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CLT UPDATE
Wednesday, August 9, 2017
Foolish hope springs eternal
|
“I’d gladly pay you Tuesday for a
hamburger today.” — J. Wellington Wimpy
Let’s face it, Democratic lawmakers on
Beacon Hill took the Wimpy approach to Gov. Charlie
Baker’s recent proposal to rein in the cost of providing
health insurance to the poor in Massachusetts. They
grabbed the hamburger — the $200 million in revenue from
a series of new fees on employers Baker had proposed —
while putting off payment until, well, who knows when.
“Payment,” in this case, is in the form of
overdue reforms to the Medicaid system, which is known here
as MassHealth and represents 40 percent of the state budget.
Baker feels strongly enough about the need for reforms to
rein in those costs that he could have backed recalcitrant
lawmakers into a corner. A veto of the fees would have
scored him points with employer groups....
We sure hope Baker has secured an ironclad
guarantee from House Speaker Robert DeLeo and Senate
President Stan Rosenberg that they’ll take up the reform
package in a serious and meaningful way — soon. Not to do so
would be a dereliction of duty for the Democratic leaders
who acknowledge the need to rein in costs — but have refused
to guide their members in the direction of real reform....
These changes should have happened long ago.
But now that lawmakers have fattened up the budget by
imposing new fees, they need to eat their spinach.
A Boston Herald editorial
Thursday, August 3, 2017
Baker’s only option
Gov. Charlie Baker is mounting a late bid to
return the popular sales tax holiday this year, formally
asking lawmakers who have already begun their summer break
to approve a proposal to hold the tax-free weekend in just
17 days.
The governor's plan received an
underwhelming reaction from legislative leaders, with one
calling the idea a "colossal mistake."
Baker announced Wednesday that he would file
legislation declaring a sales tax holiday for Saturday, Aug.
19 and Sunday, Aug. 20....
The tax holiday's fate is uncertain since
the House and Senate are on summer recess and if a holiday
bill -- similar bills are pending before two committees --
were to make it to the floor, a single lawmaker could block
its progress with a mere objection. The House and Senate
plan to meet at least twice a week through August before
resuming formal sessions sometime after Labor Day....
Rep. Jay Kaufman, the House chair of the
Revenue Committee, said the sales tax holiday bills "will
continue to sit" before the panel without a vote planned on
whether to endorse them. He said he hopes the Legislature
does not act on Baker's bill.
"Sales tax holidays under any circumstances
are a mistake, and under these circumstances are a colossal
mistake," the Lexington Democrat told the News Service. He
described sales tax holidays as "sometimes politically
attractive" but "not good public policy."
"Built into this proposal is the lie that we
can provide public services without paying for them,"
Kaufman said.
State House News Service
Wednesday, August 2, 2017
With lawmakers on holiday, Baker bids to revive sales tax
suspension
Consumers will get no break on the sales tax
from the state of Massachusetts this summer, as lawmakers
opt for the second year in a row to forego a tax holiday
weekend.
Revenue Committee Chairman Jay Kaufman
confirmed that August will pass without what has been in
recent years a semiannual tradition of suspending the sales
tax for one weekend.
"I would say that's certain. I don't see how
there could be one since there's no possibility of us having
a hearing and a session to vote for one, so there will be no
sales tax holiday this year," Kaufman, a Lexington Democrat,
told the News Service Monday....
Rep. Shaunna O'Connell, a Taunton
Republican, suggested there is a double-standard.
Lawmakers this session quickly passed a
hefty pay package for themselves, even though state finances
were questionable at the beginning of the year, too.
"They can afford to give these huge pay
raises, but they can't afford to give the taxpayers just a
small little break once a year that they really look forward
to and that really stimulates the economy, gets people out
shopping," O'Connell told Boston Herald Radio. She said, "I
hope people aren't going to forget about this when it comes
election time."
State House News Service
Tuesday, August 8, 2017
Chairman "certain" there won't be a sales tax holiday
After a bumpy fiscal year 2017, fiscal 2018
got off to a smooth start for the Department of Revenue,
which reported collecting $1.798 billion in taxes in July,
just slightly more than expected.
July revenues were $6 million, or 0.3
percent, above the monthly benchmark and were "in line with
expectations and the trends and patterns of the past several
months that were used to develop the FY18 benchmark," DOR
said....
Income tax collections in July were $1.004
billion, $56 million more than July 2016 but still $10
million or 0.9 percent below the July 2017 monthly
benchmark. Withholding was $993 million for the month, and
sales and use tax collections were $541 million, both
meeting the monthly benchmark.
State House News Service
Thursday, August 3, 2017
Tax collections on track after one small month
With an eye on the 2018 and 2020 ballots, 17
groups filed more than two dozen initiative petitions for
proposed laws and constitutional amendments in time to be
considered for certification by Attorney General Maura
Healey....
