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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”
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their Institutional Memory — |
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CLT UPDATE
Saturday, April 20, 2019
All eyes
on House budget debate next week
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Explaining how and why state dollars are
being spent will fall to House leaders next week, if they
are up to the challenge.
The impending budget debate, and school
vacation week, lulled Beacon Hill into a soft slumber, but
legislators and the media will need the rest to keep up with
what's on tap.
House lawmakers have filed 1,370 amendments
to the $42.7 billion Ways and Means budget, some of which
highlight the tension that exists between House Speaker
Robert DeLeo and his cautious approach to this year's
budget.
DeLeo's stated intention to forestall a
debate over new taxes didn't stop members like Rep. Mike
Connolly from filing an amendment to raise $1 billion in new
revenue by hiking capital gains taxes. The question will be
whether he forces debate or lets it die quietly as a
placeholder for the conversations to come.
As usual, however, there is a cushion built
into the Ways and Means budget that allows for some
additional spending without new revenue, which has given
hope to members looking, for instance, to boost UMass
funding by $10 million and give universities what they say
they need to freeze tuition and fees.
The spotlight might be on the House for much
of next week, but the Senate has more planned than just
making some popcorn and watching the show....
Senate President Karen Spilka, back from her
Florida vacation, will address the Greater Boston Chamber of
Commerce on Thursday where she's expected to talk about the
working groups she's assembling to look at the tax code,
transportation and mental health, and perhaps give a tease
of what to expect in her own budget proposal next month.
Later that day, the Senate will take up the so-called
"Gender X" bill that the Senate Ways and Means Committee
released this week with a new wrinkle.
The bill, like the one that passed the Senate last year,
would instruct the Registry of Motor Vehicles to allow
license and permit applicants to select a third, gender
neutral option when checking off a box identifying their
sex.
The Senate version of the bill this year, however, also
includes language that would allow people to have the sex on
their birth records changed to reflect a person's gender
identity.
State House News Service
Friday, April 19, 2019
Weekly Roundup
Recap and analysis of the week in state government
A state representative from Cambridge wants
to raise the state's capital gains tax in order to generate
more than $1 billion in new revenue for the state each year,
but at least one fiscal watchdog worries that could backfire
by discouraging investment.
An amendment Rep. Mike Connolly filed to the
fiscal 2020 budget set for deliberation in the House next
week would boost the state's tax rate on long-term capital
gains to 8.95 percent from its current 5.05 percent. The
Democrat said he would be prepared to debate the amendment
on the floor next week, even though House Speaker Robert
DeLeo has signaled he'd like to wait longer before
considering new tax proposals.
"I think what's so appealing about it as a
progressive is that 80 percent of capital gains goes to the
top 1 percent of Massachusetts households, according to the
Mass. Budget and Policy Center, so I would say it's
unassailably progressive to want to raise revenue from
capital gains," Connolly said....
"Raising the tax rates on 'unearned income'
would be a highly progressive way to raise additional
revenue because ownership of these assets (especially
financial assets such as stocks, bonds and cash holdings) is
narrowly concentrated in top-income households," the
MassBudget report said.
The $42.7 billion budget the House Ways and
Means Committee rolled out last week does not propose any
broad-based tax hikes, and it omitted proposals from Gov.
Charlie Baker to impose an excise tax on opioid
manufacturers and extend the tobacco tax to e-cigarettes.
Most of the more than 1,300 amendments House
lawmakers filed steer clear of the issue of taxes. Minority
Leader Brad Jones has proposed adding the governor's opioid
and tobacco taxes, and Billerica Republican Rep. Marc
Lombardo offered amendments that would lower both the sales
and income tax rates to 5 percent.
DeLeo has said he wants the House to
consider new revenue proposals later this year, after
committees have had time to vet various pieces of
legislation. Connolly's amendment, however, could spark
debate moving forward about whether the capital gains tax
rate is one that could be raised without hurting the economy
to net additional money for state investments....
Nine states, including New Hampshire, do not
impose a state capital gains tax. Elsewhere nearby, Maine
taxes capital gains at rates of up to 7.15 percent and
Connecticut up to 7 percent. Connolly, in a message pitching
his amendment to other lawmakers, said an increase to 8.95
percent would put Massachusetts "more in line with many
other states such as New York, Vermont, Maine, Minnesota,
Oregon, California, and others."
As of noon Thursday, two dozen other House
Democrats were backing Connolly's amendment -- he said he's
been "really gratified" by the response from his colleagues
-- and the Massachusetts Teachers Association and Public
Higher Education Network of Massachusetts have also voiced
support....
"As progressives, I think we've spent about
five years waiting for the Fair Share Amendment, and that
sort of consumed the space when it comes to raising
revenue," Connolly said. "Of course I was proud to cosponsor
the legislative version and stand in support of it last
week, but as we look at these needs for education,
transportation, housing, the feeling that I'm feeling and I
think that many other people are feeling is that we can't
wait another five years to address some of these needs, and
want to do it in a progressive way."
State House News Service
Thursday, April 18, 2019
Capital gains eyed by Cambridge rep as was to raise $$$
The House of Representatives gavels in at 10
a.m. Monday to begin its "budget week," a few days of
longer-than-usual formal sessions held to consider
amendments to leadership's $42.7 billion fiscal year 2020
budget proposal. The spending plan (H 3800) would boost
total state spending by 3 percent over the current year's
budget and includes no increases to broad-based taxes.
