backed a 3 percent
sales tax ballot question, this week offered a tepid
endorsement of the idea of lowering the sales tax, saying it
"makes some sense." Like Baker, Polito wants a "grand
bargain" assembled to address ballot questions, with the
sales tax included.
The door, however, might not be completely shut.
The biggest policy game in town right now is a regular
gathering of union, business and Legislature folks trying to
broker a deal that would keep the minimum wage, paid family
leave and sales tax reduction questions off the ballot in
November.
The Raise Up Coalition, which is behind two of those
questions, showed on Tuesday why business is even at the
table at all.
Hundreds of union workers and community activists flooded
the State House for what felt more like a street festival
than a press conference. There was singing and dancing, a
live band. No one in the building didn't know they were
here.
The coalition members came, ostensibly, to call on the
Legislature to pass a $15 an hour minimum wage and paid
family and medical leave bills. The union and coalition
leaders behind the rally, however, are well aware of the
chances of that happening, because they're at the table
where the private negotiations are actually taking place.
Going to the ballot very well might be a slam dunk for
wage and leave advocates, and business groups know it, but
they are also costly propositions. Hence, the effort to
strike a deal.
On the other side of the table is the Retailers
Association of Massachusetts. Its board voted this week to
go forward with the next round of signature gathering to
qualify for the ballot with a question that would lower the
sales tax from 6.25 percent to 5 percent, a $1.2 billion
proposition for the state. That idea might also be a popular
one with the electorate, but a nightmare scenario for Beacon
Hill budget writers, especially if the Supreme Judicial
Court winds up disqualifying a millionaire's tax
constitutional amendment supported by the Democratic
majority in the Legislature.
So RAM, even though it might not be as powerful as some
of the labor unions, has some leverage.
As those talks continue, the Legislature has no choice
but to move full steam ahead with its annual budget planning
for fiscal 2019 without knowing whether to expect a major
blow, windfall or offsetting fouls to its revenue stream.
State House News Service
Friday, May 11, 2018
Weekly Roundup - Checking Expectations
If the Massachusetts House ever steps from
the shadows and conducts business in public, it’ll be
because a handful of members forced it there — maybe with a
shove from frustrated voters. No one’s saying
that Beacon Hill is changing its ways, at least not yet, but
there was a small token of hope sewed into the $41 billion
spending package that passed the House two weeks ago. A
short amendment by Rep. Jim Lyons, R-Andover, would slice
eight words from state law, making lawmakers’ records fair
game for public inspection. As it is, the law
forcing most local and state agencies to manage their
affairs in full public view conveniently omits the
Legislature, governor’s office and state court system. How
fitting that an effort to right part of that wrong was
slipped into a spending plan assembled in secret.
The House budget is one of the most extreme examples of
flouting the principles of open government you’ll find. Its
writers do most of their work in meetings the public isn’t
allowed to attend or hear about. In four whirlwind days,
they sifted through 1,400 amendments suggested by lawmakers
— many seeking money for local projects — and changed,
dropped or rolled them into dense budget updates that most
legislators themselves would have trouble parsing.
If politics is like watching sausage being made, the state
budget is the mystery meat.... His voice is
that of a Republican in a chamber full of Democrats, of
course, and the Senate has yet to produce its version of the
budget. So this spending plan is a long way from done and is
unlikely to keep Lyons' imprint. Still, it
would be nice to see some of his fellow lawmakers rally to
the cause — and for their constituents to nudge them to do
so. A Salem News editorial
Wednesday, May 9, 2018
Lawmakers should work in the open
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Chip Ford's CLT
Commentary
Where's Charlie?
The State House News Service reported:
"Baker has said he supports a
sales tax reduction without saying if he supports a
ballot question backed by the Retailers Association of
Massachusetts to drop the tax rate from 6.25 percent to
5 percent.
"Tax collections 10 months into
fiscal 2018 are up $1.7 billion, or 8.1 percent, over
the same period last year."