Lawmakers largely departed the State House
late last week for summer recess, and August marks a time
for citizens to try their hands at crafting policy....
Medford High School junior Lauren Brown, 16,
filed her petition Wednesday to increase the minimum wage to
$15 an hour after studying the issue in class.
"I was in this elective at my school called
'Facing History' and each person chose a social issue to
research and take action on so I did minimum wage," Brown
said. "People can't live on what they're making, yet they're
working harder, in my opinion than some people who make
really high salaries. Some of them are working multiple jobs
or are single parents and they deserve more than they're
making." ...
It is not unusual for groups to file several
versions of the same initiative petition and decide later
which they will gather signatures for.
Different from proposed laws, amendments to
the state constitution must pass two constitutional
conventions with approval from 25 percent of the Legislature
each time before they can land on the ballot.
Brown plans to join Raise Up Massachusetts,
a coalition that plans to gather signatures in the fall for
its own petition to raise the minimum wage to $15 an hour in
Massachusetts by 2022, as well as a proposal for an income
surtax on high earners and a measure for guaranteed paid
family and medical leave.
Other petitions filed with the attorney
general's Boston office shortly before the 5 p.m. deadline
included several proposals regarding money in politics filed
by Nick Bokron of Pass Mass Amendment, a proposal to lower
out-of-pocket costs for holistic health care filed by Carl
Tripp and proposals focused on the solar net metering cap
and clean energy filed by members of the Cambridge Climate
Initiative.
Andover Rep. Jim Lyons filed a petition for
a constitutional amendment earlier this summer that would
place the decision to fund abortions with public money in
the hands of the Legislature.
State House News Service
Wednesday, August 2, 2017
Quest for ballot spot begins with filing of initiative
petitions
The menu of more than two dozen proposed
questions for the 2018 Massachusetts ballot offers something
for pretty much every ideological and political taste,
including those who want to raise taxes, cut taxes or
perhaps do both at the same time.
The tax paradox could emerge as an
intriguing aspect to next year's election.
One initiative dubbed the "millionaire tax"
— its sponsors call it the Fair Share Amendment — would
impose a surtax of 4 percent on any portion of an
individual's annual income that exceeds $1 million. It's
estimated to raise $1.9 billion in annual revenue for the
state.
The Retailers Association of Massachusetts
filed several versions of a proposed ballot question that
would reduce the state's 6.25 percent sales tax to either 5
percent or 4.5 percent. Some versions would also require the
state hold a sales tax holiday each summer.
Since each 1 percent of the sales tax
translates to roughly $1 billion for the state, the
projected revenue loss would be $1.25 billion to $1.75
billion, nearly enough to cancel out higher taxes on the
wealthy.
Associated Press
Saturday, August 5, 2017
Offsetting votes? Ballot proposals both raise, lower taxes
Massachusetts has made some expensive
promises over the years. Chief among them, a commitment to
provide retirement pensions for teachers, State Police, and
other public workers.
As of now, we don’t have enough money to
cover all these pension promises. Every dollar we owe is
backed by roughly 60 cents of assets. That’s not terrible —
some states are in far worse shape — but it’s not
sustainable either....
Here’s one problem: There’s no free lunch
when it comes to pensions. For the state to meet its
long-term obligations, lawmakers have to set aside more
money. Every year, in every budget, until we’ve made up the
funding gap.
Officially at least, they’ve committed to
doing so. But their whole approach is back-loaded, so that
the really big contributions are put off for another day.
This fiscal year, the state set aside $2.4 billion for
pension contributions, which is already 6 percent of total
state spending. In 2027, they’re expected to allocate $5.2
billion; by 2036, it’s $11.2 billion.
Even adjusting for inflation — and the fact
that Massachusetts will probably be a lot richer in 2036
than it is today — that’s still a massive increase. And it
means that when today’s college students become our future
representatives, pension contributions could be siphoning
tax dollars away from things like schools or health care....
Note, too, that all this is just for
state-run pensions. Lots of cities and towns run their own
plans for municipal workers, some of them in worse shape
than others. Also, there is the MBTA, which has roughly $1
billion in uncovered pension obligations and doesn’t
participate in the state system.
The Boston Globe
Wednesday, August 9, 2017
Will Massachusetts break its pension promises?
The state’s top watchdog is asking the
council that decides his salary to again consider hiking his
earnings, setting up the potential for a major raise thanks
to the controversial pay hike legislation lawmakers rammed
through earlier this year.
Inspector General Glenn Cunha has requested
the Inspector General Council take up its annual review of
his $158,727 salary at its next meeting — scheduled for
tomorrow — when he’s expected to make a presentation to the
eight-member panel.
Under statute, the council is required each
year to set Cunha’s salary — a decision, his office said,
that has historically been made at the start of the fiscal
year. But the council didn’t do so last year, and instead,
after months of delays, gave him a retroactive 3 percent
raise at its last meeting three months ago in May.