Representatives will weigh 1,370 amendments,
but, if past practice holds, most will be withdrawn, laid
aside or otherwise handled without discussion (as of Friday
morning, representatives had already withdrawn 28 of their
proposed amendments). For many other amendments, certain
aspects will be blended into large "consolidated" amendment
bundles and approved, often with bipartisan support, by a
single vote. Rather than go through each amendment on the
floor, House leaders typically hold court with sponsors in a
private back room to decide amongst themselves which ones
will be adopted and which ones members will be asked to
withdraw.
Debate could break out -- usually there is
some debate on the first day about revenue-related
amendments and then sporadically as certain riders catch
attention on the floor. The Massachusetts Taxpayers
Foundation said the Ways and Means Committee budget's
revenues exceed total spending by $95.3 million, "presumably
to support spending added by amendment during the floor
debate."
The House will first consider any amendments
that would raise or lower the revenues the rest of the
spending plan is built on. There are a few such amendments,
including Rep. Marc Lombardo's attempts to lower the sales
and income tax rates to 5 percent....
Next week also brings the April 24 deadline
for legislative committees to report on proposed
constitutional amendments. There is a May 8 deadline to put
items on the Constitutional Convention calendar and to
convene the joint session where such amendments are
considered.
Committee review is a first step of a
multi-year process for legislative attempts to amend the
constitution. The most high-profile proposed amendment is
the so-called "millionaire's tax" or Fair Share Amendment,
filed by Sen. Jason Lewis and Rep. James O'Day, to generate
new revenue for education and transportation by imposing a 4
percent surtax on incomes over $1 million. Both versions of
that bill (H 86, S 16) have already received favorable
reports from the Revenue Committee.
State House News Service
Friday, April 19, 2019
Advances - Week of April 21, 2019
A new campaign is underway to promote an
amendment to the state constitution to allow a graduated
income tax in Massachusetts and impose an additional 4
percent income tax, in addition to the current flat 5.1
percent tax, on taxpayers’ earnings of more than $1 million.
Language in the amendment requires that, “subject to
appropriation,” the revenue goes to fund quality public
education, affordable public colleges and universities, and
for the repair and maintenance of roads, bridges and public
transportation.
The proposal is sponsored by Sen. Jason
Lewis (D-Winchester) and Rep. James O’Day (D-West Boylston).
It would need the votes of 101 of the 200 members of the
House and Senate in the current 2019-2020 session and again
in the 2021-2022 session. The earliest it could be on the
ballot is in November 2022....
“We can’t conceive of how anything can
possibly be more fair than every taxpayer paying an equal
tax rate on whatever their income,” said Chip Ford,
Executive Director of Citizens for Limited Taxation,
an opponent of the tax. “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.”
“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,” concluded Ford.
Beacon Hill Roll Call
Week of April 8-12, 2019
By Bob Katzen
Proponents of the so-called “millionaires
tax” conveniently fail to mention that one group negatively
impacted by this proposal are not millionaires at all. They
are small businesses that happen to file their business
taxes on the same form as their personal income tax. Unlike
C-corporations, these businesses are called partnerships,
sole proprietorships, limited liability corporations, and S
corps. They make up most of the small businesses, like local
builders and boutiques, or retail shops and restaurants.
Despite the fact they probably aren’t wealthy, they would be
treated like “millionaires” and face a 4 percent income tax
surcharge....
The “millionaires” tax is promoted as a way
to raise more money for state education and transportation
spending. But history has demonstrated it is unlikely the
increased revenue would go for those purposes. More likely,
it would be rerouted to legislator’s pork-barrel spending
projects or state health spending, which makes up 40 percent
of the state’s budget.
Tell your local elected officials that small
business owners are your friends and neighbors who
strengthen your community and they should not be subjected
to crushing tax rates through a deceptive tax hike scheme
with a misleading name like the “millionaires” tax.
The Salem News
Thursday, April 11, 2019
The unfair impact of the 'millionaires tax'
By Christopher Carlozzi
Massachusetts sanctuary cities such as
Somerville, Cambridge and Boston would be overwhelmed if
President Trump follows through on his threat to flood them
with thousands of detained migrants, local economic and
immigration experts say.
School systems would be strained, and it
could prove impossible to house them in an already saturated
and super-charged real estate market.
While both Somerville and Cambridge
officials have touted their sanctuary city status, and
Boston calls itself an illegal immigrant-friendly “trust
act” city, migrants are more typically placed in Lynn,
Chelsea and other places with lower housing prices, said
Jessica Vaughan, director of policy studies with the Center
for Immigration Studies.
“Somerville and Cambridge have higher than
average housing costs, so eventually they’d be pushed out to
more affordable areas,” she said. “Unless volunteers take
people into their homes, they’d have to move on.”
Somerville is already facing a housing
crisis, said City Councilor Stephanie Hirsch. Ten percent of
the city’s residential units are affordable, and there’s a
long wait list, she said.
When asked where these immigrants would
live, she responded Monday, “That’s a good question,” adding
that it would certainly be a challenge considering the
region’s housing crunch. But she added, “I hope we as a city
and region continue to host an influx of immigrants. But
whether or not we have more immigrants — and I hope we do —
we need to pull together as a commonwealth to serve all our
residents better.”
The Boston Herald
Tuesday, April 16, 2019
Trump’s threatened migrant influx
would strain Massachusetts sanctuary cities, experts say
Make no mistake, a congestion pricing law is
really a collateral damage law that will punish law-abiding
taxpayers for having the audacity to show up for work.
As the Herald’s Sean Philip Cotter reports,
momentum is building for congestion pricing as lawmakers say
the traffic heading into downtown Boston is wreaking havoc
on roads and clogging up neighborhoods.
Congestion pricing includes several forms of
tolling intended to discourage people from driving. During
peak driving hours, prices would increase and deter
commuters from getting behind the wheel during those times.
