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CLT UPDATE
Monday, July 1, 2013
Tax and budget decisions arrive at last
|
House and Senate leaders struck a deal on Tuesday
night to raise taxes by $500 million to fund short and long-term
investments in the state’s aging highway and transit system,
directing enough new revenue to the MBTA to forestall immediate fare
increases and providing what lawmakers consider to be enough new
funding to facilitate future expansion projects....
The conference committee proposal, which is not
be subject to amendment from lawmakers, would raise the gas tax by 3
cents a gallon and tie future increases to inflation. The per-pack
tax on cigarettes would increase by $1, and lawmakers hope to
collect $161 million by applying the state's 6.25 percent sales tax
to computer system design services, and $83 million from changes to
the utility classification and sales sourcing for tax reporting.
The bill would require the Massachusetts
Department of Transportation to come up with plans to toll
additional roads, including border tolls, and appropriate $100,000
for an advisory council to help MassDOT develop a statewide asset
management system....
Though the tax on software services was included
in both the House and Senate bills and not subject to the most
recent negotiations, Massachusetts Taxpayers Foundation President
Michael Widmer blasted its inclusion in the bill, suggesting
lawmakers have failed to grasp it full impact.
“State leaders could hardly have chosen a more
perfect tax to undercut the future of the Massachusetts economy.
This is the most sweeping computer and software services tax in the
nation. It strikes at the heart of the state’s innovation economy
and will stifle job creation for years to come,” Widmer told the
News Service.
He estimated software design businesses will pay
as much as $500 million in new taxes under the deal, far more than
the $160 million lawmakers are expecting.
State House News Service
Tuesday, June 25, 2013
Conferees agree to $500 Mil tax bill that devotes $800 Mil to
transportation
Buried in the guts of transportation financing
legislation that raises taxes by $500 million are numerous outside
sections that could affect transportation policy and decision-making
in Massachusetts for years to come.
State House News Service
Wednesday, June 26, 2013
In addition to taxes, transportation bill lays out policy directives
A compromise bill aimed at upgrading the state's
aging and debt-ridden transportation system was advanced by
Massachusetts lawmakers on Wednesday, but Gov. Deval Patrick
announced he could not accept the measure in its current form....
The bill calls for about $500 million in new
taxes, including a 3 cent hike in the gasoline tax to 24 cents per
gallon and a $1 per pack increase in the cigarette tax. It would
also impose the state's 6.25 percent sales tax on computer and
software services, a move that has been sharply criticized by
business leaders....
The House approved the bill on a 105-47 vote one
day after the compromise was unveiled by House and Senate
negotiators. The Senate followed a short time later, approving the
measure on a 34-6 vote.
Republicans who are heavily outnumbered in the
House warned of the consequences of the new taxes.
"If you think it's OK to pass taxes without
knowing exactly who they will impact or how they are going to impact
the economy of Massachusetts, vote yes," House Minority Leader Brad
Jones, R-North Reading, told his colleagues. "We (Republicans) don't
think it's appropriate to do that."
The business-backed Massachusetts Taxpayers
Foundation issued a statement, saying the state would have the
highest tax rate in the nation on software services if the new tax
is imposed.
"The tax takes clear aim at the state's
innovation economy, which is the essence of the state's competitive
edge and at the core of its economic future," the foundation said.
The group estimated that the tax would cost
businesses $500 million, well above the $160 million estimate of
Democratic leaders.
Associated Press
Thursday, June 27, 2013
Deval Patrick says transportation compromise lacking
Technology executives and trade groups are
alarmed by potential new taxes on computer services included in a
transportation finance bill Massachusetts legislators passed
Wednesday night, saying the legislation is too broadly written and
will impose unfair levies on many different aspects of a key sector
of the economy.
The tax is part of a bill the Legislature wrote
to finance some $500 million in improvements to the state’s
transportation infrastructure and was passed by both chambers.
It would extend the 6.25 percent sales tax to
so-called computer systems design services, which critics say is so
vaguely defined that it could be applied to almost any business that
relies on third-party software vendors.
The Boston Globe
Thursday, June 27, 2013
Possible tech levy alarms sector
Executives, groups say tax vague, unfair;
Could hit state’s big companies, start-ups
Legislators passed a transportation funding
package Wednesday that would raise up to $805 million in new annual
revenue for the state Department of Transportation by 2018. But
Governor Deval Patrick said that he would not sign the bill in its
current form, because the funding promised in the bill includes
revenue from tolls that could disappear in the next few years....
Patrick has 10 days to return the bill with the
amendment. After that, legislators will vote on whether to approve
it. The legislation approved Wednesday passed both chambers with
veto-proof margins.
The transportation funding package relies on a
mish-mash of funding sources — a 3-cent gas tax, a $1 cigarette tax,
a tax on computer software and utilities, money diverted from an
underground storage cleanup fund — to deliver an average of $600
million per year over the next five years to help put the state’s
transit agencies on firm financial footing.
Many have criticized the bill for being too
generous, providing too much money to a transportation agency often
criticized as bloated and inefficient, as well as being vaguely
written, especially when it comes to a software computer tax that
many fear will stifle the growth of technology companies.
The Boston Globe
Friday, June 28, 2012
Tolls could be a deal breaker in Mass. transit bill
Michael Widmer, the usually mild-mannered
president of the Massachusetts Taxpayers Foundation, is as alarmed
as I can ever remember him being. If it becomes law, he says, the
transportation bill that the Legislature passed on Wednesday would
require the Department of Revenue to tax a sweeping range of
computer services that state firms purchase to stay competitive.
Given the high-tech state of the Massachusetts
economy, that big new tax would have large negative consequences.
“It’s a tsunami,” he says. “Any company that
invests in new technology to upgrade its system will be taxed.” ...
Widmer says that Staples, the Massachusetts-based
office-supply company, would see its sales tax bill rise by some $10
million a year. Only three other states — New Mexico, Hawaii, and
South Dakota — have such a broad tax on computer services....
Or the governor, Widmer, and legislative leaders
could sit down and hammer out a way forward. That might, say, result
in Patrick’s signing this bill with the understanding that
corrective legislation would soon follow.
The Boston Globe
Friday, June 28, 2012
The tech-tax monster vs. Beacon Hill
By Scot Lehigh
Currently sitting on Governor Patrick’s desk is a
state transportation financing bill that raises an average of $600
million in revenue over the next five years. Some of the money would
come from hiking the cigarette tax, changing some business tax
rules, and adding 3 cents to the gas tax. Yet the bill also includes
an ill-conceived new sales tax on computer systems design services.
Patrick has said he will send the bill back to legislators with
amendments. He should, and one of his changes should be to scrap the
computer services tax....
The tech tax should go. Its revenues could be
replaced by hiking the gas tax by an extra nickel. That’s a more
obvious source of money for transportation anyway.
A Boston Globe editorial
Friday, June 28, 2012
Transportation financing: Tech tax must go
Massachusetts lawmakers have delayed a final vote
on the new state budget.
A six-member House and Senate committee has been
negotiating behind closed doors trying to hammer out a compromise
spending plan.
House and Senate leaders had hoped to release the
final budget Friday with a vote on Saturday, but decided to put off
the vote until at least Monday, the first day of the new fiscal
year.
Associated Press
Friday, June 28, 2013
Mass. lawmakers racing to finish new state budget
According to Patrick, that makes the $805 million
proposal more like a $670 million proposal. And that’s not good
enough.
Senate President Therese Murray and House Speaker
Robert DeLeo could barely decide who to be more frustrated with –
Patrick or Massachusetts Taxpayers Foundation President Michael
Widmer?
