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CLT UPDATE
Friday, May 19, 2017
Senate budget insights
|
Senate Democrats on Tuesday unanimously
approved a $40.3 billion spending plan for fiscal 2018 that
they said recognizes the state does not have as much revenue
as it needs to pay for desired programs and service.
With approximately $400 million in new
revenues proposed, the budget tries to bridge some of that
gap and invest in housing, health and education accounts,
Senate Ways and Means Chairwoman Karen Spilka said. It
raises spending by 3.3 percent over estimated fiscal 2017
spending, according to the committee.
Legislative budget writers and Baker
administration officials all built their 2018 budgets on the
assumption that revenue would grow 3.9 percent from the
$26.056 billion expected in fiscal 2017, to $27.072 billion.
But as senators discussed their proposal,
they acknowledged uncertainty over whether that assumption
will stand, after weak April revenue collections more than
doubled this year's revenue gap to $462 million and Revenue
Commissioner Michael Heffernan called for a second look at
next year's revenue projections....
The Senate Ways and Means Committee said its
budget has a total of $40.79 billion in spending, a number
that includes a $452 million transfer to a medical
assistance trust fund. House lawmakers and Gov. Charlie
Baker do not include that money in their bottom lines. The
Massachusetts Taxpayers Foundation, which includes the
transfer in its estimates, tracked the final House budget at
about $40.8 billion and Gov. Charlie Baker's proposal at
$40.9 billion....
Budget deliberations are set to begin next
Tuesday. Senators have until Thursday at 5 p.m. to file
amendments, which will give a fuller picture of the full
Senate's tax policy agenda.
Like Baker's and the House's budgets, the
Senate spending plan calls for the state to collect sales
tax from online retailers. It proposes to generate $18
million from taxing short-term vacation rentals through
websites like Airbnb and $7 million from taxing online hotel
room resellers like Expedia on the full price paid by
consumers.
Spilka said the committee had "lots of
discussion" around taxes and ended up with a plan for
approximately $400 million in new revenue, consistent with
what the House approved in its budget.
"There's a recognition by all that we don't
have the revenue that we need to meet our obligations," the
Ashland Democrat said.
Though Senate President Stan Rosenberg
repeatedly has expressed interest in new revenues, the Ways
and Means budget eschews broad-based tax hikes, which both
Baker and House Speaker Robert DeLeo oppose....
Through a spokeswoman, Gov. Charlie Baker
expressed concern that the Senate budget didn't allocate
sufficient funding for numerous accounts and did not include
savings measures favored by the governor.
"The Baker-Polito Administration proposed a
balanced budget that reins in government spending while
increasing investments in public education to historic
levels and it is concerning that numerous accounts to pay
for core services, like indigent legal services, are
underfunded in this budget," Lizzy Guyton, Baker's
communications director, said. "Additionally, the
administration is disappointed that legislators dropped
much-needed proposals to save taxpayers millions like the
administration's bipartisan welfare reform. The
administration looks forward to working with the Legislature
on a final budget that continues Governor Baker's increased
investments in public education while protecting the
hardworking people of Massachusetts from tax increases."
State House News Service
Tuesday, May 16, 2017
Senate rolls out budget amid shaky revenue supports
Without raising existing tax rates, the
Massachusetts Senate projects that it could generate an
additional $409 million in tax revenue in fiscal year 2018
by applying existing taxes to new payers, changing how the
state collects some taxes, and taking other steps.
The Senate budget released Tuesday morning
by the Committee on Ways and Means calls for the state to
levy a 5 percent excise tax upon all short-term room rentals
through websites like Airbnb and VRBO, a proposal that the
committee estimates would generate $18 million in annual
revenue.
The roughly $40.3 billion spending plan also
includes $30 million in new revenue from changing how the
state collects sales taxes from online retailers and $125
million from a change in when companies remit sales, room
occupancy, and meals taxes to the state.
By building on new tax revenues approved in
the House budget, the Senate budget all but ensures that
Gov. Charlie Baker will face tax policy decisions when a
budget reaches his desk, probably sometime in late June or
early July. Baker says he opposes new taxes, but has also
aired tax proposals of his own....
While the state budget appears on track to
eclipse $40 billion in spending for the first time,
lawmakers say they've had to hold spending increases down.
Sen. Patricia Jehlen, the assistant vice
chair of the Senate Ways and Means Committee, said the
Senate budget proposal demonstrates a lack of sufficient
resources and "shows we have a revenue problem and not a
spending problem."
