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Post Office Box 1147 ●
Marblehead, Massachusetts 01945 ●
(781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
45 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Saturday, March 30, 2019
Tax hike
schemes bloom on Beacon Hill
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A left-of-center advocacy group is lamenting
$4.15 billion in what it calls “lost revenue” from
incremental decreases in the Massachusetts taxes since the
late 1990s.
A report issued by the Massachusetts Budget
and Policy Center highlights decreases in personal income
tax (from 5.95 percent to 5.05 percent), long-term capital
gains tax (from 6 percent to 5.05 percent), and dividend and
interest income from stocks and savings accounts (12 percent
to 5.05 percent); and an increase in the personal exemption
for state income tax (from $2,200 to $4,400 for single
filers and from $4,400 to $8,800 for married couples).
“These cuts have played a major role in
reducing the revenue available to fund the state budget and,
as a consequence, have severely limited the capacity to fund
essential services in the Commonwealth,” the report says.
The New Boston Post
Thursday, March 28, 2019
Tax Cuts in Massachusetts Have Led To $4 Billion-Plus in
‘Lost Revenue,’
Liberal Group Says
Senate Democrats are close to rolling out
detailed plans for a working group to be led Sen. Adam Hinds
of Pittsfield that will look at the state's tax code. Senate
President Karen Spilka has been talking about an examination
of the tax code since she was sworn in as president in
January, and the Boston Globe reported on Tuesday that the
effort could take as long as two years.
Spilka's office, however, said that the
working group "does not preclude making decisions about the
various revenue proposals that may come up this session,"
and DeLeo said he did not think that the Senate's study
would impact decisions on revenue his year....
[House Speaker Robert] DeLeo has also left
the door open to new revenue streams this year, and invited
the business community to come to him with tax ideas that it
could support to invest in public transit improvement,
traffic mitigation and education.
The speaker, however, said Wednesday that
it's his opinion that the Joint Committee on Revenue,
co-chaired in the House by Rep. Mark Cusack, should be the
group tasked with vetting the tax code and revenue
proposals.
"I congratulate the Senate president for
looking at this issue. I think it's an important issue to
look at. I think our means are probably just a little bit
different in terms of how we go about it," DeLeo said.
State House News Service
Wednesday, March 27, 2019
House, Senate differ on approach to tax policy
As calls multiply for money to address the
state’s transportation and education needs, Senate President
Karen E. Spilka is taking some initial steps to examine the
tax system — a process that could ultimately find new ways
to bring in more cash.
Spilka is launching a group of policy
makers, academics, and business specialists from across the
political spectrum who will be charged with taking what she
calls “a good long hard look at our tax code.” Spilka and
Senator Adam Hinds, chairman of the revenue committee, said
they want the group to generate ideas that not only would
better provide for the state’s policy priorities but also
ensure wealthier citizens pay their fair share.
“We must create a more progressive tax
framework that reflects the remarkable changes we have seen
in the ways we live, work, and shop, and which embraces our
ability to innovate well into the 21st century,” Spilka
said....
While Spilka was coy on whether the effort
is geared toward raising taxes, that is certainly the topic
on many policy makers’ and activists’ minds, with the state
grappling with expensive problems ranging from school
spending inequality to climate change to a dilapidated
public transportation system. And by including key
constituencies at the table the working group format could
help create consensus on a topic the Legislature has been
reluctant to tackle in recent years....
Jim Stergios, executive director of the
libertarian-leaning Pioneer Institute, noted that over the
past five years state revenue growth has often fallen short
of expectations; it is also not as robust as it was when the
Legislature first introduced the current school funding
formula, he said.
“It would be foolish to bank on the same
kind of revenue generation from economic growth that we had
in the past simply because it has not materialized in the
past five years,” he said, “and to think that somehow
magically we’re going to sprout all these shoots of revenues
. . . I think is probably reckless.”
The Boston Globe
Wednesday, March 27, 2019
Lawmakers will examine state’s taxes — including new revenue
Spilka has been talking about a tax code
working group since early January, but it appears now it's
close to coming to fruition.
Officials told the Globe that the effort,
which will be led by Sen. Adam Hinds, could take up to two
years to complete, but Spilka's office followed up to make
clear that the working group's existence doesn't foreclosure
the possibility of Senate leaders pursuing new revenue
proposals this year.
