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CLT UPDATE
Wednesday, June 10, 2015
Income tax hike remains a threat
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Republican lawmakers are accusing Democrats of
using a plan to expand tax credits for low- to moderate-income
taxpayers as a guise for a progressive tax system that voters have
rejected in the past.
Last month, Senate Democrats amended the state's
upcoming budget to increase an earned income tax credit to 22.5
percent of the amount of a federal earned income tax break. The
Democrats' plan, phased in over three years, freezes the state's
personal income tax rate at 5.15 percent to cover the cost of an
expanded tax credit, about $145 million per year.
The plan is under review by the Supreme Judicial
Court at the request of House Speaker Robert DeLeo and others to
determine whether the changes are allowed as part of a budget.
The move also sparked a backlash from Republicans
and conservative groups who call it a backdoor attempt to bypass the
state constitution. Under state law, voters ultimately must approve
changes to the tax code.
"There seems to be a hidden agenda here," said
Senate Minority Leader Bruce Tarr, R-Gloucester. "There's a lot of
language in this proposal suggesting they're trying to circumvent
the constitution." ...
In 2000, voters approved a ballot question to cut
the then-5.95 tax rate to 5 percent. The Legislature later reset the
rate at 5.3 percent, but with triggers that would allow it to fall
incrementally until settling at 5 percent. The rate is expected to
lower to 5.1 percent next year....
During this year's budget debate, Tarr proposed
expanding the earned income tax credit to 30 percent of the federal
tax break, but without freezing the income tax rate. Lawmakers
rejected that plan, as well as a proposal to reduce the income tax.
"The EITC could be expanded without freezing the
income tax rate and defying the will of the voters," Tarr said....
"There's no question that the purpose of this
measure is to increase progressivity in the state's income tax
code," said Eileen McAnneny, president of the Massachusetts
Taxpayers Foundation, which supports the current flat tax. "The
unanswered question is whether this is a move towards a graduated
tax or something in place of it."
The Salem News
Wednesday, June 10, 2015
Lawmakers wrangle over tax fairness
Members of the Massachusetts Senate broke faith
with voters by raising taxes in their budget plan for next year, and
broke their commitment to the House and to Gov. Charlie Baker to
honor a scheduled tax cut. The state’s highest court is now weighing
whether those actions were permissible under the Massachusetts
Constitution.
But as the legal issues are sorted out we are
getting a clearer picture of just how much the Robin Hoods of the
Upper Chamber would drum up in their scheme to spread the wealth
around (well, some of it anyway).
The Department of Revenue estimates that the
Senate plan would generate an additional $1 billion in unrestricted
revenue over three years by making the current 5.15 percent tax rate
permanent. (The law now calls for the rate to be reduced gradually
to 5 percent.) A lawyer for the House cites the DOR analysis in a
brief filed with the Supreme Judicial Court....
Senate leaders insist an increase in the personal
income tax exemption, as well as an expansion of the earned-income
tax credit for low-income workers, means that under their plan
everyone will enjoy an actual tax cut. They insist the whole scheme
is “revenue-neutral.”
In the first year, maybe. But as the House points
out in its brief, the Senate budget imposes no restrictions on the
new revenue. Once everyone gets his “cut” Beacon Hill could spend
whatever is left over in future years, unfettered.
A Boston Herald editorial
Wednesday, June 10, 2015
The $1 billion betrayal
Last week, the Senate debated and passed its
version of the fiscal year 2016 state budget. Proposed with the
title and theme of “Lifting All Families,” the Senate budget
achieves its goal. On top of increased local aid funding and
much-needed MBTA reform, the Senate also included provisions to
expand the earned income tax credit (EITC) and cut taxes for all
Massachusetts taxpayers.
I would like to take this opportunity to share
the reasons why I supported this plan, which will help all working
families in Massachusetts....