"The House, the governor and the Senate all
recognize for the first time that we need new revenue, and
the Ways and Means budget makes steps to increase that
revenue modestly," Jehlen said Tuesday....
"I really do believe we're going to have a
much bigger discussion about revenues," Rosenberg said
Monday. "It starts with closing loopholes and it continues
with modernizing the system so it's a 21st-century tax code
for a 21st-century economy. Right now we're still operating
on a 20th-century tax code and we cannot support what this
commonwealth needs."
Senators may add tax-raising or tax-reducing
proposals to the Senate budget through floor amendments. On
Thursday at 5 p.m. - the deadline for amendments - the tax
policy agendas of senators for next week's budget will
become clearer. Budget debate begins in the Senate on
Tuesday, May 23.
State House News Service
Tuesday, May 16, 2017
Sales, rental taxes among more than $400 mil in new Senate
revenues
Senate leaders unveiled a $40.3 billion
budget Tuesday that includes $180 million in new revenue
collected from employers....
But, after months of less-than-expected tax
revenue, the Senate spending plan is based on the state
bringing in more cash than is now considered realistic by
some Beacon Hill budget experts. Its total spending level is
likely to be reduced when the House, which already passed a
budget, and the Senate hash out a final plan next month.
“We face an unsteady fiscal environment,”
said Senator Karen E. Spilka, the chamber’s budget chief....
Like the budgets proposed by the governor
and the House, the Senate plan includes hundreds of millions
of dollars in new revenue....
In January, the Senate, House, and the
governor’s budget office all agreed to project that state
tax revenue would grow by 3.9 percent in the fiscal year
that begins in July.
But since then, tax revenue has fallen far
below expectations. Through April, the state brought in $462
million, or 2.2 percent, less tax money than expected.
Through April, year-to-date tax revenue is
up just 1.1 percent.
Experts say those numbers mean the 3.9
percent growth estimate for the next fiscal year is unlikely
to be borne out by reality.
“Given the track record of revenue growth
over the last 18 months, it’s important to begin fiscal year
2018 with a lower and more realistic tax estimate so as not
to compound the problem,” said Eileen McAnneny, who leads
the business-backed Massachusetts Taxpayers Foundation.
Spilka underscored that, at this point,
there is no consensus on what a different revenue figure
ought to be, so the Senate is basing its budget on the
number agreed to in January.
But she acknowledged that, once the Senate
passes a budget, House and Senate negotiators may have to
tinker with the state spending plan’s total cost.
The Boston Globe
Wednesday, May 17, 2017
Senate budget includes new fee on business
Senators have filed 1,031 amendments to
their $40.3 billion budget bill set for debate next week.
Minority Leader Bruce Tarr of Gloucester
filed 137 amendments, including proposals to lower the
income tax and sales tax rates to 5 percent and to set a
sales tax holiday for August 12 and 13 this year....
Senators had until 5 p.m. on Thursday to
file amendment to the budget bill that was released Tuesday
morning from the Ways and Means Committee.
One-hundred and forty amendments deal with
education, including one from Sen. Michael Rush that would
set a three-year moratorium on the use of standardized test
results for graduation requirements....
Floor debate on the budget is scheduled to
begin on Tuesday.
State House News Service
Thursday, May 18, 2017
Senators offer more than 1,000 ideas to improve budget bill
“Who Wants to Be a Millionaire?”
If that’s your dream, you no longer have to
go on the TV game show — just hang around Massachusetts
until 2019, and the state will declare you one — at least
for income-tax purposes.
Perhaps you’ve heard about the new
“millionaires’ tax” that the Beacon Hill hackerama wants to
impose — but don’t worry, it’ll only be on “millionaires.”
Wink wink, nudge nudge. And oh by the way, all that extra
revenue — it’s earmarked for education and transportation.
Triple wink, triple nudge.
Right now Massachusetts has a flat
income-tax rate of just over 5 percent. It used to be 5
percent but in 1989 the hacks declared a fiscal emergency
and raised it to 6.25 percent, but only until the emergency
was over. They were lying. Needless to say, the emergency
continues, even 17 years after the electorate voted to
reduce the tax rate back to 5 percent.
So the payroll Charlies weren’t telling the
truth then, but you can trust them now when they say their
confiscatory new tax will only be imposed on millionaires.