Prices would decrease during lower-traffic periods.
Some lawmakers are counting on congestion
pricing to reduce congestion but that contention relies on
the supposition that commuters enjoy their rush-hour treks
through the city and are doing so as a matter of choice.
Last year, Gov. Baker acknowledged that many
Bay Staters were locked into rush-hour commutes and it
wasn’t by choice. “A lot of people come in based on when
their boss requires them to come in. They also come in based
on things like dropping their kids off at school and putting
their kids at day care and a whole bunch of other things,”
he said. “And I think for a lot of folks who don’t have the
flexibility to manage their schedule, because, you know,
they are working on a time clock, and stuff like that, they
are going to view this as incredibly punitive.” ...
If tolling is going to be used to influence
traffic in and around Boston, the only fair way to do it is
to lower rates dramatically for off-peak hours and hope that
commuters with flexibility adjust to those times. Rather
than punish everybody, we’d be rewarding those who had the
ability to make the change.
A Boston Herald editorial
Wednesday, April 17, 2019
Congestion pricing is punishing the victims
Commuting is not a choice for many
Nearly one-third of the employees who
retired from the MBTA last year were under the age of 55,
and dozens were still in their 40s, adding to the flow of
younger retirees state lawmakers had hoped to stem years
ago....
In all, nearly 200 employees retired from
the transit agency in 2018, according to a list released by
the MBTA Retirement Fund in response to a Globe request....
Two dozen were in their 40s, including
Kendra J. Thomas, who retired at 47 from the T’s Wellington
garage with a $63,406 pension, and Jean MacEachern, a former
contract services manager in the T’s Signal & Communications
Maintenance office, who is receiving a $60,353 pension after
retiring at 48.
Continuing waves of younger retirees could
further strain a $1.5 billion pension system already beset
by other concerns. More pensioners — 5,600 in total — are
collecting benefits than there are workers paying in, and T
officials have raised alarms over the growing payments the
agency is funneling into the separately run pension fund....
Amid the discussions, T and state officials
have focused on the agency’s contributions to the pension
system, which have ballooned from $30 million in fiscal year
2007 to $103 million this year....
The Boston Globe
Tuesday, April 16, 2019
One of three MBTA retirees last year was under 55,
putting another strain on pension fund
MBTA spokesman Joe Pesaturo told the
newspaper that more than 1,200 of those receiving MBTA
pensions began collecting before they hit age 50. An
additional 500 current employees are eligible to retire
because they have worked more than 23 years, he said.
It’s not news that pension obligations –
coupled with the huge cost of delayed system maintenance and
replacement of aging subway cars – contribute to the poor
financial condition of the transit agency. The repair
backlog tops $7 billion alone, and a quarter of the T’s
annual budget goes toward paying down the debt.
The numbers show there are more MBTA
pensioners than workers paying into the pension system.
Taxpayers will continue to shoulder a major burden for
decades as this essential public transit system tries to
right itself.
A ballot question in 2013 to have an
automatic gas tax, with a portion going to fund the MBTA,
was defeated at the polls by about 53 percent of voters.
Discussions about a “millionaires tax” now could bring some
hope – if it was approved and helped fund public
transportation. That’s a big “if” and may not be a solution
at all. But serious measures are needed to give the MBTA a
leg up and to take a little of the burden off the average
taxpayers of Massachusetts.
A Newburyport Daily News editorial
Friday, April 19, 2019
T's young retirees a symbol of the challenge
The symbolic date when Massachusetts
residents are said to start working for themselves instead
of merely paying their tax burden to government is coming up
next week, according to an organization that tracks taxes.
Massachusetts is tied for 43rd in the nation
this year for earliest Tax Freedom Day, which this year
occurs on Tuesday, April 23, according to the Tax
Foundation, a pro-growth think tank in Washington D.C. that
is skeptical about taxes.
Oil-rich Alaska is number one, on March 25.
High-tax New York is 50th, at May 3. (That’s the same date
as Washington D.C., the nation’s capital.)
Among New England states, New Hampshire’s
Tax Freedom Day comes the earliest, on April 19. But even
with no state income tax or state sales tax, it still isn’t
among the top half of the country in per-capita tax burden,
according to the Tax Foundation – it ranks 35th.
Maine ranks 38th, at April 20, not among the
highest in part because of the policies of former Governor
Paul LePage, who resisted tax hikes and sometimes didn’t
spend appropriations the state legislature approved.
New Hampshire’s higher-tax neighbor,
Vermont, ranks 42nd, at April 22.
Massachusetts, at 43rd, beats out only Rhode
Island and Connecticut, tied for 46th at April 25....
Tax Freedom Day for Americans overall this
year is April 16. That’s the same as it was in 2018, but
five days earlier than it was in 2017, thanks to the Trump
income and corporate tax cut of that year.
The New Boston Post
Thursday, April 18, 2019
Massachusetts Near Bottom
When It Comes To ‘Tax Freedom,’ Think Tank Says
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Chip Ford's CLT
Commentary
"The impending budget debate, and school
vacation week, lulled Beacon Hill into a soft slumber"
the State House News Service reported on Friday
afternoon. But there was plenty of activity
happening around the edges and in the shadows all week
as the House gears up and maneuvers for its upcoming big
week of budget debate. With 1,370 amendments to it
filed – each sponsored by
an advocate or advocates –
even "bundling" them, the recent mechanism to create
something vaguely manageable, will be Beacon Hill
sausage-making of the highest order. This is
especially true if Speaker DeLeo and his cadre of
"regular Democrat" loyalists truly intend to hold the
line – at least for now
– on any tax and fee
increases.