The Salem News
Monday, June 1, 2015
Letter to the editor
Senate tax plan would benefit all residents
By State Senator Joan B. Lovely
How disappointing to read Sen. Joan Lovely’s
awkward justification for flouting the will of the voters
(“Senate tax plan would benefit all residents,” June 1). The
Senate budget for which she voted halts Beacon Hill’s grudging
implementation of the 2000 ballot question mandating the
reduction of the income tax from 5.95 percent to 5 percent by
2003.
This question was approved by more than 60
percent of the voters in her district, as well as by 60 percent
of the entire state. Only 29 of 351 municipalities voted “no.”
Any tax-cutting measure winning a super-majority in liberal
Massachusetts sends a clear, unequivocal message and must – must
– be obeyed.
With this ballot question, every taxpayer
gets an equal percentage reduction on income tax paid.
Understandably, the more taxes you pay, the bigger rebate you
will receive in absolute dollar terms. If you pay no taxes, you
get no rebate. This is only fair, and is what the voters
demanded....
The Salem News
Tuesday, June 9, 2015
Letter to the editor
Lovely's vote out of step
By Michael DuBois
State budget negotiators started the third
act of their effort to reach an agreement on a $38.1 billion
spending plan by voting to close meetings of a six-member
conference committee charged with agreeing on a consensus budget
by July 1.
The conference committee featuring three
House and Senate members - four Democrats and two Republicans -
met for the first time in open session for about three minutes
in House Ways and Means Committee Chairman Rep. Brian Dempsey's
office on Thursday before taking a voice vote to close their
deliberations....
The work of the conferees is particularly
important because the bill they are expected to produce is not
subject to further amendments. House and Senate members will be
asked to take it or leave it and over the years conference
committee reports have been routinely rubber-stamped by the
branches....
The branches are also tangled in another
power struggle over taxes. The House in late May took the Senate
to court, challenging the constitutionality of Senate tax policy
changes in the budget and asking the Supreme Judicial Court to
issue a quick advisory opinion. In short, the House claims the
Senate was not empowered to add tax policy changes to its budget
while senators assert a conservation land tax credit amendment
adopted by the House during its budget debate opened the door to
Senate changes....
State House News Service
Thursday, June 4, 2015
Budget conferees plan to strike deal after private talks
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Chip Ford's CLT
Commentary
What the state Senate proposed in its FY2016
budget is a two-for: Again defying the voters' 2000 ballot
mandate that the 25-year old "temporary" income tax hike be finally
rolled back to 5 percent, and; sneaking in an unconstitutional
graduated income tax through the back door.
While a House/Senate budget conference committee
has been established — three House and
Senate members, four Democrats and two Republicans
— there's little they can do until the state
Supreme Judicial Court issues its ruling on whether the Senate has a
constitutional right to unilaterally halt the income tax rollback
permanently at 5.15 percent.
You can read the amicus
briefs filed with the court at the link below:
SUPREME JUDICIAL COURT
for the Commonwealth of Massachusetts
Case Docket
REQUEST FOR ADVISORY OPINION
SJC-11883
If the SJC rules in favor of taxpayers,
voters, and the constitution — case
closed, no tax hike.
If the SJC rules in favor of a newfound power for
the Senate to initiate taxes, then the fight will move to the
conference committee to kill the tax hike there.
Note the defensive letter published in the Salem
News by state Sen. Joan Lovely (D-Salem). This is likely in
response to Barbara's May 28 Salem News column ("The
return of senatorial arrogance"). Democrat Senators who voted to
hike the income tax on their constituents are now circling the
wagons, scurrying about trying to justify their treachery, their
defiance of their voters' mandate.
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Chip Ford |
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The Salem News
Wednesday, June 10, 2015
Lawmakers wrangle over tax fairness
By Christian M. Wade, Statehouse Reporter
Republican lawmakers are accusing Democrats of using a plan to
expand tax credits for low- to moderate-income taxpayers as a guise
for a progressive tax system that voters have rejected in the past.