Five times the voters have nixed a graduated
income tax — in ’62, ’68, ’72, ’76 and 1994. Alas, the
electorate is dumbing down, so the trough-feeders are back
for another bite at the apple. The plan is to put the grift
on the statewide ballot in 2018, with the big lie that the
new 4 percent so-called surcharge will only be imposed on
income of more than $1 million a year.
What could possibly go wrong? ...
Don’t worry, they’ll tell you, it’ll only
hurt for a second. But the pain will pass. It’s just
temporary, like the tolls on the Mass Pike.
Who wants to be a millionaire? In 2019, in
Massachusetts, you won’t have any choice in the matter.
The Boston Herald
Wednesday, May 17, 2017
Exodus will be millionaires’ final answer
By Howie Carr
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|
Chip Ford's CLT
Commentary
On Tuesday the state Senate Ways and Means Committee
released its FY2018 budget recommendations. It
proposes to spend
$40.3 billion and raise $400 million in new "revenue" (aka,
taxes).The State House News Service reported:
The
Senate Ways and Means Committee said its budget has a
total of $40.79 billion in spending, a number that
includes a $452 million transfer to a medical assistance
trust fund. House lawmakers and Gov. Charlie Baker do
not include that money in their bottom lines. The
Massachusetts Taxpayers Foundation, which includes the
transfer in its estimates, tracked the final House
budget at about $40.8 billion and Gov. Charlie Baker's
proposal at $40.9 billion.
The Boston Globe reported:
But, after months
of less-than-expected tax revenue, the Senate spending
plan is based on the state bringing in more cash than is
now considered realistic by some Beacon Hill budget
experts. Its total spending level is likely to be
reduced when the House, which already passed a budget,
and the Senate hash out a final plan next month....
“Given the track
record of revenue growth over the last 18 months, it’s
important to begin fiscal year 2018 with a lower and
more realistic tax estimate so as not to compound the
problem,” said Eileen McAnneny, who leads the
business-backed Massachusetts Taxpayers Foundation.
Spilka underscored
that, at this point, there is no consensus on what a
different revenue figure ought to be, so the Senate is
basing its budget on the number agreed to in January.
But she
acknowledged that, once the Senate passes a budget,
House and Senate negotiators may have to tinker with the
state spending plan’s total cost.
The State House News Service added:
"We recognize that we may need to adjust, and there have
already been discussions with the House chair of Ways and
Means, the secretary of administration and finance,"
[Senate Ways and Means Chairwoman Karen Spilka]
told reporters. "There's close contact and we're all
monitoring it, and if we need to take action in June we
will, but at this point there's no consensus as to how much
even we would make adjustments, so we'll take a look in
June."
The State House News Service further reported:
Senators
may add tax-raising or tax-reducing proposals to the
Senate budget through floor amendments. On Thursday at 5
p.m. - the deadline for amendments - the tax policy
agendas of senators for next week's budget will become
clearer. Budget debate begins in the Senate on Tuesday,
May 23.
The good news seems to be that —
so far — there is no wholesale
assault on taxpayers, though another $409 million in
"revenue" is expected to be generated by less direct
gimmicks. The bad news is that it ain't over 'till
it's over. The state Senate will begin its formal
budget debate on Tuesday over the 1,031 amendments added to
the Senate Ways and Means Committee's recommendation.
If history is a teacher, though "revenue estimates" have
been discredited the spending nonetheless will only go in
one direction, higher. That's who they are and what
they do.
Senate Minority Leader Bruce Tarr (R-Gloucester) has
added amendments to finally restore the state income and
sale taxes to their historic five percent
— bills CLT again filed
for this legislative session. While it's unlikely
these amendments will be adopted, we hope to at least get a
roll call vote and put individual senators and their
integrity on the record. Will they vote for or
against keeping the Legislature's 1989 promise that
the income tax would be hiked only "temporarily"
— still a broken promise
after twenty-eight years, for now over a generation?
The tax-borrow-and-spend liberals are focused on killing
our state's historic flat tax, replacing it with a
divide-and-conquer graduated income tax. That
amendment to the state constitution is expected to be on the
2018 ballot for voters to decide, for the sixth time.
The Takers are being patient, biding their time. But
they're not planning to give anything back to
hard-working taxpayers. More Is Never Enough (MINE)
and never will be. As they see it, what's yours is
theirs, and what's theirs is theirs too.
|
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Chip Ford
Executive Director |
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State House News Service
Tuesday, May 16, 2017
Senate rolls out budget amid shaky revenue
supports
By Katie Lannan
Senate Democrats on Tuesday unanimously approved
a $40.3 billion spending plan for fiscal 2018
that they said recognizes the state does not
have as much revenue as it needs to pay for
desired programs and service.