I pointed out last week that a single tax or fee
increase can and likely would be interpreted as opening
up the budget as a "money bill."
That would be an invitation to the Senate budget for
unfettered further tax and fee increases. That's
what will be most important to watch for next week.
"Minority Leader Brad Jones has proposed
adding the governor's opioid and tobacco taxes, and
Billerica Republican Rep. Marc Lombardo offered
amendments that would lower both the sales and income
tax rates to 5 percent," the State House News Service
reported. Under the state Supreme Judicial Court's
ruling, those too would likely open the House
budget to being a "money bill."
Already there are
tax amendments offered in the House budget, any one of
them sufficient to open the floodgates. The big
one that needs to fail is a proposed hike in the
long-term capital gains tax to 8.95 percent from its
current 5.05 percent, submitted by Democrat Rep. Mike
Connolly of Cambridge.
CLT,
"The Taxpayers’ Institutional Memory”
–
Those who were around in 1990 might recall that repealing the
capital gains tax was part of the late-night devil's
bargain then-Gov. Bill Weld made with then-House Speaker
Tom Finneran. Weld got the capital gains tax
repeal; Finneran got a 55% pay raise for legislators.
Then in 2002 –
with their pay hike firmly locked in and pocketed
– at the same time the
Legislature "temporarily froze" our income tax rollback
it reinstituted the capital gains tax repeal, making it
retroactive.
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Gov. Romney,
Barbara Anderson, and Chip Ford at a news
conference outside the governor's office.
(Photo by SHNS) |
Barbara Anderson explained this betrayal
best in her May 14, 2005 column, "Small
wonder smart businesses choose to invest their money
elsewhere." At that time, the Legislature
attempted to make its new capital gains tax hike
retroactive. The state
Supreme Judicial Court ultimately rejected that
outrage.
The battle over what to do next was
waged through November, when Gov. Romney, Barbara
Anderson, and affected CLT members and small-business
owners held
a news conference to support the governor's bill to
refund the retroactive taxation (termed "The Vampire
Tax," it having come back from the dead).
On December 1, 2005 the Legislature
dropped its retroactive capital gains tax money grab.
But here comes another "progressive"
Taker legislator for another bite at a capital gains
tax hike because – More Is
Never Enough (MINE) and never will be. According
to Rep. Connolly of Cambridge, if imposed it would rake
in an additional $1 billion that –
unlike the proposed "millionaire's tax" alleges it will
be – this one wouldn't be "dedicated" to
anything; it will be unrestricted, free cash to
squander anywhere on anything.
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Chip Ford
Executive Director |
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State House News
Service
Friday, April 19, 2019
Weekly Roundup
Recap and analysis of the week in state
government
By Matt Murphy
. . . Explaining how and why state dollars are
being spent will fall to House leaders next
week, if they are up to the challenge.
The impending budget debate, and school vacation
week, lulled Beacon Hill into a soft slumber,
but legislators and the media will need the rest
to keep up with what's on tap.
House lawmakers have filed 1,370 amendments to
the $42.7 billion Ways and Means budget, some of
which highlight the tension that exists between
House Speaker Robert DeLeo and his cautious
approach to this year's budget.
DeLeo's stated intention to forestall a debate
over new taxes didn't stop members like Rep.
Mike Connolly from filing an amendment to raise
$1 billion in new revenue by hiking capital
gains taxes. The question will be whether he
forces debate or lets it die quietly as a
placeholder for the conversations to come.
As usual, however, there is a cushion built into
the Ways and Means budget that allows for some
additional spending without new revenue, which
has given hope to members looking, for instance,
to boost UMass funding by $10 million and give
universities what they say they need to freeze
tuition and fees.
The spotlight might be on the House for much of
next week, but the Senate has more planned than
just making some popcorn and watching the show.
Senate President Karen Spilka, back from her
Florida vacation, will address the Greater
Boston Chamber of Commerce on Thursday where
she's expected to talk about the working groups
she's assembling to look at the tax code,
transportation and mental health, and perhaps
give a tease of what to expect in her own budget
proposal next month.
Later that day, the Senate will take up the
so-called "Gender X" bill that the Senate Ways
and Means Committee released this week with a
new wrinkle.
The bill, like the one that passed the Senate
last year, would instruct the Registry of Motor
Vehicles to allow license and permit applicants
to select a third, gender neutral option when
checking off a box identifying their sex.
The Senate version of the bill this year,
however, also includes language that would allow
people to have the sex on their birth records
changed to reflect a person's gender identity.
State House News
Service
Thursday, April 18, 2019
Capital gains eyed by Cambridge rep as was to
raise $$$
By Katie Lannan
A state representative from Cambridge wants to
raise the state's capital gains tax in order to
generate more than $1 billion in new revenue for
the state each year, but at least one fiscal
watchdog worries that could backfire by
discouraging investment.
An amendment Rep. Mike Connolly filed to the
fiscal 2020 budget set for deliberation in the
House next week would boost the state's tax rate
on long-term capital gains to 8.95 percent from
its current 5.05 percent. The Democrat said he
would be prepared to debate the amendment on the
floor next week, even though House Speaker
Robert DeLeo has signaled he'd like to wait
longer before considering new tax proposals.
"I think what's so appealing about it as a
progressive is that 80 percent of capital gains
goes to the top 1 percent of Massachusetts
households, according to the Mass. Budget and
Policy Center, so I would say it's unassailably
progressive to want to raise revenue from
capital gains," Connolly said.
Connolly said he was inspired to file the
amendment by a January report from the
Massachusetts Budget and Policy center detailing
14 options for raising "progressive revenue."