It’s unclear how the council will act
tomorrow, but Cunha could be poised for a major raise, plus
more to come, as outlined by the bill lawmakers passed in
February hiking their own salaries and stipends....
Under state statute, the IG’s salary — while
voted on by the council — is allowed to go as high as 90
percent of the chief justice’s. That means Cunha’s salary
could legally be raised as high as $174,365 right now. By
next July, the cap on his salary will hit $185,615.
The Boston Herald
Wednesday, August 9, 2017
IG may get another salary bump thanks to Legislature’s pay
hike
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Chip Ford's CLT
Commentary
The Boston Herald's editorial compares Gov. Baker's "hope"
for a deal with the Legislature on his MassHealth/Medicaid
reforms to the Popeye the Sailor comic strip character, Wimpy. In our last
Update ("Hope is not a strategy, Gov.") I compared
his misplaced hope
to Peanuts'
Lucy and her infamous football. With the extra $56
million in income tax revenue month-to-month over last
July's — not to mention the
Legislature's obscene $18 million pay grab in January
— he must have hoped the
Legislature would show some appreciation to taxpayers, deign
to provide them with one weekend's relief from the sales
tax.My hope is that this awakens Gov. Charlie
Baker to the value of his misplaced hope. If he
runs for reelection as expected, we hope he learns a lesson:
"Hope is not a strategy!"
On August 3 the Department
of Revenue's release ("July
Revenue Collections Total $1.798 Billion") reported:
"Income tax collections for July were $1.004 billion, $56
million or 5.9% more than a year ago, which left them $10
million or 0.9% below the monthly benchmark."
Translation:
● The state collected $1.798
billion in total taxes during the month of July.
$1.004 billion if that was in income taxes alone.
●
That $1.004 billion in income taxes was $56 million
more
than the state collected last July, 2016. Nonetheless,
it was $10 million less than "anticipated" for the
month of July.
●
In Beacon Hill OPM-speak,
$56 million more in
income tax revenue than the previous year's take is interpreted as
a $10 million shortfall.
●
The bureaucratic bean-counters expected
$66 million
more to come in last month than what was raked in last July,
2016. "The Best Legislature Money Can Buy" spent more
than came in based on that elusive expectation, their
ethereal "benchmark."
A $56 million increase in revenue in just the month of
July over last July is still not enough for a sales tax
holiday weekend that would "forgo" the state of some $20
million in revenue spread over the year's $40 billion budget
spending spree. And remember —
the Legislature was able to easily find $18 million for
their obscene pay grab as their first priority this year,
slammed through in two weeks of January.
It would appear our next best hope for tax relief will be
offered by the Retailers Association of Massachusetts in the
form of one-of-four sales tax ballot questions. NAM has
filed four for approval by the Attorney General; its
membership will decide which one to pursue after the AG
clears them for constitutionality.
Whichever version is pursued, if the sales tax cut and
the proposed Graduated Income Tax constitutional amendment
(aka, "The Fair Share Amendment" and "The Millionaire's
Tax") are both adopted by the voters in November the
anticipated revenue grab from the Grad Tax will be pretty
much neutralized.
Meanwhile the government employee pension crisis
continues to loom large. The Boston Globe reported:
"This fiscal year, the state set aside $2.4 billion
for pension contributions, which is already 6
percent of total state spending. In 2027, they’re
expected to allocate $5.2 billion; by 2036, it’s
$11.2 billion."
Eventually taxpayers will be working our fingers to the
bone just to support a vast multitude of comfortably retired
former government employees and nothing else. For two
decades CLT has been warning this day is inevitable unless
changes are made soon (The
Ticking Time Bomb — Public
Employee Benefits). Nobody was listening, but as
the detonation nears more are beginning to hear the ticking.
Some of the hacks aren't waiting for their healthy
pensions. The kleptocracy is grabbing all our money
they can while its available. With the obscene pay
grab locked down by the Legislature, the fallout continues
as more hacks discover they're also entitled to an obscene
pay raise for themselves. Such is the case of the
state's — of all positions
— Inspector General. The
other Beacon Hill hacks all pocketed their huge pay boosts;
now the IG wants his cut of the spoils as well.
And remember: The higher a hack's salary, the
fatter the hack's pension.
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Chip Ford
Executive Director |
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The Boston Herald
Thursday, August 3, 2017
A Boston Herald editorial
Baker’s only option
“I’d gladly pay you Tuesday for a hamburger
today.” — J. Wellington Wimpy
Let’s face it, Democratic lawmakers on Beacon
Hill took the Wimpy approach to Gov. Charlie
Baker’s recent proposal to rein in the cost of
providing health insurance to the poor in
Massachusetts. They grabbed the hamburger — the
$200 million in revenue from a series of new
fees on employers Baker had proposed — while
putting off payment until, well, who knows when.