Patrick has given up on trying to boost that
number above $1 billion, but now says the Legislature didn’t account
for the fact that turnpike tolls from Newton to the New York border
are due to come down in 2017.
According to Patrick, that makes the $805 million
proposal more like a $670 million proposal. And that’s not good
enough....
Needless to say, the Legislature is not the
governor’s biggest fan at the moment. But [MTF president Michale]
Widmer hasn’t made any friends either.
"State leaders could hardly have chosen a more
perfect tax to undercut the future of the Massachusetts economy.
This is the most sweeping computer and software services tax in the
nation. It strikes at the heart of the state's innovation economy
and will stifle job creation for years to come," Widmer told the
News Service, mere minutes after the tax bill deal was announced.
State House News Service
Friday, June 28, 2013
Weekly Roundup
The Legislature did an amazing thing this week.
It overwhelmingly decided to never, ever vote to raise gas taxes
again.
That doesn’t mean gas taxes aren’t going to keep
going up and up and up. It just means the General Court will never
have to go on record as raising them. Because from now on the state
gas taxes are going to increase ... automatically! ...
Instead of having actual roll-call votes on
whether to increase the gas tax — votes that might be used against
the hacks in the next election — from now on they’re going to use a
formula based on the Consumer Price Index.
You know, the same CPI that overestimates
inflation so much that even Barack Obama has been complaining about
it.
The hacks at the State House used to vote on
their own pay raises, which proved to be an extremely hazardous roll
call. Afterwards, in the next election, a few of the feebler solons
would always be culled from the herd. So the hacks now determine
their inevitable pay raises with this marvelous new CPI dodge, which
has proven so successful that they’ve decided to use it on gas
taxes....
Rep. Jim Lyons of Andover pointed out that MBTA
painters make $79,000 a year, while painters in “regular government”
get $46,000. Wonder how much they make in the Dreaded Private
Sector.
Rep. Ryan Fattman of Sutton mentioned the
greatest accomplishment of the Patrick administration: “We have had
more dead people receiving EBT benefits in a decade than jobs have
been created.”
And Sen. Bruce Tarr noted how the “reforms”
invariably work out with the state’s bloated bureaucracies: “You
didn’t save the money you said you would, so let’s give you some
more money.”
But look on the bright side. You won’t have to
read any more headlines about the gas tax going up. Because it’ll
just be going up automatically.
The Boston Herald
Sunday, June 30, 2013
Gas tax on cruise control
By Howie Carr
All eyes are on a State House conference
committee that could finally lift the veil on the MBTA’s secret
pension system, giving taxpayers access to information on T
retirees’ payouts.
“At a time when we’re asking taxpayers to fork
over hundreds of millions for transportation, the least the MBTA can
do is work to have the retirement board unseal their pension
information,” said state Rep. Brad Hill (R-Ipswich). “Taxpayers
deserve to know how and where their tax dollars are being spent.”
The Boston Herald
Sunday, June 30, 2013
Bill would open T pension books
Taxpayers may see retirees’ $
A group of environmentalists plans to ask
voters to make Massachusetts the first state in the nation to
adopt a so-called carbon tax by imposing new levies on gasoline,
heating oil, and other fossil fuels based on the amount of
carbon dioxide they produce.
The group, which has registered with the
state as a political committee, is launching a campaign to place
the issue on the ballot for the 2014 state elections. If
approved, such a tax would add several cents to the price per
gallon of gas and could generate as much as $2.5 billion in
revenue a year, according to an economic analysis that was done
for the group, the Committee for a Green Economy....
But the effort will almost certainly attract
opposition from antitax groups and businesses not eager to
contend with higher taxes and energy costs....
The Boston Globe
Monday, June 24, 2013
Environmentalists call for a Mass. carbon tax
Agreeing to significantly higher spending on
the state’s university system and new efforts to tamp down on
fraud in the welfare system while discarding an expansion of the
bottle deposit law, the group of lawmakers negotiating the
annual state budget filed their $34 billion proposal on the eve
of the new fiscal year, along with an accord on a mid-year
spending bill.
The House and Senate are scheduled to take up
the two conference committee reports during sessions on Monday
afternoon. If the two budget bills are approved as expected,
Gov. Deval Patrick will have 10 days to consider the proposal
and announce any amendments or vetoes before he signs it....
The $34 billion budget, up from the $32.5
billion fiscal 2013 budget, depends on new revenues from a gas
tax hike, an application of the sales tax to certain computer
software services and increased tobacco taxes, which are part of
a separate piece of legislation that Patrick has said he will
amend to ensure the revenues in it would eventually add up to
$800 million.
The final budget also draws $350 million out
of the state’s rainy day fund, according to an aide....
The budget was filed about four hours before
midnight, July 1, when fiscal year 2014 begins.
State House News Service
Sunday, June 30, 2013
Negotiators agree to $34 Bil state budget on eve of fiscal year
With the House and Senate both preparing for
formal sessions this afternoon to debate a fiscal 2014 budget
and a fiscal 2013 supplemental spending bill filed over the
weekend, Gov. Deval Patrick, Senate President Therese Murray and
House Speaker Robert DeLeo have called off their meeting for
Monday afternoon.
State House News Service
Monday, July 1, 2013
State Capitol Briefs
Meeting between Patrick, legislative leaders called off
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Chip Ford's CLT
Commentary
"A day late and a dollar short" goes the old
bromide. In Massachusetts, it's a day late and $1.5 Billion more,
more, more.
The House/Senate conference committee released
its Fiscal Year 2014 budget last night, only four hours ahead of the
end of Fiscal Year 2013. It's supposed to be voted on this
afternoon, which I suppose means all the legislators will have time
to fully comprehend what they're voting upon, as usual.
Everything's at last coming together: Tax
hikes, transportation bill, next fiscal year's budget
— once again in the final moments
before The Great and General Court, aka "The Best Full-Time
Legislature Money Can Buy," departs on its months of summer
vacation.
By the time I finish writing this the bloated
proposed budget will likely be passed and sent to the governor's
desk for his signature. You can get a belated look at it (don't
blink)
here, and the close of FY13 supplemental budget
here.
Still many stakeholders are questioning the
wisdom of extending the sales tax to computer services. Some have
become outright opponents of it, now that they're getting at least a
clue of who it will effect and how.
In our memo to legislators on April 24 ("Tax
hikes, Sales Tax on computer services") Barbara reminded them
all of the last time the sales tax was applied to services, briefly
before being repealed. We advised:
"While you’re preparing to begin
applying the sales tax to services with an obscure new
sales tax on computer services that no one seems to
understand, let us share our institutional memory with
you about the last time the Legislature tried this, to
its embarrassment...."
The silence of a response was tangible. Nobody
knew and fewer cared in April what this new imposition of the sales
tax meant or would foment.
Now, at last, the fat-cats'-backed so-called
Massachusetts Taxpayers Foundation is in high dudgeon. The
Associated Press reported:
The business-backed Massachusetts Taxpayers
Foundation issued a statement, saying the state would have the
highest tax rate in the nation on software services if the new tax
is imposed.
"The tax takes clear aim at the state's
innovation economy, which is the essence of the state's competitive
edge and at the core of its economic future," the foundation said.
The group estimated that the tax would cost
businesses $500 million, well above the $160 million estimate of
Democratic leaders.
Massachusetts, one of only four states that
imposes this tax, is on the cutting edge of taxation once again.
More will inevitably and undoubtedly follow
— once everyone has time to digest
what's in this new budget proposal.
