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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, April 13, 2019
House
budget: More spending, no tax hikes –
for now
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– Graduated Income Tax / "Fair
Share Amendment" –
The two sides last faced off in court.
They’re girding for battle again on Thursday — this time
before a legislative committee in the State House’s
cavernous Gardner Auditorium, where lawmakers hold hearings
that they know will drag on for hours. Wear comfortable
clothes, folks.
The Boston Globe
Tuesday, April 9, 2019
A 2nd try at a surcharge on the wealthy
Beacon Hill leaders had their eyes on the
extra revenue before the Massachusetts Supreme Judicial
Court last July invalidated a ballot question slated for the
November 2018 general election because it tied the tax to
specific types of appropriations (education and
transportation), in violation of the state constitution’s
standards for a citizens’ petition statewide referendum.
Instead, supporters are back with a new
version of the so-called Fair Share Amendment, this time
proposing that state legislators put the measure on the
ballot directly, which would avoid the restrictions on what
kinds of constitutional amendments can go to the voters via
citizens’ petition....
Supporters of the so-called Millionaires’
Tax say it’s fairer for rich people to pay extra on top of
the current 5.05 percent flat income tax, and they project
that the surtax would raise an extra $2 billion they say is
sorely needed for roads and bridges and public
transportation and public schools.
Opponents don’t see what’s unfair about a
flat tax rate, where those with higher incomes pay more in
actual dollars than those with lower incomes. They also
predict the surtax would hurt the Massachusetts economy by
encouraging Massachusetts residents with high incomes to
leave and stop paying income taxes in the state
altogether....
The Raise Up Massachusetts coalition sees
the numbers as crying out for a tax-the-richest scheme.
“In fact, those with the highest incomes
contribute the lowest percentage of their incomes, with the
highest-income 1 percent of taxpayers paying the smallest
share of any group. And as a result of years of systemic
barriers to opportunity, Black and Latinx workers are
over-represented among low-income taxpayers and
underrepresented among higher-income taxpayers, meaning that
our current tax system makes it relatively harder for people
of color to get ahead,” said Raise Up Massachusetts in a
written statement.
But Citizens for Limited Taxation
doesn’t buy the fairness argument.
“We can’t conceive of how anything can
possibly be more fair than every taxpayer paying an
equal tax rate on whatever their income. The higher one’s
income the more in taxes one pays. How can imposing a
different tax rate on some and not on others by any stretch
be termed ‘fair’? It is the antithesis of fair,”
Citizens for Limited Taxation said in a written
statement.
As for the effect, Citizens for Limited
Taxation warns Massachusetts lawmakers about sticking it
to rich residents, noting that New York Governor Andrew
Cuomo, a liberal Democrat, in February came out against
raising additional taxes on rich people in his state.
“Please recognize that assaulting “the
wealthy” — the most mobile population — will only serve to
motivate many of the commonwealth’s higher earners and
businesses to relocate to more tax-friendly, greener
pastures,” Citizens for Limited Taxation said. “… It
is something you should consider carefully before
rubber-stamping this proposal with your vote. When wealthier
Bay State taxpayers flee, who will pick up and pay their
‘fair share’ burden, their taxes which now already provide a
disproportionate amount of state revenue, and state
spending?”
The New Boston Post
Thursday, April 11, 2019
Massachusetts Legislators All Ears for Millionaires’ Tax
The last time activists pushed for a surtax
on income above $1 million, it was more or less expected
that the proposal would face a legal challenge. But now,
less than a year after the Supreme Judicial Court
invalidated a citizen's petition seeking a constitutional
amendment to add the 4 percent surtax, proponents are
confident that they can avoid the same obstacle.
The crucial difference, they explained in
testimony at a Joint Committee on Revenue hearing Thursday,
is that the change is now being sought directly by
legislators....
Opponents of the surtax, including those who
pushed for last year's court case, offered no hint Thursday
that they would pursue another lawsuit if the measure clears
the committee and heads to the Constitutional Convention,
where it will need the votes of 101 of the 200 members of
the House and Senate in back-to-back, two-year sessions. The
question could not reach the ballot until 2022.
Chris Anderson, president of the
Massachusetts High Technology Council, noted in his
testimony that the amendment has "different legal scrutiny"
this time around....
While the proposal drew support Thursday
from a handful of local companies, several business groups
and anti-tax organizations criticized it as overreaching.
"We can't conceive of how anything can
possibly be more fair than every taxpayer paying an equal
tax rate on whatever their income," the Citizens for
Limited Taxation group said in a statement. "The higher
one's income the more in taxes one pays. How can imposing a
different tax rate on some and not on others by any stretch
be termed 'fair'? It is the antithesis of fair."
Rep. Randy Hunt, Republican of Sandwich,
asked "what prevents the Legislature from simply reducing
what we spend now by $2 billion, and putting $2 billion on
hold for other priorities of the Legislature, thus net not
providing an extra penny towards transportation and
education?" ...
If lawmakers are inclined to support the
surtax through the latest legislative amendment, some action
will be required quickly. The amendment must be reported out
by the Joint Committee on Revenue by April 24 and then added
to the Constitutional Convention calendar by May 8, but a
vote would not have to take place until the end of formal
sessions in July 2020.
House Speaker Robert DeLeo has said as
recently as this week that he continues to support the idea
of a "millionaires tax," and Senate President Karen Spilka
has also supported the proposal.
State House News Service
Thursday, April 11, 2019
Diminished threat of legal challenge as "Millionaires Tax"
returns
A measure to revive a statewide tax on high
earners received a glowing reception on Beacon Hill
Thursday, suggesting an easy path ahead despite staunch
opposition from business groups.
“We are in desperate need for revenue for
our districts,” said Senator Michael D. Brady of Brockton,
one of the proposal’s more than 100 sponsors and a member of
the Joint Committee on Revenue, which convened a hearing on
the proposal Thursday. “We’ve got to move as swiftly and as
responsibly as we can on this.” ...
“We have tremendous unmet needs in our
Commonwealth that are hurting families, hurting our
communities, and putting our state’s economic future at
risk,” said Senator Jason M. Lewis of Winchester, the lead
sponsor of the Senate version of the proposal....
The revival of the so-called millionaires tax comes as the
Legislature has started to engage in a broader debate about
how it might find more money to address a list of pressing
policy concerns....
The earliest the tax, known as the Fair
Share Amendment, could kick in is 2023, given the procedural
path it must travel, since imposing it requires changing the
state Constitution. The tax would need majority votes in
successive two-year legislative sessions before heading to
the voters; the governor would not have a say.
The Boston Globe
Friday, April 12, 2019
Proposed tax on high earners gets warm reception on Beacon
Hill
– House Budget
–
With House leadership preparing to unveil
its annual spending bill this week, Speaker Robert DeLeo
said Monday the budget will steer clear of major new revenue
proposals "that aren't finalized," but promised "further
action" this year to consider new taxes or fees.
The statement from the speaker answered one
of the major questions leading into Wednesday's release of
the House Ways and Means budget proposal: Will House leaders
embrace significant new revenues?