Last month, Senate Democrats amended the state's upcoming budget to
increase an earned income tax credit to 22.5 percent of the amount
of a federal earned income tax break. The Democrats' plan, phased in
over three years, freezes the state's personal income tax rate at
5.15 percent to cover the cost of an expanded tax credit, about $145
million per year.
The plan is under review by the Supreme Judicial Court at the
request of House Speaker Robert DeLeo and others to determine
whether the changes are allowed as part of a budget.
The move also sparked a backlash from Republicans and conservative
groups who call it a backdoor attempt to bypass the state
constitution. Under state law, voters ultimately must approve
changes to the tax code.
"There seems to be a hidden agenda here," said Senate Minority
Leader Bruce Tarr, R-Gloucester. "There's a lot of language in this
proposal suggesting they're trying to circumvent the constitution."
Graduated tax?
Progressive Democrats, including Senate President Stanley Rosenberg,
D-Amherst, have for years pushed for a graduated income tax, similar
to the federal system, in which low-income taxpayers pay at a lower
rate than those with larger incomes. Voters have rejected those
efforts five times, most recently in 1994.
"The changes the Senate made in our budget will deliver tax cuts to
all taxpayers while targeting the benefits to those who need it the
most,” Rosenberg said in a statement Friday in response to DeLeo's
legal challenge.
A chief proponent of the move, Sen. Jamie Eldridge, D-Acton, says
the state's income tax system is "regressive and unfair" because it
requires those earning less money to pay a larger share of income
than higher income payers — once sales, property and income taxes
are all added.
Eldridge said income has been largely stagnant for many low- and
middle-income Massachusetts families in recent years.
"We've passed a number of tax breaks for corporations in recent
years that have overwhelmingly benefited those who are wealthy,” he
said. "This proposal would go a long way to helping the state’s
working families, but the only way we're going to get true fairness
in the system is by switching over to a graduated tax."
In 2000, voters approved a ballot question to cut the then-5.95 tax
rate to 5 percent. The Legislature later reset the rate at 5.3
percent, but with triggers that would allow it to fall incrementally
until settling at 5 percent. The rate is expected to lower to 5.1
percent next year.
During this year's budget debate, Tarr proposed expanding the earned
income tax credit to 30 percent of the federal tax break, but
without freezing the income tax rate. Lawmakers rejected that plan,
as well as a proposal to reduce the income tax.
"The EITC could be expanded without freezing the income tax rate and
defying the will of the voters," Tarr said.
Gov. Charlie Baker, a Republican who took office in January,
proposed doubling the tax credit that now benefits nearly 400,000
filers by eliminating an $80 million-a-year tax credit for the film
industry. But lawmakers balked.
Backed by Lovely
The Senate Democrats' plan for a broader earned income credit —
backed by local lawmakers including Sen. Joan Lovely, D-Salem —
would allow those earning less than $54,427 to claim at least 22.5
percent of the federal tax credit by 2017.
Backers say it saves low-wage earners about $470 a year.
The reconfigured income tax code, if it survives, also increases the
personal tax exemption for all taxpayers, regardless of income, to
$4,800 for individuals and $9,600 for married couples. That
represents an increase of $400 per person.
The legal dispute between the House and Senate over the earned
income tax credit is mostly procedural. DeLeo wants the justices to
determine if the Senate budget is a so-called “money bill" —
essentially increasing taxes. Under the constitution, such bills
must originate in the House. Rosenberg contends the Senate's budget
doesn't increase taxes.
Baker, who has mostly avoided the wrangling, has said he hopes a
ruling comes promptly.
Opponents of a graduated income tax say it discourages businesses
from investing in the state, which could mean fewer jobs and erosion
of the middle class.
"There's no question that the purpose of this measure is to increase
progressivity in the state's income tax code," said Eileen McAnneny,
president of the Massachusetts Taxpayers Foundation, which supports
the current flat tax. "The unanswered question is whether this is a
move towards a graduated tax or something in place of it."