The News Service added:
"Lt. Gov. Karyn
Polito, who in 2010 backed a 3 percent sales tax ballot
question, this week offered a tepid endorsement of the
idea of lowering the sales tax, saying it 'makes some
sense.' Like Baker, Polito wants a 'grand bargain'
assembled to address ballot questions, with the sales
tax included."
We're not the only disappointed,
disillusioned parties. The Boston Business Journal's
editorial concluded:
"The absence of
Baker’s voice on such important issues strikes us as an
abdication of leadership at a time when businesses need
such leaders....
"On behalf of the business
community, we urge Baker to use the power of his office
now — before voters head to the beaches for the summer —
to put forth his vision for business and economic
growth. Working toward a legislative solution is fine,
but it’s a safe bet that some, if not all, of these
questions won’t be fully resolved by the July 1 deadline
to put questions on the ballot. The governor's failure
to speak up — and soon — amounts to a tacit endorsement
of the questions as written. Gov. Baker owes it to the
business community to explain his opinions on the ballot
questions while those opinions still have a chance to
make a difference."
While the governor dithers, dodges, ducks
and weaves, the Retailers Association of Massachusetts is
moving ahead to collect the second round of signatures to
put its sales tax rollback on the ballot. RAM must
collect an additional 10,792 certified signatures (from
voters who did not sign on the first round) by the first
week in July to qualify.
Maybe — as with
his non-vote for president —
Charlie will decide to just blank the ballot questions too.
I'm almost willing to bet that he'll vote for himself
for governor — but I could be
wrong.
The State House News Service reported:
The Senate Ways and Means
Committee on Thursday unanimously approved a $41.42
billion fiscal year 2019 budget proposal, touting the
spending plan's "robust and critical investments" in
education, an "innovative approach to drug pricing" and
a focus on children....
The Senate's budget includes
about $61 million more in spending than Gov. Charlie
Baker's budget plan (H 2) and $97 million less in
spending than the budget (H 4401) amended and adopted by
the House....
The Senate Ways and Means Committee's proposed budget has
taken the middle ground so far, between Gov. Baker's initial
proposal and the recently passed House budget, but all three
increase spending next year by over another billion
of our dollars — as usual.
The Senate's initial budget proposal is usually the
highest of the three, so the situation could be worse
— but the Senate won't begin
its debate until May 22, when the amendments to it will
begin. The Senate budget process has just begun.
Adding an additional $100 million of amendments spending can
still make it the largest of the three.
Tax collections for the first 10 months of this fiscal
year are up $1.7 billion, or 8.1 percent, over the same
period last year. There's still two months of
collections to go.
That's close to $2 billion more than last year, with two
months to go. Remember my commentary in the last
Update:
Senate Budget Chairwoman (and incoming
Senate President) Karen Spilka "recently warned against 'spending
sprees' on Beacon Hill, but with tax collections up more
than 8 percent this fiscal year there's plenty of
speculation about a possible surplus and what to do with it — spend it, save it, cut taxes, to name a few."
"Spend it, save it, cut taxes" are the
choices?
"Cut taxes" can be eliminated without
further conjecture. "Save it?" Not likely or not
much. "Spend it" is the default position on Bacon Hill,
always.
We'll see what happens. You already know what I
expect.
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Chip Ford
Executive Director |
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State House News Service
Monday, April 30, 2018
Baker suggests mashup to tackle all ballot
questions
By Colin A. Young and Michael P. Norton
In front of a crowd of Republican convention
delegates Saturday, Gov. Charlie Baker scored
applause when he said he is in favor of lowering
the state sales tax.
But after being asked by reporters on two
separate occasions, Baker still has not staked
out his precise position — including the amount
by which he wants to see the sales tax drop and
whether he supports the proposed ballot question
pushed by retailers frustrated with Beacon Hill.
Asked Monday whether he supports the proposed
ballot question that would cut the sales tax
rate from its current 6.25 percent to 5 percent,
Baker's response was instead to restate his
observation that the Legislature could take
action to avoid the question going to voters in
November.
