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CLT UPDATE
Friday, May 15, 2015
Senate to begin debating its
budget on Tuesday
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Plans to expand a tax credit that benefits
low-income workers are faltering, with lawmakers unable to reach
consensus over how to pay for it.
The plan, a key piece of Gov. Charlie Baker’s
legislative agenda, doubles the earned income tax credit that now
puts $125 million a year back into the pockets of hundreds of
thousands of low-wage workers.
The first-term Republican governor wants to scrap
the state’s film tax credit to pay for it.
While there is broad support on Beacon Hill to
expand the program for low-income workers, House and Senate leaders
haven’t agreed on how to cover the lost revenue....
Lawmakers have pitched alternatives including one
that would freeze automatic decreases in the state’s personal income
tax, but the proposals have garnered little support.
To be sure, supporters of the film tax credit
have pushed hard against Baker’s proposal, staging protests and
turning up for legislative hearings to voice opposition....
The film tax credit provides a subsidy equal to
25 percent of production costs including set construction, wages,
security, food, gas, lodging and other expenses for cast and crew.
That means a studio that spends $10 million is
eligible for a tax credit worth $2.5 million — even if it paid
little or no taxes.
Since 2006, more than $400 million in film tax
credits have gone to Hollywood productions including like “Ted” and
“The Town.”
In 2012, the state paid $78.9 million in tax
credits to 98 productions, which the Department of Revenue says
generated about $11 million in revenue from taxes and spending.
State officials say the tax incentives have
created jobs since 2006, though the average cost to the state is
about $120,000 per job....
The Salem News
Friday, May 15, 2015
Baker's plan to expand tax break hits snag
The budget plan that state Senate leaders
proposed this week is fine as far as it goes — the bottom line is
slightly lower (for the moment anyway) than the one approved last
month by the House, and it contains (for the moment anyway) no new
taxes or fees.
But the entire $38 billion exercise is flawed,
since senators are choosing simply to ignore important money-saving
reforms that are sorely needed at the broke — and broken — MBTA....
Of course the upper chamber is, traditionally,
where reasonable reforms that displease public employee unions go to
die. That explains why the Senate budget does not include a
suspension of the Pacheco law. And there is little optimism that
senators will ever go along with the reform — particularly
those who have become dependent on the generosity of the Boston
Carmen’s Union.
A Boston Herald editorial
Wednesday, May 13, 2015
Big stall in the Senate
Senators filed 942 amendments to the $38 billion
Ways and Means budget proposal that will be debated next week,
according to the clerk's office, as the deadline to file for changes
to the spending and policy bill passed Thursday afternoon.
Senate leaders are fully expecting a debate over
tax policy after Senate President Stanley Rosenberg said he was
advised by the Senate counsel that the House opened the door to tax
amendments with two provisions inserted into its budget bill (H
3400), including an expanded land conservation tax credit.
"There will be a debate, because it is a money
bill," Rosenberg said Wednesday. House Speaker Robert DeLeo, who has
voiced opposition to raising taxes this year, disagrees with
Rosenberg.
Taking advantage of that perceived opening,
multiple senators filed tax amendments, including proposals to
expand the popular earned income tax credit and to reduce both the
sales and income taxes to 5 percent....
Senate Minority Leader Bruce Tarr, who filed
amendments to lower the income and sales taxes, also filed a
proposal to expand the EITC to 30 percent of the federal credit over
three years....
The Senate plans to open debate on the fiscal 2016 budget next
Tuesday.
State House News Service
Thursday, May 14, 2015
Stage set for senate tax debate as budget amendment deadline passes
Gov. Charlie Baker is getting a pittance in
disaster aid from the Obama White House compared to the tens of
millions of dollars former Gov. Deval Patrick scored for lesser
storms than the worst winter in memory inflicted on the Bay
State, a Herald review found.
The Federal Emergency Management Agency
rejected Baker’s request yesterday to extend the time available
to Bay State communities to apply for reimbursement for the
late-January blizzard.
Only $67.5 million in federal relief is
expected to be available....
By comparison, Patrick was routinely granted
FEMA disaster relief for much smaller storms, most of which
covered a much larger percentage of the damage suffered in
cities and towns....
Others were less gracious about the response
from the president now that Patrick, a friend and former
co-chairman of his re-election campaign, is out of office.
“We are at a disadvantage as long as Barack
Obama is president,” said Barbara Anderson, executive
director for Citizens for Limited Taxation.
“Gov. Baker is just one more person who has
to deal with him for another year and a half.