The answer, for now, appears to be no.
State House News Service
Monday, April 8, 2019
House may explore tax bill later in 2019
Democratic leaders in both branches are now
saying its unlikely the Legislature will pursue substantial
new revenue proposals as part of next year's state budget,
with Senate Ways and Means Committee Chairman Michael
Rodrigues on Tuesday joining House Speaker Robert DeLeo in
suggesting that those discussions should be postponed until
later in the year.
DeLeo said Monday that the House's fiscal
year 2020 budget set to be unveiled this week would not
include significant new taxes or fees and that "further
action" on revenue proposals would come instead later this
year. Rodrigues echoed that approach on Tuesday, saying he
is "not anxious to jump into the revenue discussion at this
time" — even as Senate President Karen Spilka said the
decision has not been made.
"We're not going to have time to get it done
for this budget," Rodrigues told the News Service on
Tuesday. "We're just not going to pull taxes out of thin air
and increase them. We really need a holistic approach at
taxes, at our tax code. There won't be any major changes to
the tax code in the budget. We just don't have time."
Rodrigues, like DeLeo, left open the
possibility that lawmakers could take up a major revenue
debate outside of the budget process....
Lawmakers have called for a wide range of
new taxes and fees to generate funding for transportation,
education and more, particularly after a ballot question
that would have taxed income above $1 million at a higher
rate was invalidated by a court last year.
The House Ways and Means Committee will
release its budget on Wednesday, queueing up debate for
later in the month. The Senate will then take up the matter
in May.
Gov. Charlie Baker included several new
taxes in his budget, such as a 15 percent tax on opioid
manufacturers and an excise tax on e-cigarettes and vaping
products. The Wednesday budget release will show whether
House leaders agree with him.
Rodrigues said Baker's proposals will still
be considered in the Senate, although he did not indicate
whether he supported them, and he acknowledged that senators
may file revenue-generating amendments if the budget comes
to them as a "money bill."...
"Our personal taxes, our businesses, haven't
been looked at in a comprehensive way in decades," [Senate
President Karen] Spilka said. "In fact, I can't find when it
was truly last really looked at. I believe we can do a
better way of collecting taxes in a fair, more progressive
way that creates a 21st-century framework where innovative,
technology-driven businesses can develop and thrive — we
clearly want them to thrive — but that captures new
revenue."
State House News Service
Tuesday, April 9, 2019
Senate budget chief agrees Dems should wait on taxes
The House reported out its version of a
$42.69 billion dollar budget today, eliminating many of the
taxes Gov. Charlie Baker had in his own proposal and making
its own attempt to address the state’s underfunded school
system.
The House version of the fiscal year 2020
budget does not include an expanded tax to include
e-cigarettes, an increase excise tax through property sales
or the tax on gross receipts of opioids that Baker proposed
in his own budget in January. Speaker Robert DeLeo said he
expects those will be “discussed at a later date.” ...
The budget, which recommends approximately
$1.8 million less spending than the governor’s H1 budget,
would add $260 million to the rainy day fund, bringing that
account total in excess of over $2.5 billion, according to
the Speaker.
The Boston Herald
Wednesday, April 10, 2019
House budget zaps Baker tax proposals; seeks boost in
education spending
The House's plan to take a wait-and-see
approach on new revenues this session, rather than pursue
new sources of funding in its fiscal year 2020 budget, was
not well-received by two major advocacy groups Wednesday.
House leadership unveiled its $42.7 billion
annual spending plan, but Speaker Robert DeLeo said
consideration of new revenue proposals would take place
later this session, including sports betting, extending
tobacco taxes to e-cigarettes, taxing opioid manufacturers
and more.
The budget proposal (H 3800), which the
House is expected to debate in formal sessions the week of
April 22, would boost total state spending by 3 percent over
the current year's budget and includes no increases to
broad-based taxes.
Marie-Frances Rivera, president of the
Massachusetts Budget and Policy Center, said that her
organization appreciates the "thoughtful approach" the House
plans to take on revenue but panned the budget plan itself,
with no associated revenue boosters, as unhelpful....
The Fund Our Future campaign, an advocacy
group made up of more than two dozen labor and community
organizations pushing for changes to how the state funds
public schools, said the Ways and Means Committee's
inclusion of $218 million in new Chapter 70 education aid
and its new $16.5 million program to support low-income
students is notable and laudable....
The Massachusetts Teachers Association was
also unimpressed by the plan, calling the funding for
education "woefully inadequate." ...
The committee budget was well-received by
members of the House's Republican caucus, which accounts for
32 of the 160 House members....
"The good news for the state's taxpayers is
that the budget does not impose any new broad-based taxes,"
North Reading Rep. Brad Jones, the House minority leader,
said. "I will be working closely with the members of the
House Republican Caucus over the next few days to identify
potential amendments we can offer to further protect the
interests of the state's taxpayers and ensure the passage of
a fiscally responsible budget." ...
The budget proposal was rolled out a week
after the Department of Revenue reported that a $292 million
shortfall in state tax collections was wiped out in March
thanks to monthly tax revenues that exceeded projections by
$316 million, or 13.4 percent. With three months left in
fiscal year 2019 -- including April, the largest month for
tax collections -- Massachusetts stands $19 million above
its revenue goal.
State House News Service
Wednesday, April 10, 2019
Revenue advocates disappointed by House leaders' caution on
new taxes
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Chip Ford's CLT
Commentary
It's been a very frenetic week
– both on Beacon Hill, and
here at CLT trying to keep up with and makes sense of it
all.
The graduated income tax constitutional
amendment (Grad Tax), aka, "The Fair Share Amendment"
barrels along. With its multitude of legislator
co-sponsors – over a
hundred of them – eventual
passage is virtually assured. First The Joint
Committee on Revenue will issue its recommendation, to
wit: Rubber-stamp the House and Senate bills with
its lusty approval. That will happen by April 24,
the committee's deadline. Then, by May 8 the
Legislature must add it to its Constitutional Convention
calendar.
After that's accomplished, the
Legislature has until the end of its formal two-year
session in July of 2020 to take the first of two votes.
The second vote in the Legislature needs to be taken by
the end of the next two-year Legislative session
following the 2020 election, in 2021-2022. If
approved in both two-year sessions
– as expected – it
would appear on the November 2022 statewide ballot.
If enough voters approve of this sixth attempt (on
the ballot; last year's actual sixth attempt
was ruled unconstitutional and prohibited from being on
the ballot by the Supreme Judicial Court),
Massachusetts' historic flat-tax –
a single tax rate for all taxpayers
– will be changed forever.
The House Budget –
at this point – is somewhat
encouraging. It proposes to spend $42.7 billion
– almost another billion
($800 million more even before a bevy of amendments are
added) more than the
$41.9 billion budget that was adopted last July for
the current fiscal year. But it ignored all of
Gov. Baker's proposed tax increases. The Boston
Herald reported:
"The House version of the fiscal year 2020
budget does not include an expanded tax to
include e-cigarettes, an increase excise tax
through property sales or the tax on gross
receipts of opioids that Baker proposed in his
own budget in January. Speaker Robert DeLeo said
he expects those will be 'discussed at a later
date.'”