"Well, I've said many times that I'd like to see
all of the ballot questions addressed through
the legislative process between now and the end
of the session. There's an ongoing dialogue
between proponents of all of those questions
with members of the Legislature and our folks
have been involved in some of those
conversations as well," Baker said. "It's my
hope that one way or another we mash all those
things together and come up with a way to handle
all of those before the end of the session."
Reminded of his comments from Saturday's GOP
convention in Worcester, Baker said, "I think
lowering the sales tax ought to be part of the
conversation, yeah," before moving on to other
questions.
At the convention Saturday, Baker did not
directly answer questions about his call to
reduce the sales tax and a Baker campaign
spokesman said the governor's comment about
wanting a lower sales tax rate was consistent
with his previous call for the Legislature to
address issues raised by ballot questions, which
offer an opportunity for voters to pass laws
without the Legislature's participation.
"My hope is that we will find a way to work
through some of this stuff in the context of the
legislative process. I think we can probably do
a better job of dealing with those issues that
way than dealing with them through the ballot,"
Baker on April 10 told retailers, including
people who support a sales tax cut and oppose a
minimum wage hike and new family and medical
leave requirements. He added, "There are
opportunities here to do some things that I
think would be positive, but I also worry about
some of the negative consequences of some of
those questions as well."
There are other ballot questions advancing
toward the November ballot that would institute
a paid family and medical leave program, raise
the minimum wage to $15 an hour, and impose new
nurse staffing requirements. Baker has not
staked out positions on those proposals.
A Baker campaign official declined to provide an
on the record response Monday when asked if
Baker supported the full slate of pending ballot
questions.
The ballot question being pushed by retailers
who say Beacon Hill has been too slow to stand
up for them would deliver a roughly $1.2 billion
tax break but also require state government to
make major reductions in spending. Organized
labor unions and many Democrats in state
government oppose the tax rate cut.
Baker, who helped impose a tax on businesses to
help the state afford rising Medicaid costs,
supported 5 percent sales and income tax rates
during his unsuccessful 2010 gubernatorial
campaign. As governor, Baker has not joined
other Republicans who still support those
measures.
State House News Service
Monday, May 7, 2018
Sales tax cut not on radars of legislative
leaders
By Andy Metzger
Gov. Charlie Baker gave voice Monday to a
potential "grand bargain" addressing issues
raised by ballot questions, but leaders of the
House and Senate said reducing the sales tax,
the topic of one question, is not in the cards
this year.
"I don't think our bodies are going to agree on
a lowering of the sales tax. We're concerned
about revenue," Senate President Harriette
Chandler said after a meeting with Baker and
other legislative leaders.
"In the last couple of months, I do not see that
as an issue that will come before the House,"
said House Speaker Robert DeLeo, whose House
rejected a bid to lower the sales tax during its
April budget debate.
Baker last weekend declared his support for
reducing the sales tax, an idea he campaigned on
in 2010. As his re-election contest ramps up,
Baker lately has begun portraying Democrats as
tax raisers, and contrasting them with
Republicans who he says do not want to raise
taxes.
"I said all along that my hope is that we end up
finding a way to work with a number of the folks
who have ballot questions pending to come up
with what I would describe as sort of a grand
bargain between and among all the players,"
Baker told reporters Monday after his meeting.
Baker said discussions about ballot question
alternatives will "get more poignant" as
lawmakers get closer to the July 31 end of
formal sessions. The deadline to come up with
legislative alternatives to ballot questions is
early July, but it would not be unprecedented
for a deal to be struck after the question has
been placed on the ballot.
Baker has said he supports a sales tax reduction
without saying if he supports a ballot question
backed by the Retailers Association of
Massachusetts to drop the tax rate from 6.25
percent to 5 percent.
Tax collections 10 months into fiscal 2018 are
up $1.7 billion, or 8.1 percent, over the same
period last year. The Senate plans to release
its fiscal 2019 budget bill on Thursday.
Two other ballot efforts opposed by the
retailers association and supported by the group
Raise Up Massachusetts would establish a paid
family and medical leave program in
Massachusetts and gradually raise the minimum
wage to $15 per hour.
The Massachusetts Nurses Association is also
pushing a question to impose staffing mandates
in hospitals.