“Maybe the president would have done a favor
for Deval Patrick,” Anderson added, “but we better all just take
a deep breath and wait until the president is out of office.”
The Boston Herald
Thursday, May 14, 2015
Charlie Baker gets cold shoulder...while Patrick got generous
storm aid often
By Kimberly Atkins
So once again it’s not the crime — it’s the
cover-up.
Had the Patrick administration merely bungled
the development of the new Health Connector website we could
blame (and have) incompetence, poor planning, mismanagement — in
short, its usual failings.
But there is growing suspicion that officials
working on the project deliberately misled the federal
government — which was funding it — about its progress. And if
state officials did lie to the feds in an effort to keep the
funds flowing, well, we’re way beyond bureaucratic bungling
here. It may even constitute a crime.
Last week the Baker administration confirmed
it is cooperating with the Justice Department’s demand for
documents related to the revamped Connector website. And
yesterday the
Pioneer Institute released a damning report quoting
whistleblowers who worked on the project and who alleged
deliberate concealment of its flaws....
Based on its review Pioneer suggests the
state misrepresented progress to [the Centers for Medicare and
Medicaid Services] on at least two occasions —
during a misleading readiness test in March 2013, and again in a
presentation in May, when it “vastly overstated” how much work
had been completed.
If there is a crime here, it is not
victimless. Taxpayers are on the hook for hundreds of millions
of dollars wasted on a site that didn’t work — and that,
according to one of the whistleblowers quoted in Pioneer’s
report, everyone involved knew wouldn’t work.
A Boston Herald editorial
Tuesday, May 12, 2015
A
damning diagnosis
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Chip Ford's CLT
Commentary
On Beacon Hill there is a big push to increase
the state earned income tax credit (EITC). The only
disagreement is how to pay for doubling the cost of the current $125
million a year.
Gov. Baker wants to eliminate the state’s film
tax credit to pay for it. Some Democrats in the Legislature
instead want to again "freeze" our income tax rollback at its
current 5.15 percent.
Bear in mind that a tax credit is different from
a tax deduction. A tax deduction reduces the amount a
taxpayer must pay when making out their tax returns each year.
A tax credit is an annual direct payment from government to
the recipient — whether that be a
low-income worker or the film industry. Funding a doubling of the EITC should not come at the expense of the state's taxpayers
("freezing" the income tax rollback)
just to continue support of the Hollywood film industry.
This week the state Senate Ways & Means Committee
released its $38 billion FY2016 budget plan. The period for offering
amendments to it closed on Thursday, with 942 amendments filed.
The debate on the budget will begin on Tuesday.
Senate President Stanley Rosenberg (D-Amherst)
has unilaterally deemed it a "money bill," so that the Senate can
therefore consider adding taxes to their final budget. House
Speaker Robert DeLeo (D-Winthrop) disagrees, and has pledged no new
taxes or fees can be added.
Just one potential example is, on May 5, the
State House News Service noted in its report ("CLT
not giving up on "Promise" of 5 percent income tax rate"):
"Sen.
Benjamin Downing (D-Pittsfield) said last week he is
considering filing a budget amendment to increase the earned
income tax credit while freezing the income tax rate at 5.15
percent. During his 2010 campaign, Charlie Baker made a 5
percent income tax rate a priority."
The Boston Herald editorial on Wednesday
observed: "Of course the upper chamber is, traditionally,
where reasonable reforms that displease public employee unions
go to die." It is also where spending and taxes that favor
liberals can be expected to be increased, if the proposed House
budget is considered a "money bill." This is apparently the
reason for the dispute between the House and Senate leaders.
It will bear watching, closely.
Whatever the Senate passes in its FY2016 budget
proposal, it will then go to a conference committee composed of
selected House and Senate members. There, the differences will
need to be reconciled in negotiations between the two branches.
Though he's gone, the Deval Patrick saga
continues to haunt us. So much of his mismanagement and
malfeasance continues to plague the Commonwealth and Gov. Charlie
Baker. The Patrick damage and the costs from them will saddle us for
years if not decades to come. Now that Patrick is out of
office, the Obama administration's Justice Department has gotten
around to investigating whether Patrick administration officials
lied in reports submitted regarding its Health Connector website.
If fraud is found, this could cost Massachusetts taxpayers tens of
millions more in fines, penalties, and restitution
— on top of all his other costly
blunders and fiascos.
And while on the subject of Patrick and his
Chicago cohort, President Obama — isn't
it curious how the Obama administration granted only $67.5 million
in federal relief to the Baker administration for our
record-breaking winter snowstorms this past season, but handed the
Patrick administration $71.3 million in 2011 for one storm that left
3 feet of snow in the Berkshires, $51.5 million for a 2008 ice
storm, and $42.2 million for a single snowstorm in 2013.