Reading between the lines, it would seem
that Spilka is saying that the Senate may be ready to
embrace some of the governor's tax proposals, like an excise
tax on vaping products, or even come out with some of its
own. But anyone hoping to see Spilka to roll out some Deval
Patrick-esque reconfiguring of income or corporate tax rates
may have to wait.
The more imminent tax debate, in fact, is
likely to start, or end, with the House next month when
Michlewitz releases his first budget plan as Ways and Means
chair. "We're still looking at it," the North End Democrat
said about taxes this week, leaving a meeting with
legislative leadership and the governor on Monday.
DeLeo has in recent weeks challenged
business leaders like Greater Boston Chamber of Commerce
President Jim Rooney to come to him with revenue ideas that
employers could support, and he has no plan to sign up any
of his members to take part in Sen. Hinds' exploration of
the tax code.
State House News Service
Friday, March 29, 2019
Weekly Roundup - Low-Hanging Fruit
BUDGET HEARINGS WRAP UP - The House Ways and
Means Committee is only about two weeks from releasing its
fiscal 2020 budget and lawmakers still have yet to formally
hear from anyone about the spending plan other than the
Baker administration and municipal government officials.
Everyone else will finally get an opportunity, usually under
strictly enforced time limitations, on Tuesday as the Joint
Ways and Means Committee wraps up its annual budget hearings
by taking testimony from the public (Tuesday, 11 a.m.,
Gardner Auditorium) ....
JUDICIARY COMMITTEE - CONSTITUTIONAL
AMENDMENTS: Judiciary Committee will convene a hearing on
constitutional amendments, including a Rep. Mindy Domb
proposal (H 80) striking the word "he" in every instance in
the constitution and replacing it with "they," a Rep. Thomas
Golden measure (H 82) to impose seven-year renewable term
limits upon judges, a Rep. Bradley Jones bill (H 83)
prohibiting eminent domain takings, a Sen. Cynthia Creem
proposal (S 14) banning amendments that restrict "freedom
and equality," and a Rep. Paul Mark proposal (H 84)
requiring the governor to nominate a lieutenant governor,
subject to confirmation by the House and Senate, whenever
that office becomes vacant. Full Agenda (Tuesday, 1 p.m.,
Room A-1)
State House News Service
Friday, March 29, 2019
Advances - Week of March 31, 2019
Sounding an alarm bell over potential health
impacts, the American Academy of Pediatrics and the American
Heart Association issued a series of recommendations,
including raising prices of sugary drinks through an excise
tax, with revenues dedicated "in part toward reducing health
and socioeconomic disparities."
The pediatricians group said the policy
statement marks the first time it has recommended taxing
sugary drinks....
On Beacon Hill, lawmakers have offered a
pair of proposals that take aim at kids' consumption of
sugary beverages and align with the Academy of
Pediatrics/Heart Association recommendation.
Sen. Jason Lewis, Rep. Kay Khan and Rep. Jon
Santiago have filed bills that would impose an excise tax on
sugary drinks, with the tax increasing along with the sugar
content.
Under the bills (S 1709, H 2529), beverages
with 7.5 grams of sugar or less per 12 fluid ounces would
not be taxed, and those with 30 grams of sugar or more per
12 fluid ounces would be taxed at a rate of 2 cents per
ounce. Drinks that fall in between those two sugar levels
would be taxed 1 cent per ounce.
The tax is "based around the same idea of
how we tax tobacco," Perron said, and would generate
somewhere between $280 million and $320 million a year in
revenue.
State House News Service
Thursday, March 28, 2019
Tax, marketing restrictions eyed to reduce soda consumption
Philadelphia fought all the way to the
Pennsylvania Supreme Court last summer to keep its soda tax.
But primary elections are in May, and Democrats fighting to
keep their City Council seats are having second thoughts.
Other cities can learn from this spectacle of regret.
Councilwoman Maria Quiñones Sánchez this
month proposed to either slash the 1.5-cent-per-ounce tax or
phase it out. And this month the City Council voted to
conduct a study to show the economic consequences of the
tax. Councilwoman Cherelle Parker, who faces two
challengers, complained that soda-tax proponents like
herself are now under "an insurmountable amount of heat” and
described the study as “political weaponry.”
Any wounds will be self-inflicted, but Ms.
Parker is right to fear the findings....
The tax burden has disproportionately fallen
on poor Philadelphians. Proponents claim the levy isn’t
regressive because it taxes distribution, not sales, but
customers ultimately swallow the added costs with every
gulp.
Then there’s the toll on retail employees.