At this point, the House budget does not
propose any "broad-based" tax increases, but that's
merely a reprieve for now. The State House News
Service (SHNS) reported:
"Speaker Robert DeLeo said Monday the budget
will steer clear of major new revenue proposals
'that aren't finalized,' but promised 'further
action' this year to consider new taxes or
fees."
SHNS further reported:
"Hundreds of amendments are expected to be
filed, including many that may propose new or
higher taxes to raise additional money for state
government. Revenue amendments are usually among
the first to be considered during floor debate."
That House floor debate on those amendments is scheduled
to begin on April 22.
The Senate cannot originate tax or fee
increases in a budget unless the House does first.
If even one House amendment raising a tax or fee is
included in the House budget it becomes what is termed a
"money bill" – which opens
up the entire budget debate in both branches for further
tax and fee ("revenue-generating") increases. The
Senate is ready to pounce, as the SHNS reported:
[Senate Ways and Means Committee Chairman
Michael] Rodrigues said Baker's proposals will
still be considered in the Senate, although he
did not indicate whether he supported them, and
he acknowledged that senators may file
revenue-generating amendments if the budget
comes to them as a "money bill."
The Legislature was challenged by this
as recently as 2017, as the State House News Service
then reported:
--- MONEY, MONEY, MONEY BILL: While Speaker
Robert DeLeo eschewed broad-based tax increases
with his budget proposal, there are provisions
in the bill that make it a "money bill," opening
the door for the Senate to consider taxes next
month when it takes a turn producing a budget.
The House bill includes a $2,000 tax credit for
businesses that hire veterans, as well as
reforms to how sales taxes are collected and
remitted to the state. "I think we'll see what
they do," Dempsey said about the possibility of
the Senate adding tax increases to the budget to
generate new revenue. Senate President Stanley
Rosenberg last week raised the idea of a sales
tax on services, which was briefly contemplated
and abandoned in the early 1990s. "Any new
expansion to something that it is currently not
taxed is always a challenge...," Dempsey said.
"Personally, I would have some concerns."
What constitutes a "money bill" was
previously decided by the state Supreme Judicial
Court in its
advisory ruling of June 15, 2015 (CLT Update, June 17,
2015, "The
Senate vs. Taxpayers"). According to the SHNS
at that time:
The state's top court ruled in favor of the
Senate on Monday, finding that proposed House
policies had in fact made the fiscal 2016 budget
bill a "money bill" and allowed the Senate to
attach major tax reforms, including a suspension
of the income tax rollback and an increase in
tax credits for low-income families.
The advisory opinion, which was unsealed and
read aloud by the clerk during Monday's House
session, clears the way for the Senate's tax
reform plan to become a part of ongoing budget
negotiations between a six-member House and
Senate conference committee.
The Supreme Judicial Court, in its opinion
signed by all seven justices, found that the
House's decision in its version of the budget to
delay the implementation of a business tax break
and expand a tax credit for land conservation
opened the door for the Senate to propose
additional tax policy changes.
"We are of the view that the House bill was a
money bill, and that the Senate did not
improperly originate a money bill," the
justice's wrote in a 28-page advisory opinion.
Keep your eyes on those House amendments, folks
– CLT will be. Even a
single tax or fee increase in the House budget will open
the floodgates in the tax-hungry Senate.
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Chip Ford
Executive Director |
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– Graduated Income
Tax / "Fair Share Amendment
–
The Boston Globe
Tuesday, April 9, 2019
A 2nd try at a surcharge on the wealthy
By Jon Chesto
Welcome to the Millionaires Tax Showdown, Part
2. It could get ugly.
The two sides last faced off in court. They’re
girding for battle again on Thursday — this time
before a legislative committee in the State
House’s cavernous Gardner Auditorium, where
lawmakers hold hearings that they know will drag
on for hours. Wear comfortable clothes, folks.
In 2018, the Massachusetts Supreme Judicial
Court nixed a ballot initiative that would have
imposed a millionaires tax — aka the Fair Share
amendment. The majority of SJC judges sided with
business groups that argued the question was
unconstitutional because it packs multiple
subjects — a new income tax surcharge on the
wealthy, increased spending on transportation
and education — into a single ballot measure.
The supporters, led by the Raise Up
Massachusetts coalition, have changed tactics
with an important tweak. The previous proposal
was submitted as a citizens’ initiative. This
time, it was introduced as a petition by state
lawmakers. That one change should nullify the
“relatedness” argument about multiple subjects
that the business associations used to block the
initiative. Legislative petitions, it turns out,
are allowed to contain more than one concept.
Otherwise, the song remains the same: a
surcharge of 4 percentage points on the state’s
income tax, for earnings above $1 million. As
with the first version, the anticipated windfall
— perhaps as much as $2 billion a year — would
be dedicated to education and transportation
purposes.
Because this surcharge requires a change to the
state’s constitution, it would need majority
votes in successive two-year legislative
sessions before heading to the voters. The
earliest you’d see it on the ballot is November
2022.
Raise Up now has home-court advantage. “Fair
Share” enjoys widespread support in the
Democrat-controlled Legislature already.
Lawmakers, led by cosponsors Senator Jason Lewis
and Representative Jim O’Day, will line up in
support on Thursday. At least a dozen Raise Up
members will speak in favor. Organized labor,
including the powerful Service Employees
International Union, helped bankroll the
question last time. You can bet union members
show their support in the Gardner.
The business groups know this as they head to
Beacon Hill. Maybe they can persuade legislators
who are on the fence. Leaders from the
Massachusetts High Technology Council,
Associated Industries of Massachusetts, the
Massachusetts Taxpayers Foundation, and the
National Federation of Independent Business —
all plaintiffs in the previous lawsuit — plan to
testify.
They will cite the damage seen in some high-tax
states, as companies and wealthy residents vote
with their feet, and will predict similar
economic carnage here. (Poor Connecticut
assuredly will be mentioned as a poster child
for wrongheaded policies.)
Opponents will also point to the owners of
small- and mid-size businesses who will suffer,
particularly those whose firms have earnings
that get taxed as personal income. They will
remind lawmakers of the big chunk in the state
budget that already depends on taxes from
high-earners.
And they will question whether the newfound
revenue stream will truly be dedicated to new
education and transportation spending: What’s to
stop the Legislature, they’ll say, from simply
cutting back on the preexisting allocations for
those important budget items once they have the
money from the millionaires tax?
The Fair Share supporters are fired up. Many
will come armed with responses to those
arguments. Expect a populist theme to emerge.
O’Day, for example, says he’s bracing for the
challenge from the business world. The folks who
have the most money, he says, often don’t want
to give up a penny of it.
The business groups haven’t ruled out another
lawsuit, either. But that’s a much tougher route
now. Instead, their argument will more likely
hinge on how well they make their case to state
legislators, and then the voters. Let the fun
begin.