That report said the state currently receives
about $1.7 billion annually from capital gains
taxes, and each one percentage point increase in
the rate would generate about $300 million in
additional annual revenue.
"Raising the tax rates on 'unearned income'
would be a highly progressive way to raise
additional revenue because ownership of these
assets (especially financial assets such as
stocks, bonds and cash holdings) is narrowly
concentrated in top-income households," the
MassBudget report said.
The $42.7 billion budget the House Ways and
Means Committee rolled out last week does not
propose any broad-based tax hikes, and it
omitted proposals from Gov. Charlie Baker to
impose an excise tax on opioid manufacturers and
extend the tobacco tax to e-cigarettes.
Most of the more than 1,300 amendments House
lawmakers filed steer clear of the issue of
taxes. Minority Leader Brad Jones has proposed
adding the governor's opioid and tobacco taxes,
and Billerica Republican Rep. Marc Lombardo
offered amendments that would lower both the
sales and income tax rates to 5 percent.
DeLeo has said he wants the House to consider
new revenue proposals later this year, after
committees have had time to vet various pieces
of legislation. Connolly's amendment, however,
could spark debate moving forward about whether
the capital gains tax rate is one that could be
raised without hurting the economy to net
additional money for state investments.
Addressing the Greater Boston Chamber of
Commerce last month, DeLeo asked business
leaders for their input on policies to improve
transportation in Massachusetts and afterwards
told reporters that "it's all on the table" when
it comes to possible new revenue for
transportation.
Connolly said he found those remarks, and the
prospect of a future revenue discussion,
"encouraging."
"I think what I want to make sure is that as
part of this revenue picture, we really look
toward progressive approaches," he said. "I
wouldn't want to see us simply rely on more
regressive approaches."
Massachusetts Taxpayers Foundation President
Eileen McAnneny said lawmakers should be "very
careful" in considering changes to the capital
gains tax rate, warning of potential unintended
consequences like discouraging people from
investing or saving. McAnneny noted that money a
person invests has often already been taxed when
it is earned as income.
"We're a state that relies a lot on innovators
and entrepreneurs and investors to provide
capital up front, so we have to be really
careful," she told the News Service. "We don't
want to hurt a lot of the underpinnings of our
economy."
Nine states, including New Hampshire, do not
impose a state capital gains tax. Elsewhere
nearby, Maine taxes capital gains at rates of up
to 7.15 percent and Connecticut up to 7 percent.
Connolly, in a message pitching his amendment to
other lawmakers, said an increase to 8.95
percent would put Massachusetts "more in line
with many other states such as New York,
Vermont, Maine, Minnesota, Oregon, California,
and others."
As of noon Thursday, two dozen other House
Democrats were backing Connolly's amendment --
he said he's been "really gratified" by the
response from his colleagues -- and the
Massachusetts Teachers Association and Public
Higher Education Network of Massachusetts have
also voiced support.
The amendment (1357) does not seek to dedicate
revenue from a higher capital gains tax to any
specific purpose.
Connolly said he thinks education funding would
be a "top priority" for the money his proposal
would generate, along with public
transportation, housing and programs and
services that support the state's most
vulnerable residents.
"As a state rep, every single day I'm confronted
with examples of where we need to be making
bigger investments," he said.
The Revenue Committee last week held a hearing
on the latest iteration of what's known as the
millionaire's tax or Fair Share Amendment, a
proposed amendment to the state Constitution
that would impose a 4 percent surtax on incomes
over $1 million and dedicate the corresponding
revenue to education and transportation.
The measure could not be put before voters until
2022 at the earliest. A similar years-long
effort to put the surtax on the 2018 ballot was
scuttled last year when the Supreme Judicial
Court ruled that it improperly mixed unrelated
subjects -- a restriction that does not apply to
amendments origninated by lawmakers, like this
year's version.
"As progressives, I think we've spent about five
years waiting for the Fair Share Amendment, and
that sort of consumed the space when it comes to
raising revenue," Connolly said. "Of course I
was proud to cosponsor the legislative version
and stand in support of it last week, but as we
look at these needs for education,
transportation, housing, the feeling that I'm
feeling and I think that many other people are
feeling is that we can't wait another five years
to address some of these needs, and want to do
it in a progressive way."
State House News
Service
Friday, April 19, 2019
Advances - Week of April 21, 2019
The House of Representatives gavels in at 10
a.m. Monday to begin its "budget week," a few
days of longer-than-usual formal sessions held
to consider amendments to leadership's $42.7
billion fiscal year 2020 budget proposal. The
spending plan (H 3800) would boost total state
spending by 3 percent over the current year's
budget and includes no increases to broad-based
taxes.
Representatives will weigh 1,370 amendments,
but, if past practice holds, most will be
withdrawn, laid aside or otherwise handled
without discussion (as of Friday morning,
representatives had already withdrawn 28 of
their proposed amendments). For many other
amendments, certain aspects will be blended into
large "consolidated" amendment bundles and
approved, often with bipartisan support, by a
single vote. Rather than go through each
amendment on the floor, House leaders typically
hold court with sponsors in a private back room
to decide amongst themselves which ones will be
adopted and which ones members will be asked to
withdraw.
Debate could break out -- usually there is some
debate on the first day about revenue-related
amendments and then sporadically as certain
riders catch attention on the floor. The
Massachusetts Taxpayers Foundation said the Ways
and Means Committee budget's revenues exceed
total spending by $95.3 million, "presumably to
support spending added by amendment during the
floor debate."