Sharing
David Axelrod as their campaign guru (recall that the Patrick
campaign was the
test tube incubator for Axelrod's Obama campaign model) and
other background similarities sure helped Patrick in one arena:
Cronyism.
As Barbara said: "“Maybe the president would have done a favor
for Deval Patrick, but we better all just take
a deep breath and wait until the president is out of office.”
The threat of a Graduated Income Tax has been
extended until October. As a Grad Tax would require a
constitutional amendment it would need to be passed in two
successive legislative sessions (2015-16 then 2017-18), then
approved by the voters.
The Legislature's 2015-16 Constitutional
Convention was gaveled open by Senate President Rosenberg
(D-Amherst) on Wednesday. Sen. Petruccelli (D-East Boston)
immediately moved to recess the convention until October 21, 2015
and the motion was adopted.
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Chip Ford |
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The Salem News
Friday, May 15, 2015
Baker's plan to expand tax break hits snag
By Christian M. Wade, Statehouse Reporter
Plans to expand a tax credit that benefits low-income workers are
faltering, with lawmakers unable to reach consensus over how to pay
for it.
The plan, a key piece of Gov. Charlie Baker’s legislative agenda,
doubles the earned income tax credit that now puts $125 million a
year back into the pockets of hundreds of thousands of low-wage
workers.
The first-term Republican governor wants to scrap the state’s film
tax credit to pay for it.
While there is broad support on Beacon Hill to expand the program
for low-income workers, House and Senate leaders haven’t agreed on
how to cover the lost revenue.
“We all agree it’s necessary and merited, given income disparities
in our state, but the question is how do we pay for it?” said Rep.
Linda Campbell, D-Methuen, a member of the House Ways and Means
Committee.
Lawmakers have pitched alternatives including one that would freeze
automatic decreases in the state’s personal income tax, but the
proposals have garnered little support.
To be sure, supporters of the film tax credit have pushed hard
against Baker’s proposal, staging protests and turning up for
legislative hearings to voice opposition.
On Tuesday, hundreds of film production workers rallied at the
Statehouse, many holding bright yellow signs that read “Films =
Jobs” as lawmakers arrived for work.
Production companies say the film tax credit has created thousands
of jobs, including many on the North Shore, and supports a small but
thriving industry.
“This tax break is creating good paying jobs and attracting films to
the state,” Rick Barnes, an electrician who works in film
production, said at Tuesday’s rally. “Why would they want to get rid
of it?”
The film tax credit provides a subsidy equal to 25 percent of
production costs including set construction, wages, security, food,
gas, lodging and other expenses for cast and crew.
That means a studio that spends $10 million is eligible for a tax
credit worth $2.5 million — even if it paid little or no taxes.
Since 2006, more than $400 million in film tax credits have gone to
Hollywood productions including like “Ted” and “The Town.”
In 2012, the state paid $78.9 million in tax credits to 98
productions, which the Department of Revenue says generated about
$11 million in revenue from taxes and spending.
State officials say the tax incentives have created jobs since 2006,
though the average cost to the state is about $120,000 per job.
Tax credit popular
Meanwhile, more than 400,000 filers claim the earned income tax
credit.
The program allows households earning less than $52,427 to claim 30
percent of what they received in earned income tax credits on
federal returns.
Doubling the program, under Baker’s plan, gives families who now
claim a maximum credit of $937 up to $1,874. That will go a long way
in cities such as Salem and Lawrence, where large numbers of filers
claim the credit.
“This tax credit helps lift people out of poverty,” said Evelyn
Friedman, executive director of the Greater Lawrence Community
Action Center, an anti-poverty group. “It allows them to pay down
debt, buy a car and purchase things they need but couldn’t otherwise
afford.”
In Salem, 3,156 filers took the credit in 2013. So did 2,675 in
Peabody.
Government watchdogs say the tax credit, while essential for
low-wage workers, has lagged behind the rising cost of living.
“Wages have stagnated for low- and moderate-income workers in
Massachusetts and nationally, making it increasingly difficult for
many hardworking parents to make ends meet and provide for their
children,” said Noah Berger, president of the budget and policy
center. “This program helps push back against that trend.”
Baker said he is willing to consider other ways to expand the
program.
“As long as the math works and we’re able to double the credit, I’m
open to suggestions,” he said in a recent interview. “But I’ve said
from the start I didn’t want to file a tax cut without proposing a
way to pay for it.”