The New Boston Post
Thursday, April 11, 2019
Massachusetts Legislators All Ears for
Millionaires’ Tax
By Matt McDonald
Supporters of a 4 percent state surtax on
million-dollar-plus incomes can expect a largely
receptive audience when they appear before a
legislative committee Thursday to stump for an
amendment to the Massachusetts Constitution to
establish it.
Beacon Hill leaders had their eyes on the extra
revenue before the Massachusetts Supreme
Judicial Court last July invalidated a ballot
question slated for the November 2018 general
election because it tied the tax to specific
types of appropriations (education and
transportation), in violation of the state
constitution’s standards for a citizens’
petition statewide referendum.
Instead, supporters are back with a new version
of the so-called Fair Share Amendment, this time
proposing that state legislators put the measure
on the ballot directly, which would avoid the
restrictions on what kinds of constitutional
amendments can go to the voters via citizens’
petition. If at least half of state legislators
(acting as a constitutional convention) vote for
the measure this current 2019-2020 legislative
session and during the 2021-2022 legislative
session, the measure will go to the state
general election ballot in November 2022 for
voters to decide.
Supporters of the so-called Millionaires’ Tax
say it’s fairer for rich people to pay extra on
top of the current 5.05 percent flat income tax,
and they project that the surtax would raise an
extra $2 billion they say is sorely needed for
roads and bridges and public transportation and
public schools.
Opponents don’t see what’s unfair about a flat
tax rate, where those with higher incomes pay
more in actual dollars than those with lower
incomes. They also predict the surtax would hurt
the Massachusetts economy by encouraging
Massachusetts residents with high incomes to
leave and stop paying income taxes in the state
altogether.
These warring versions of fairness and economic
effects drive the debate, but many state
legislators are mostly interested in tax dollars
and what projects they can steer them toward.
The Massachusetts Budget and Policy Center,
which supports the Millionaires’ Tax, says that
when you combine state income taxes, state sales
tax, and local property taxes, households with
the lowest incomes tend to pay a larger
percentage of their incomes in taxes than
households with higher incomes. People making
less than $22,500 a year, for instance, pay
about 10 percent of their incomes in those
taxes, while people in the top 1 percent making
$690,400 or more a year pay about 6.8 percent of
their incomes in those taxes, according to a
study by the Institute for Taxation and Economic
Policy cited by the Massachusetts Budget and
Policy Center.
The disparities lessen when considering other
brackets – people making $22,500 to $41,400 pay
about 8.5 percent of their incomes in those
state and local taxes, compared to 8.0 percent
for those making $269,800 to $680,400. Closer to
the middle, the spread is also about one-half of
one percentage point: The middle 20 percent,
making $41,400 to $71,000, pay about 9.3 percent
of their incomes to those state and local taxes;
the next highest 20 percent bracket, making
$71,000 to $122,600, pay about 9.4 percent, or
almost the same as the bracket below it; the
next highest 15 percent bracket, making $122,600
to $269,800, pay about 8.8 percent of their
incomes, according to the study.
The Raise Up Massachusetts coalition sees the
numbers as crying out for a tax-the-richest
scheme.
“In fact, those with the highest incomes
contribute the lowest percentage of their
incomes, with the highest-income 1 percent of
taxpayers paying the smallest share of any
group. And as a result of years of systemic
barriers to opportunity, Black and Latinx
workers are over-represented among low-income
taxpayers and underrepresented among
higher-income taxpayers, meaning that our
current tax system makes it relatively harder
for people of color to get ahead,” said Raise Up
Massachusetts in a written statement.
But Citizens for Limited Taxation doesn’t
buy the fairness argument.
“We can’t conceive of how anything can possibly
be more fair than every taxpayer paying
an equal tax rate on whatever their income. The
higher one’s income the more in taxes one pays.
How can imposing a different tax rate on some
and not on others by any stretch be termed
‘fair’? It is the antithesis of fair,”
Citizens for Limited Taxation said in a
written statement.
As for the effect, Citizens for Limited
Taxation warns Massachusetts lawmakers about
sticking it to rich residents, noting that New
York Governor Andrew Cuomo, a liberal Democrat,
in February came out against raising additional
taxes on rich people in his state.
“Please recognize that assaulting “the wealthy”
— the most mobile population — will only serve
to motivate many of the commonwealth’s higher
earners and businesses to relocate to more
tax-friendly, greener pastures,” Citizens for
Limited Taxation said. “… It is something
you should consider carefully before
rubber-stamping this proposal with your vote.
When wealthier Bay State taxpayers flee, who
will pick up and pay their ‘fair share’ burden,
their taxes which now already provide a
disproportionate amount of state revenue, and
state spending?”
Raise Up Massachusetts, which supports the
Millionaires’ Tax, notes that other states have
graduated income tax rates that hit the highest
earners at rates around the 9.05 percent
proposed for Massachusetts – including New York,
New Jersey, Vermont, Minnesota, Oregon, Hawaii,
and California.
“There have been numerous economic studies of
the effects in those other states and they have
not found the negative consequences that
opponents predict. On the contrary, these
investments help create better economic
opportunities for our residents and a
transportation infrastructure that works, all of
which will help attract and grow businesses in
the state,” Raise Up Massachusetts said, without
citing specific studies.
The group’s list doesn’t include Connecticut,
which taxes lowest earners 3 percent and $1
million-plus earners 6.99 percent. Connecticut
has had well-documented fiscal problems during
recent years, though Republicans and Democrats
argue over whether high taxes are to blame.
Skeptics about the Millionaires’ Tax, including
the Massachusetts Taxpayers Foundation, note
that if a significant portion of high earners in
Massachusetts moved to nearby New Hampshire,
which has no state income tax, tax revenues
would fall dramatically in Massachusetts. But
supporters say higher tax rates on millionaires
in other states have brought in more money to
the state than the taxes the state lost from
those who left.
Paul Craney, spokesman for the Massachusetts
Fiscal Alliance, which opposes the Millionaires’
Tax, noted that voters in Massachusetts have
previously rejected graduated income tax schemes
several times. In 1994, for instance, a proposed
constitutional amendment allowing higher income
tax rates on higher earners lost 65 to 28
percent.
“Historically speaking, there isn’t a ballot
question less popular than the graduated income
tax. Lately, it’s been marketed by proponents as
a ‘surtax on high earners,’ and that has created
some buzz by big government politicians. But
when people discover what it really does —
removing our constitutional guaranteed rights to
an equal tax rate — its popularity plummets. It
starts with high earners, but once that
constitutional protection is removed lawmakers
will have free reign and people realize that,”
Craney said in a written statement.
Supporters think the electorate has changed
since then. A poll in May 2018 showed strong
support for the Millionaires’ Tax before the
state’s highest court prevented it from going to
the ballot.
But Craney said state legislators ought to
concentrate on getting state government’s house
in order instead of demanding more cash from
certain residents.
“There are a lot of important problems that need
legislative attention — we have one of the
highest levels of debt per capita in the country
and our healthcare costs continue to balloon to
budget busting numbers. Legislators should earn
their recent pay raises and work on solving
those issues before trying to change the
constitution to raise our taxes with tried and
failed gimmicks,” Craney said.
A hearing before the state Legislature’s Joint
Committee on Revenue is scheduled for 11 a.m.