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Chip Ford |
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State House News Service
Tuesday, June 25, 2013
Conferees agree to $500 Mil tax bill that devotes $800 Mil to
transportation
By Matt Murphy
House and Senate leaders struck a deal on Tuesday night to raise
taxes by $500 million to fund short and long-term investments in the
state’s aging highway and transit system, directing enough new
revenue to the MBTA to forestall immediate fare increases and
providing what lawmakers consider to be enough new funding to
facilitate future expansion projects.
The House and Senate could vote on the bill as early as Wednesday
when both branches will be in session.
The conference committee proposal, which is not be subject to
amendment from lawmakers, would raise the gas tax by 3 cents a
gallon and tie future increases to inflation. The per-pack tax on
cigarettes would increase by $1, and lawmakers hope to collect $161
million by applying the state's 6.25 percent sales tax to computer
system design services, and $83 million from changes to the utility
classification and sales sourcing for tax reporting.
The bill would require the Massachusetts Department of
Transportation to come up with plans to toll additional roads,
including border tolls, and appropriate $100,000 for an advisory
council to help MassDOT develop a statewide asset management system.
Legislative leaders believe the plan will provide enough additional
financial support to shore up the MBTA and MassDOT operations in the
near-term, while also allowing for projects like the Green Line
extension to Medford and South Coast rail to move forward.
Though the tax on software services was included in both the House
and Senate bills and not subject to the most recent negotiations,
Massachusetts Taxpayers Foundation President Michael Widmer blasted
its inclusion in the bill, suggesting lawmakers have failed to grasp
it full impact.
“State leaders could hardly have chosen a more perfect tax to
undercut the future of the Massachusetts economy. This is the most
sweeping computer and software services tax in the nation. It
strikes at the heart of the state’s innovation economy and will
stifle job creation for years to come,” Widmer told the News
Service.
He estimated software design businesses will pay as much as $500
million in new taxes under the deal, far more than the $160 million
lawmakers are expecting.
House Ways and Means Chair Brian Dempsey and Senate Ways and Means
Chair Stephen Brewer were not available to comment on the accord,
but the contours of the plan mirror those presented by House Speaker
Robert DeLeo and Senate President Therese Murray in April, according
to a summary obtained by the News Service.
The six-member conference committee – tasked with negotiating a
compromise between the previously passed House and Senate versions
of the bill - also accepted Senate-backed provisions that would
direct up to $805 million in additional state spending to
transportation needs by 2018. The concession from the House could
help mitigate a threat from Gov. Deval Patrick to veto the bill if
it insufficiently funded transportation.
To reach the higher new spending level on transportation, the House
agreed to Senate-approved measures to sweep the underground storage
tank removal fund of surplus revenues collected through a 2.5 cent
per gallon surcharge on gas, and to require utilities to pay the
state the fair market value for the use of rights-of-way on highways
where they own infrastructure, such as poles.
The bill was filed in time Tuesday night to allow consideration of
the bill on Wednesday without suspending legislative rules aimed at
fostering transparency and time for lawmakers to review bills before
voting on them. Dempsey, Brewer, Sen. Thomas McGee and Rep. William
Straus all signed off on the agreement, while the Republican
conferees Sen. Robert Hedlund and Rep. Steven Howitt did not sign
the bill.
Gov. Patrick called the House bill a “pretend fix” to the state’s
infrastructure problems when it passed in April and threatened to
veto the measure if it got to his desk. He softened to the Senate’s
version, however, and said last week on the radio he expects to be
able to sign a law that approached $800 million in new
transportation spending.
Patrick is in California visiting his daughter and new grandson, and
his office did not have an immediate comment on the compromise.
The House and Senate tax bills (H 3415/S 1770) were sent to
conference committee on April 22 after the House tax bill passed
97-55. The Senate bill was approved 30-5.
The conference committee bill would also close the budget gap at the
T in fiscal 2014, avoiding the need for a second year of fare
increases and service cuts, and envisions moving all MassDOT
employees off the capital budget over three years.
Regional transit authorities would be forward funded starting in
2014 under the proposal. MassDOT and the MBTA would be required to
generate their own new revenue sources and savings over the life of
the five-year plan to meet spending expectations.
The Patrick administration, which proposed as much as a $1 billion
in new transportation revenue and spending in its budget, has
questioned whether multiple major transportation funding goals can
be accomplished with less new revenue, and has even held up $150
million in local road funding as it waits to review the compromise
bill.
State House News Service
Wednesday, June 26, 2013
In addition to taxes, transportation bill lays out policy directives
By Michael Norton
Buried in the guts of transportation financing legislation that
raises taxes by $500 million are numerous outside sections that
could affect transportation policy and decision-making in
Massachusetts for years to come.
Here’s a look at several of the riders included in the bill, which
emerged Tuesday night from conference committee and could clear the
House and Senate during sessions scheduled for Wednesday afternoon.
•
STUDIES ON BORDER TOLLS, COMPREHENSIVE TOLLING PLAN: The bill gives
the Patrick administration just over six months, or until Dec. 31,
2013, to study and report on the feasibility of establishing
interstate tolls along the state’s border. Lawmakers want the report
to touch on the option of seeking a federal waiver or reaching
interstate or regional agreements. Also, Section 67 of the bill
requires MassDOT by Dec. 31, 2013 to “develop a comprehensive
tolling plan for additional interstate and limited access state
highways within the commonwealth on or before July 1, 2018, which
shall consider equity issues, revenue benchmarks established by
state law, policy objectives, diversion issues, cost and consistency
with the current highway program and necessary waivers or approvals
from the Federal Highway Administration to toll additional
interstate highways and which also shall examine a regional value
pricing program, road pricing program and other available tolling
options.”
•
TOLLS ON WESTERN END OF TURNPIKE: Under the bill, MassDOT will need
to serve up a plan within 90 days of the bill’s signing to implement
a proposed fee structure for collecting turnpike tolls between
interchange 1 in West Stockbridge and interchange 6 in Springfield
at I-291.
•
MBTA AFTER HOURS: The bill orders the MBTA to seek sponsorship
agreement proposals from business, civic and nonprofit entities in
order to provide services beyond current hours of operation. While
some T riders have longed for extended hours of service, the T over
the years has been unable to afford extended hours within its
budget.
•
PREMIUM PARKING: Just as policymakers are talking about enabling
drivers to someday pay to ride in high-speed highway lanes, the bill
directs the MBTA to create a pilot program under which not more than
10 percent of available parking spots at three high-volume stations
will be dedicated to customers “willing to pay an increased premium
for a reserved parking spot that is guaranteed to be available to
them if they arrive at the spot before a certain hour, as determined
by the authority.”
•
REPORT ON T SPONSORSHIP EFFORTS: The bill gives the T just over a
month to issue a report on revenues collected through sponsorship
agreements, including offers to sponsor that have been declined and
attempts to increase sponsorship opportunities. The report is due to
be filed with legislative clerks by Aug. 30 under the bill.
•
FISCAL STATUS OF MASSDOT: In what appears to be an attempt to keep
the Legislature in the information loop, the bill requires the MBTA
general manager, the state transportation secretary and the
secretary of administration and finance - all Patrick administration
appointees - to meet with members of the House and Senate Ways and
Means committees every January and July. Before each meeting, the
transportation secretary is required to submit a detailed report on
agency finances, with the report due before the July 2015 meeting
identifying any potential changes in fares and fees needed to
achieve benchmarks.