“Payment,” in this case, is in the form of
overdue reforms to the Medicaid system, which is
known here as MassHealth and represents 40
percent of the state budget. Baker feels
strongly enough about the need for reforms to
rein in those costs that he could have backed
recalcitrant lawmakers into a corner. A veto of
the fees would have scored him points with
employer groups.
But it would also risk blowing a $200 million
hole in the state budget. And frankly Baker’s
decision to accept the fee hikes is an important
acknowledgement that businesses share some of
the responsibility for fixing this mess —
particularly those that benefit from a system
that has shifted more of the cost of covering
low-income workers to the taxpayers.
We sure hope Baker has secured an ironclad
guarantee from House Speaker Robert DeLeo and
Senate President Stan Rosenberg that they’ll
take up the reform package in a serious and
meaningful way — soon. Not to do so would be a
dereliction of duty for the Democratic leaders
who acknowledge the need to rein in costs — but
have refused to guide their members in the
direction of real reform.
And please, spare us the excuses that lawmakers
simply didn’t have time to consider the reforms
Baker had proposed as part of the state budget.
It doesn’t require a year-long study to
understand that moving a large group of
individuals — able-bodied adults, many working
full-time — from a fully-subsidized public
health plan into a commercial plan that provides
them with the same coverage (with slightly
higher out-of-pocket costs) would deliver big
savings while protecting access to care.
These changes should have happened long ago. But
now that lawmakers have fattened up the budget
by imposing new fees, they need to eat their
spinach.
State House News Service
Wednesday, August 2, 2017
With lawmakers on holiday, Baker bids to revive
sales tax suspension
By Katie Lannan
Gov. Charlie Baker is mounting a late bid to
return the popular sales tax holiday this year,
formally asking lawmakers who have already begun
their summer break to approve a proposal to hold
the tax-free weekend in just 17 days.
The governor's plan received an underwhelming
reaction from legislative leaders, with one
calling the idea a "colossal mistake."
Baker announced Wednesday that he would file
legislation declaring a sales tax holiday for
Saturday, Aug. 19 and Sunday, Aug. 20.
"The sales tax holiday gives consumers a much
needed break and supports business across the
Commonwealth for our hardworking retailers,"
Baker said in a statement. "We look forward to
working with the Legislature to make this
important weekend possible, so the Commonwealth
can shop local and make purchases tax free."
"We've heard from a lot of folks who said to us
that this is really important to them," Baker
added in a WBZ NewsRadio interview. "It's
important to downtowns, it's important to main
streets, and we just think it's the right thing
to do."
Baker announced he's filing the bill came on the
same day that he plans to sign an employer-based
health care assessment, a proposal businesses
have likened to a new tax. The governor ran in
2014 on a campaign built in part on opposition
to new fees and higher taxes.
The tax holiday's fate is uncertain since the
House and Senate are on summer recess and if a
holiday bill -- similar bills are pending before
two committees -- were to make it to the floor,
a single lawmaker could block its progress with
a mere objection. The House and Senate plan to
meet at least twice a week through August before
resuming formal sessions sometime after Labor
Day.
The state collected $25.625 billion in taxes
during fiscal 2017, which ended June 30, an
increase of $355 million or 1.4 percent over
fiscal 2016.
Citing the state's tight revenue picture,
legislative leaders did not express outright
opposition but appeared wary of Baker's tax
holiday proposal.
"It makes little sense for the Governor to file
this legislation now when the there are several
similar bills already in committee. Each year
our hope is to hold a sales tax holiday to give
our hardworking citizens and local businesses a
boost, which is why the House votes consistently
in favor of the sales tax holiday whenever
revenues allow," House Speaker Robert DeLeo
said. "This year, the Commonwealth experienced
unpredicted revenue shortfalls and accordingly,
the Legislature had to make significant budget
cuts to programs and services."
Senate President Stan Rosenberg said he would
await the recommendations of the committee that
would be charged with reviewing the bill. "The
Commonwealth's fiscal situation has not really
changed," he said.
The break from the state's 6.25 percent sales
tax has been signed into law in 11 of the past
13 years cheered by retailers and lawmakers who
say it boosts sales during an otherwise slow
period. Lawmakers eschewed the idea last year,
pointing to sluggish revenue growth, and some
view the holiday as a gimmick.
Revenue growth has been slow again this year, a
factor Baker said he took into consideration
when deciding to file the bill. He described the
holiday as "certainly one of the more popular
things we do here in the commonwealth."
Baker is asking lawmakers to agree to the brief
tax holiday after he revised tax revenue
projections downward for this year by $749
million and vetoed $320 million in spending from
the fiscal 2018 budget they passed last month.
Massachusetts finished the last fiscal year,
which ended in June, with tax collections that
ran $431 million below budget expectations.
The last sales tax holiday, in 2015, passed the
House 136-20 and the Senate 27-11. The
Department of Revenue estimated $25.5 million in
foregone revenue from the holiday that year.