The House will first consider any amendments
that would raise or lower the revenues the rest
of the spending plan is built on. There are a
few such amendments, including Rep. Marc
Lombardo's attempts to lower the sales and
income tax rates to 5 percent. Then, after
giving its initial approval to the budget, the
House will move on to earmarks and policy
riders. At least one topic, sports betting, will
be completely off the table after the House
agreed to exclude any amendment "that would
authorize any form of illegal gaming or
authorize or regulate any form of gaming not
presently authorized or regulated in the
commonwealth."
Much about how the House approaches this year's
debate is unknown, and all eyes will be on Ways
and Means Chairman Aaron Michlewitz as he steers
colleagues through his first annual budget as
chairman. The North End Democrat said last week
that he and his team were looking at possible
ways to switch up the budget process, but an
aide said Friday that no major changes are
anticipated. Michlewitz is the third Ways and
Means chairman to lead the House's budget debate
in the last three years. Brian Dempsey resigned
from the House after finishing up the budget in
2017, and Jeffrey Sanchez took the reins for
last year's budget but was voted out of office
by his constituents in last September's primary
election.
The FY2020 House budget debate will take place
while the state is in a cautiously comfortable
revenue position. 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. With three months left in
fiscal year 2019 -- including April, the largest
month for tax collections -- Massachusetts
stands $19 million above its revenue target.
Though the House will command most of the
attention in the State House next week, the
Senate is preparing to take up a piece of
legislation that has become a central part of
Senate President Karen Spilka's agenda. On
Thursday, the Senate plans to take up the
so-called "Gender X" bill (S 2203), which would
require the Registry of Motor Vehicles to make a
third, gender-neutral option available to
applicants for a license or learner's permit and
would allow anyone 18 or older, an emancipated
minor or the parents of a minor to request a
change in the sex listed on someone's birth
certificate to male, female or X.
The Senate on Thursday will also vote to
override Gov. Charlie Baker's veto of a bill
repealing a welfare benefit cap -- often
referred to as the "cap on kids" -- that
restricts the amount of assistance provided to
families who have additional children while they
are already receiving aid. The Senate approved
the bill (H 3594) on a 37-1 vote in late March.
Next week also brings the April 24 deadline for
legislative committees to report on proposed
constitutional amendments. There is a May 8
deadline to put items on the Constitutional
Convention calendar and to convene the joint
session where such amendments are considered.
Committee review is a first step of a multi-year
process for legislative attempts to amend the
constitution. The most high-profile proposed
amendment is the so-called "millionaire's tax"
or Fair Share Amendment, filed by Sen. Jason
Lewis and Rep. James O'Day, to generate new
revenue for education and transportation by
imposing a 4 percent surtax on incomes over $1
million. Both versions of that bill (H 86, S 16)
have already received favorable reports from the
Revenue Committee.
Other amendments suggest term limits for judges
(Judiciary Committee), gender-neutral wording in
the Constitution (Judiciary), no-excuse absentee
voting (Election Laws), restoring voting rights
to incarcerated felons (Election Laws), and
creation of an independent redistricting
commission (Election Laws).
MONDAY, APRIL 22, 2019
HOUSE - BUDGET WEEK BEGINS: The House gavels in
at 10 a.m. to begin deliberations on the House
Ways and Means Committee's $42.7 billion fiscal
year 2020 budget proposal (H 3800). Tax policy
amendments will be up first since those
proposals, if adopted, could reduce or increase
the amount of revenue available for
consideration during the portion of budget
deliberations focused on spending amendments.
Sessions typically run into the evening and at
some point Monday the House will likely begin
the process of assembling its consolidated
amendment packages. The House usually draws from
its own budget allocation to provide catered
meals to representatives, and in the past has
used Metro Catering, D'Amelio's Off the Boat
Seafood in Revere and Kelly's Roast Beef to
provide the food. (Monday, 10 a.m., House
Chamber)
Beacon Hill Roll
Call
Week of April 8-12, 2019
By Bob Katzen
Beacon Hill Roll Call records local
representatives’ votes on roll calls from the
week of April 8-12. There were no roll calls in
the Senate last week.
FOUR PERCENT TAX HIKE ON MILLIONAIRES: A new
campaign is underway to promote an amendment to
the state constitution to allow a graduated
income tax in Massachusetts and impose an
additional 4 percent income tax, in addition to
the current flat 5.1 percent tax, on taxpayers’
earnings of more than $1 million. Language in
the amendment requires that, “subject to
appropriation,” the revenue goes to fund quality
public education, affordable public colleges and
universities, and for the repair and maintenance
of roads, bridges and public transportation.
The proposal is sponsored by Sen. Jason Lewis
(D-Winchester) and Rep. James O’Day (D-West
Boylston). It would need the votes of 101 of the
200 members of the House and Senate in the
current 2019-2020 session and again in the
2021-2022 session. The earliest it could be on
the ballot is in November 2022.
A similar effort by a group called the “Raise Up
Coalition” to get the question on the 2018
ballot was derailed when it was ruled
unconstitutional by the Supreme Judicial Court
which said the constitution prohibits placing
more than one objective in a single proposed
constitutional amendment that is sought by a
citizens’ group. The court’s decision noted that
the proposal imposed the tax and then stipulates
how the money could be spent.
The current amendment is proposed by legislators
rather than citizens and according to
proponents, amendments proposed by legislators
can have more than one objective and would not
be ruled unconstitutional by the court.
Supporters say the amendment will affect only
14,000 extremely wealthy individuals and will
generate up to $1.9 billion per year in
additional tax revenue. They argue that using
the funds for public education, public colleges,
and universities, and for the repair and
maintenance of roads, bridges and public
transportation will benefit millions of Bay
State taxpayers.