Thursday, April 11 at Gardner Auditorium at the
Massachusetts State House in Boston.
The proposed constitutional amendment,
Massachusetts Senate Bill 16, states:
Article 44 of the
Massachusetts Constitution is hereby
amended by adding the following
paragraph at the end thereof:-
To provide the resources for quality
public education and affordable public
colleges and universities, and for the
repair and maintenance of roads, bridges
and public transportation, all revenues
received in accordance with this
paragraph shall be expended, subject to
appropriation, only for these purposes.
In addition to the taxes on income
otherwise authorized under this Article,
there shall be an additional tax of 4
percent on that portion of annual
taxable income in excess of $1,000,000
(one million dollars) reported on any
return related to those taxes. To ensure
that this additional tax continues to
apply only to the commonwealth’s highest
income taxpayers, this $1,000,000 (one
million dollars) income level shall be
adjusted annually to reflect any
increases in the cost of living by the
same method used for federal income tax
brackets. This paragraph shall apply to
all tax years beginning on or after
January 1, 2023.
State House News
Service
Thursday, April 11, 2019
Diminished threat of legal challenge as
"Millionaires Tax" returns
By Chris Lisinski
The last time activists pushed for a surtax on
income above $1 million, it was more or less
expected that the proposal would face a legal
challenge. But now, less than a year after the
Supreme Judicial Court invalidated a citizen's
petition seeking a constitutional amendment to
add the 4 percent surtax, proponents are
confident that they can avoid the same obstacle.
The crucial difference, they explained in
testimony at a Joint Committee on Revenue
hearing Thursday, is that the change is now
being sought directly by legislators.
Sen. Jason Lewis and Rep. Jim O'Day have filed
proposed amendments (H 86 | S 16) that would add
a 4 percent surtax on every dollar of personal
income above $1 million.
Lewis said the change would only affect 14,000
households across the state, but would bring in
as much as $2 billion per year in revenue,
which, under the amendment, would be directed
specifically toward growing needs in
transportation and education.
While the state constitution holds that
amendments proposed as citizen initiatives can
only include "mutually dependent" matters,
amendments filed by legislators do not have to
satisfy that requirement, according to Peter
Enrich, a Northeastern University law professor.
The mutual dependence requirement was a test
that the 2018 version drafted by the Raise Up
Coalition failed, according to the SJC, because
it sought to raise the tax and also allocate how
the revenue would be spent.
"There is no ground for a challenge to this
matter on grounds of not being sufficiently
related, as was the previous metric," Enrich,
who is advising the Raise Up Massachusetts
coalition, said at the hearing. "I don't doubt
the creativeness of those who would like to keep
this off the ballot. I imagine they may come up
with some (legal) arguments. But we cannot
visualize what they would be, and there is no
reason to think they will have any substance."
Opponents of the surtax, including those who
pushed for last year's court case, offered no
hint Thursday that they would pursue another
lawsuit if the measure clears the committee and
heads to the Constitutional Convention, where it
will need the votes of 101 of the 200 members of
the House and Senate in back-to-back, two-year
sessions. The question could not reach the
ballot until 2022.
Chris Anderson, president of the Massachusetts
High Technology Council, noted in his testimony
that the amendment has "different legal
scrutiny" this time around.
Instead, the council and other opponents focused
on trying to persuade lawmakers on the merits,
arguing that a constitutionally enshrined higher
income tax on top earners would prompt wealthy
individuals to leave the state or cut into the
viability of small businesses. Anderson warned
that other states such as Maryland have seen
revenue figures from similar taxes fall short of
initial projections.
"Many are surprised to learn that the
Commonwealth's long-term fiscal condition is
relatively unstable, but a strong private
economy is preventing the Commonwealth from
suffering the same flight of employment, capital
and tax revenue that we've seen in states like
Connecticut and New Jersey," Anderson said.
Because the state constitution calls for a flat
tax rate, a formal amendment is required to put
a different rate on a higher income bracket.
Supporters argue the current system is
"upside-down," pointing to research that
indicates wealthier Massachusetts households pay
a smaller overall percentage of their income in
state and local taxes than do middle- and
working-class ones.
"We have tremendous unmet needs in our
Commonwealth that are hurting families, hurting
our communities and putting the state's economic
future at risk," said Lewis, who testified in
support of the bill flanked by 29 other
representatives and senators. "We have a choice:
we can either continue to accept the status quo,
or we can do something about it."
While the proposal drew support Thursday from a
handful of local companies, several business
groups and anti-tax organizations criticized it
as overreaching.
"We can't conceive of how anything can possibly
be more fair than every taxpayer paying an equal
tax rate on whatever their income," the
Citizens for Limited Taxation group said in
a statement. "The higher one's income the more
in taxes one pays. How can imposing a different
tax rate on some and not on others by any
stretch be termed 'fair'? It is the antithesis
of fair."
Rep. Randy Hunt, Republican of Sandwich, asked
"what prevents the Legislature from simply
reducing what we spend now by $2 billion, and
putting $2 billion on hold for other priorities
of the Legislature, thus net not providing an
extra penny towards transportation and
education?"
Ballot-question efforts to amend the state
constitution to include a graduated income tax
rate, where higher earners pay a higher rate,
have been unsuccessful in the second half of the
20th century. However, the most recent
"millionaire's tax" proposal had been fairly
popular, including on Beacon Hill. Legislators
endorsed it two years in a row with 70 percent
support or more support.
Public polls leading up to last year's
thrown-out initiative found significant support
among voters, too, as supporters pointed to a $1
billion annual shortfall in education funding
and aging transportation infrastructure around
the state.
If lawmakers are inclined to support the surtax
through the latest legislative amendment, some
action will be required quickly. The amendment
must be reported out by the Joint Committee on
Revenue by April 24 and then added to the
Constitutional Convention calendar by May 8, but
a vote would not have to take place until the
end of formal sessions in July 2020.
House Speaker Robert DeLeo has said as recently
as this week that he continues to support the
idea of a "millionaires tax," and Senate
President Karen Spilka has also supported the
proposal.
The Boston Globe
Friday, April 12, 2019
Proposed tax on high earners gets warm reception
on Beacon Hill
By Victoria McGrane
A measure to revive a statewide tax on high
earners received a glowing reception on Beacon
Hill Thursday, suggesting an easy path ahead
despite staunch opposition from business groups.
“We are in desperate need for revenue for our
districts,” said Senator Michael D. Brady of
Brockton, one of the proposal’s more than 100
sponsors and a member of the Joint Committee on
Revenue, which convened a hearing on the
proposal Thursday. “We’ve got to move as swiftly
and as responsibly as we can on this.”
The hearing kicked off Round Two for progressive
activists and legislators pushing to create a
new income tax on the state’s highest earners.
Years of work on a previous ballot initiative
were dashed at the eleventh hour when the
Supreme Judicial Court ruled the measure was
unconstitutional because it combined multiple
subjects that were not related.
The goal remains the same: generate much-needed
cash — supporters say $2 billion annually — to
plow into education and transportation with a
surcharge of 4 percentage points on the state’s
income tax for earnings above $1 million.