Christian Wade covers the Massachusetts Statehouse for CNHI's
newspapers.
The Boston Herald
Wednesday, June 10, 2015
A Boston Herald editorial
The $1 billion betrayal
Members of the Massachusetts Senate broke faith with voters by
raising taxes in their budget plan for next year, and broke their
commitment to the House and to Gov. Charlie Baker to honor a
scheduled tax cut. The state’s highest court is now weighing whether
those actions were permissible under the Massachusetts Constitution.
But as the legal issues are sorted out we are getting a clearer
picture of just how much the Robin Hoods of the Upper Chamber would
drum up in their scheme to spread the wealth around (well, some of
it anyway).
The Department of Revenue estimates that the Senate plan would
generate an additional $1 billion in unrestricted revenue over three
years by making the current 5.15 percent tax rate permanent. (The
law now calls for the rate to be reduced gradually to 5 percent.) A
lawyer for the House cites the DOR analysis in a brief filed with
the Supreme Judicial Court.
Keep in mind that Senate President Stan Rosenberg has said he does
not consider a change in the law that ensures the state will demand
a bigger piece of taxpayers’ earnings — $1 billion bigger, as it
turns out — a tax increase. Yes, really.
Senate leaders insist an increase in the personal income tax
exemption, as well as an expansion of the earned-income tax credit
for low-income workers, means that under their plan everyone will
enjoy an actual tax cut. They insist the whole scheme is
“revenue-neutral.”
In the first year, maybe. But as the House points out in its brief,
the Senate budget imposes no restrictions on the new revenue. Once
everyone gets his “cut” Beacon Hill could spend whatever is left
over in future years, unfettered.
It will be left to the SJC to determine what constitutes a “money
bill” and whether the Senate initiated one unlawfully, as the House
insists. But it doesn’t take a legal scholar to define a garden
variety income tax hike.
The Salem News
Monday, June 1, 2015
Letter to the editor
Senate tax plan would benefit all residents
By State Senator Joan B. Lovely
Last week, the Senate debated and passed its version of the fiscal
year 2016 state budget. Proposed with the title and theme of
“Lifting All Families,” the Senate budget achieves its goal. On top
of increased local aid funding and much-needed MBTA reform, the
Senate also included provisions to expand the earned income tax
credit (EITC) and cut taxes for all Massachusetts taxpayers.
I would like to take this opportunity to share the reasons why I
supported this plan, which will help all working families in
Massachusetts.
First, the Senate’s plan expands the EITC from 15 percent of the
Federal EITC to 22.5 percent over the next three years. This means
that Massachusetts tax filers claiming EITC would receive $2.25 for
every $10 granted through the federal program. Under this structure,
EITC has proven to be an effective program that benefits
Massachusetts workers.
Second, the proposal also lifts the personal exemption for all
taxpayers in Massachusetts. The personal exemption allows
Massachusetts tax filers to exempt a certain amount of their
personal income. Under the Senate plan, this exemption would
increase from $4,400 to $4,800 for an individual and from $8,800 to
$9,600 for a married couple filing jointly. With this provision, the
plan would ensure that all residents, regardless of income level,
receive a tax cut.
Third, to fund the changes to the EITC and personal exemption, the
proposal keeps the income tax rate at its current level of 5.15
percent. In recent years, the income tax rate dropped 0.05 percent
in January 2012, 2014 and 2015 in response to Massachusetts voters
approving a ballot question in 2000 that called for a reduction in
the state income tax. In analyzing the impact of these reductions,
the Massachusetts Budget and Policy Center reported that 25 percent
of the benefits have gone to the top 1 percent of earners making an
average annual salary of $2.57 million. Even further, 67 percent of
the benefits flowed to the top 20 percent of income earners. The
Senate’s plan to increase the EITC and raise the personal exemption
implements a change that cuts taxes in a way that helps all working
households, not just the top 1 percent of wage earners.