Many Philadelphians have avoided the soda tax by buying
groceries outside the city limit. A ShopRite supermarket
near the West Philly borderline was forced to close on March
14 after sales plunged 23% since the tax took effect on Jan.
1, 2017. Brown’s Super Stores CEO Jeff Brown, who owned
seven stores in Philadelphia, says the soda tax has forced
him to eliminate more than 300 jobs through attrition.
Before the levy his ShopRites were known for hiring workers
with criminal records, but now those vulnerable job seekers
have fewer opportunities.
The soda tax has also failed to create
incentives for consumers to choose healthier drinks.
Researchers from Stanford, Northwestern and the University
of Minnesota studied Philadelphia’s soda tax and concluded
earlier this year that it “does not lead to a shift in
consumption towards healthier products” and had delivered
"no significant reduction in calorie and sugar intake.” In
2017 the Tax Foundation discovered that in some cases
Philadelphia's tax had made beer cheaper than soda....
Some 59% of Philadelphians now oppose the
tax, according to a poll of likely Democratic primary voters
last month by the American Beverage Association. No wonder
Democratic City Councillors are nervous.
The Wall Street Journal
Thursday, March 28, 2019
OPINION | REVIEW & OUTLOOK
Soda Tax Fizz Out
Philly politicians up for re-election have some regrets
about the levy.
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Chip Ford's CLT
Commentary
"A
report issued by the Massachusetts Budget and
Policy Center highlights decreases in personal
income tax (from 5.95 percent to 5.05 percent) .
. . 'These cuts have played a major role in
reducing the revenue available to fund the state
budget and, as a consequence, have severely
limited the capacity to fund essential services
in the Commonwealth,' the report says."
In the CLT Update of February 28 ("A
billion here, a billion there")
I revisited the history and background of the
loudest voice of The Takers coalition. If
ever there was an example of More Is Never Enough (MINE)
this is it. Founded in 1987 as the Tax Equity
Alliance for Massachusetts (TEAM) it was the taxpayers
and CLT's greatest nemesis. Headed for over a
decade by its executive director, Jim Braude, he and
Barbara Anderson traveled around the state for years as
vehement political opponents in spirited frequent
debates before large audiences of citizens, and appeared
on
countless TV face-offs. The Gimme Lobby's lead
advocate group for higher and more taxes morphed into
the Massachusetts Budget and Policy Center in 2002
– after we'd doggedly and
successfully rebranded TEAM "Tax Everything And More."
Its name has changed but its policies
haven't wavered an iota.
In
mentioning Barbara Anderson I'm reminded that
Monday, April 8th will mark the third anniversary of her
passing, at 2:40 PM. If you think of it, stop
for a moment and reflect on her life, her mission, and
her indefatigable spirit – on how much she gave for and
to the taxpayers of Massachusetts over the last three
and a half decades of her life.
The Salem
News
Editorial Cartoon by Christopher Smigliano
April 13, 2016
Whether responding to the insatiable
Takers' call for ever more "revenue" and spending
– meaning taking more from
productive, hard-working, already overburdened taxpayers
and giving it to others – or simply motivated by its own
relentless greed and sense of superiority, the schemes
for more and higher taxes on Bacon Hill are in full
spring bloom. We need to start building a
spreadsheet to keep up with the myriad of schemes – the
ones being floated, the ones announced, and those yet to
come.
The new Senate
president, Karen Spilka, is forming a "working group"
tasked with rewriting the entire state tax code.
House Speaker-for-Life Bob DeLeo doesn't think that's
necessary – he assured them that his Revenue Committee
(until a few years ago called the Taxation
Committee) is perfectly capable of hiking taxes on its
own.
One of the crazy
ideas that was promoted on Beacon Hill this week is a
tax on "sugary drinks" – in other places known as a
"soda tax." They need to stick it to everyone "for
the children" don'cha know. As worn-out a cliché
as it has become – more like a bad joke – does doing
radical, unpopular things "for the children" still work,
anywhere, for anything?
The
we-know-what's-best nannies of the Philadelphia city
council imposed this revenue scam on its residents in
2017. After recently assessing the repercussions
and failures of its alleged goals – and with their
reelection chances dimming – the Philadelphia city
council is now looking to repeal its disaster, quickly.
Never to learn
from the mistakes of others, again the Massachusetts
Legislature is looking to bolster its New Hampshire
Economic Stimulus Program.