With approximately $400 million in new revenues
proposed, the budget tries to bridge some of
that gap and invest in housing, health and
education accounts, Senate Ways and Means
Chairwoman Karen Spilka said. It raises spending
by 3.3 percent over estimated fiscal 2017
spending, according to the committee.
Legislative budget writers and Baker
administration officials all built their 2018
budgets on the assumption that revenue would
grow 3.9 percent from the $26.056 billion
expected in fiscal 2017, to $27.072 billion.
But as senators discussed their proposal, they
acknowledged uncertainty over whether that
assumption will stand, after weak April revenue
collections more than doubled this year's
revenue gap to $462 million and Revenue
Commissioner Michael Heffernan called for a
second look at next year's revenue projections.
"We recognize that we may need to adjust, and
there have already been discussions with the
House chair of Ways and Means, the secretary of
administration and finance," Spilka told
reporters. "There's close contact and we're all
monitoring it, and if we need to take action in
June we will, but at this point there's no
consensus as to how much even we would make
adjustments, so we'll take a look in June."
The Senate Ways and Means Committee said its
budget has a total of $40.79 billion in
spending, a number that includes a $452 million
transfer to a medical assistance trust fund.
House lawmakers and Gov. Charlie Baker do not
include that money in their bottom lines. The
Massachusetts Taxpayers Foundation, which
includes the transfer in its estimates, tracked
the final House budget at about $40.8 billion
and Gov. Charlie Baker's proposal at $40.9
billion.
Sen. Vinny deMacedo, the committee's ranking
minority member, said the Senate budget
represents "the fifth inning of a long process."
"There is a challenge in regards to the revenue
picture that we're looking at," the Plymouth
Republican said. "That's something that I think
is going to be played out in the sixth, seventh
and eighth inning, and we're going in next week,
and we're going to debate some other
priorities."
Budget deliberations are set to begin next
Tuesday. Senators have until Thursday at 5 p.m.
to file amendments, which will give a fuller
picture of the full Senate's tax policy agenda.
Like Baker's and the House's budgets, the Senate
spending plan calls for the state to collect
sales tax from online retailers. It proposes to
generate $18 million from taxing short-term
vacation rentals through websites like Airbnb
and $7 million from taxing online hotel room
resellers like Expedia on the full price paid by
consumers.
Spilka said the committee had "lots of
discussion" around taxes and ended up with a
plan for approximately $400 million in new
revenue, consistent with what the House approved
in its budget.
"There's a recognition by all that we don't have
the revenue that we need to meet our
obligations," the Ashland Democrat said.
Though Senate President Stan Rosenberg
repeatedly has expressed interest in new
revenues, the Ways and Means budget eschews
broad-based tax hikes, which both Baker and
House Speaker Robert DeLeo oppose.
Asked if Baker and DeLeo's stances influenced
her committee's budget, Spilka said the panel
"looked at the fiscal situation, and we based
our recommendations accordingly."
"If you look at it, it's a little different,"
she said of the Senate's proposed new revenues.
"There are some similarities, and the House is a
little different than the governor, the Senate's
a little different than the House and the
governor."
The 2018 budget will be the state's first to
surpass $40 billion, and the pressures of
growing MassHealth enrollments, debt service,
pension obligations and other fixed costs are
again leaving little room for substantial
discretionary spending increases.
"This budget demonstrates the commitment to the
values we share, but it also demonstrates the
lack of resources," committee assistant vice
chair Sen. Patricia Jehlen said. "It shows that
we have a revenue problem, not a spending
problem."
Jehlen said the budget takes steps to implement
the 2015 recommendations of the Foundation
Budget Review Commission, which found the
current school funding formula underestimates
the cost of education by $1 billion to $2
billion per year, driven largely by health care
and special education costs.
Like Baker and the House, Senate Ways and Means
included funding to help school districts cover
their health insurance costs. Spilka said there
is also a "down payment" towards special
education costs.
Spilka said the budget focuses on "education at
all levels," including $15.1 million to expand
preschool access; a minimum increase of $30 per
pupil in aid to local schools; and workforce
training programs. It includes $545.9 million
for community colleges and state universities,
and increases funding for the University of
Massachusetts by more than $26 million over 2017
to $534.5 million. The House funded UMass at
$513.5 million.