•
TAX FAIRNESS COMMISSION: The fairness of taxation is always in the
eye of the beholder. Section 77 of the bill creates a “tax fairness
commission” to study the federal, state and local tax laws
applicable to the state’s residents. “The commission shall review
and evaluate the equity of historical tax rates and methods in
relation to the changing income and wealth of residents of the
commonwealth since 1990,” the bill states. “The commission shall
examine the experiences and policy efforts of other states relating
to tax fairness.” The bill instructs the commission to file a report
by March 1, 2014.
•
NAMING RIGHTS $$$ FOR TRANSIT EXPANSION: The bill requires the T by
Jan. 1, 2014 to issue a request for proposals to sell, license or
rent naming or sponsorship rights for all subway, bus or commuter
rail stations that it operates and owns. All revenues derived from
such sponsorships are dedicated under the bill to mass transit
expansion projects.
•
REPORT ON AIR QUALITY IMPACTS OF BIG DIG: Within six months of the
bill’s signing, or probably around the new year, a report would be
due from MassDOT under the bill that is based on an analysis of the
air quality impacts of the Big Dig and transit commitments completed
to date as a result of that megaproject.
Associated Press
Thursday, June 27, 2013
Deval Patrick says transportation compromise lacking
A compromise bill aimed at upgrading the state's aging and
debt-ridden transportation system was advanced by Massachusetts
lawmakers on Wednesday, but Gov. Deval Patrick announced he could
not accept the measure in its current form.
The bill unveiled a day earlier by House and Senate negotiators
would eliminate the MBTA's projected deficit for the fiscal year
that starts Monday, forestalling any immediate fare hikes or service
cuts.
It would also provide financing for long-term capital projects,
including the extension of the Green Line and the expansion of
commuter rail to the South Coast, and would end the practice of
borrowing to pay the salaries of some transportation workers.
The bill calls for about $500 million in new taxes, including a 3
cent hike in the gasoline tax to 24 cents per gallon and a $1 per
pack increase in the cigarette tax. It would also impose the state's
6.25 percent sales tax on computer and software services, a move
that has been sharply criticized by business leaders.
In a statement issued by his office Wednesday evening, Patrick said
he could not support the bill because it fails to account for a
revenue source that will not be available in the future. While the
statement did not specify that source, it was an apparent reference
to tolls on the western portion of the Massachusetts Turnpike that
are scheduled to be taken down in 2017.
Without those tolls, the Patrick administration believes the $805
million in new transportation funding that the bill promises by
fiscal year 2018 would not be achievable.
"I expect to return this bill with an amendment and look forward to
working with the Legislature to enact it," Patrick said in the
statement. The governor is in California this week visiting his new
grandson.
The House approved the bill on a 105-47 vote one day after the
compromise was unveiled by House and Senate negotiators. The Senate
followed a short time later, approving the measure on a 34-6 vote.
Republicans who are heavily outnumbered in the House warned of the
consequences of the new taxes.
"If you think it's OK to pass taxes without knowing exactly who they
will impact or how they are going to impact the economy of
Massachusetts, vote yes," House Minority Leader Brad Jones, R-North
Reading, told his colleagues. "We (Republicans) don't think it's
appropriate to do that."
The business-backed Massachusetts Taxpayers Foundation issued a
statement, saying the state would have the highest tax rate in the
nation on software services if the new tax is imposed.
"The tax takes clear aim at the state's innovation economy, which is
the essence of the state's competitive edge and at the core of its
economic future," the foundation said.
The group estimated that the tax would cost businesses $500 million,
well above the $160 million estimate of Democratic leaders.
But supporters of the overall bill called it a responsible and
reasonable approach to bridging the state's chronic transportation
funding gap and addressing some of its most pressing infrastructure
needs.
Rep. Brian Dempsey, D-Haverhill, chairman of the House Ways and
Means Committee, said the bill calls for far less than the $1.9
billion in new taxes originally sought by Patrick for transportation
and education improvements.
"We are still in a challenging economic climate" Dempsey said.
The bill also directs transportation officials to formulate a plan
for placing tolls on highways near the borders of neighboring
states, and immediately reinstate tolls for motorists traveling
between Exits 1 and 6 on the western end of the turnpike.
The Boston Globe
Thursday, June 27, 2013
Possible tech levy alarms sector
Executives, groups say tax vague, unfair;
Could hit state’s big companies, start-ups
By Michael B. Farrell
Technology executives and trade groups are alarmed by potential new
taxes on computer services included in a transportation finance bill
Massachusetts legislators passed Wednesday night, saying the
legislation is too broadly written and will impose unfair levies on
many different aspects of a key sector of the economy.
The tax is part of a bill the Legislature wrote to finance some $500
million in improvements to the state’s transportation infrastructure
and was passed by both chambers.
It would extend the 6.25 percent sales tax to so-called computer
systems design services, which critics say is so vaguely defined
that it could be applied to almost any business that relies on
third-party software vendors.
Depending on how tax regulators apply the legislation, the levy
could hit some of the state’s biggest employers and promising
start-ups alike, and be assessed on a wide range of activities, from
custom Web design to smartphone apps to sophisticated software for
industrial applications. While the state forecast the provision
would raise $160 million in revenues, critics claim it could amount
to $500 million in additional taxes on technology users.
“That provision alone could be a half-billion dollar tax hike aimed
at the very heart of our technology economy,” said Chris Anderson,
president of the Massachusetts High Tech Council, an industry group.
“The question for the Legislature is why would we want to blunt that
edge, and let other states get ahead of us.”
The Patrick administration, which initially proposed a broader
version of the tax, did not return calls for comment. But the
governor said in a statement Wednesday that he will not support the
bill in its current form because it does not raise enough money for
transportation.
State lawmakers, meanwhile, said they had narrowed the scope of
Patrick’s initial proposal from a broader tax that would have
covered such hot areas of the Massachusetts technology sector as
cloud computing and so-called big data analytics.
“We scaled it back and looked for something that was fair, reasoned,
and balanced,” said Senator Thomas McGee of Lynn, chairman of the
joint Committee on Transportation.
According to the current version of the proposal, computer system
design services are defined as “the planning, consulting or
designing of computer systems that integrate computer hardware,
software or communication technologies and are provided by a vendor
or a third party.”
But that description, business leaders said, is still too vague, and
it could lead regulators at the Department of Revenue to apply the
tax to transactions that lawmakers had not intended, said Andrew
Bagley, director of research for Massachusetts Taxpayers Foundation.
That ambiguity is creating concerns within the business community,
Bagley said, and comes at a time when other states are offering
incentives to attract technology companies.
But McGee and a colleague, Senator Stephen Brewer of Barre, chairman
of the Senate Committee on Ways and Means, said they would lobby the
Revenue Department to ensure the taxes are not too far reaching.
The tax proposal snuck up on many in the technology industry, as
several prominent local companies said they did not know the
legislation was even under consideration, while some industry groups
said they weren’t sure of its overall impact.
“We need a clarification of this law as soon as possible,” said Dave
Andelman, president of the Restaurant and Business Alliance.
“Businesses should not be required to guess on what items they
should pay taxes.”
The Boston Globe
Friday, June 28, 2012
Tolls could be a deal breaker in Mass. transit bill
By Martine Powers and Michael Levenson
The drawn-out battle about a transportation finance bill appears to
have hit a new snag: tolls.
Legislators passed a transportation funding package Wednesday that
would raise up to $805 million in new annual revenue for the state
Department of Transportation by 2018. But Governor Deval Patrick
said that he would not sign the bill in its current form, because
the funding promised in the bill includes revenue from tolls that
could disappear in the next few years.