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Chip Ford
Executive Director |
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The New Boston Post
Thursday, March 28, 2019
Tax Cuts in Massachusetts Have Led To $4
Billion-Plus in ‘Lost Revenue,’ Liberal Group
Says
A left-of-center advocacy group is lamenting
$4.15 billion in what it calls “lost revenue”
from incremental decreases in the Massachusetts
taxes since the late 1990s.
A report issued by the Massachusetts Budget and
Policy Center highlights decreases in personal
income tax (from 5.95 percent to 5.05 percent),
long-term capital gains tax (from 6 percent to
5.05 percent), and dividend and interest income
from stocks and savings accounts (12 percent to
5.05 percent); and an increase in the personal
exemption for state income tax (from $2,200 to
$4,400 for single filers and from $4,400 to
$8,800 for married couples).
“These cuts have played a major role in reducing
the revenue available to fund the state budget
and, as a consequence, have severely limited the
capacity to fund essential services in the
Commonwealth,” the report says.
The essential services the report highlights are
spending for public schools and transportation,
which are the same services that were targeted
in the failed attempt last year to bring to the
voters a proposed 4 percent surtax on incomes of
$1 million or more.
The report finds that the top 20 percent of
earners in Massachusetts have benefited from 67
percent of the tax decreases since 1998, which
the author finds unfair.
“Reviewing and reversing these rate cuts is just
one example of the many opportunities to raise
new revenue in ways that also can help turn our
upside-down tax system right-side up,” said
Marie-Frances Rivera, president of the
Massachusetts Budget and Policy Center, in a
written statement.
Supporters of tax decreases argue that they
increase freedom and play a major role in recent
growth and prosperity in Massachusetts.
State House News
Service
Wednesday, March 27, 2019
House, Senate differ on approach to tax policy
By Matt Murphy
With the Senate slowly gearing up for a
long-term exploration of the state tax system,
House Speaker Robert DeLeo on Wednesday said the
House was unlikely to participate in the
exercise, and Gov. Charlie Baker said he remains
opposed to "broad-based" tax increases.
Senate Democrats are close to rolling out
detailed plans for a working group to be led
Sen. Adam Hinds of Pittsfield that will look at
the state's tax code. Senate President Karen
Spilka has been talking about an examination of
the tax code since she was sworn in as president
in January, and the Boston Globe reported on
Tuesday that the effort could take as long as
two years.
Spilka's office, however, said that the working
group "does not preclude making decisions about
the various revenue proposals that may come up
this session," and DeLeo said he did not think
that the Senate's study would impact decisions
on revenue his year.
"I think the Senate president said she thought
this process would take awhile, which says to me
she and her team are going to do what I would
describe as a thorough review of this, but we do
not come at this from the point of view that
Massachusetts needs to raise taxes," Baker told
reporters on Wednesday.
The Republican governor has resisted turning to
revenue generators like the sales or incomes
taxes -- both broad-based taxes -- to generate
new money for priority programs, but has
presented a budget and legislation this year
that would raise money through new or increased
taxes on real estates transfers, opioid sales
and vaping products to pay for climate change
adaptation and substance abuse prevention.
He said he didn't know what Spilka's working
group might mean for tax proposals this session.
"I'm going to give the Senate president the
benefit of the doubt and assume that her
objective here is to take a look at the tax code
based on the fact that we're now living in a
21st century economy, but we've said before that
we think we should not be raising broad-based
taxes," Baker said.
DeLeo has also left the door open to new revenue
streams this year, and invited the business
community to come to him with tax ideas that it
could support to invest in public transit
improvement, traffic mitigation and education.
The speaker, however, said Wednesday that it's
his opinion that the Joint Committee on Revenue,
co-chaired in the House by Rep. Mark Cusack,
should be the group tasked with vetting the tax
code and revenue proposals.
"I congratulate the Senate president for looking
at this issue. I think it's an important issue
to look at. I think our means are probably just
a little bit different in terms of how we go
about it," DeLeo said.
The speaker also said that Spilka has told him
personally that her objective with the tax
working group is not to lay the groundwork for a
major tax hike in two years, but to look at ways
to "modernize" the tax code and make it "more
equitable."
"There's nothing to be read into this in terms
of what the future may hold," he said.
Sen. Adam Hinds, the co-chair of the Revenue
Committee, will lead the working group.
He could not be reached for comment on
Wednesday, but he told the Globe that membership
will likely include representatives from
Associated Industries of Massachusetts, the
Massachusetts Business Roundtable, chambers of
commerce, think tanks like the Massachusetts
Budget and Policy Center and Raise Up
Massachusetts, which was behind last year's
"millionaires tax" proposal.