Politically the Legislature’s slow acceptance of Baker’s plan
represents another blow to his legislative agenda.
Last week, the Democratic-led Senate rebuffed his plans to reform
the Massachusetts Bay Transportation Authority by establishing a
control board and other measures to get the troubled transit system
into order.
Instead, Senate leaders presented Baker with their own plan to fix
the MBTA, which his administration is reviewing.
Christian Wade covers the Statehouse for CNHI’s Massachusetts
newspapers
The Boston Herald
Wednesday, May 13, 2015
Boston Herald editorial
Big stall in the Senate
The budget plan that state Senate leaders proposed this week is fine
as far as it goes — the bottom line is slightly lower (for the
moment anyway) than the one approved last month by the House, and it
contains (for the moment anyway) no new taxes or fees.
But the entire $38 billion exercise is flawed, since senators are
choosing simply to ignore important money-saving reforms that are
sorely needed at the broke — and broken — MBTA.
Now, everyone agrees the transit agency is in desperate need of
reform. Gov. Charlie Baker proposed a bill last month that would
make dramatic changes at the T, and the House in its budget proposal
for fiscal 2016 went along with the most controversial of those
changes — a suspension of the state’s anti-privatization statute,
known as the Pacheco law. That law makes it difficult to realize
significant savings within the transit system by contracting out
services to private vendors. The House measure is temporary, but
still a potential game-changer.
The Senate, on the other hand, took only a weak swing at T reforms
in its budget — and missed.
Senators went along with Baker’s proposal to expand the membership
of the Department of Transportation board from seven to 11, and
agreed to empower Baker and future governors to appoint the MBTA
general manager. Those are welcome steps, but in the face of what
still needs to be done it amounts to rearranging the deck chairs on
the Titanic.
Of course the upper chamber is, traditionally, where reasonable
reforms that displease public employee unions go to die. That
explains why the Senate budget does not include a suspension of the
Pacheco law. And there is little optimism that senators will ever
go along with the reform — particularly those who have become
dependent on the generosity of the Boston Carmen’s Union.
It also explains why the budget retains the boost in funding for the
T that was called for in a 2009 transportation reform bill — but
ignores Baker’s request for a temporary fiscal management and
control board that might actually make grown-up, fiscally
responsible decisions about how the currently dysfunctional agency
spends that money.
The Pacheco law, the control board and other T reforms may yet be
taken up in a separate debate. But through their budget blueprint
senators made clear this week not to expect particularly meaningful
reforms to emerge from their wing of the State House.
State House News Service
Thursday, May 14, 2015
Stage set for senate tax debate as budget amendment deadline passes
By Matt Murphy
Senators filed 942 amendments to the $38 billion Ways and Means
budget proposal that will be debated next week, according to the
clerk's office, as the deadline to file for changes to the spending
and policy bill passed Thursday afternoon.
Senate leaders are fully expecting a debate over tax policy after
Senate President Stanley Rosenberg said he was advised by the Senate
counsel that the House opened the door to tax amendments with two
provisions inserted into its budget bill (H 3400), including an
expanded land conservation tax credit.
"There will be a debate, because it is a money bill," Rosenberg said
Wednesday. House Speaker Robert DeLeo, who has voiced opposition to
raising taxes this year, disagrees with Rosenberg.
Taking advantage of that perceived opening, multiple senators filed
tax amendments, including proposals to expand the popular earned
income tax credit and to reduce both the sales and income taxes to 5
percent.
Gov. Charlie Baker has filed separate legislation to double the EITC
for low-income families in Massachusetts to 30 percent of the
federal tax credit, and to pay for the new policy by eliminating tax
breaks for the film industry
Senate Minority Leader Bruce Tarr, who filed amendments to lower the
income and sales taxes, also filed a proposal to expand the EITC to
30 percent of the federal credit over three years. Sen. Jamie
Eldridge, and Acton Democrat, went further with his amendment to go
to 50 percent of the federal earned income tax credit. Eldridge
filed a separate amendment to repeal the film tax credits.
The deadline to file amendments to the Senate Ways and Means budget,
which was released on Tuesday, was 5 p.m. on Thursday. The Senate
plans to open debate on the fiscal 2016 budget next Tuesday.
With 40 members in the upper chamber, the total number of amendments
averages to 23.5 per senators. House members filed 1,098 amendments
to their leadership's budget proposal last month, or just under
seven amendments per representative.