Democrat leaders may have opposed the idea of a
sales tax cut on Monday, but most years they
have supported a sales tax holiday weekend
during the summer. Baker wants to make the tax
holiday an annual event.
"We'll take a run at them on the sales tax
holiday for the summer, though, sometime between
now and the end of the year, and see if we can
make any progress on that," Baker said.
Boston Business Journal
Wednesday, May 9, 2018
A Boston Business Journal editorial
Baker must take stronger stance on ballot
questions
Gov. Charlie Baker is the CEO of the
commonwealth, with the strongest gubernatorial
approval rating in the nation. Yet ask his views
on the most important revenue questions of the
year — questions on taxes that are headed to the
November ballot — and his answers are vague, his
stance evasive.
Perhaps this is why his approval is so high,
despite his being in one of the bluest states of
the union?
Like most Republicans, Baker doesn’t want to
raise taxes, and has said recently that he
supports lowering the state’s sales tax — by an
unspecified amount. Like a good pragmatist
looking to avoid the ballot questions entirely,
he encourages “legislative compromises” over the
next two months. On this last point, we
wholeheartedly agree. Compromise is needed, and
these ballot questions are dangerously worded.
But where does the man in the state's corner
office actually stand on these questions?
Less than six months before Election Day, Baker
won't commit specifics to the questions that
could bring about some of the most sweeping
changes in years for businesses and the state's
economy. Still unanswered, for example, is the
question of what Baker thinks of the so-called
"millionaire’s tax," an unconstitutional money
grab that threatens, at worst, to chase the Bay
State’s wealthiest residents out of state. At
best, it will hurt the hiring plans and economic
vitality among the state's strongest privately
held companies. Also left wanting is his
leadership on yet another proposed hike of the
minimum wage and the mandating of paid medical
leave.
The absence of Baker’s voice on such important
issues strikes us as an abdication of leadership
at a time when businesses need such leaders.
Baker's bona fides upon his election included
his business acumen. Politics and the proximity
of re-election this November doesn’t absolve him
of the need to give voice to his pro-business,
moderate Republican viewpoint on big policy
changes. Indeed, as the national Republican
party appears to be moving ever farther away
from moderates like Baker in the Trump era,
sensible voices are needed now more than ever.
On behalf of the business community, we urge
Baker to use the power of his office now —
before voters head to the beaches for the summer
— to put forth his vision for business and
economic growth. Working toward a legislative
solution is fine, but it’s a safe bet that some,
if not all, of these questions won’t be fully
resolved by the July 1 deadline to put questions
on the ballot. The governor's failure to speak
up — and soon — amounts to a tacit endorsement
of the questions as written. Gov. Baker owes it
to the business community to explain his
opinions on the ballot questions while those
opinions still have a chance to make a
difference.
State House News Service
Wednesday, May 9, 2018
Retailers pushing ahead on signatures for sales
tax cut
By Matt Murphy
The board of the Retailers Association of
Massachusetts met Wednesday and authorized the
group to proceed with the second round of
signature gathering to qualify its proposed
question reducing the sales tax to 5 percent for
the November ballot.
The organization representing hundreds of small
business in Massachusetts has proposed to cut
the sales tax from 6.25 percent to 5 percent in
2019, and implement a permanent summer sales tax
holiday.
After clearing the initial, and larger,
signature hurdle, the group must collect an
additional 10,792 signatures by the first week
in July to qualify for the ballot.
An official with RAM confirmed to the News
Service that its board had authorized the
signature collection drive, and petitions had
been printed to begin the process.
Negotiations between the group and other
business leaders, unions and legislators are
ongoing on Beacon Hill in an attempt to reach on
compromise on not just the sales tax, but also
the minimum wage and paid family leave, and
avoid costly ballot fights. Gov. Charlie Baker
has referred to this as a possible "grand
bargain."
State House News Service
Thursday, May 10, 2018
Senate's $41.4 Bil budget includes expansion of
low-income tax credit
By Colin A. Young
The Senate Ways and Means Committee on Thursday
unanimously approved a $41.42 billion fiscal
year 2019 budget proposal, touting the spending
plan's "robust and critical investments" in
education, an "innovative approach to drug
pricing" and a focus on children.