Bills establishing sales tax holidays are
pending before the Revenue Committee and the
Economic Development and Emerging Technologies
Committee.
Rep. Jay Kaufman, the House chair of the Revenue
Committee, said the sales tax holiday bills
"will continue to sit" before the panel without
a vote planned on whether to endorse them. He
said he hopes the Legislature does not act on
Baker's bill.
"Sales tax holidays under any circumstances are
a mistake, and under these circumstances are a
colossal mistake," the Lexington Democrat told
the News Service. He described sales tax
holidays as "sometimes politically attractive"
but "not good public policy."
"Built into this proposal is the lie that we can
provide public services without paying for
them," Kaufman said.
Baker's bill comes as retail industry officials
are planning to file a series of ballot
initiatives lowering the sales tax, including
two that would decrease the sales tax and
establish an annual sales tax holiday in August.
Asked on the radio about the possibility of a
permanent sales tax holiday, Baker said, "Having
predictability on this is certainly not a bad
idea."
Bill Rennie of the Massachusetts Association of
Retailers told the Economic Development
Committee in July that having a sales tax
holiday is important to his group's members amid
a changing retail landscape.
"Our members compete every day with New
Hampshire and with online sellers, sellers like
Ebay and Overstock who do not charge sales tax,"
he said at a July 18 hearing. "We've been
fighting for decades now to try to get a level
playing field with regards to sales tax
collection. Until we reach that point, somewhere
in the future hopefully, the sales tax holiday
at least has provided a two-day equalizer."
State House News Service
Tuesday, August 8, 2017
Chairman "certain" there won't be a sales tax
holiday
By Andy Metzger
Consumers will get no break on the sales tax
from the state of Massachusetts this summer, as
lawmakers opt for the second year in a row to
forego a tax holiday weekend.
Revenue Committee Chairman Jay Kaufman confirmed
that August will pass without what has been in
recent years a semiannual tradition of
suspending the sales tax for one weekend.
"I would say that's certain. I don't see how
there could be one since there's no possibility
of us having a hearing and a session to vote for
one, so there will be no sales tax holiday this
year," Kaufman, a Lexington Democrat, told the
News Service Monday.
House Speaker Robert DeLeo and Senate President
Stan Rosenberg had strongly indicated the sales
tax holiday was not on their agenda after Gov.
Charlie Baker tried to revive the issue last
week by filing his own sales tax holiday
legislation.
After lawmakers adjourned their final formal
sessions of the summer in late July without
taking up a sales tax holiday bill, Baker last
Wednesday filed a bill to suspend the 6.25
percent tax on purchases under $2,500 the
weekend of Aug. 19-20.
"We've heard from a lot of folks who said to us
that this is really important to them," Baker
said in a WBZ NewsRadio interview last week.
"It's important to downtowns, it's important to
main streets, and we just think it's the right
thing to do."
Lawmakers left Beacon Hill with sales tax
holiday bills idling in committees and Baker, by
filing his bill after lawmaker recessed, was
apparently counting on legislators being able to
pass his controversial bill in informal
sessions, which is unlikely since some lawmakers
strongly oppose the idea.
Baker filed his bill on the same day that he
signed new temporary assessments on employers
that critics have labeled a new tax. The
assessments are part of a new state budget that
will also not deliver a Jan. 1 income tax
reduction that lawmakers just a few months ago
believed was inevitable.
DeLeo said it made "little sense" for the
governor to file a new sales tax holiday bill
when other similar bills were already pending
before committee, and Rosenberg said he would
wait for the recommendations from the committee.
The House and Senate referred the governor's
bill (H 3871) to the Revenue Committee, which
may not hold a public hearing on it until
September.
"Sales tax holidays under any circumstances are
a mistake, and under these circumstances are a
colossal mistake," Kaufman said last week.
On Monday Kaufman said there are no immediate
plans to hold a hearing on the bill.
Kaufman said, "Since it's a proposal for a sales
tax holiday, what, 10 days from now, it was sort
of not timely filed."
Baker is on a staycation this week in
Massachusetts.
Rep. Shaunna O'Connell, a Taunton Republican,
suggested there is a double-standard.
Lawmakers this session quickly passed a hefty
pay package for themselves, even though state
finances were questionable at the beginning of
the year, too.
"They can afford to give these huge pay raises,
but they can't afford to give the taxpayers just
a small little break once a year that they
really look forward to and that really
stimulates the economy, gets people out
shopping," O'Connell told Boston Herald Radio.
She said, "I hope people aren't going to forget
about this when it comes election time."
Chris Dempsey, director of Transportation for
Massachusetts, debated the sales tax holiday on
Greater Boston Monday with Jon Hurst, president
of the Retailers Association of Massachusetts.
Rather than providing a major stimulus, Dempsey
said the holiday only "shifts purchases around"
and doesn't create "a lot of new spending."