Sen. Jamie Eldridge, the leader of the Senate
Progressives Caucus, said he was "encouraged" to
see Spilka following through with the tax reform
working group.
"I'm certainly hearing more and more calls from
not just my colleagues, but municipal officials
and business that we need to raise significant
revenue to fix the transportation system, to
figure out how we're going to fund the
foundation budget commission recommendations and
things like climate change," Eldridge said.
Eldridge, however, said he did think it was
critical for the Legislature to agree to some
new revenue this year, and told Senate Ways and
Means Chairman Michael Rodrigues in a recent
budget meeting that he would be advocating and
voting for that.
"I think that things have really changed in the
last couple of years and I hope that means we're
not just going to wait for the millionaires tax
to pass in four years at the ballot but the
Legislature will have the will to pass
significant revenue and my preference is
progressive revenue, taxing the wealthy and
closing corporate tax loopholes," the Acton
Democrat said.
Taxes aren't the only issue the Senate plans to
explore this session with working groups
operating outside the traditional joint
committee structure with the House, according to
several members of staff and senators.
Sen. Joseph Boncore, a Winthrop Democrat and the
co-chair of the Transportation Committee, is
working on putting together a transportation
working group that could be announced in the
next couple weeks that is expected to look at
both policy and financing options.
Sen. Julian Cyr is also pulling together a group
that will include outside stakeholders to review
the state's mental health system and gaps in
access and care that could be addressed. The
Truro Democrat is chairing the Joint Committee
on Mental Health, Substance Use and Recovery
this session.
The Boston Globe
Wednesday, March 27, 2019
Lawmakers will examine state’s taxes — including
new revenue
By Victoria McGrane
As calls multiply for money to address the
state’s transportation and education needs,
Senate President Karen E. Spilka is taking some
initial steps to examine the tax system — a
process that could ultimately find new ways to
bring in more cash.
Spilka is launching a group of policy makers,
academics, and business specialists from across
the political spectrum who will be charged with
taking what she calls “a good long hard look at
our tax code.” Spilka and Senator Adam Hinds,
chairman of the revenue committee, said they
want the group to generate ideas that not only
would better provide for the state’s policy
priorities but also ensure wealthier citizens
pay their fair share.
“We must create a more progressive tax framework
that reflects the remarkable changes we have
seen in the ways we live, work, and shop, and
which embraces our ability to innovate well into
the 21st century,” Spilka said.
The working group will be formally announced in
the coming weeks and could take as long as two
years to produce a set of recommendations.
Spilka said the idea grew out of her work on
legislation that grappled with the state’s
changing economy, including a 2016 law
regulating ride-hailing firms Uber and Lyft.
“We are in a new economy right now where new
industries are being developed all the time, and
we are behind the curve, and there’s been no
talk about being more proactive” in figuring out
how to both capture revenue generated by these
industries but also set appropriate guidelines
to improve “the economic development and the job
creation” that comes with them, Spilka said in
an interview.
Other major goals include adjusting the tax code
to address the state’s income inequality, which
ranks among the worst in the country, and to
“make sure we can meet the number of competing
needs which are all demanding our attention,
especially that of access to a quality public
education for all of our children, as well as
transportation, housing, and climate change,”
Spilka said.
Asked if the working group meant lawmakers were
looking for tax increases, Spilka said not
necessarily. She characterized it instead as a
way to modernize the state’s tax code “to better
capture the new economy.” That could “probably”
involve identifying new sources of revenue,
Spilka said, but it could also mean lessening
the tax burden elsewhere.
“I don’t have a preconceived notion as to how
this will come out, but I know we can do
better,” she said, noting that the group may
work throughout the two-year legislative session
so they can be “thorough” in their examination.
While Spilka was coy on whether the effort is
geared toward raising taxes, that is certainly
the topic on many policy makers’ and activists’
minds, with the state grappling with expensive
problems ranging from school spending inequality
to climate change to a dilapidated public
transportation system. And by including key
constituencies at the table the working group
format could help create consensus on a topic
the Legislature has been reluctant to tackle in
recent years.
Of course, the usefulness of the exercise could
dim if the House leadership does not sign on to
the effort — which the Senate has pitched as a
joint undertaking. Spilka said that she has
raised it with House Speaker Robert DeLeo and
that he is thinking about it. “We will see, but
we will go forward nonetheless,” she said.