The fiscal 2019 budget plan (S 4) represents a 3
percent increase in state spending over the
current year's budget and is based on the
consensus revenue agreement that state tax
revenue will grow by 3.5 percent in fiscal 2019,
significantly less than tax revenue growth so
far this fiscal year.
Senate Ways and Means Chairwoman Karen Spilka,
who is expected to ascend to the Senate
presidency in July, said the budget plan
recognizes "that when all people in the
Commonwealth are given the opportunities to
participate in Massachusetts' economy -- as well
as the tools to succeed -- we all benefit."
"Massachusetts has long been a leader in so many
areas, from education and health care, to
economic innovation and protecting the
vulnerable. Our budget continues in this long
tradition and invests in our strengths, while
confronting obstacles to continued success,"
Spilka said. "We boost funding for school
districts and empower regions across the state
to provide local services. We provide tools to
support full engagement in the economy,
recognizing that access to opportunities and
support services benefit our people and our
Commonwealth as a whole."
The release of the Senate budget, which will be
debated beginning May 22, comes at a point when
it appears the state is more flush with cash
than in the past two fiscal years. Since the
passage of federal tax reform in November, tax
collections have spiked, leaving the state with
$809 million more this fiscal year than it had
anticipated. The size of a potential state
budget surplus, and of supplemental spending
needs, remains unclear.
Spilka said the budget represents "a cautiously
optimistic approach" to spending given the
state's fiscal picture.
The Senate's budget includes about $61 million
more in spending than Gov. Charlie Baker's
budget plan (H 2) and $97 million less in
spending than the budget (H 4401) amended and
adopted by the House. The Senate's budget plan
calls for $1.1 billion in unrestricted local
aid, matching proposals from the governor and
the House.
"I think at the basic values level it's very
similar to the House budget, there's a focus on
expanding opportunity, particularly for kids.
There are trade-offs; the Senate put some more
money into K-12 public schools, the House put
more money into early education," Noah Berger,
president of the Massachusetts Budget and Policy
Center, said. "They're both working very much
within the same tight revenue box, so if you do
a little bit more on one thing it means doing a
little less in the other."
Senate President Harriette Chandler called the
Ways and Means Committee's plan "an effective,
robust budget" that represents "a clear
declaration of support for children and
families, statewide transportation, healthcare,
education, and our most vulnerable populations."
Senate Minority Leader Bruce Tarr called the
Ways and Means Committee budget proposal "a
reasonable starting point for the work the
Senate must do to chart a proper course for the
coming year." But he also cautioned that
maintaining fiscal health and discipline will
require government reforms, of which there [are]
seldom few in the House or Senate budgets.
"Eluding new taxes and budget shortfalls in the
future, however, will require not only fiscal
discipline, but also intensive efforts today to
undertake reforms and capture effectiveness that
will produce consistently balanced budgets in
the years ahead," Tarr said.
Education was a central theme of the press
conference the Ways and Means Committee held to
unveil its budget. Spilka said the budget tries
to fund education for people of all ages and
backgrounds because education is "the
fundamental building block of individual and
shared success."
The Senate proposes funding Chapter 70 aid to
local school systems at $4.91 billion -- "its
highest level ever, even after accounting for
inflation" -- to allow for a minimum aid
increase of at least $30 per pupil, Spilka said.
In sum, the committee's proposed budget would
fund education to the tune of $5.5 billion.
The Ways and Means Committee budget also
recommends $270.1 million for income-eligible
childcare, and $5 million for the Commonwealth
Preschool Partnership Initiative to expand
access for 3- and 4-year-olds. There is $318.9
million in the budget plan for the Special
Education Circuit Breaker, which reimburses
districts at the statutorily required 75 percent
rate and $62.5 million for regional school
transportation reimbursements.