Starting in 2017, tolls on the Massachusetts Turnpike will no longer
be legally mandated. If the tolls are eliminated, the lost revenue
could leave the state’s transportation system with as much as $130
million less than projected in the bill.
In a statement, Patrick said he would send the bill back to
lawmakers with an amendment intended to ensure that the
Transportation Department is not left out to dry.
House Speaker Robert A. DeLeo said he was “somewhat surprised” by
the governor’s objections and did not agree with the
administration’s assertion that the bill does not provide as much
new revenue as it promises.
“I’m anxious to see exactly what amendments he wants to file and
what the issues are, because I think we’re there,” DeLeo said.
“Bottom line: The numbers are solid.”
Transportation Secretary Richard A. Davey said he met with
legislators in recent weeks to outline a need for a fix. In a June 6
memo to the legislators, he suggested two solutions: vote to
continue the tolls past 2017 or raise the gas tax.
“This shouldn’t be a surprise to anyone,” Davey said. “It’s clear
this was our deepest concern.”
But DeLeo said Davey raised concerns too late.
“The bill was done,” he said. “This was not even brought to our
attention until after we had completed negotiations.”
Patrick has 10 days to return the bill with the amendment. After
that, legislators will vote on whether to approve it. The
legislation approved Wednesday passed both chambers with veto-proof
margins.
The transportation funding package relies on a mish-mash of funding
sources — a 3-cent gas tax, a $1 cigarette tax, a tax on computer
software and utilities, money diverted from an underground storage
cleanup fund — to deliver an average of $600 million per year over
the next five years to help put the state’s transit agencies on firm
financial footing.
Many have criticized the bill for being too generous, providing too
much money to a transportation agency often criticized as bloated
and inefficient, as well as being vaguely written, especially when
it comes to a software computer tax that many fear will stifle the
growth of technology companies.
Still, it is far short of the $1 billion proposal put forth by
Patrick early this year, but will help regional transit authorities
pay their operating costs in advance, allow MassDOT to pay for
personnel costs without borrowing money, and will close the MBTA’s
budget deficit.
Without a funding plan in place, the T’s budget will be in financial
limbo, because its fiscal year starts Monday. Davey said the T will
continue to take a wait-and-see approach in coming weeks, holding
off on fare hikes or service cuts for at least a couple of months.
“We’re not going to panic; we’re not going to create a crisis,”
Davey said. When it comes to enacting fare increases, he continued,
“we don’t want to go there.”
Stephanie Pollack, associate director of Northeastern University’s
Dukakis Center for Urban and Regional Policy, said Patrick’s issue
with tolls is an important one.
“You’ve got to shore up every last dollar,” Pollack said. “I know
we’re down to the last minute, but it feels like it would still be
great if we could make one last run at getting everything exactly
right.”
Marc Draisen, executive director of the Metropolitan Area Planning
Council, said he disagreed that the amendment was essential and said
it could be addressed by legislators in a year or two.
“Getting $600 million for your program is not something that happens
every day,” said Draisen. “I know it’s not everything we want, and
it’s not everything we need, but it’s 60 percent, and that’s a
pretty good year’s work.”
The Boston Globe
Friday, June 28, 2012
The tech-tax monster vs. Beacon Hill
By Scot Lehigh
Michael Widmer, the usually mild-mannered president of the
Massachusetts Taxpayers Foundation, is as alarmed as I can ever
remember him being. If it becomes law, he says, the transportation
bill that the Legislature passed on Wednesday would require the
Department of Revenue to tax a sweeping range of computer services
that state firms purchase to stay competitive.
Given the high-tech state of the Massachusetts economy, that big new
tax would have large negative consequences.
“It’s a tsunami,” he says. “Any company that invests in new
technology to upgrade its system will be taxed.”
The Patrick administration, which put forward a variant of that plan
as part of its proposal to raise transportation money, originally
estimated the effects at about $370 million per year. In reworking
Patrick’s plan, the Legislature meant to scale it back to $160
million. But the way the final legislation is worded, Widmer says,
the added annual burden is more likely to be $500 million.
Mind you, this is not about taxing software products that are sold
in boxes or downloaded from vendors; those products are already
taxed. This provision would extend the state sales tax to all of the
computer services, IT work, or website developments or upgrades that
companies hire third-party vendors to do for them.
The problem is compounded by a nascent standoff.
For example, computer systems developed or upgraded to manage sales
and inventory and improve customer services would be taxed.
So would banks’ investment in better online and mobile banking.
What’s more, the cost of developing the new web portals that health
plans must build for their customers under last year’s health care
cost-containment legislation will be taxed, making it harder to rein
in premiums.
Widmer says that Staples, the Massachusetts-based office-supply
company, would see its sales tax bill rise by some $10 million a
year. Only three other states — New Mexico, Hawaii, and South Dakota
— have such a broad tax on computer services.
The new tax is a big concern because it would slap businesses with
significant new expenses for making the investments needed to stay
on the cutting edge in the digital age. Indeed, the foundation
estimates that the new levy alone would amount to a 30 percent
increase in the state sales taxes Massachusetts firms pay.
The foundation’s analysis carries significant weight on Beacon Hill;
House Ways and Means Chairman Brian Dempsey, who says the sales-tax
extension isn’t intended to be that broad, says the House is willing
to work with Widmer and the business community to fix it.
But the problem is compounded by a nascent standoff between Patrick
and the Legislature. The governor wanted more transportation
spending supported principally by a hike in the state income tax.
The Legislature passed a smaller transportation plan backed by
increases in the gas, corporate, and cigarette taxes.
Patrick, who is in California visiting family, issued a statement
asserting that the Legislature’s plan doesn’t provide enough future
funding and saying that he will send it back with an amendment. That
amendment will supposedly stipulate that tolls on the western part
of the turnpike, currently scheduled to expire in 2017, will be
retained. Because that wasn’t in the governor’s original plan, the
feeling among legislators is that Patrick is doing some posturing at
their expense. Further, adding such a provision at this late
juncture would create significant process problems for legislative
leadership.
One can see this standoff moving in one of two directions. The
governor and legislative leaders could dig in. Patrick could file
his amendment; the Legislature could reject it; he could then veto
the legislation, and they could likely override that veto.
That route would have two unfortunate results: 1) The new tech tax
would take effect, and 2) the battle would set an antagonistic tone
for the last year and a half of Patrick’s term.
Or the governor, Widmer, and legislative leaders could sit down and
hammer out a way forward. That might, say, result in Patrick’s
signing this bill with the understanding that corrective legislation
would soon follow.
That would be the sensible way forward. But that’s not always the
favored way — not on Beacon Hill anyway.
The Boston Globe
Friday, June 28, 2012
A Boston Globe editorial
Transportation financing: Tech tax must go
Currently sitting on Governor Patrick’s desk is a state
transportation financing bill that raises an average of $600 million
in revenue over the next five years. Some of the money would come
from hiking the cigarette tax, changing some business tax rules, and
adding 3 cents to the gas tax. Yet the bill also includes an
ill-conceived new sales tax on computer systems design services.
Patrick has said he will send the bill back to legislators with
amendments. He should, and one of his changes should be to scrap the
computer services tax.
The state forecasts the 6.25 percent tech tax would raise $160
million in revenues. That estimate, however, appears to assume that
only services provided by in-state vendors would incur the tax. As
currently written, though, the increase would likely apply to any
purchases of customized software or Web services. Companies big and
small, across virtually every major industry in the state, make such
purchases — and would end up paying the new tax. According to the
Massachusetts Taxpayers Foundation, corporate technology users could
face up to $500 million annually in additional taxes. That’s a major
bite to take out of businesses.