“We have tremendous unmet needs in our
Commonwealth that are hurting families, hurting
our communities, and putting our state’s
economic future at risk,” said Senator Jason M.
Lewis of Winchester, the lead sponsor of the
Senate version of the proposal. Low- and
middle-income families in Massachusetts are
“tapped out” with the high cost of living here,
while “these super-wealthy families can afford
to pay slightly higher taxes and continue living
in the great state of Massachusetts,” he said.
The revival of the so-called millionaires tax
comes as the Legislature has started to engage
in a broader debate about how it might find more
money to address a list of pressing policy
concerns. Senate President Karen E. Spilka has
launched a task force of outside experts to
study overhauling the tax code. House Speaker
Robert A. DeLeo has said “it’s all on the table”
when it comes to figuring out how to address the
state’s transportation difficulties and has left
the door open to potentially pursuing other
measures this year. Both leaders support the tax
on high earners.
The earliest the tax, known as the Fair Share
Amendment, could kick in is 2023, given the
procedural path it must travel, since imposing
it requires changing the state Constitution. The
tax would need majority votes in successive
two-year legislative sessions before heading to
the voters; the governor would not have a say.
The previous proposal, nixed from the 2018
ballot, was submitted as a citizens’ initiative.
This time the proposal was introduced as a
legislative petition by Lewis and Representative
Jim O’Day of West Boylston. The procedural
difference, supporters and their lawyers say,
should avoid the “relatedness” challenge in
court, since legislative petitions don’t have to
meet that standard.
The business groups that defeated the earlier
proposal are mounting their fight again, though
it remains to be seen if they will bring new
court challenges. At Thursday’s hearing, they
came armed with arguments that hiking taxes on
the state’s highest earners would drive
entrepreneurs — and the jobs and tax revenue
they create — out of the state, as well as
unfairly harm small- and mid-sized business
owners whose business income passes through
their individual tax returns.
“Look, we’re trying to prevent Massachusetts
from becoming Connecticut,” said Christopher
Anderson, president of the Massachusetts High
Technology Council, referring to ongoing budget
woes and population loss that Massachusetts’
neighbor to the south has suffered in recent
years. Connecticut, he noted, lost more than
20,000 residents with a total adjusted gross
income of $2.6 billion following tax increases
in 2011 and 2015.
Christopher Carlozzi, Massachusetts state
director for the National Federation of
Independent Business, said the tax on high
earners would mean small business owners of
modest means would have to give a big chunk of
their retirement nest eggs to the state when
they sold their businesses. “Taxing small
business . . . would strongly inhibit business
growth,” he said.
Democrats on the revenue panel were not having
it. Their exchanges with the business witnesses
grew testy at times, with lawmakers bristling at
the view put forward by some of the business
officials that the state’s highest earners
already pay their fair share of taxes.
“Do you suggest we tax the poor?” Representative
Susannah M. Whipps, an Independent of Athol,
demanded from the panel of business
representatives. “I’m a business owner, I expect
to pay more taxes than my employees.” Noises of
approval and applause from Fair Share Amendment
supporters for her words drowned out the
response from a business witness.
Senator Joanne M. Comerford challenged the
evidence presented by the business groups that
taxes on high earners leads to economic
distress, offering competing data that she said
showed several states with special taxes on high
incomes had strong economies.
“This is a head scratcher for me. The states
with the highest concentration of millionaires
have millionaires’ taxes,” she said.
Peter Enrich, a tax specialist at Northeastern
University and general counsel for Raise Up
Massachusetts, the coalition of labor, faith,
and community groups that had brought the
high-earner tax forward, said he believes the
second stab at implementing it is on solid legal
footing.
“I don’t doubt the creativeness of those who
would like to keep this off the ballot,” said
Enrich, who worked for former governors Michael
Dukakis and Deval Patrick. “I imagine they will
come up with some argument, but we cannot
visualize what they will be and there’s no
reason to think that they will have any
substance.”
Supporters of the tax offered testimony about
both the fairness of the approach as well as the
need for the revenue it would generate.
Middle school history teacher Alex Hoyt told
legislators that he was allowed the equivalent
of only one sheet of paper per student each day
because of budget constraints.
“No millionaire risks sliding down the ladder of
opportunity because 4 percent of their income
after the first million is redistributed to
schools serving families who may not even make
that 4 percent,” he told lawmakers. But it could
mean a ladder of opportunity for the children of
those families, he continued. “Please build
those rungs for them. They’ll do the climbing.”
– House Budget
–
State House News
Service
Monday, April 8, 2019
House may explore tax bill later in 2019
By Matt Murphy
With House leadership preparing to unveil its
annual spending bill this week, Speaker Robert
DeLeo said Monday the budget will steer clear of
major new revenue proposals "that aren't
finalized," but promised "further action" this
year to consider new taxes or fees.
The statement from the speaker answered one of
the major questions leading into Wednesday's
release of the House Ways and Means budget
proposal: Will House leaders embrace significant
new revenues?
The answer, for now, appears to be no.
DeLeo said he has met with Majority Leader Ron
Mariano, Ways and Means Chairman Aaron
Michlewitz and Revenue Committee Co-Chairman
Mark Cusack to discuss revenue-raising
proposals, but still wanted additional feedback
from other House members and outside groups.
The speaker, however, foreshadowed what could be
a tax debate later in 2019. A senior House
official said the speaker would prefer to take
up revenue bills outside of this year's budget
process, and indicated that DeLeo "intends to
have the revenue issues come up for a vote
within the year, pending the outcome of the
committee process."
"As we head into the House budget debate, we do
not believe we can craft a balanced FY20 budget
based on revenue proposals that aren’t finalized
and fully vetted. I look forward to further
action later this year," DeLeo said in a
statement to the News Service.
The Legislature meets almost year-round in the
first year of the two-year session with the
exception of August, when lawmakers typically
take a summer break until after Labor Day, and
December.
The Ways and Means Committee, newly chaired by
Boston Democrat Rep. Aaron Michlewitz, will
release a spending plan for fiscal 2020 on
Wednesday that will be debated later this month.
Hundreds of amendments are expected to be filed,
including many that may propose new or higher
taxes to raise additional money for state
government. Revenue amendments are usually among
the first to be considered during floor debate.
Whether tax-supporting House lawmakers will
adjust their plans, or fight to round up support
and force debate over their proposals remains to
be seen in light of DeLeo's latest statement on
the matter.
Following the defeat in the courts last year of
a ballot question that could have raised
billions by taxing income over $1 million at a
higher rate, progressives have been agitating
for serious consideration of other new tax and
revenue generating ideas that could help pay for
increased investments in education,
transportation, climate change and other
priorities.
The refiled "millionaires tax" can't reach the
ballot until at least 2022. The speaker said he
continues to support a higher income tax on
individual income over $1 million, but said some
of the other proposals on the table need more
time to marinate.
"The House will begin to address revenue
proposals in the first year of this session.
While bills continue to go through the committee
process, I know that the Fair Share Amendment –
which I support – and transportation revenue,
among other ideas, have received some early
attention," DeLeo said.