Opponents argue the new tax will result in the
loss of 9,500 private sector jobs, the loss of
$405 million annually in personal disposable
income, and some millionaires moving out of
state. They argued that the earmarking of the
funds for specific projects is illegal and said
all the funds will go into the General Fund and
be up for grabs to spend on anything.
“The $2 billion in new revenue that this
proposal would raise would go a long way in
helping to fix crumbling roads and bridges,
improving service on the MBTA and other public
transportation, increasing funding for public
schools, expanding access to quality early
childhood education, and making higher education
more affordable for students and families,” said
Lewis. “It’s also the best way to raise revenue
that would make our tax system fairer and more
progressive, rather than increasing taxes on
middle class families who cannot afford to pay
more.”
“By increasing the state’s already-high reliance
on the income tax—a volatile and economically
sensitive revenue source—this proposal would
make the state more vulnerable to future budget
gaps, leaving residents more exposed to the tax
increases and budget cuts required to close such
gaps,” said James Rooney, President & CEO of the
Greater Boston Chamber of Commerce in a written
statement opposing the tax.
“Should the proposal pass, 30 percent of total
income tax revenue would come from less than 1
percent of all Massachusetts personal income tax
filers,” continued Rooney. “Since the revenue
would be dependent on the actions of a small
share of filers, it is even more susceptible to
sharp fluctuation.”
“The 1 percent, those who make $1 million in
income a year, pay the smallest share in state
income tax,” said O’Day. “This practice has
built an economy on the backs of those who
struggle most. By increasing income taxes by 4
percent for those who make $1 million in income
a year, Massachusetts will lower the economic
burden on low income residents while investing
in the education and infrastructural foundations
of the state which drive our economic
development.”
“We can’t conceive of how anything can possibly
be more fair than every taxpayer paying an equal
tax rate on whatever their income,” said Chip
Ford, Executive Director of Citizens for
Limited Taxation, an opponent of the tax.
“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.”
“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,” concluded Ford.
The Salem News
Thursday, April 11, 2019
The unfair impact of the 'millionaires tax'
By Christopher Carlozzi
Everybody wants to see vibrant, bustling
Massachusetts main streets in every town
populated with thriving small businesses. So why
are legislators proposing a policy that will
unfairly tax small businesses at a higher tax
rate?
Proponents of the so-called “millionaires tax”
conveniently fail to mention that one group
negatively impacted by this proposal are not
millionaires at all. They are small businesses
that happen to file their business taxes on the
same form as their personal income tax. Unlike
C-corporations, these businesses are called
partnerships, sole proprietorships, limited
liability corporations, and S corps. They make
up most of the small businesses, like local
builders and boutiques, or retail shops and
restaurants. Despite the fact they probably
aren’t wealthy, they would be treated like
“millionaires” and face a 4 percent income tax
surcharge.
This ill-advised tax proposal will especially
hurt these entrepreneurs once they reach
retirement age. Let’s say they opened a small
business 30 years ago in Cambridge or Melrose
and spent decades investing time, money and
energy, and now they want to sell their business
and retire. Over time, the price of the property
where the business is located is likely to have
grown exponentially because Massachusetts
property values are at a premium. Their little
parcel of land could now be worth more than $1
million.
The retirement the business owner counted on
would include the sale of their business, assets
and property, at the current tax rate. But if a
millionaires tax becomes law, the rate for that
one-time sale would jump from a 5.05 percent tax
to a whopping 9.05 percent rate. A huge chunk of
the nest egg they planned to use in their golden
years would go to the state.
The Massachusetts Supreme Judicial Court struck
down an identical tax proposed as a ballot
initiative for the 2018 election. Other areas of
the country that enacted similar taxes have seen
devastating results as higher-income people left
the state for more tax-friendly places.
Massachusetts small business owners will be
stuck, however, and punished for simply owning
and operating a business here.
Proponents of this tax call it the “fair share”
amendment, but nothing about it is fair to small
business owners. These men and women in your
community are the ones that sponsor your kids’
Little League teams, donate to the local school
fundraiser and provide jobs to your neighbors.
To thank them, some legislators would like to
increase their taxes, making it more difficult
for them to retire comfortably.
The “millionaires” tax is promoted as a way to
raise more money for state education and
transportation spending. But history has
demonstrated it is unlikely the increased
revenue would go for those purposes. More
likely, it would be rerouted to legislator’s
pork-barrel spending projects or state health
spending, which makes up 40 percent of the
state’s budget.
Tell your local elected officials that small
business owners are your friends and neighbors
who strengthen your community and they should
not be subjected to crushing tax rates through a
deceptive tax hike scheme with a misleading name
like the “millionaires” tax.
Christopher Carlozzi is the state director of
NFIB, an association that represents thousands
of small business members in Massachusetts.
The Boston Herald
Tuesday, April 16, 2019
Trump’s threatened migrant influx
would strain Massachusetts sanctuary cities,
experts say
By Rick Sobey
Massachusetts sanctuary cities such as
Somerville, Cambridge and Boston would be
overwhelmed if President Trump follows through
on his threat to flood them with thousands of
detained migrants, local economic and
immigration experts say.
School systems would be strained, and it could
prove impossible to house them in an already
saturated and super-charged real estate market.
While both Somerville and Cambridge officials
have touted their sanctuary city status, and
Boston calls itself an illegal
immigrant-friendly “trust act” city, migrants
are more typically placed in Lynn, Chelsea and
other places with lower housing prices, said
Jessica Vaughan, director of policy studies with
the Center for Immigration Studies.
“Somerville and Cambridge have higher than
average housing costs, so eventually they’d be
pushed out to more affordable areas,” she said.
“Unless volunteers take people into their homes,
they’d have to move on.”
