The annual state budget, on track to weigh
in north of $40 billion, will be built on the expectation of
roughly $27 billion in tax revenue - but state reps on both
sides of the aisle are hoping to tinker with that figure
upwards and downwards.
Lawmakers in recent years have opted against
lengthy, impassioned debates on tax policy changes, but the
pending tax amendments provide plenty of fodder should state
representatives wish to engage each other in an environment
marked by rising state spending and sluggish growth in tax
revenues.
Rep. Marc Lombardo, a Billerica Republican
considering a run for Senate this year, filed amendments to
drop the income and sales taxes down to 5 percent, which his
aide said would result in about $850 million in foregone
revenue.
"We owe it to the taxpayers," Lombardo told
the News Service. He said his tax amendments are paired with
other cost-cutting proposals, including a control board at
MassHealth to rein in expenses in the state's Medicaid
program. He said, "At some point the taxpayers want to see
government stop growing."
In 2000, voters passed a ballot measure to
bring the income tax rate down from 5.95 percent to 5
percent by tax year 2003, but two years after the vote
lawmakers scrapped that schedule, installing economic
triggers to more gradually reduce the tax rate to 5 percent.
Those triggers are expected to result in the
income tax rate dropping from 5.1 percent to 5.05 percent on
Jan. 1, 2018. Somerville Democrat Rep. Denise Provost has
proposed freezing the income tax rate at 5.1 percent.
According to information provided by her office, four income
tax reductions since 2012 have resulted in a nearly $1
billion reduction in revenue. Provost's amendment would
boost fiscal 2018 revenue by $83 million, according to her
office.
Gov. Charlie Baker, a Republican, ran
unsuccessfully in 2010 on a platform that included reducing
the income, sales and corporate taxes to 5 percent, but he
moderated his stance ahead of his 2014 victory and during
his governorship.
"The administration fully supports upholding
the will of the voters to reduce the income tax when
revenues meet the benchmarks and will carefully monitor the
state's fiscal situation to do so as quickly as possible,"
Baker spokesman William Pitman said in a statement Tuesday
when asked about Lombardo's amendments.
State House News Service
Thursday, April 20, 2017
Taxing matters await as House preps for budget debate
A friendly warning on this (belated) tax
filing day. The next time a group of progressive lawmakers
in Massachusetts insists they’re interested only in raising
taxes on millionaires to ensure they pay their “fair share,”
be on guard. Given the chance, those lawmakers might feel
perfectly comfortable with the rest of us paying a higher
tax rate, too.
Among the 1,200 proposed amendments to the
House Ways and Means budget, which will be debated on the
House floor next week, is a proposal from a Democratic
lawmaker to freeze the state income tax rate at its current
5.1 percent.
Now, under the current schedule, should
revenue meet certain targets, the tax is expected to drop to
5.05 percent on Jan. 1. And blocking a .05 percent reduction
in the income tax rate may not sound like much of a burden
on Massachusetts taxpayers.
But the gradual reduction of the income tax
rate back down to 5 percent is part of a longstanding
promise on Beacon Hill — a promise that was only made after
a previous promise to voters, who ordered a full
rollback to 5 percent, had been broken.
The amendment’s sponsor, Rep. Denise Provost
(D-Somerville), doesn’t just want millionaires to pay a
higher tax rate (a 4 percent surcharge on income above $1
million, the subject of a proposed constitutional amendment
for which Provost advocates). She wants the tax burden to
remain where it is for all filers, regardless of the voters’
intention.
A Boston Herald editorial
Tuesday, April 18, 2017
Truth about taxes
The misinformation campaign surrounding the
proposed “millionaires’ tax” has been running along
smoothly. How annoying when facts get in the way of a good
narrative.
For instance, the groups supporting a 4
percent surcharge on incomes above $1 million like to
portray the image of an army of Thurston Howell the Thirds
being forced to part with what to them is the equivalent of
tip money.
But as the Boston Business Journal detailed
on Friday, the new tax, which is expected to go before
voters in 2018, wouldn’t just apply to personal income but
to profits earned by many corporations. Two-thirds of the
state’s millionaires own an S corp or a partnership, the BBJ
noted, many of them locally based, and they’d all be paying
the added tax. That would divert earnings that might have
been plowed right back into the business.