In recent speeches to chambers of commerce
groups, DeLeo has been asking business leaders
to join the discussion and present revenue ideas
they could support.
The Joint Committee on Revenue, co-chaired this
session by Cusack and Sen. Adam Hinds, has only
one hearing scheduled so far on April 11 to take
testimony on a constitutional amendment to tax
the wealthy a higher rate on income over $1
million.
Hinds is assembling a Senate working group to
study the fairness of the state's tax code and
look for ways to modernize the tax system.
Senate President Karen Spilka has said the
process could take up to two years, but she has
not ruled out voting on revenue proposals in the
interim.
The speaker's statement does make it entirely
clear whether the Ways and Means budget will
exclude all of Gov. Charlie Baker's
revenue-generating ideas, including a new 15
percent tax on opioid manufacturers and
expanding the cigarette excise tax to
e-cigarettes and vaping products.
The governor also proposed in his January budget
plan to grab $42 million by forcing online
marketplaces like Amazon, eBay and Etsy to
collect and remit sales taxes on purchases
delivered into Massachusetts and to accelerate
the process for retailers to remit sales taxes
to the state, netting $306 million in fiscal
2020 in one-time additional revenues.
Baker opposes "broad based" tax increases, which
his office said includes the income and sales
tax rates, but has periodically gone along with
and even proposed tax and fee increases on new
services or products.
The governor's office said it does not have a
complete list of taxes that the governor
considers to be non-starters in the new revenue
discussion, but he has also proposed separate
legislation filed in the Senate to raise $1
billion over the next decade for climate
adaptation by raising real estate transfer fees.
State House News
Service
Tuesday, April 9, 2019
Senate budget chief agrees Dems should wait on
taxes
By Chris Lisinski
Democratic leaders in both branches are now
saying its unlikely the Legislature will pursue
substantial new revenue proposals as part of
next year's state budget, with Senate Ways and
Means Committee Chairman Michael Rodrigues on
Tuesday joining House Speaker Robert DeLeo in
suggesting that those discussions should be
postponed until later in the year.
DeLeo said Monday that the House's fiscal year
2020 budget set to be unveiled this week would
not include significant new taxes or fees and
that "further action" on revenue proposals would
come instead later this year. Rodrigues echoed
that approach on Tuesday, saying he is "not
anxious to jump into the revenue discussion at
this time" — even as Senate President Karen
Spilka said the decision has not been made.
"We're not going to have time to get it done for
this budget," Rodrigues told the News Service on
Tuesday. "We're just not going to pull taxes out
of thin air and increase them. We really need a
holistic approach at taxes, at our tax code.
There won't be any major changes to the tax code
in the budget. We just don't have time."
Rodrigues, like DeLeo, left open the possibility
that lawmakers could take up a major revenue
debate outside of the budget process. He noted
the Senate will convene a working group to study
the state's tax code, but warned it could be "at
least a year, if not longer" before that effort
yields any actionable suggestions.
Lawmakers have called for a wide range of new
taxes and fees to generate funding for
transportation, education and more, particularly
after a ballot question that would have taxed
income above $1 million at a higher rate was
invalidated by a court last year.
The House Ways and Means Committee will release
its budget on Wednesday, queueing up debate for
later in the month. The Senate will then take up
the matter in May.
Gov. Charlie Baker included several new taxes in
his budget, such as a 15 percent tax on opioid
manufacturers and an excise tax on e-cigarettes
and vaping products. The Wednesday budget
release will show whether House leaders agree
with him.
Rodrigues said Baker's proposals will still be
considered in the Senate, although he did not
indicate whether he supported them, and he
acknowledged that senators may file
revenue-generating amendments if the budget
comes to them as a "money bill."
"We'll take them as we come," he said. "We
haven't made that decision. We tend to deal with
our budget collectively and as a group. We
haven't even thought about that, haven't had
that discussion as a Senate on how we're going
to handle various amendment proposals."
Earlier on Tuesday, the Senate president said
she had not yet decided on a timeline for
considering additional revenues.
"We will decide when I meet with the senators as
to what our approach is," Spilka said.
Spilka did, however, tout the working group,
which will be chaired by Sen. Adam Hinds. In
remarks at the 495/MetroWest Partnership's
annual advocacy day, she said the effort will
explore potentially significant updates to a tax
code that has not received scrutiny in years.
"Our personal taxes, our businesses, haven't
been looked at in a comprehensive way in
decades," Spilka said. "In fact, I can't find
when it was truly last really looked at. I
believe we can do a better way of collecting
taxes in a fair, more progressive way that
creates a 21st-century framework where
innovative, technology-driven businesses can
develop and thrive — we clearly want them to
thrive — but that captures new revenue."
The Boston Herald
Wednesday, April 10, 2019
House budget zaps Baker tax proposals; seeks
boost in education spending
By Mary Markos
The House reported out its version of a $42.69
billion dollar budget today, eliminating many of
the taxes Gov. Charlie Baker had in his own
proposal and making its own attempt to address
the state’s underfunded school system.
The House version of the fiscal year 2020 budget
does not include an expanded tax to include
e-cigarettes, an increase excise tax through
property sales or the tax on gross receipts of
opioids that Baker proposed in his own budget in
January. Speaker Robert DeLeo said he expects
those will be “discussed at a later date.”
“As is the House’s history in the past, I think
that you will find this budget to be fiscally
responsible,” DeLeo said in a media briefing
this morning. “You will see various targeted
investments in terms of growing our economy as
well as making sure that we increase support for
our most vulnerable residents of the
Commonwealth.”
As part of the revenue projections, the House is
anticipating $294 million from gaming, which
includes revenue from Encore Boston Harbor,
whose license is currently being weighed by
regulators over the handling of sexual
misconduct allegations against former CEO Steve
Wynn.
“I think we are looking, watching closely what
happens with Encore,” said House Ways and Means
Committee Chair Aaron Micheliwtz. “It does
assume that Encore is going to open up at an
approximate time, I think we will just watch
that closely and pay attention to that as we go
forward.”
The House is recommending “historic levels of
investment,” into Chapter 70 funding, Michlewitz
said, proposing $5 billion in spending, $17.7
million more than Baker’s budget and $218
million more than the previous fiscal year. An
additional $16.5 million would be dedicated to a
low income reserve.
“We felt it was appropriate to set aside
available funds as a down payment as the
legislative process continues to move forward on
this important issue,” Michlewitz said,
referencing a number of bills that are being
considered to address the education funding
formula. “We are hoping to head back towards a
fully funded system within the next two years.”
The House is also “hitting the reset button” on
how the state handles Charter School
reimbursement to “create a more predictable
scale,” said Michlewitz, adding that the formula
has become “substantially unsustainable.”
A $2 million dollar SHARE grant program would
enhance access to social services and behavioral
health services “to support students beyond
their academics,” DeLeo said.
“I think that what we have learned over the
years is the importance of the intertwine, shall
we say, between academics and health care
services and social services and the like,”
DeLeo said, “and with the SHARE program, we’re
doing just that.”