Expanding the EITC has also consistently received bipartisan
support. The idea has been praised by both Democrats and Republicans
as a proven way to stimulate economic growth and help working-class
families. Earlier this year, Gov. Baker proposed an even greater
expansion of the EITC and advocated for doubling the current benefit
from 15 percent to 30 percent. The Senate’s plan to expand the EITC
would provide an average benefit of $472 to approximately 415,000
tax filers in Massachusetts, including more than 8,650 individuals
and families in Beverly, Danvers, Peabody, Salem, and Topsfield.
Since the Senate included its proposal within its version of the
budget, the plan is subject to a conference committee tasked with
reconciling the differences between the House and Senate budgets.
Nevertheless, it is important to make sure the constituents I
represent know the reasons why I voted in favor of the Senate’s
plan, which offers tax relief to all Massachusetts families....
State Senator Joan B. Lovely
The Salem News
Tuesday, June 9, 2015
Letter to the editor
Lovely's vote out of step
By Michael DuBois
How disappointing to read Sen. Joan Lovely’s awkward justification
for flouting the will of the voters (“Senate tax plan would benefit
all residents,” June 1). The Senate budget for which she voted halts
Beacon Hill’s grudging implementation of the 2000 ballot question
mandating the reduction of the income tax from 5.95 percent to 5
percent by 2003.
This question was approved by more than 60 percent of the voters in
her district, as well as by 60 percent of the entire state. Only 29
of 351 municipalities voted “no.” Any tax-cutting measure winning a
super-majority in liberal Massachusetts sends a clear, unequivocal
message and must – must – be obeyed.
With this ballot question, every taxpayer gets an equal percentage
reduction on income tax paid. Understandably, the more taxes you
pay, the bigger rebate you will receive in absolute dollar terms. If
you pay no taxes, you get no rebate. This is only fair, and is what
the voters demanded.
Her strained defense – that “working families” are still getting a
tax break through the EITC and the personal exemption – is
disingenuous, and merely recycles the tired mantra of income
redistribution so popular with certain politicians. In previous
budgets, the Legislature protested that the state couldn’t afford
each incremental reduction. Now, they simply spend the money of
those who earned it, to purchase the votes of those who didn’t.
I am also disappointed that, in a district that Charlie Baker and
Scott Brown each won twice, Sen. Lovely ran unopposed last November.
However, a 2010 question to eliminate the double-taxing of alcohol,
and the recent question to eliminate inflation-indexed gas taxes,
each won more than 56 percent of the vote in Second Essex.
Sen. Lovely’s vote – and her justification for it – is not only
wrong, it’s completely out-of-step with the prevailing opinion of
her district’s voters.
Michael DuBois
Beverly
State House News Service
Thursday, June 4, 2015
Budget conferees plan to strike deal after private talks
By Michael Norton
State budget negotiators started the third act of their effort to
reach an agreement on a $38.1 billion spending plan by voting to
close meetings of a six-member conference committee charged with
agreeing on a consensus budget by July 1.
The conference committee featuring three House and Senate members -
four Democrats and two Republicans - met for the first time in open
session for about three minutes in House Ways and Means Committee
Chairman Rep. Brian Dempsey's office on Thursday before taking a
voice vote to close their deliberations.
The conferees were appointed two weeks ago by the House and Senate
to advocate for spending bills that cleared the House in late April
and the Senate in May. Democratic legislative leaders in both
branches relied on private meetings geared towards dispensing with
hundreds of amendments. Most amendments were dispensed with without
debate. A few drew recorded, or roll call votes.
Gov. Charlie Baker has spent a good deal of his first five months in
office attempting to bring state spending under control after
inheriting an out-of-balance budget assembled by Democratic
legislative leaders and former Gov. Deval Patrick. State tax
collections have surged upwards lately, easing some of the pressure
on the budget - collections are running $389 million ahead of budget
benchmarks.