A statement from UMass President Marty Meehan's
office said the Senate appropriation would
"preserve affordability for students and their
families."
The budget directs $98.4 million to the
stabilization fund and takes $15 million from a
race horse development fund to provide funding
increases to the Department of Environmental
Protection and Department of Conservation and
Recreation, Spilka said.
Spilka said the money in the race horse fund,
created under the 2011 expanded gaming law, has
"just been sitting there" and using it for
conservation and recreation was consistent with
the fund's purpose.
The Ways and Means Committee allocates $52.9
million for the Department of Environmental
Protection, including a new investment of
$500,000 to ensure compliance with the federal
Safe Drinking Water Act, according to the
committee.
Through a spokeswoman, Gov. Charlie Baker
expressed concern that the Senate budget didn't
allocate sufficient funding for numerous
accounts and did not include savings measures
favored by the governor.
"The Baker-Polito Administration proposed a
balanced budget that reins in government
spending while increasing investments in public
education to historic levels and it is
concerning that numerous accounts to pay for
core services, like indigent legal services, are
underfunded in this budget," Lizzy Guyton,
Baker's communications director, said.
"Additionally, the administration is
disappointed that legislators dropped
much-needed proposals to save taxpayers millions
like the administration's bipartisan welfare
reform. The administration looks forward to
working with the Legislature on a final budget
that continues Governor Baker's increased
investments in public education while protecting
the hardworking people of Massachusetts from tax
increases."
State House News Service
Tuesday, May 16, 2017
Sales, rental taxes among more than $400 mil in
new Senate revenues
By Colin A. Young
Without raising existing tax rates, the
Massachusetts Senate projects that it could
generate an additional $409 million in tax
revenue in fiscal year 2018 by applying existing
taxes to new payers, changing how the state
collects some taxes, and taking other steps.
The Senate budget released Tuesday morning by
the Committee on Ways and Means calls for the
state to levy a 5 percent excise tax upon all
short-term room rentals through websites like
Airbnb and VRBO, a proposal that the committee
estimates would generate $18 million in annual
revenue.
The roughly $40.3 billion spending plan also
includes $30 million in new revenue from
changing how the state collects sales taxes from
online retailers and $125 million from a change
in when companies remit sales, room occupancy,
and meals taxes to the state.
By building on new tax revenues approved in the
House budget, the Senate budget all but ensures
that Gov. Charlie Baker will face tax policy
decisions when a budget reaches his desk,
probably sometime in late June or early July.
Baker says he opposes new taxes, but has also
aired tax proposals of his own.
Senate Minority Leader Bruce Tarr, a Gloucester
Republican, acknowledged Massachusetts is facing
"serious issues with our state's revenue
collections and an uncertain future for those
collections in the current year and the one to
follow" and said Senate Republicans will
carefully examine the proposals.
"The proposed budget relies on some significant
tax changes that warrant careful thought and
analysis before approval," Tarr, who has opposed
tax increases over the years, said in a
statement. "We must be attentive to any
potential negative impacts or unintended
consequences of these changes, and we will
carefully examine them."
While the state budget appears on track to
eclipse $40 billion in spending for the first
time, lawmakers say they've had to hold spending
increases down.
Sen. Patricia Jehlen, the assistant vice chair
of the Senate Ways and Means Committee, said the
Senate budget proposal demonstrates a lack of
sufficient resources and "shows we have a
revenue problem and not a spending problem."
"The House, the governor and the Senate all
recognize for the first time that we need new
revenue, and the Ways and Means budget makes
steps to increase that revenue modestly," Jehlen
said Tuesday.
In his budget proposal, Gov. Charlie Baker
recommended applying the state's room occupancy
tax to anyone who provides 150 days or more of
accommodation in a calendar year, which he
estimated would generate $12 million in fiscal
2018.
The Senate plan calls for the tax to be applied
to room rentals of any length, generating an
additional $6 million in revenue by dropping the
governor's 150-day threshold. The Senate
proposal also allows municipalities to impose a
local option tax of up to 6 percent (6.5 percent
in Boston) on short-term rentals.
"On day one, the sales tax would be charged
similar to like a hotel room," Senate Ways and
Means Chairwoman Karen Spilka said Tuesday. She
added, "When you rent a hotel room for a day you
pay tax on it."