A spokeswoman for DeLeo referred questions to
Representative Mark Cusack of Braintree, the
House chairman of the Revenue Committee, who
indicated he wants a House-Senate legislative
panel to decide tax policy.
“We have a working group. It’s called the Joint
Committee on Revenue,” Cusack said. “That’s
where the conversation should be taking place.”
Cusack said one option could be to create a
subcommittee within the joint committee to
tackle the tax code question, as well as hold
hearings on the topic.
But Spilka and Hinds plan to move forward with
their own group. The Department of Revenue will
support its work but not participate directly,
according to Hinds, and a spokesperson for the
agency said they would “provide information upon
request.”
About a dozen participants have signed on to the
group so far, Hinds said. Members include
representatives from Associated Industries of
Massachusetts, the state’s largest employer
group, the Massachusetts Business Roundtable,
and chambers of commerce from the cities of
Worcester and Springfield; left-leaning groups
such as the Massachusetts Budget and Policy
Center, a think tank, and Raise Up
Massachusetts, a coalition of community,
religious, and labor organizations.
While the Senate working group is still getting
off the ground, local lawmakers and policy
specialists have pitched some of their own ideas
to generate revenue.
A proposed tax on earnings of more than $1
million is still on the table, even though a
ballot initiative was ruled unconstitutional by
the courts last year. State lawmakers have
introduced legislation that is identical to the
ballot question.
It would amend the state constitution to impose
a 4 percent surtax on people who earn more than
$1 million a year, generating an estimated $2
billion a year in new revenue. But the
constitutional amendment process means that, if
approved, cash wouldn’t start flowing into state
coffers until 2023 at the earliest.
The Massachusetts Budget and Policy Center has
suggested a few other ways to make higher
earners pay more, without the constitutional
headaches: Raise the state’s 5.05 percent income
tax for everyone — but also increase the
exemptions and credits that go to middle- and
low-income households, such as the automatic
personal exemption, the $1,000 exemption for
each dependent, and the state Earned Income Tax
Credit for low-income households.
Other ideas from the groupinclude higher taxes
on investment income; raising the state’s estate
tax; and revamping the corporate tax code.
There has been mounting frustration with the
lack of leadership shown by lawmakers on Beacon
Hill when it comes to finding money to address
pressing policy problems. One recent instance:
Massachusetts Bay Transportation Authority
officials criticized lawmakers for complaining
about a just-approved fare hike but failing to
do anything themselves to address the state’s
transportation demands.
Education is another area where lawmakers have
yet to address how they would pay for ambitious
plans to rewrite the state’s troubled education
formula.
Behind the scenes some lawmakers are arguing
that additional spending on education can be
phased in slowly, forgoing the need for new
taxes.
But that approach is raising doubts among some
observers.
Jim Stergios, executive director of the
libertarian-leaning Pioneer Institute, noted
that over the past five years state revenue
growth has often fallen short of expectations;
it is also not as robust as it was when the
Legislature first introduced the current school
funding formula, he said.
“It would be foolish to bank on the same kind of
revenue generation from economic growth that we
had in the past simply because it has not
materialized in the past five years,” he said,
“and to think that somehow magically we’re going
to sprout all these shoots of revenues . . . I
think is probably reckless.”
State House News
Service
Friday, March 29, 2019
Weekly Roundup - Low-Hanging Fruit
By Matt Murphy
. . . Spilka has been talking about a tax code
working group since early January, but it
appears now it's close to coming to fruition.
Officials told the Globe that the effort, which
will be led by Sen. Adam Hinds, could take up to
two years to complete, but Spilka's office
followed up to make clear that the working
group's existence doesn't foreclosure the
possibility of Senate leaders pursuing new
revenue proposals this year.
Reading between the lines, it would seem that
Spilka is saying that the Senate may be ready to
embrace some of the governor's tax proposals,
like an excise tax on vaping products, or even
come out with some of its own. But anyone hoping
to see Spilka to roll out some Deval Patrick-esque
reconfiguring of income or corporate tax rates
may have to wait.
The more imminent tax debate, in fact, is likely
to start, or end, with the House next month when
Michlewitz releases his first budget plan as
Ways and Means chair. "We're still looking at
it," the North End Democrat said about taxes
this week, leaving a meeting with legislative
leadership and the governor on Monday.
DeLeo has in recent weeks challenged business
leaders like Greater Boston Chamber of Commerce
President Jim Rooney to come to him with revenue
ideas that employers could support, and he has
no plan to sign up any of his members to take
part in Sen. Hinds' exploration of the tax code.