The Boston Herald
Thursday, May 14, 2015
Charlie Baker gets cold shoulder...
while Patrick got generous storm aid often
By Kimberly Atkins
WASHINGTON — Gov. Charlie Baker is getting a pittance in disaster
aid from the Obama White House compared to the tens of millions of
dollars former Gov. Deval Patrick scored for lesser storms than the
worst winter in memory inflicted on the Bay State, a Herald review
found.
The Federal Emergency Management Agency rejected Baker’s request
yesterday to extend the time available to Bay State communities to
apply for reimbursement for the late-January blizzard.
Only $67.5 million in federal relief is expected to be available.
That’s a drop in the bucket for the estimated $350 million or more
in expenses incurred during the brutal storms that blanketed the
region in more than 108 inches of snow this past winter. FEMA
rejected the state’s request to help dig out from the entire
record-setting season.
By comparison, Patrick was routinely granted FEMA disaster relief
for much smaller storms, most of which covered a much larger
percentage of the damage suffered in cities and towns.
For example, a 2011 October storm that left 3 feet of snow in the
Berkshires resulted in $71.3 million in FEMA assistance. A December
2008 ice storm funneled $51.5 million to the state. And a February
2013 storm, with flooding, tallied $42.2 million.
While Baker downplayed the notion that partisan politics is at play,
others cried foul.
“Having federal agencies politicized seems to be a pattern with this
administration,” said state Sen. Robert Hedlund (R-Weymouth). “I’ve
seen evidence of this in other areas. The (state health) Connector
investigation, for instance. The timing there was curious. They
didn’t announce the federal investigation until after former Gov.
Deval Patrick left.”
Baker, in Washington to meet with members of the Massachusetts
congressional delegation as well as federal transportation and
health officials, said he was disappointed in the result.
“I obviously would have wanted a slightly broader playing field to
deal with this, especially for the cities and towns that were
affected by the storms,” Baker said.
“But the folks at FEMA up in Boston (are) working very hard on the
ground with us to make sure that we get all of the documentation we
need to get reimbursed.”
Others were less gracious about the response from the president now
that Patrick, a friend and former co-chairman of his re-election
campaign, is out of office.
“We are at a disadvantage as long as Barack Obama is president,”
said Barbara Anderson, executive director for Citizens for Limited
Taxation.
“Gov. Baker is just one more person who has to deal with him for
another year and a half.
“Maybe the president would have done a favor for Deval Patrick,”
Anderson added, “but we better all just take a deep breath and wait
until the president is out of office.”
Joe Dwinell contributed to this report.
The Boston Herald
Tuesday, May 12, 2015
A Boston Herald editorial
A damning diagnosis
So once again it’s not the crime — it’s the cover-up.
Had the Patrick administration merely bungled the development of the
new Health Connector website we could blame (and have) incompetence,
poor planning, mismanagement — in short, its usual failings.
But there is growing suspicion that officials working on the project
deliberately misled the federal government — which was
funding it — about its progress. And if state officials did lie to
the feds in an effort to keep the funds flowing, well, we’re way
beyond bureaucratic bungling here. It may even constitute a crime.
Last week the Baker administration confirmed it is cooperating with
the Justice Department’s demand for documents related to the
revamped Connector website. And yesterday the
Pioneer Institute released a damning report quoting
whistleblowers who worked on the project and who alleged deliberate
concealment of its flaws.
The Pioneer report details countless technical and management
failures that doomed the project from the start. But the most
troubling conclusion is that the state concealed those shortcomings,
not just from the public and the media but from the Centers for
Medicare and Medicaid Services.
Based on its review Pioneer suggests the state misrepresented
progress to CMS on at least two occasions — during a misleading
readiness test in March 2013, and again in a presentation in May,
when it “vastly overstated” how much work had been completed.
If there is a crime here, it is not victimless. Taxpayers are on the
hook for hundreds of millions of dollars wasted on a site that
didn’t work — and that, according to one of the whistleblowers
quoted in Pioneer’s report, everyone involved knew wouldn’t work.
Former general counsel to the U.S. Health and Human Services
Department, Michael Astrue, writing in the Herald, has been calling
for a federal probe for nearly a year, citing similar investigations
well underway in Oregon and Maryland. Surely there is cause for
concern over the timing of this DOJ probe as well as some obvious
conflicts. The fact that Obama’s Justice Department is investigating
work overseen by Gov. Deval Patrick, one of the administration’s top
cheerleaders for Obamacare, bears monitoring.
Still, that an investigation is taking place at all should encourage
taxpayers, who have been royally skewered here. Perhaps they will
someday see justice after all.
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material is distributed without profit or payment to those who have expressed a prior
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only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
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▪ 508-915-3665
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