The work of the conferees is particularly important because the bill
they are expected to produce is not subject to further amendments.
House and Senate members will be asked to take it or leave it and
over the years conference committee reports have been routinely
rubber-stamped by the branches.
Private conference committee meetings have been the norm on Beacon
Hill for many years as the state Legislature is not subject to open
meeting laws that govern municipal government deliberations. While
legislative leaders often tout transparency as a top priority,
legislative conferees have often said the value of more frank
private discussions outweighs the benefit of keeping negotiations
open.
A veteran budget negotiator, Dempsey recalled before Thursday's
meeting the string of on-time state budgets that had reached former
Gov. Deval Patrick's desk. His counterpart, Senate Ways and Means
Committee Chairwoman Karen Spilka, remembered her first year in the
Legislature, 2001, when House and Senate leaders failed to reach
agreement on a spending bill until late November.
In brief remarks prior to closing the meeting, Dempsey and Spilka
expressed interest in working together and defending priorities in
the House and Senate budgets, which contain similarities and
differences. Dempsey is negotiating his fifth budget while Spilka is
leading Senate budget talks for the first time.
"The differences between the branches that we look forward to
resolving are often the choices between two good ideas and more
difference of degree than direction," Dempsey said.
Spilka commended the House budget, calling it "terrific," and said
she looked forward to blending it with the Senate bill. "Hopefully
this final budget will be more than the sum of its parts," she said,
asserting the House and Senate both hoped to "lift all families"
through its spending plans.
Conferees met for about two hours, breaking for the day just after
noon.
There's some rumbling this year about the potential for a late
budget. House and Senate leaders have quarreled openly about rules
reforms pushed by new Senate President Stanley Rosenberg. A
conference committee named more than 100 days ago to resolve
competing joint rules orders appears at an impasse. And the Senate
in mid-April asked its Rules Committee, chaired by Sen. Mark
Montigny (D-New Bedford), to develop a plan to break from its
decades-old joint committee system with the House and establish
separate Senate committees. Montigny has been unavailable for
comment.
The branches are also tangled in another power struggle over taxes.
The House in late May took the Senate to court, challenging the
constitutionality of Senate tax policy changes in the budget and
asking the Supreme Judicial Court to issue a quick advisory opinion.
In short, the House claims the Senate was not empowered to add tax
policy changes to its budget while senators assert a conservation
land tax credit amendment adopted by the House during its budget
debate opened the door to Senate changes.
Asked after the meeting if conferees discussed Senate tax changes,
Spilka told the News Service "you know I can't talk about what we
talked about."
The first meeting of the conferees got underway 10 minutes late, as
negotiators and staff, who were allowed to attend the meeting after
reporters were shown the door, waited for Senate Ways and Means
Committee Vice Chairman Sal DiDomenico (D-Everett) to arrive.
"Everett's a tough commute," someone shouted as the senator arrived.
At the start of the meeting, House Ways and Means staffers Justin
Sterritt and Kathryn Kendall sat on either side of Dempsey, and
MaryAnne Padien, Spilka's chief of staff, sat to her right. Many
other staff members lined the room.
Dempsey, Rep. Stephen Kulik (D-Worthington) and Sen. Vinny deMacedo
(R-Plymouth) made small talk as the room filled up with staffers and
reporters. On the long negotiating table, copies of the House and
Senate budgets (S1930/H3401) sat bound up in binders for the
conferees.
"You're no stranger," Dempsey said, clapping deMacedo on the back
and referencing deMacedo's tenure as the ranking House Republican on
the Ways and Means Committee who was often tapped to serve on budget
conference committees.
Three minutes after the meeting began Kulik moved to close the
gathering and Dempsey gaveled the motion through on a voice vote.
"We will now move into executive session. Thank you all for joining
us this morning," Dempsey said.
Andy Metzger and Gintautas Dumcius contributed reporting
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