MassHealth spending would increase by $345
million from the previous fiscal year and a
provision would be added to allow the Executive
office of Health and Human Services to negotiate
with drug manufacturers, similar to the
governor’s bill.
“We’re hopeful that this is going to be of
assistance in our efforts to try to contain
costs,” DeLeo said.
One of the major differences between the
governor’s proposal and the House, according to
Michlewitz, is that theirs did not include a
process to include the Attorney General because
they felt the AG already had the tools necessary
to look at the drug-pricing issue if she should
chose to.
The budget, which recommends approximately $1.8
million less spending than the governor’s H1
budget, would add $260 million to the rainy day
fund, bringing that account total in excess of
over $2.5 billion, according to the Speaker.
The budget also proposes a $30 million dollar
funding increase to nursing homes as well as the
establishment of a task force to examine how
they are run, a provision of $2 million to
promote restaurants and $10.1 million investment
in homeless student transportation.
State House News
Service
Wednesday, April 10, 2019
Revenue advocates disappointed by House leaders'
caution on new taxes
By Colin A. Young
The House's plan to take a wait-and-see approach
on new revenues this session, rather than pursue
new sources of funding in its fiscal year 2020
budget, was not well-received by two major
advocacy groups Wednesday.
House leadership unveiled its $42.7 billion
annual spending plan, but Speaker Robert DeLeo
said consideration of new revenue proposals
would take place later this session, including
sports betting, extending tobacco taxes to
e-cigarettes, taxing opioid manufacturers and
more.
The budget proposal (H 3800), which the House is
expected to debate in formal sessions the week
of April 22, would boost total state spending by
3 percent over the current year's budget and
includes no increases to broad-based taxes.
Marie-Frances Rivera, president of the
Massachusetts Budget and Policy Center, said
that her organization appreciates the
"thoughtful approach" the House plans to take on
revenue but panned the budget plan itself, with
no associated revenue boosters, as unhelpful.
"Moving the needle on current priorities -- from
education and transportation, to affordable
housing and other services -- means giving
serious consideration to sustainable, adequate,
and progressive revenue options," Rivera said in
a statement. "The House Ways and Means Committee
budget proposal would make it nearly impossible
for lawmakers to support our Commonwealth's
priorities in any meaningful way in the coming
fiscal year."
The Fund Our Future campaign, an advocacy group
made up of more than two dozen labor and
community organizations pushing for changes to
how the state funds public schools, said the
Ways and Means Committee's inclusion of $218
million in new Chapter 70 education aid and its
new $16.5 million program to support low-income
students is notable and laudable.
But the House is planning on addressing the
school funding formula after it passes a budget,
and Fund our Future said "half-measures will not
be sufficient." The group pledged to continue
pushing "for the major reinvestment that our
students need."
"We know that students, especially in low-income
urban and rural communities, need significantly
greater investments than this budget provides,
and they need to see those increased investments
this year," the coalition said in a statement.
"We hope that this budget proposal represents a
down payment on the way to the massive school
finance overhaul that we need to give every
student a high-quality public education from
preK through college."
The Massachusetts Teachers Association was also
unimpressed by the plan, calling the funding for
education "woefully inadequate."
"While the House budget is a modest improvement
over the governor's plan, it must be amended to
increase education funding. As the House debates
the budget, we will continue to fight to pass
bills that would require phasing in significant
increases for public education over the next few
years," the state's largest teachers union said
in a statement.
The MTA supports legislation put forward by Sen.
Sonia Chang-Diaz and Rep. Aaron Vega known as
the "Promise Act," which the union called the
only bill that would achieve "a
once-in-a-generation opportunity to provide all
students and communities with the schools they
deserve."
The committee budget was well-received by
members of the House's Republican caucus, which
accounts for 32 of the 160 House members.
Republican leaders pointed out that the budget
bill "builds on the Baker-Polito
Administration's commitment" to increasing local
aid and school funding, and endorses the Baker-Polito
administration's plan to let MassHealth directly
negotiate drug prices.
"The good news for the state's taxpayers is that
the budget does not impose any new broad-based
taxes," North Reading Rep. Brad Jones, the House
minority leader, said. "I will be working
closely with the members of the House Republican
Caucus over the next few days to identify
potential amendments we can offer to further
protect the interests of the state's taxpayers
and ensure the passage of a fiscally responsible
budget."
Rep. Todd Smola, the ranking Republican member
of the House Ways and Means Committee, did not
respond to messages from the New Service on
Wednesday. Other Republican House members
deferred to Smola when asked their thoughts on
the committee's budget plan.
In recent years, Jones and the Republican caucus
have raised concerns about the way the House
conducts its multi-day budget debate. Rather
than go through each of the hundreds of
amendments filed by members, House leaders
typically hold court with amendment sponsors in
a private back room and decide amongst
themselves which amendments will be adopted and
which amendments members will be asked to
withdraw.
The House typically consolidates dozens of
amendments into packages based on subject matter
that can be approved with a single vote, making
it more difficult for the public and advocates
to discern exactly what the House approves and
what is left out of the budget. On Wednesday,
Michlewitz said he and his team are still
deciding how to conduct the debate.
"In terms of the actual procedure, I think we're
still working on exactly what's the right way to
do it," he said. "We're looking at what's
previously been done and what we could add to it
as well."
In a Rules Committee's order adopted Wednesday
laying down the rules of the budget debate, the
House agreed to exclude from consideration any
amendments "that would authorize any form of
illegal gaming or authorize or regulate any form
of gaming not presently authorized or regulated
in the commonwealth."
Amendments are due to the clerk's office by 5
p.m. on Friday and debate on the amendments will
begin April 22, with those that would alter
state revenue up for consideration first.
The budget proposal was rolled out a week after
the Department of Revenue reported that a $292
million shortfall in state tax collections was
wiped out in March thanks to monthly tax
revenues that exceeded projections by $316
million, or 13.4 percent. With three months left
in fiscal year 2019 -- including April, the
largest month for tax collections --
Massachusetts stands $19 million above its
revenue goal.
"This is in contrast with the release of the
House Ways and Means budget from last year, when
the year-to-date collections were actually at
$892 million above benchmark," Michlewitz said.
"So while we've had a nice recovery in February
and March, we're still in a volatile situation."
In his letter to fellow House members,
Michlewitz attributed the swing in state revenue
to "volatility in the stock market, the 24 day
shutdown of the Federal government, and recent
changes to the Federal tax code."
Eileen McAnneny, president of the Massachusetts
Taxpayers Foundation, wrote in an op-ed
Wednesday that House budget managers "would be
wise to proceed using conservative revenue
estimates and judicious spending assumptions" to
avoid having to change course later in the
fiscal year.
The foundation highlighted the volatility of tax
collections this year, and the challenges of
forecasting the next year based on FY19
collections, in a recent brief.
"Fiscal 2019 tax revenue collections have been a
roller coaster ride, careening between $323
million over benchmarks to $403 million below
benchmarks over the past nine months," the
business-backed organization wrote. "There is no
way to know if the tax revenue roller coaster
ride is over."
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