Instead, DeLeo suggested that's what the Joint
Committee on Revenue is there for.
He probably won't be super thrilled, then, when
the Senate also rolls out its working group on
transportation and its working group on mental
health. Those side projects are in the works,
and could be seen as a further circumvention of
the joint legislative committees already set up
to study major policy challenges.
"I congratulate the Senate president for looking
at this issue. I think it's an important issue
to look at. I think our means are probably just
a little bit different in terms of how we go
about it," DeLeo said.
As a sidenote, legislative rules don't appear to
speak to transparency requirements for working
groups.
Whatever the House chooses to do or not do with
regard to taxes in its budget will establish a
guardrail for the tax debate this session, with
the promise of the millionaires tax continuing
to float in the horizon.
The Revenue Committee has scheduled an April 11
hearing on the newest constitutional amendment
proposal to tax the wealthy to pay for education
and transportation improvements.
But all in due time.
More immediately, the House and Senate this week
also wrapped up behind the scenes negotiations
over a $136 million mid-year budget bill to pay
some bills, boost funding for some programs and
offset cuts in federal low-income home energy
assistance.
The compromise excluded a proposal from the
House to allow legislative caucuses to raise
private money and store it in a caucus trust
fund, but Michlewitz said the House is still
working with counsel to figure out if caucuses –
groups of lawmakers with similar interests – can
raise money without the trust fund legislation.
The budget bill is also on the governor's desk
now, and could be joined early next week by
bills to lift the family cap on children that
qualify for welfare benefits and to ban gay
conversion therapy.
Baker has said he's "inclined to support" the
conversion therapy ban, but he's been coy about
how he'll respond to the welfare cap repeal,
which has has wanted to see conjoined to other
welfare reforms that legislative Democrats want
no part of.
He vetoed the welfare cap last year, but after
the Senate voted 37-1 this week in favor of
repeal it's clear that Democratic leaders have
both the votes and the time to override a Baker
veto if it comes.
State House News
Service
Thursday, March 28, 2019
Tax, marketing restrictions eyed to reduce soda
consumption
By Katie Lannan
The average child consumes enough sugary drinks
each year to fill a bathtub -- more than 30
gallons -- according to two organizations that
this week recommended a suite of policy options
aimed at reducing kids' access to such beverages
and encouraging healthier alternatives.
Sounding an alarm bell over potential health
impacts, the American Academy of Pediatrics and
the American Heart Association issued a series
of recommendations, including raising prices of
sugary drinks through an excise tax, with
revenues dedicated "in part toward reducing
health and socioeconomic disparities."
The pediatricians group said the policy
statement marks the first time it has
recommended taxing sugary drinks. Other
recommendations include efforts to decrease
sugary drink marketing to children and teens and
making healthier drinks like water and milk the
default option on children's menus and vending
machines.
"We're probably on sugary drinks where we were
20 years ago on tobacco, where people are still
not 100 percent convinced that there's a
problem," Allyson Perron of the American Heart
Association told the News Service. "More and
more things are coming out -- the high rates of
young children with diabetes and heart disease
and really unhealthy weights. We have kids that
have high cholesterol when they're in elementary
school, we're seeing an increase in cases of
heart disease and stroke in the young, and part
of that is the unhealthy diet."
On Beacon Hill, lawmakers have offered a pair of
proposals that take aim at kids' consumption of
sugary beverages and align with the Academy of
Pediatrics/Heart Association recommendation.
Sen. Jason Lewis, Rep. Kay Khan and Rep. Jon
Santiago have filed bills that would impose an
excise tax on sugary drinks, with the tax
increasing along with the sugar content.
Under the bills (S 1709, H 2529), beverages with
7.5 grams of sugar or less per 12 fluid ounces
would not be taxed, and those with 30 grams of
sugar or more per 12 fluid ounces would be taxed
at a rate of 2 cents per ounce. Drinks that fall
in between those two sugar levels would be taxed
1 cent per ounce.
The tax is "based around the same idea of how we
tax tobacco," Perron said, and would generate
somewhere between $280 million and $320 million
a year in revenue.
The same three lawmakers have also filed bills
(S 1291, H 1947) that would take steps aimed at
reducing youths' access and exposure to sugary
drinks.
The legislation would ban the marketing of
sugary drinks in schools -- ads on scoreboards,
for example -- and require that advertisements
for sugary drinks carry a label stating,
"WARNING: Drinking beverages with added sugar(s)
contributes to obesity, diabetes, and tooth
decay."