Lawmakers could tailor the bill to tax only Massachusetts-based
providers. But that would surely disadvantage local firms competing
in this sector. Just three other states tax computer and software
services in this manner, and none at more than 4 percent. Indeed,
many states offer tax incentives precisely to lure in technology
companies.
The tech tax should go. Its revenues could be replaced by hiking the
gas tax by an extra nickel. That’s a more obvious source of money
for transportation anyway.
Associated Press
Friday, June 28, 2013
Mass. lawmakers racing to finish new state budget
Massachusetts lawmakers have delayed a final vote on the new state
budget.
A six-member House and Senate committee has been negotiating behind
closed doors trying to hammer out a compromise spending plan.
House and Senate leaders had hoped to release the final budget
Friday with a vote on Saturday, but decided to put off the vote
until at least Monday, the first day of the new fiscal year.
Both House and Senate budgets call for spending increases over the
current fiscal year, but less in total spending than Gov. Deval
Patrick had requested.
Both budgets are also predicated on about $500 million in new
revenue, including hikes in gasoline and cigarette taxes included in
a separate transportation financing bill.
Patrick has said he will return the transportation bill to
lawmakers, asking for changes.
State House News Service
Friday, June 28, 2013
Weekly Roundup
By Matt Murphy
It’s late June and it’s time to make a deal. The only things thicker
than the humidity hanging over Beacon Hill were anticipation and raw
political ambition, neither in short supply.
If you were a newsmaker this week, you better have brought your “A”
game, because otherwise it was probably lost in the flood. Remember
back to Monday when the Bruins lost the Stanley Cup in heartbreaking
fashion? If you don’t, it’s probably better that way.
Since then Congressman Ed Markey was elected to the United State
Senate, former Patriots tight end Aaron Hernandez was arrested for
murder and cut from the team, Whitey’s trial waded deeper into the
underworld, Dzhokhar Tsarnaev was indicted on 30 counts for the
Boston marathon bombing, and the Supreme Court struck down the
Defense of Marriage Act, but agreed to hear a challenge of the
state’s abortion clinic buffer zone law.
That’s all in addition to what was happening right here under the
Golden Dome, where lawmakers voted to raise gas, cigarette and
business taxes by $500 million, but it still wasn’t enough to
satisfy Gov. Deval Patrick, whose beef with the bill now centers
around the future of tolls on the Massachusetts Turnpike.
Lawmakers headed into the weekend without a budget in place,
ensuring that the new fiscal year will start Monday without a
full-year spending plan in place – a concern of optics more than
real life consequence given that an interim spending bill is already
in place to keep government running.
“This week’s stories only solidifies our belief in Boston that the
world really does revolve around us,” state Rep. Aaron Michlewitz
wrote in Tweet. This week it was true.
Gov. Patrick spent the week in California visiting his new grandson,
but still managed a transcontinental derailing of the deal struck by
the House and Senate to carve out $805 million in new resources for
transportation. Patrick has given up on trying to boost that number
above $1 billion, but now says the Legislature didn’t account for
the fact that turnpike tolls from Newton to the New York border are
due to come down in 2017.
According to Patrick, that makes the $805 million proposal more like
a $670 million proposal. And that’s not good enough.
Senate President Therese Murray and House Speaker Robert DeLeo could
barely decide who to be more frustrated with – Patrick or
Massachusetts Taxpayers Foundation President Michael Widmer?
Patrick has never been wild about the Legislature’s effort to find
new revenue for transportation, but agreed to compromise as long as
they hit the $800 million threshold by 2018. Murray and DeLeo,
however, said Patrick raised the toll issue when it was too late to
fix, didn’t even include it in his own budget plan, and is now
holding a gun to their head over a problem that won’t exist until
four years from now.
Needless to say, the Legislature is not the governor’s biggest fan
at the moment. But Widmer hasn’t made any friends either.
"State leaders could hardly have chosen a more perfect tax to
undercut the future of the Massachusetts economy. This is the most
sweeping computer and software services tax in the nation. It
strikes at the heart of the state's innovation economy and will
stifle job creation for years to come," Widmer told the News
Service, mere minutes after the tax bill deal was announced.
Posted on its website right underneath the Taxpayers Foundation’s
scathing assessment of proposed sales tax on software design
services is a link to the foundation’s statement in April endorsing
the original House and Senate financing plans. At the time, Widmer
called the software tax “troubling,” but how he got from there to
driving a stake through the heart of the economy has left lawmakers
bewildered.
The debate over taxes and spending – and the immediate start of yet
another special election – left Democrats with little time to bask
in the afterglow of Markey’s 10-point win over Republican Gabriel
Gomez in the U.S. Senate special election. Interim Sen. Mo Cowan can
now pack up his bowties and come home after an election that might
be remembered most for candidates who stuck to talking points and
voters who showed no interest in the battle.
Turnout defied even Secretary of State William Galvin’s worst
predictions with just 1.16 million ballots cast, or roughly 27
percent of registered voters. The poor turnout wound up hurting
Gomez who could not rack up the independent votes in territories
where Scott Brown performed well in 2010 after his campaign caught
fire.
“It’s a numbers game in Massachusetts. When you have 11 percent
Republican enrollment, it’s very difficult,” offered Brown for his
paying gig with Fox News.
Now that Markey is headed to the Senate, candidates are free to
openly campaign for his Congressional seat without any caveats. They
wasted little time. Rep. Carl Sciortino formally announced on the
steps of the State House Wednesday afternoon, and Sen. Karen Spilka
planned her announcement for Monday in Framingham. Sens. Katherine
Clark, William Brownsberger and Sheriff Peter Koutoujian are also
in.
Another senator – Sen. Daniel Wolf – has made the decision to run
for governor in 2014, according to sources. He will likely make his
announcement within the next two weeks, while others like Treasurer
Steven Grossman, U.S. Rep. Michael Capuano and now Attorney General
Martha Coakley, according to the Globe, bide their time and weigh
the options. Coakley has previously said she plans to run for
attorney general again.
In one race overshadowed by the Markey-Gomez tilt, Democrat Jay
Livingstone, who was unopposed Tuesday, rode Markey’s coattails to
swamp his write-in opponents. An attorney, Livingstone pulled in
93.42 percent of the vote with write-in candidates netting 6.58
percent.
He’ll take the seat former Rep. Martha Walz gave up to join Planned
Parenthood. For the record, Markey bested Gomez by a 76-23 margin in
Boston and Livingstone was unopposed this week, after defeating
Joshua Dawson in the primary. The district covers Back Bay, Beacon
Hill and Cambridgeport neighborhoods.
Once he gets sworn in, DeLeo will be just three representatives
short of a full House.
The Boston Herald
Sunday, June 30, 2013
Gas tax on cruise control
By Howie Carr
The Legislature did an amazing thing this week. It overwhelmingly
decided to never, ever vote to raise gas taxes again.
That doesn’t mean gas taxes aren’t going to keep going up and up and
up. It just means the General Court will never have to go on record
as raising them. Because from now on the state gas taxes are going
to increase ... automatically!
Who says the hackerama at the State House is incapable of
innovations? When new ways are needed to pick the taxpayers’
pockets, Beacon Hill will invent them.
Instead of having actual roll-call votes on whether to increase the
gas tax — votes that might be used against the hacks in the next
election — from now on they’re going to use a formula based on the
Consumer Price Index.