If the Senate passes a budget that includes
taxing short-term rentals, it will set up a
conflict between the House and Senate budgets
that would have to be ironed out during
closed-door conference committee negotiations.
The House budget shied away from beginning to
apply the tax to short-term rentals, and House
Ways and Means Chairman Brian Dempsey said his
committee preferred to let bills dealing with
the issue wind their way through the legislative
process and "stay away from any potential
revenue there."
Last week, the Committee on Financial Services
announced it will hold three hearings around
Massachusetts to hear from people about the
potential impact of short-term rental taxes on
tourism and the rental market. Rep. Aaron
Michlewitz, who chairs the committee, has filed
legislation that would not only implement a tax
structure for short-term room rentals, but
address insurance requirements and safety
precautions.
After the Baker administration reported in early
May that tax collections through April were
trailing downgraded fiscal 2017 estimates by
$462 million, Airbnb wrote to Senate President
Stanley Rosenberg reminding him that the company
was willing to begin collecting room taxes on
units rented through its website to help with
the budget situation.
The Senate also expects Massachusetts to collect
an additional $7 million in fiscal 2018 by
taxing internet-based room resellers, like
TripAdvisor or Expedia, that buy hotel rooms in
bulk and then sell them at a higher price.
"When they sell them one by one they jack up the
prices," Spilka said. "They pay tax on the bulk
sales, but not what you and I would pay on the
increase, so we're taxing that as well."
The Senate is also counting on a one-time
collection of $125 million in tax revenue but is
giving the administration two options for how to
effectuate that collection. Baker's budget
proposed requiring third party credit card
processors to remit sales, room occupancy and
meals taxes to the state on a daily basis,
instead of holding it in a trust for up to 50
days as is the current practice.
Spilka said the Senate Ways and Means Committee
talked to businesses that were concerned about
the governor's "accelerated" sales tax idea, so
the Senate's budget directs the administration
to either pursue accelerated sales tax
collection or devise a sales tax prepayment
system.
Either change would shift the timing of tax
collections, resulting in a one-time lump sum of
$125 million in fiscal year 2018.
The Senate also goes along with Baker's plan to
begin to collect sales tax from online retailers
who do not have a physical location in
Massachusetts but do more than $500,000 in sales
in the Bay State annually. The change is
expected to yield $30 million in revenue next
fiscal year, according to the administration.
Another $20 million in revenue is expected from
a Department of Revenue change that will require
credit card companies to provide a 1099-K form
to individuals who earn more than $600 from
credit or debit card transactions in a calendar
year. The current threshold for a 1099-K form is
$20,000 in income from 200 or more transactions
in a year.
Though Rosenberg on Monday said he is concerned
about the "revenue drain" on the state budget
and has recently floated the idea of
implementing a tax on services, the Senate's
plan does not stray too far from the new
revenues already included in the governor's or
the House budgets.
"I really do believe we're going to have a much
bigger discussion about revenues," Rosenberg
said Monday. "It starts with closing loopholes
and it continues with modernizing the system so
it's a 21st-century tax code for a 21st-century
economy. Right now we're still operating on a
20th-century tax code and we cannot support what
this commonwealth needs."
Senators may add tax-raising or tax-reducing
proposals to the Senate budget through floor
amendments. On Thursday at 5 p.m. - the deadline
for amendments - the tax policy agendas of
senators for next week's budget will become
clearer. Budget debate begins in the Senate on
Tuesday, May 23.
The Boston Globe
Wednesday, May 17, 2017
Senate budget includes new fee on business
By Joshua Miller and Priyanka Dayal McCluskey
A new fee on businesses is more likely to become
law after Senate leaders Tuesday broadly
concurred with Governor Charlie Baker and the
House of Representatives that such an effort is
needed to help fund the state’s sharply rising
health care costs.
Senate leaders unveiled a $40.3 billion budget
Tuesday that includes $180 million in new
revenue collected from employers. They said the
Baker administration should pick from one of two
options: a new fee on employers with 25 or more
workers that don’t offer adequate health
coverage or an increase to an existing fee that
nearly all businesses already pay.
The Senate proposal, similar to the one approved
by the House, scales down Baker’s initial plan
to raise $300 million from a fee on employers.
It would phase out the new or increased fee
after two years. Nonprofit employers “that serve
the public interest” could be exempt from the
Senate plan, though it’s unclear exactly which
nonprofits that would include.