Sen. Sonia Chang-Diaz, the committee's assistant
vice chair, said the Senate is "stopping and
reversing a dangerous trend" of underfunding a
commitment to local school systems in its budget
by providing $100 million to fund its charter
school reimbursement program for traditional
public school districts.
While the budget includes no new broad-based tax
increases, the Senate joined the governor and
House in proposing to increase the state earned
income tax credit from 23 percent to 30 percent
of the federal credit, which will help many
low-to-middle income families. The governor's
budget office has pegged the cost of the
expansion at $65 million annually beginning in
fiscal 2020.
The Ways and Means Committee budget also seeks
to do away with a restriction that prohibits
families from receiving an extra $100 per-month
cash assistance for a baby conceived while the
family was receiving public assistance, as the
House did with an amendment to its budget last
month. The current cap denies benefits to 9,400
children in Massachusetts, according to the
Massachusetts Law Reform Institute.
The Senate's proposal takes a different tack
than the House, though. The House made the
change effective July 1, 2019, pushing the need
for funding into fiscal year 2020. The Senate
proposes to lift the cap effective Jan. 1, 2019
and includes $5.5 million to fund the expansion
of benefits for the second half of the fiscal
year. The annualized cost of the expansion is
expected to be roughly $13 million.
Sen. Sal DiDomenico, who has been the leading
Senate advocate for lifting the so-called Cap on
Kids, said the Senate's proposal would be "a
gamechanger for families across our state" and
said that the Senate's inclusion of funding
"puts our money where our mouth is."
MassHealth, the state's behemoth Medicaid
program, is funded to the tune of $16.12 billion
in the Ways and Means Committee budget --
accounting for nearly 40 percent of the spending
plan.
Senate leaders scrapped the governor's proposal
to shift 140,000 non-disabled adults between 100
percent and 138 percent of the federal poverty
line to comparable plans at the Massachusetts
Health Connector. The House also discarded the
governor's suggestion, despite what the
administration described as efforts taken to
tweak the proposal so that people who are
transferred could receive zero-copay,
zero-premium coverage.
"We do not adopt that," Spilka said. "We did not
change eligibility or take anyone off MassHealth."
Businesses in Massachusetts are making new
payments to help the state afford its MassHealth
program, and have supported efforts to reform
the program.
To tackle the rising costs of pharmaceutical
drugs, the Senate budget plan includes an annual
prescription drug spending target and authorizes
the secretary of health and human services to
seek rebates from drug companies, changes that
Spilka said are expected to deliver $40 million
in savings. Ways and Means Committee aides said
the hope is that the changes will lead to a 6
percent cut in MassHealth pharmacy spending.
The Senate budget anticipates an $88.5 million
deposit into the state's "rainy day" fund.
Fiscal watchdogs have cautioned Beacon Hill that
officials have not set aside enough reserves
during the state's prolonged recovery and that
its inadequate reserves could easily be drained
in a recession.
Spilka suggested that the $88.5 million deposit
is a starting point and that the Senate would
look to further bolster the rainy day fund with
surplus money at the end of this fiscal year
and/or next fiscal year.
"If we can put more in at the end of the year,
just like I'm hoping that for fiscal year 2018
-- when I mentioned earlier that we're a little
more than $800 million above benchmark, there
may be about $500 million of that that's capital
gains, so I'm hoping that we can put some of
that towards the rainy day fund," she said.
"It's not a matter of if there is going to be a
recession, it's a matter of when."
The budget also includes an outside policy
section that calls for the secretary of
administration and finance, treasurer,
comptroller and executive director of the
Pension Reserves Investment Management Board to
study the fiscal management of the stabilization
fund, including investing the money in the fund
differently and "the feasibility and
advisability of using the fund as a source of
short-term borrowing funds for the
commonwealth."
Following up on the passage of a sweeping
criminal justice reform bill that legislative
Democrats are already pointing to as a key
accomplishment of this session, the Senate
budget includes between $5 million and $8
million in funding related to that new law.
The Senate's budget plan, like the governor and
House, assumes the state will pull in $63
million in revenue from legal marijuana sales,
which are expected to begin July 1 with an
effective state tax rate of 17 percent. The
Senate is also counting on $20 million in
revenue next fiscal year from taxing short-term
rentals, although compromise legislation to
regulate and tax that growing industry remains a
work in progress.