Hurst said the holiday is a "life preserver" for
business that have a "six and a quarter percent
anchor around their neck."
Retailers this month filed potential 2018 ballot
questions with the goal of both reducing the
sales tax and making the sales tax holidy
weekend permanent.
—Michael P.
Norton contributed reporting
State House News Service
Thursday, August 3, 2017
Tax collections on track after one small month
By Colin A. Young
After a bumpy fiscal year 2017, fiscal 2018 got
off to a smooth start for the Department of
Revenue, which reported collecting $1.798
billion in taxes in July, just slightly more
than expected.
July revenues were $6 million, or 0.3 percent,
above the monthly benchmark and were "in line
with expectations and the trends and patterns of
the past several months that were used to
develop the FY18 benchmark," DOR said.
Before breaking for recess, legislators said
they planned to monitor tax collections before
deciding in the fall on whether to override any
of Gov. Charlie Baker's $320 million in budget
vetoes.
"July revenues came in as expected," Revenue
Commissioner Michael Heffernan said in a
statement. "We see continued growth in
withholding, in regular sales tax, and in meals
tax. The more volatile categories, including
income returns and bills, refunds, and
corporate/ business taxes, showed mixed
results."
The first month of the new fiscal year, July is
one of the least significant months for state
revenue, DOR said.
Income tax collections in July were $1.004
billion, $56 million more than July 2016 but
still $10 million or 0.9 percent below the July
2017 monthly benchmark. Withholding was $993
million for the month, and sales and use tax
collections were $541 million, both meeting the
monthly benchmark.
Corporate and business tax collections were $78
million, $6 million or 8 percent above the
monthly benchmark, and other taxes -- including
motor fuels, cigarette, estate, and other
categories -- were $175 million, 6.1 percent
above the monthly benchmark.
The fiscal 2018 budget is predicated on state
revenue growth of 2.9 percent over fiscal 2017,
which featured growth of just 1.4 percent over
the previous year. To meet the fiscal 2018
revenue projection, DOR must collect an
additional $24.806 billion by the end of June.
State House News Service
Wednesday, August 2, 2017
Quest for ballot spot begins with filing of
initiative petitions
By Stephanie Murray
With an eye on the 2018 and 2020 ballots, 17
groups filed more than two dozen initiative
petitions for proposed laws and constitutional
amendments in time to be considered for
certification by Attorney General Maura Healey.
Wednesday's 5 p.m. petition deadline is the
first step in the process to get a question on
the statewide ballot. Petitioners filed 26
proposed laws that could show up on the 2018
ballot and two constitutional amendments that
would appear on the 2020 ballot if successful,
the attorney general's office said.
Lawmakers largely departed the State House late
last week for summer recess, and August marks a
time for citizens to try their hands at crafting
policy.
Medford High School junior Lauren Brown, 16,
filed her petition Wednesday to increase the
minimum wage to $15 an hour after studying the
issue in class.
"I was in this elective at my school called
'Facing History' and each person chose a social
issue to research and take action on so I did
minimum wage," Brown said. "People can't live on
what they're making, yet they're working harder,
in my opinion than some people who make really
high salaries. Some of them are working multiple
jobs or are single parents and they deserve more
than they're making."
Brown's mother Patricia, who came with her to
submit the petition to the attorney general's
office, said the process pushed her daughter out
of her comfort zone.
"She learned a lot from it. Just to see how the
process goes," Patricia Brown said. "We did it
one way and came in June - didn't have all the
information we thought we needed so we had to go
back, and she stepped out of her zone to ask
more people than she did originally. That was
good to see."
Petitioners had to submit 10 signatures from
registered voters to the attorney general's
office by the Wednesday deadline. The attorney
general will now decide whether each petition
meets certain constitutional requirements. If
the attorney general certifies a petition, it
may be filed with the Secretary of State. Those
decisions are expected Sept. 6, according to the
attorney general's office.
Later in the fall, petitioners will be tasked
with gathering the necessary 64,750 signatures
from registered voters by Dec. 6. At that point,
the proposal is sent to the Legislature. If
lawmakers don't enact the proposal by the first
Wednesday in May, petitioners are given the
go-ahead to collect 10,792 more signatures by
early June, the last step to get the question on
the ballot.
It is not unusual for groups to file several
versions of the same initiative petition and
decide later which they will gather signatures
for.
Different from proposed laws, amendments to the
state constitution must pass two constitutional
conventions with approval from 25 percent of the
Legislature each time before they can land on
the ballot.
Brown plans to join Raise Up Massachusetts, a
coalition that plans to gather signatures in the
fall for its own petition to raise the minimum
wage to $15 an hour in Massachusetts by 2022, as
well as a proposal for an income surtax on high
earners and a measure for guaranteed paid family
and medical leave.