You know, the same CPI that overestimates inflation so much that
even Barack Obama has been complaining about it.
The hacks at the State House used to vote on their own pay raises,
which proved to be an extremely hazardous roll call. Afterwards, in
the next election, a few of the feebler solons would always be
culled from the herd. So the hacks now determine their inevitable
pay raises with this marvelous new CPI dodge, which has proven so
successful that they’ve decided to use it on gas taxes.
But just for old times’ sake, they decided to raise the gas tax one
final time — by 3 cents per gallon.
Maybe you didn’t hear about this new scheme, I mean plan, to never
vote on raising gas taxes again. It got buried in the larger story
about the latest tax increase, which is somewhere between $500
million and $1.2 billion, but hey, who’s counting, it’s only
taxpayers’ money.
The tax increase is to be used for transportation funding, well,
some of it is, at least a third maybe. But as the years go by,
they’re hoping to use more of it for actual things like roads. You
can trust them, after all, they’re not like the others.
But right now, you see, Deval et al. need the money for their
beloved programs, like $270 million in Mass Health benefits for
illegal aliens and God only knows how much more for their free
in-state college tuitions and their Section 8 Tsarnaev housing.
See, after providing a proper welcome to all the newcomers, the
state is short — oh wait, actually, the actual revenue figures for
the fiscal year that ends tonight are $600 million above estimates.
Another hike: an extra buck for a pack of smokes — but you’ll never
even miss it, just like you never noticed that 2 percent cut in your
pay Jan. 1 for Social Security, right?
Oddly, the Legislature did not begin debating the “t” word until
after the U.S. Senate special election was over. Just a coincidence,
I’m sure.
About the only word in the debate that had any real meaning was
“fix,” in its drug definition. The hackerama needed another fix,
because they’re junkies, addicted to tax dollars.
Nobody cares anymore, apparently. As long as they don’t have to
actually work, the hacks are content to bankrupt the state, while
everyone with a real job is figuring out a way to flee, permanently.
Only a handful of Republicans are left to complain.
Rep. Jim Lyons of Andover pointed out that MBTA painters make
$79,000 a year, while painters in “regular government” get $46,000.
Wonder how much they make in the Dreaded Private Sector.
Rep. Ryan Fattman of Sutton mentioned the greatest accomplishment of
the Patrick administration: “We have had more dead people receiving
EBT benefits in a decade than jobs have been created.”
And Sen. Bruce Tarr noted how the “reforms” invariably work out with
the state’s bloated bureaucracies: “You didn’t save the money you
said you would, so let’s give you some more money.”
But look on the bright side. You won’t have to read any more
headlines about the gas tax going up. Because it’ll just be going up
automatically.
The Boston Herald
Sunday, June 30, 2013
Bill would open T pension books
Taxpayers may see retirees’ $
By Chris Cassidy
All eyes are on a State House conference committee that could
finally lift the veil on the MBTA’s secret pension system, giving
taxpayers access to information on T retirees’ payouts.
“At a time when we’re asking taxpayers to fork over hundreds of
millions for transportation, the least the MBTA can do is work to
have the retirement board unseal their pension information,” said
state Rep. Brad Hill (R-Ipswich). “Taxpayers deserve to know how and
where their tax dollars are being spent.”
Language that would open up the MBTA Retirement Fund’s books to the
public eye was included in both House and Senate versions of the
annual budget bill. Observers are now watching closely to see if the
provisions survive the six-member conference committee and make it
into the final version of next year’s $34 billion budget — or get
scrapped altogether.
The committee met Friday but broke for the weekend, and is expected
to finally reach an agreement in the next few days.
“We’re hopeful,” said state Sen. William Brownsberger (D-Watertown),
who sponsored the pension-transparency amendment.
Brownsberger also sponsored the same amendment in a separate
transportation bill — but the language was struck when it hit
conference committee. Still, he was confident the amendment would
survive this time around.
“I’m not concerned yet,” said Brownsberger. “I’m hopeful everything
will come out the right way.”
The Herald reported earlier this year that the T’s pension system
still isn’t public. The MBTA’s share of pension contributions have
soared 42 percent from $30 million in 2007 to $52.3 million in 2011.
The MBTA has insisted it has no control over the information since
the retirement fund is a private entity, frequently citing a 1993
Supreme Judicial Court ruling that the records are not covered by
the state’s open records law.
Gov. Deval Patrick has also cited that decision and has insisted the
state can’t “compel them to make the personal information public.”
But critics argue taxpayers have a right to know.
“People want more transparency,” Hill said. “We want to make sure
pension information is at a point where if we want to see what’s
going with the pension fund we can do that.”
The Boston Globe
Monday, June 24, 2013
Environmentalists call for a Mass. carbon tax
By Erin Ailworth
A group of environmentalists plans to ask voters to make
Massachusetts the first state in the nation to adopt a so-called
carbon tax by imposing new levies on gasoline, heating oil, and
other fossil fuels based on the amount of carbon dioxide they
produce.
The group, which has registered with the state as a political
committee, is launching a campaign to place the issue on the ballot
for the 2014 state elections. If approved, such a tax would add
several cents to the price per gallon of gas and could generate as
much as $2.5 billion in revenue a year, according to an economic
analysis that was done for the group, the Committee for a Green
Economy.
The goal is to combat climate change by reducing consumption of
fossil fuels and the carbon dioxide they produce when burned in
cars, trucks, and heating systems. Increasing levels of carbon
dioxide are accelerating climate change and the chances of
environmental disaster, scientists say.
“There is grass-roots support for taking this kind of action,” said
Gary Rucinski, of Newton, a cofounder and chairman of the group.
But the effort will almost certainly attract opposition from antitax
groups and businesses not eager to contend with higher taxes and
energy costs. Some note that Massachusetts already participates in
the Regional Greenhouse Gas Initiative, a program among Northeastern
states to cut carbon dioxide emissions by requiring power plants to
pay an allowance for every ton they produce.
“Massachusetts is already committed to reducing carbon,” said Robert
Rio, senior vice president at Associated Industries of
Massachusetts, a trade group. “Raising the cost of living or the
cost of doing business just to make a statement would seem
counterproductive.”
No state has adopted a carbon tax, but several jurisdictions in
foreign nations have put a price on carbon emissions, including the
Canadian province of British Columbia. There, the tax has added
roughly 25 cents to a gallon of gasoline.
Climate change, which faded as an issue during the economic crisis,
is gaining new attention, in part due to the increasing frequency of
destructive storms, such as Hurricane Sandy last fall. President
Obama has made climate change a focus of his second administration
and is expected on Tuesday to detail a plan to combat it, according
to a video posted over the weekend on the White House website.
Using carbon taxes to discourage consumption of fossil fuels and
fund measures, such as transit improvements, that reduce pollution
has been discussed for years, but there has been no headway in
Congress or legislatures. In Massachusetts, carbon tax legislation
was filed in January, but has languished.
This lack of progress prompted the Committee for a Green Economy to
launch its ballot measure campaign, said Rucinski, also Northeast
regional coordinator for Citizens Climate Lobby, an advocacy group
based in California. The Committee is drafting language for the
proposed law, which must be submitted in an initial petition to the
attorney general by August.
Then begins a quest to gather the tens of thousands of signatures
needed to put the issue before voters. The committee declined to say
how much money it has raised.
The Committee for a Green Economy hired a consulting firm, Regional
Economic Models Inc., to analyze the economic effects of a carbon
tax here. The study’s findings, to be released Wednesday, show that
taxing consumers on every unit of fossil fuel they use could boost
the state’s economic activity by as much as $8 billion over the next
two decades, by using the revenues to lower income, sales, and
corporate taxes.