While Senate leaders touted areas of investment
on Thursday, the Massachusetts Taxpayers
Foundation recently cautioned that a growing
portion of state revenues are being consumed by
a few priorities, leaving a lot less money for
lawmakers to invest in programs important to
their constituents.
Fixed obligations to non-discretionary spending
in areas like MassHealth, debt service and
pensions accounted for 55 percent of tax
revenues in fiscal 2007, but accounted for 73
percent in fiscal 2017, the foundation said.
State House News Service
Friday, May 11, 2018
Weekly Roundup - Checking Expectations
By Matt Murphy
What a guv wants and what a guv gets are often
two different things.
That's been true of both Democrat and Republican
chief executives dealing with Democratic
supermajorities in both the House and Senate
whose top priority is their own branch over
party.
That's why when Gov. Charlie Baker two weeks ago
emphatically declared his support for lowering
the sales tax, it raised a few eyebrows. It
wasn't the biggest surprise since he campaigned
on the issue eight years ago, but it's an idea
he dropped from his 2014 campaign and also
something he rarely, if ever, talks about during
his "day job."
That's probably because he knows it's not going
to happen on Beacon Hill. House Speaker Robert
DeLeo and Senate President Harriette Chandler
basically confirmed that on Monday. "I don't
think our bodies are going to agree on a
lowering of the sales tax. We're concerned about
revenue," Chandler said. Ditto, from Speaker
DeLeo.
The MassGOP convention was a place for Baker to
test his old tax relief reflexes before the
Republican base before going back to his safe
space in the State House where he can focus on
the things he really cares about getting done,
like a housing production bill. He still won't
commit to a preferred tax rate.
Lt. Gov. Karyn Polito, who in 2010 backed a 3
percent sales tax ballot question, this week
offered a tepid endorsement of the idea of
lowering the sales tax, saying it "makes some
sense." Like Baker, Polito wants a "grand
bargain" assembled to address ballot questions,
with the sales tax included.
The door, however, might not be completely shut.
The biggest policy game in town right now is a
regular gathering of union, business and
Legislature folks trying to broker a deal that
would keep the minimum wage, paid family leave
and sales tax reduction questions off the ballot
in November.
The Raise Up Coalition, which is behind two of
those questions, showed on Tuesday why business
is even at the table at all.
Hundreds of union workers and community
activists flooded the State House for what felt
more like a street festival than a press
conference. There was singing and dancing, a
live band. No one in the building didn't know
they were here.
The coalition members came, ostensibly, to call
on the Legislature to pass a $15 an hour minimum
wage and paid family and medical leave bills.
The union and coalition leaders behind the
rally, however, are well aware of the chances of
that happening, because they're at the table
where the private negotiations are actually
taking place.
Going to the ballot very well might be a slam
dunk for wage and leave advocates, and business
groups know it, but they are also costly
propositions. Hence, the effort to strike a
deal.
On the other side of the table is the Retailers
Association of Massachusetts. Its board voted
this week to go forward with the next round of
signature gathering to qualify for the ballot
with a question that would lower the sales tax
from 6.25 percent to 5 percent, a $1.2 billion
proposition for the state. That idea might also
be a popular one with the electorate, but a
nightmare scenario for Beacon Hill budget
writers, especially if the Supreme Judicial
Court winds up disqualifying a millionaire's tax
constitutional amendment supported by the
Democratic majority in the Legislature.
So RAM, even though it might not be as powerful
as some of the labor unions, has some leverage.
As those talks continue, the Legislature has no
choice but to move full steam ahead with its
annual budget planning for fiscal 2019 without
knowing whether to expect a major blow, windfall
or offsetting fouls to its revenue stream.
So Sen. Karen Spilka, still Senate Ways and
Means chairwoman for now, presented her final
budget on Thursday, a $41.4 billion spending
plan with few surprises. For now, Senate leaders
have opted against pursuing new revenue options,
despite Chandler's stated concern over revenues.