Other petitions filed with the attorney
general's Boston office shortly before the 5
p.m. deadline included several proposals
regarding money in politics filed by Nick Bokron
of Pass Mass Amendment, a proposal to lower
out-of-pocket costs for holistic health care
filed by Carl Tripp and proposals focused on the
solar net metering cap and clean energy filed by
members of the Cambridge Climate Initiative.
Andover Rep. Jim Lyons filed a petition for a
constitutional amendment earlier this summer
that would place the decision to fund abortions
with public money in the hands of the
Legislature.
Associated Press
Saturday, August 5, 2017
Offsetting votes? Ballot proposals both raise,
lower taxes
By Bob Salsberg
The menu of more than two dozen proposed
questions for the 2018 Massachusetts ballot
offers something for pretty much every
ideological and political taste, including those
who want to raise taxes, cut taxes or perhaps do
both at the same time.
The tax paradox could emerge as an intriguing
aspect to next year's election.
One initiative dubbed the "millionaire tax" —
its sponsors call it the Fair Share Amendment —
would impose a surtax of 4 percent on any
portion of an individual's annual income that
exceeds $1 million. It's estimated to raise $1.9
billion in annual revenue for the state.
The Retailers Association of Massachusetts filed
several versions of a proposed ballot question
that would reduce the state's 6.25 percent sales
tax to either 5 percent or 4.5 percent. Some
versions would also require the state hold a
sales tax holiday each summer.
Since each 1 percent of the sales tax translates
to roughly $1 billion for the state, the
projected revenue loss would be $1.25 billion to
$1.75 billion, nearly enough to cancel out
higher taxes on the wealthy.
So could voters giveth and taketh away when it
comes to taxes? Some very early polling suggests
support for both measures, and not surprisingly.
Consumers would welcome saving some cash at the
mall and many struggling to make ends meet would
feel little guilt over asking the rich to pay a
bit more in taxes.
There is no certainty that any of the ballot
initiatives will actually reach voters. The
petitions could be withdrawn, ruled
unconstitutional or fail to collect the
requisite 64,750 signatures among other
potential roadblocks. Historically, only a
handful of questions make it to the finish line.
The millionaire tax amendment has already
qualified for the ballot on the strength of
successive votes by two Legislatures, though
some of its provisions could face legal
challenges.
Still, should both make the ballot and pass, the
ramifications would go well beyond a simple tax
trade-off.
By law, fixed portions of sales tax revenue are
dedicated to the MBTA and the Massachusetts
School Building Authority. They would continue
to receive the same share even if the tax rate
was reduced, leaving an even smaller portion of
revenue for the state's general fund.
Under the millionaire tax proposal, all
newly-generated revenue would be dedicated for
education and transportation purposes. However
if the state loses nearly as much overall
revenue from sales, the implications for other
budget priorities such as health care could be
serious, analysts worry.
Eileen McAnneny, president of the Massachusetts
Taxpayers Foundation, said the dilemma points to
the hazards of letting voters decide complex tax
issues.
"More often than not a ballot question is
written by its proponents," she said. "It's very
one-sided and it's not a good way to make
policy."
Raise up Massachusetts, a coalition of labor and
community groups backing the millionaire tax,
was focusing on its own campaign and for the
moment not worrying about a potential sales tax
question, spokesman Steve Crawford said
recently. He added that he had faith in voters'
ability to sort out conflicting arguments.
Jon Hurst, president of the retailers
association, said he was sensitive to the impact
a tax cut could have on the state's already
tenuous fiscal situation. He noted his group
took no formal position on an unsuccessful 2010
ballot question that would have reduced the tax
to 3 percent.
But in a blog posting this week, Hurst declared
retailers were running out of patience.
"Over the past several years, our members have
become increasingly frustrated with the lack of
urgency in addressing the very real challenges
they face over unfair competition from online
sellers and tax-free New Hampshire stores," he
wrote.
The Boston Globe
Wednesday, August 9, 2017
Will Massachusetts break its pension promises?
By Evan Horowitz
Massachusetts has made some expensive promises
over the years. Chief among them, a commitment
to provide retirement pensions for teachers,
State Police, and other public workers.
As of now, we don’t have enough money to cover
all these pension promises. Every dollar we owe
is backed by roughly 60 cents of assets. That’s
not terrible — some states are in far worse
shape — but it’s not sustainable either.
To ensure that we fill our pension coffers by
2040, the state has embraced an actuarially
sound plan, built on a mix of investment
strategies, increased contributions, and regular
adjustments.
Which is good, except for one thing. It’s not
clear how long we’ll be able to follow that
plan.
Here’s one problem: There’s no free lunch when
it comes to pensions. For the state to meet its
long-term obligations, lawmakers have to set
aside more money. Every year, in every budget,
until we’ve made up the funding gap.
Officially at least, they’ve committed to doing
so. But their whole approach is back-loaded, so
that the really big contributions are put off
for another day. This fiscal year, the state set
aside $2.4 billion for pension contributions,
which is already 6 percent of total state
spending. In 2027, they’re expected to allocate
$5.2 billion; by 2036, it’s $11.2 billion.