The study was modeled, in part, on a bill filed in the Legislature
by Representative Thomas P. Conroy, a Wayland Democrat, and Senator
Michael Barrett, Democrat of Lexington.
In addition to lowering income and corporate taxes, the bill would
set aside $100 million annually from carbon tax revenues to fund
transportation improvements, limit increases in public transit
fares, or pay down transit-related debt.
The Committee for a Green Economy’s consultant analyzed a similar
but slightly different proposal to tax fuels based on the amount of
carbon dioxide they produce. For instance, Rucinski said, a tax of
$45 per metric ton of emissions could hypothetically add 45 cents to
the price of a gallon of gas.
“We experience 45 cent swings in a gallon of gas all the time,”
Rucinski said. “Phased in over several years, it doesn’t seem like
it would be a daunting prospect.”
Skeptics say a carbon tax would make it harder for Massachusetts
businesses to compete with companies in other states where no such
tax exists. Even some environmentalists, preferring federal to
state-by-state approaches, wonder if it would have much impact on
lowering overall greenhouse gas levels.
“We are strongly in favor of having a price on carbon and having a
market signal that greenhouse gases need to come down over time,”
said Peter Rothstein, president of the New England Clean Energy
Council, but “is doing a carbon tax at a single state level going to
be most beneficial to the state and to dealing with climate change?”
The state has set goals to reduce its greenhouse gas emissions by 80
percent from 1990 levels by 2050, buy it hasn’t yet implemented all
regulations required by the law, said Susan Reid, Massachusetts
director of the nonprofit Conservation Law Foundation, an
environmental advocacy group in Boston. She said a carbon tax could
be an important part of measures to reduce greenhouse gas emissions
the state — but leaders first need to finish the job they’ve
started.
“Addressing climate change is an all-hands-on-deck scenario,” Reid
said, “so any options can and should be on the table and any
well-designed proposals need to be taken seriously.”
State House News Service
Sunday, June 30, 2013
Negotiators agree to $34 Bil state budget on eve of fiscal year
By Andy Metzger
Agreeing to significantly higher spending on the state’s university
system and new efforts to tamp down on fraud in the welfare system
while discarding an expansion of the bottle deposit law, the group
of lawmakers negotiating the annual state budget filed their $34
billion proposal on the eve of the new fiscal year, along with an
accord on a mid-year spending bill.
The House and Senate are scheduled to take up the two conference
committee reports during sessions on Monday afternoon. If the two
budget bills are approved as expected, Gov. Deval Patrick will have
10 days to consider the proposal and announce any amendments or
vetoes before he signs it.
A roughly $4.1 billion interim budget is in place to cover state
spending during July while final details of the annual spending plan
are worked out between Patrick and the Democrat-controlled House and
Senate.
The budget (H 3538) was submitted around 8 p.m. Sunday, when the
State House was mostly empty. Lawmakers missed the 8 p.m. deadline
on Friday, when both branches met in informal sessions, meaning the
House and Senate will have to suspend their rules with a two-thirds
vote to take the legislation up in formal sessions scheduled for
Monday, according to the House clerk.
The $34 billion budget, up from the $32.5 billion fiscal 2013
budget, depends on new revenues from a gas tax hike, an application
of the sales tax to certain computer software services and increased
tobacco taxes, which are part of a separate piece of legislation
that Patrick has said he will amend to ensure the revenues in it
would eventually add up to $800 million.
The final budget also draws $350 million out of the state’s rainy
day fund, according to an aide.
The final budget includes $478.9 million for the University of
Massachusetts, a proposed spending level that both the House and
Patrick had included in their budgets, which will allow the
university to prevent fee and tuition increases.
Language the Senate had included that expanded the state’s 5-cent
bottle deposit law to cover sports drinks, water and coffee was
scrapped from the final version submitted by the conference
committee.
The final budget retained language creating the Bureau of Program
Integrity within the Department of Transitional Assistance, an
oversight office that would be appointed by the inspector general
and was included in the House version of the budget.
A House proposal to require photo identification on electronic
benefit transfer cards used to distribute welfare was included in
the mid-year spending bill (H 3539) for the current fiscal year.
That mid-year spending bill also included $56 million to cover
winter snow and ice removal, $18.2 million for the Committee for
Public Counsel Services and $100,000 in line-of-duty death benefits
for the family of Sean Collier, who authorities say was killed by
the two brothers suspected of the Boston Marathon bombing.
Budget negotiations between the House and Senate began on June 6,
when the six-member bipartisan conference committee came together
and closed their meetings to the public. The four Democrats on the
conference committee signed the jacket on the conference report,
while the two Republicans on the committee did not, according to the
clerk’s office.
According to the offices of Brewer and Dempsey, the budget includes
a $6.2 million increase that will eliminate a 1,500 person waiting
list for elder home care services, and increases funding for housing
programs by $18.2 million, allowing for 1,000 new housing vouchers.
The final budget sends $920.2 million to cities and towns in
unrestricted local aid, a $21.2 million increase over the fiscal
2013 budget.
Sen. Michael Knapik, a Westfield Republican who was the Senate
minority party’s negotiator on both the budget and the mid-year
spending bill, signed the conference report jacket on the mid-year
spending bill. That spending bill would also establish a plaque on
the Charles River Esplanade for David Mugar, a philanthropist who
helped create Fourth of July fireworks and Boston Pops along the
river, and it includes $1.2 million to support the program of
providing shelter to homeless families at hotels and motels.
The budget was filed about four hours before midnight, July 1, when
fiscal year 2014 begins.
“Through this budget, the Legislature recognizes the economic
challenges facing the Commonwealth and its residents,” Chairman of
the House Committee on Ways and Means Brian Dempsey said in a
statement. The Haverhill Democrat, who was the lead negotiator for
the House, said, “Our goal is a renewed focus on governmental
oversight and accountability to eliminate fraud and delays and to
ensure that those who need the Commonwealth’s assistance receive it.
We pair this focus with an emphasis on higher education as a means
to provide our residents with a competitive edge that will continue
to support the state’s economic recovery.”
“This budget makes a number of important and responsible investments
that reflect the priorities of the legislature and of the residents
of this Commonwealth. Moving away from the painful cuts of the past,
this spending plan boosts spending for local aid and for some of our
neediest residents including our youth and our elderly. Furthermore,
this budget targets areas of spending that will foster economic
stability in the future and strengthen many of the state’s current
programs to ensure future sustainability.” Senate Ways and Means
Chairman Stephen Brewer, a Barre Democrat, said in a statement.
State House News Service
Monday, July 1, 2013
State Capitol Briefs
Meeting between Patrick, legislative leaders called off
By Matt Murphy
With the House and Senate both preparing for formal sessions this
afternoon to debate a fiscal 2014 budget and a fiscal 2013
supplemental spending bill filed over the weekend, Gov. Deval
Patrick, Senate President Therese Murray and House Speaker Robert
DeLeo have called off their meeting for Monday afternoon.
Patrick is back in the State House after spending last week in
California with family, and the afternoon meeting was to be the
first face-to-face interaction between the Democratic leaders since
Patrick said last week he would not sign the transportation
financing legislation sent to his desk by the Legislature.
The governor has promised to return the bill, which is necessary to
balance the $34 billion fiscal 2014 spending plan agreed to by House
and Senate negotiators over the weekend, with an amendment to
address Turnpike toll revenue that is scheduled to disappear in
2017.
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