The option became available when the House made
the budget a "money bill" by including an
increase in the earned income tax credit, which
was proposed by Baker and has now been adopted
in all three budget documents.
To some extent, the Senate has backed off its
free-spending ways.
After the RISE Act, which would have poured
billions of new money into the education system,
died in the House, the Senate this week took a
smaller bite out of the education puzzle by
passing a bill that would create a new budgeting
process to force leaders to figure out how to
implement the recommendations of a school
funding review commission.
Ask people in the hallways about that bill's
chances in the House, and you may get a confused
shrug. A House budget amendment mirroring the
Senate plan did not make it into the spending
plan but a majority of House members signed on
as cosponsors so the measure may be revived.
Meanwhile, the House this week was focused on a
bill that would raise the purchasing age for
tobacco to 21 across the state and ban vaping in
workplaces and all areas where tobacco smoking
is banned. DeLeo has for years flirted with this
bill and watched as the Senate passed it last
session, only to snuff it out in the House by
keeping it bottled in committee.
This week, for whatever reason, he was ready,
and the Rep. Paul McMurtry bill passed
overwhelmingly 146-4.
It wouldn't be a full week without a scandal,
but one major talker this week hit a little
farther from home.
Attorney General Maura Healey lost her
partner-in-resistance Eric Schneiderman, the now
former New York attorney general who resigned
quickly following the publication in the New
Yorker of accusations that he had forced
himself, sometimes violently, upon women against
their will.
Healey and Schneiderman have been joined at the
hip since the inauguration of President Donald
Trump, teaming up time and again to file
lawsuits against the White House and
administration over everything from clean air to
immigration.
Healey said she was "deeply troubled" by the
allegations against Schneiderman, which he has
denied, but presumably the fight will go on and
the question will become whether Healey steps up
to lead the other Democratic AGs against Trump,
or if it will be an AG from another state.
Secretary of State William Galvin also found
himself in the crosshairs this week when the
Boston Globe reported that some of Galvin's
employees had been turning in campaign signature
sheets to city and town halls during work hours,
and not all of them had taken the necessary
vacation time to keep it above board.
Galvin launched an internal investigation, but
his opponents, let's just say, don't trust him.
STORY OF THE WEEK: The shadow "conference
committee" working on the ballot questions
"grand bargain."
The Salem News
Wednesday, May 9, 2018 A Salem News
editorial
Lawmakers should work in the open
If the Massachusetts House ever steps from the
shadows and conducts business in public, it’ll
be because a handful of members forced it there
— maybe with a shove from frustrated voters.
No one’s saying that Beacon Hill is changing its
ways, at least not yet, but there was a small
token of hope sewed into the $41 billion
spending package that passed the House two weeks
ago. A short amendment by Rep. Jim Lyons,
R-Andover, would slice eight words from state
law, making lawmakers’ records fair game for
public inspection.
As it is, the law forcing most local and state
agencies to manage their affairs in full public
view conveniently omits the Legislature,
governor’s office and state court system. How
fitting that an effort to right part of that
wrong was slipped into a spending plan assembled
in secret.
The House budget is one of the most extreme
examples of flouting the principles of open
government you’ll find. Its writers do most of
their work in meetings the public isn’t allowed
to attend or hear about. In four whirlwind days,
they sifted through 1,400 amendments suggested
by lawmakers — many seeking money for local
projects — and changed, dropped or rolled them
into dense budget updates that most legislators
themselves would have trouble parsing.
If politics is like watching sausage being made,
the state budget is the mystery meat.
Lyons sent around a press release calling the
process an “insult to the hard-working citizens
of the commonwealth.”
“Why even have a House chamber if all the
decisions are going to be made behind closed
doors?” he said.
His voice is that of a Republican in a chamber
full of Democrats, of course, and the Senate has
yet to produce its version of the budget. So
this spending plan is a long way from done and
is unlikely to keep Lyons' imprint.
Still, it would be nice to see some of his
fellow lawmakers rally to the cause — and for
their constituents to nudge them to do so. |
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