The budget would also boost spending on the
University of Massachusetts system, impose a tax
on everyone who rents from sites like Airbnb in
the state, and funnel more money to services for
terminally ill children and their families.
But, after months of less-than-expected tax
revenue, the Senate spending plan is based on
the state bringing in more cash than is now
considered realistic by some Beacon Hill budget
experts. Its total spending level is likely to
be reduced when the House, which already passed
a budget, and the Senate hash out a final plan
next month.
“We face an unsteady fiscal environment,” said
Senator Karen E. Spilka, the chamber’s budget
chief.
The state Medicaid program, which provides
health coverage to poor and disabled people,
accounts for the single largest chunk of state
spending — and its rolls have been growing. An
increasing number of Massachusetts residents who
are employed have been joining the program,
according to administration data.
In response, Baker proposed a
$2,000-per-employee fee on businesses, which
business groups decried as an unfair new tax.
The administration later floated an alternative
plan that would spread the cost over more
businesses by increasing an existing assessment
called the Employer Medical Assistance
Contribution. Senate leaders said they were open
to that option.
Business leaders said they were encouraged by
the Senate’s proposal.
“I think Beacon Hill is hearing the concern,”
said Jon B. Hurst, president of the Retailers
Association of Massachusetts.
Richard C. Lord, president of Associated
Industries of Massachusetts, said in statement
that the Senate plan is “a step in the right
direction,” and James E. Rooney president of the
Greater Boston Chamber of Commerce, said he was
glad Senate leaders agreed to phase out the fee
after two years.
Following the lead of the House, Senate leaders
nixed a plan from the governor to cap the rates
at which hospitals are paid, something the
hospital industry lobbied against.
“The Senate, like the House, listened to the
concerns of hospitals and approached this budget
proposal with caution regarding its impact on
the Massachusetts health care community,” said
Massachusetts Health and Hospital Association
president Lynn Nicholas in a statement.
But senators are planning to draft new
legislation to tackle health care costs later in
the legislative session, and Spilka said,
“Everything will be on the table.”
One notable spending increase in the Senate
budget proposal is for the University of
Massachusetts system, which would see about a 5
percent increase, according to a university
spokesman.
The Senate budget would also pour $800,000 more
into a program to assist dying children and
their families with services designed to improve
their quality of life and meet their physical,
emotional, and spiritual needs.
Baker sliced some funding for that program when
he made emergency cuts during the current fiscal
year.
Like the budgets proposed by the governor and
the House, the Senate plan includes hundreds of
millions of dollars in new revenue.
For example, the budget would impose a tax on
everyone who rents an Airbnb in Massachusetts.
The governor proposed a similar Airbnb tax, but
the Senate’s version is expected to bring in
more money, a total of $18 million in the first
six months of 2018. That’s because the Senate’s
language would mandate all providers of
transient accommodations, such as people who
rent out rooms on Airbnb, collect the state’s
5.7 percent occupancy tax from customers, just
like hotels.
The Baker administration plan was narrower. It
imposed that tax only on people who rent from
high-volume providers who rent space 150 days or
more a year.
The thinking behind the tax, officials say, is
to level the playing field with hotels.
Akin to the budgets proposed by the governor and
the House, there are several accounting gimmicks
in the Senate plan.
For example, the state is poised to spend $240
million on lawyers for certain poor defendants
this fiscal year. But the Senate budget funds
that account with only $180 million. Lawmakers
often supplement that pot of money midway
through the year because it fluctuates with
demand.
A spokeswoman for Baker, Lizzy Guyton, knocked
that decision, saying, “It is concerning that
numerous accounts to pay for core services, like
indigent legal services, are underfunded in this
budget.”
In January, the Senate, House, and the
governor’s budget office all agreed to project
that state tax revenue would grow by 3.9 percent
in the fiscal year that begins in July.
But since then, tax revenue has fallen far below
expectations. Through April, the state brought
in $462 million, or 2.2 percent, less tax money
than expected.
Through April, year-to-date tax revenue is up
just 1.1 percent.
Experts say those numbers mean the 3.9 percent
growth estimate for the next fiscal year is
unlikely to be borne out by reality.
“Given the track record of revenue growth over
the last 18 months, it’s important to begin
fiscal year 2018 with a lower and more realistic
tax estimate so as not to compound the problem,”
said Eileen McAnneny, who leads the
business-backed Massachusetts Taxpayers
Foundation.