John Fish, head of Suffolk Construction,
said he won’t leave Massachusetts if the amendment passes —
but he did tell the BBJ he’d likely “deploy capital in other
parts of the country.”
In other words, the “fair share” tax would
be a job-killer.
Another infuriating aspect of the campaign
is this myth that the revenue will be set aside exclusively
for schools and transportation. Yes, the proposed amendment
states that all revenues from the tax would be expended
“only” for public education and transportation, broadly
speaking.
But those funds are also subject to
appropriation. So do we trust the folks who just voted
themselves a massive pay raise to wall off billions in new
revenue exclusively for education and transit — for as long
as the tax shall live?
Alternative facts are alive and well in the
campaign to achieve a graduated income tax, or least one by
another name.
A Boston Herald editorial
Monday, April 17, 2017
Fuzzy on the tax facts
As the state's contribution rate continues
to decline to record low levels, supporters of the Community
Preservation Act touted legislation they say is necessary to
preserve the open space protection partnership.
When Gov. Paul Cellucci signed the Community
Preservation Act (CPA) into law in 2000, it was with the
promise of state matching funds from a CPA Trust Fund to
preserve open space, renovate historic buildings and parks
and to build new playgrounds and athletic fields.
But that partnership, during the first six
years of which the state matched 100 percent of what each
municipality raised by its property tax surcharge, has
become more one-sided in the last decade, with state
matching funds falling or remaining flat in eight of the
last nine years.
"Unfortunately, that distribution has
steadily declined -- it was down about a third last year to
a record low of 20 percent and the Department of Revenue
just informed us last week that they estimate this year's
match will fall to another record low of 15 percent," Stuart
Saginor, executive director of the Community Preservation
Coalition, said. "And it will fall again in 2018 when Boston
and nine other mostly large cities and towns get their first
CPA Trust Fund distribution." ...
State matching funds are currently provided
through a $20 fee assessed on certain real estate
transactions through registries of deeds. The fee structure
and match rate formula have not been changed since the CPA
went into law in 2000.
The bill -- filed in the House by Reps.
Stephen Kulik and Kevin Honan, and in the Senate by Sen.
Cynthia Creem -- attracted 124 legislators to sign on as
co-sponsors, including about a dozen Republicans. A similar
bill won a favorable report from the Revenue Committee last
session but never made it out of the House Ways and Means
Committee.
Also Monday, the bill's sponsors sent a
letter signed by a bipartisan group of 81 lawmakers to the
Revenue Committee, urging another favorable report.
State House News Service
Monday, April 10, 2017
Frayed Community Preservation partnership in danger of
collapsing
The state has had to scale back the amount
it distributes to cities and towns to help fund their
community preservation programs, so naturally some lawmakers
want to raise fees to make up the difference.
But why should cities and towns be
guaranteed a pipeline of state funding for parks and open
space that they are already taxing local property owners to
finance? ...
Local funds for the program come from a
surcharge on property tax bills. State matching funds come
from a $20 surcharge on filing fees at the registries of
deeds.
But as the number of communities
participating in the program has grown, the balance in the
state CPA trust fund has led to lower payouts. That
displeases those who feel the state should fund elective
projects that cities and towns choose not to finance within
the constraints of their own local budgets.
Pending legislation would adjust the state
filing fees to ensure that all participating cities and
towns receive at least 50 percent in state matching funds in
the first round of grants each year. If the trust fund runs
short the fees go up — how high, well, that depends on how
many communities participate and how many projects they see
fit to approve. The State House News Service reported last
week that 124 lawmakers have signed on as sponsors of House
and Senate versions of this fee hike....
Beacon Hill routinely diverts a portion of
any surplus funds available at the end of each fiscal year
to the CPA trust fund. For advocates that isn’t enough. They
want to force every individual who engages in a real estate
transaction to pay a higher fee, to fund exceedingly local
projects in which they have no say. It’s unreasonable and it
shouldn’t pass.
A Boston Herald editorial
Monday, April 17, 2017
Community cash grab