Even adjusting for inflation — and the fact that
Massachusetts will probably be a lot richer in
2036 than it is today — that’s still a massive
increase. And it means that when today’s college
students become our future representatives,
pension contributions could be siphoning tax
dollars away from things like schools or health
care.
And that’s if the money we put aside continues
to earn decent investment returns. Otherwise,
even these fast-growing and budget-squeezing
state contributions won’t be enough.
The magic number holding everything together in
our current pension funding plan is 7.5 percent.
That’s the annual rate of return we’re expecting
to get on our savings.
It’s not an unreasonable assumption; in fact,
state pension investments have done better than
that on average since the mid-1980s. But there’s
no guarantee we can hit 7.5 percent on a
consistent basis. And if investments fall short,
we’d need even bigger contributions from
taxpayers.
Note, too, that all this is just for state-run
pensions. Lots of cities and towns run their own
plans for municipal workers, some of them in
worse shape than others. Also, there is the MBTA,
which has roughly $1 billion in uncovered
pension obligations and doesn’t participate in
the state system.
But despite all these issues, there is one big
reason not to get too worked up about the exact
size of our unfunded pension liabilities. A lot
of this is really just guesswork.
Which is not a critique of the folks who oversee
the Commonwealth’s pension systems. No doubt
they do their scrupulous best using the most
reliable information available.
But there’s much about the 2030s (and beyond)
that we just can’t know. Like, how long people
will live, how the stock market will perform, or
how deep the next recession will be. Sure, we
can look to the past for guidance, but that only
gets you so far.
What if we’re at the cusp of a breakthrough
cancer treatment. That would be great for
humanity but terrible for pension plans, because
it could keep retirees alive a lot longer.
Or consider something more humdrum: inflation.
Right now, there’s a battle in economics over
whether the Federal Reserve should maintain its
2 percent inflation target or aim for something
closer to 4 percent.
If the 4 percenters win the day, it would
dramatically reduce the cost of state pension
obligations — albeit by leaving recipients with
less-valuable checks (since state pensions
aren’t fully adjusted for inflation.)
Of course, just because forecasting is hard
doesn’t mean we should ignore our state’s
pension funding shortfall. Under nearly any
scenario, additional money will be needed if
Massachusetts is to fulfill its promises.
But given the uncertainty, perhaps it makes
sense to focus less on the accounting details
and more on the institutions and processes
designed to keep us on track — like PERAC, which
monitors the health of public pension systems
around the state, and the state law requiring
our government to reassess needs every three
years.
For now, these sorts of arrangements seem to be
working. Finance experts are developing detailed
assessments, and lawmakers are heeding their
conclusions. But the real test will come in the
years ahead, when required contributions rise
and cloudier economic times make it tempting to
divert that money for more urgent needs.
The Boston Herald
Wednesday, August 9, 2017
IG may get another salary bump thanks to
Legislature’s pay hike
By Matt Stout
The state’s top watchdog is asking the council
that decides his salary to again consider hiking
his earnings, setting up the potential for a
major raise thanks to the controversial pay hike
legislation lawmakers rammed through earlier
this year.
Inspector General Glenn Cunha has requested the
Inspector General Council take up its annual
review of his $158,727 salary at its next
meeting — scheduled for tomorrow — when he’s
expected to make a presentation to the
eight-member panel.
Under statute, the council is required each year
to set Cunha’s salary — a decision, his office
said, that has historically been made at the
start of the fiscal year. But the council didn’t
do so last year, and instead, after months of
delays, gave him a retroactive 3 percent raise
at its last meeting three months ago in May.
It’s unclear how the council will act tomorrow,
but Cunha could be poised for a major raise,
plus more to come, as outlined by the bill
lawmakers passed in February hiking their own
salaries and stipends.
Here’s why: The bill also raised the pay of the
state’s judges in installments, including that
of the Supreme Judicial Court’s chief justice.
Justice Ralph Gants currently earns $193,739;
his salary will rise to $199,989 in January, and
then to $206,239 next July.
Under state statute, the IG’s salary — while
voted on by the council — is allowed to go as
high as 90 percent of the chief justice’s. That
means Cunha’s salary could legally be raised as
high as $174,365 right now. By next July, the
cap on his salary will hit $185,615.
Council members are not required to pay to the
cap, but the judicial pay hikes gives them a
wide berth to act.
A spokesman for state auditor Suzanne M. Bump
said yesterday it was Cunha who requested the
council add a review of his salary to tomorrow’s
agenda, and referred all other questions to him.
Cunha’s office said that his request was made in
“keeping with the council’s statutory obligation
and its usual procedures.” He did not directly
address if he’d propose a specific raise.
“That is a decision for the Council,” he said in
a statement, “and out of respect for them, it
should first be addressed with the Council at
the open meeting on Thursday.” |
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