Spilka underscored that, at this point, there is
no consensus on what a different revenue figure
ought to be, so the Senate is basing its budget
on the number agreed to in January.
But she acknowledged that, once the Senate
passes a budget, House and Senate negotiators
may have to tinker with the state spending
plan’s total cost.
State House News Service
Thursday, May 18, 2017
Senators offer more than 1,000 ideas to improve
budget bill
By Katie Lannan
Senators have filed 1,031 amendments to their
$40.3 billion budget bill set for debate next
week.
Minority Leader Bruce Tarr of Gloucester filed
137 amendments, including proposals to lower the
income tax and sales tax rates to 5 percent and
to set a sales tax holiday for August 12 and 13
this year.
A Sen. Jamie Eldridge amendment would raise the
state earned income tax credit from 23 percent
of the federal level to 30 percent.
Senators had until 5 p.m. on Thursday to file
amendment to the budget bill that was released
Tuesday morning from the Ways and Means
Committee.
One-hundred and forty amendments deal with
education, including one from Sen. Michael Rush
that would set a three-year moratorium on the
use of standardized test results for graduation
requirements. Rush and Sen. Sonia Chang-Diaz
have both filed amendments that would change the
school funding formula known as the foundation
budget.
Sen. Thomas McGee, who is running for mayor of
Lynn, is seeking $500,000 to study extending the
MBTA's Blue Line from Revere to Lynn, and a Sen.
Eric Lesser of Longmeadow amendment would call
on the Department of Transportation to conduct a
feasibility study on high-speed rail between
Springfield and Boston.
Floor debate on the budget is scheduled to begin
on Tuesday.
The Boston Herald
Wednesday, May 17, 2017
Exodus will be millionaires’ final answer
By Howie Carr
“Who Wants to Be a Millionaire?”
If that’s your dream, you no longer have to go
on the TV game show — just hang around
Massachusetts until 2019, and the state will
declare you one — at least for income-tax
purposes.
Perhaps you’ve heard about the new
“millionaires’ tax” that the Beacon Hill
hackerama wants to impose — but don’t worry,
it’ll only be on “millionaires.” Wink wink,
nudge nudge. And oh by the way, all that extra
revenue — it’s earmarked for education and
transportation. Triple wink, triple nudge.
Right now Massachusetts has a flat income-tax
rate of just over 5 percent. It used to be 5
percent but in 1989 the hacks declared a fiscal
emergency and raised it to 6.25 percent, but
only until the emergency was over. They were
lying. Needless to say, the emergency continues,
even 17 years after the electorate voted to
reduce the tax rate back to 5 percent.
So the payroll Charlies weren’t telling the
truth then, but you can trust them now when they
say their confiscatory new tax will only be
imposed on millionaires.
Five times the voters have nixed a graduated
income tax — in ’62, ’68, ’72, ’76 and 1994.
Alas, the electorate is dumbing down, so the
trough-feeders are back for another bite at the
apple. The plan is to put the grift on the
statewide ballot in 2018, with the big lie that
the new 4 percent so-called surcharge will only
be imposed on income of more than $1 million a
year.
What could possibly go wrong?
Do you suppose that maybe, just maybe, the
“rich” will pack up and leave, or finagle their
taxes to keep them below one million? Hell,
state revenue collections are already in free
fall, and the tax hike is still at least two
years away.
Connecticut has been wildly jacking up its
taxes. How’s that working out for them? Just ask
GE. According to new Nutmeg State numbers
released last week, “tax revenue from the
state’s top 100 highest-paying taxpayers
declined 45 percent from 2015 to 2016.”
Gee, what do you suppose happened? Did all the
millionaires get … laid off?
There used to be a billionaire in New Jersey
named David Tepper. Last year for some reason —
could it have been the state’s 8.97 percent tax
rate? — he decided to move to no-tax Florida.
According to the New York Times, Tepper’s flight
cost the Garden State “hundreds of millions of
dollars in lost payments.”
Maryland was another state that tried the
soak-the-so-called-rich formula. In one year,
2009, the state’s population of millionaires
dropped by one-third.
Pay no attention to what’s happened in all the
other states that have tried taxing their way
into the black — New York, California, Illinois,
hell, even Venezuela.
Don’t worry, they’ll tell you, it’ll only hurt
for a second. But the pain will pass. It’s just
temporary, like the tolls on the Mass Pike.
Who wants to be a millionaire? In 2019, in
Massachusetts, you won’t have any choice in the
matter.
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