It would also require that the "default
beverage" in any chain restaurant's children's
meal be water, sparkling water, flavored water,
100 percent juice with no added sweeteners, or
milk. Customers could still request an
alternative beverage.
No state has imposed a sugary drinks tax, but a
handful of cities have done so, including
Oakland, Berkeley and San Francisco, California;
Boulder, Colorado; Philadelphia, Pennsylvania;
and Seattle, Washington.
With supporters of taxing sugary drinks hoping
the pediatricians' input buoys their efforts,
advocates are also separately calling on
lawmakers to raise the cigarette tax.
Cancer patents, survivors and their families on
Thursday visited the State House as part of a
Cancer Action Network lobby day, asking
legislators to include a $1 per pack increase in
the cigarette tax in this year's budget. The
group is also asking for the cigar tax to be
increased to 80 percent of wholesale.
The state excise tax on cigars and smoking
tobacco is currently 40 percent of the wholesale
price, and cigarettes are taxed at $3.51 per
pack of 20.
In his budget, Gov. Charlie Baker recommended
extending the tobacco tax to vaping products and
e-cigarettes.
The Wall Street Journal
Thursday, March 28, 2019
OPINION
REVIEW & OUTLOOK
Soda Tax Fizz Out
Philly politicians up for re-election have some
regrets about the levy.
Philadelphia fought all the way to the
Pennsylvania Supreme Court last summer to keep
its soda tax. But primary elections are in May,
and Democrats fighting to keep their City
Council seats are having second thoughts. Other
cities can learn from this spectacle of regret.
Councilwoman Maria Quiñones Sánchez this month
proposed to either slash the 1.5-cent-per-ounce
tax or phase it out. And this month the City
Council voted to conduct a study to show the
economic consequences of the tax. Councilwoman
Cherelle Parker, who faces two challengers,
complained that soda-tax proponents like herself
are now under "an insurmountable amount of heat”
and described the study as “political weaponry.”
Any wounds will be self-inflicted, but Ms.
Parker is right to fear the findings. The soda
tax is destructive and was even intended as an
act of revenge, according to a January criminal
indictment.
Prosecutors say John “Johnny Doc” Dougherty,
business manager of International Brotherhood of
Electrical Workers Local 98, was displeased with
Teamsters political ads that criticized him. So
the labor boss allegedly pushed City Councilman
Bobby Henon, who was on the union payroll, to
support a soda tax and boasted that the policy
“will cost the Teamsters 100 jobs in Philly.”
Messrs. Dougherty and Henon deny wrongdoing. But
a Teamsters Local 830 official says the number
of job casualties among its members has been
even higher.
The tax burden has disproportionately fallen on
poor Philadelphians. Proponents claim the levy
isn’t regressive because it taxes distribution,
not sales, but customers ultimately swallow the
added costs with every gulp.
Then there’s the toll on retail employees. Many
Philadelphians have avoided the soda tax by
buying groceries outside the city limit. A
ShopRite supermarket near the West Philly
borderline was forced to close on March 14 after
sales plunged 23% since the tax took effect on
Jan. 1, 2017. Brown’s Super Stores CEO Jeff
Brown, who owned seven stores in Philadelphia,
says the soda tax has forced him to eliminate
more than 300 jobs through attrition. Before the
levy his ShopRites were known for hiring workers
with criminal records, but now those vulnerable
job seekers have fewer opportunities.
The soda tax has also failed to create
incentives for consumers to choose healthier
drinks. Researchers from Stanford, Northwestern
and the University of Minnesota studied
Philadelphia’s soda tax and concluded earlier
this year that it “does not lead to a shift in
consumption towards healthier products” and had
delivered "no significant reduction in calorie
and sugar intake.” In 2017 the Tax Foundation
discovered that in some cases Philadelphia's tax
had made beer cheaper than soda.
Mayor Jim Kenney, a soda tax backer, pitched it
as a way to fund pre-K. Between Jan. 1, 2017,
and Dec. 31, 2018, the tax brought in more than
$149 million in revenue, but only $38.2 million
went to Pre-K, according to Philadelphia’s
controller. More than $106.4 million sits in the
city’s general fund.
Some 59% of Philadelphians now oppose the tax,
according to a poll of likely Democratic primary
voters last month by the American Beverage
Association. No wonder Democratic City
Councillors are nervous.
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