Somerville is already facing a housing crisis,
said City Councilor Stephanie Hirsch. Ten
percent of the city’s residential units are
affordable, and there’s a long wait list, she
said.
When asked where these immigrants would live,
she responded Monday, “That’s a good question,”
adding that it would certainly be a challenge
considering the region’s housing crunch. But she
added, “I hope we as a city and region continue
to host an influx of immigrants. But whether or
not we have more immigrants — and I hope we do —
we need to pull together as a commonwealth to
serve all our residents better.”
International Institute of New England CEO Jeff
Thielman said he believes immigrants could find
work here because employers are desperate for
employees.
“They could get entry-level jobs with some
English ability, and our organization would help
them learn English in our programs,” he added.
But immigrants inundating area schools would
cause major issue for districts already facing
budget pressures, Vaughan said.
“Then when a large number of kids arrive off
cycle, districts have to spread their budget
thinner,” Vaughan said. “It’s a strain.”
These students also face English barriers and
require extensive support services, she added.
Hirsch argued the city’s schools would have room
for more students. They could add five students
to a classroom, for example, without it being a
burden, she said.
Half of Somerville’s students speak a language
other than English at home, Hirsch added.
“We would figure it out,” she said.
The Boston Herald
Wednesday, April 17, 2019
A Boston Herald editorial
Congestion pricing is punishing the victims
Commuting is not a choice for many
Make no mistake, a congestion pricing law is
really a collateral damage law that will punish
law-abiding taxpayers for having the audacity to
show up for work.
As the Herald’s Sean Philip Cotter reports,
momentum is building for congestion pricing as
lawmakers say the traffic heading into downtown
Boston is wreaking havoc on roads and clogging
up neighborhoods.
Congestion pricing includes several forms of
tolling intended to discourage people from
driving. During peak driving hours, prices would
increase and deter commuters from getting behind
the wheel during those times. Prices would
decrease during lower-traffic periods.
Some lawmakers are counting on congestion
pricing to reduce congestion but that contention
relies on the supposition that commuters enjoy
their rush-hour treks through the city and are
doing so as a matter of choice.
Last year, Gov. Baker acknowledged that many Bay
Staters were locked into rush-hour commutes and
it wasn’t by choice. “A lot of people come in
based on when their boss requires them to come
in. They also come in based on things like
dropping their kids off at school and putting
their kids at day care and a whole bunch of
other things,” he said. “And I think for a lot
of folks who don’t have the flexibility to
manage their schedule, because, you know, they
are working on a time clock, and stuff like
that, they are going to view this as incredibly
punitive.”
The governor is right. It is wholly unfair to
punish people whose occupations force them to
travel into the city in peak times. It is
grueling enough making it through the juggernaut
that is Boston on a day-to-day basis. Hiking
fees to punish them further for that privilege
is downright inhumane.
If tolling is going to be used to influence
traffic in and around Boston, the only fair way
to do it is to lower rates dramatically for
off-peak hours and hope that commuters with
flexibility adjust to those times. Rather than
punish everybody, we’d be rewarding those who
had the ability to make the change.
Elected leaders must resist the knee-jerk
temptation to go to the taxpayers for quick
solutions every time they are stymied by
transportation challenges. It affects the
quality of life for commuters and visitors to
Boston and will ultimately result in producers —
the kind of people who bolster the economy —
choosing life away from the city.
The Boston Globe
Tuesday, April 16, 2019
One of three MBTA retirees last year was under
55,
putting another strain on pension fund
By Matt Stout
Nearly one-third of the employees who retired
from the MBTA last year were under the age of
55, and dozens were still in their 40s, adding
to the flow of younger retirees state lawmakers
had hoped to stem years ago.
The Legislature passed a law in 2009 intended to
dial back a lavish public sector perk at the
Massachusetts Bay Transportation Authority, but
because it only applied to new hires, many
employees retiring now still fall under the old
rules — and potentially collect pensions for
longer than they actually worked at the T.
In all, nearly 200 employees retired from the
transit agency in 2018, according to a list
released by the MBTA Retirement Fund in response
to a Globe request.
The average age of a new MBTA retiree in 2018
was 59 years old, and roughly 60 of these
now-former employees were 54 years old or
younger when they began collecting a pension.
Two dozen were in their 40s, including Kendra J.
Thomas, who retired at 47 from the T’s
Wellington garage with a $63,406 pension, and
Jean MacEachern, a former contract services
manager in the T’s Signal & Communications
Maintenance office, who is receiving a $60,353
pension after retiring at 48.
Continuing waves of younger retirees could
further strain a $1.5 billion pension system
already beset by other concerns. More pensioners
— 5,600 in total — are collecting benefits than
there are workers paying in, and T officials
have raised alarms over the growing payments the
agency is funneling into the separately run
pension fund.
Steve Crawford, a spokesman for the MBTA
Retirement Fund, said that eight of the 24 who
retired in their 40s were getting reduced
benefits because of a documented disability.
Thomas and MacEachern are not among them, he
said.
The Legislature moved to stop T employees from
cashing out an early pension a decade ago, when
it ended the agency’s famous “23 and out”
retirement provision that allowed workers to
collect substantial pensions and free health
care after 23 years on the job, regardless of
age.
New hires are now required to work 25 years and
reach age 55 before qualifying. But a pension
agreement at the time delayed by more than three
years when it took effect, ensuring that only
those hired on Dec. 6, 2012, or after were bound
to the new requirements, according to officials.
The dynamics of those retiring has shifted only
slightly. In the 10 years before the law passed,
396 people in their 40s retired. In the decade
since, there have been 336 — a span that also
includes the T making a round of early
retirement offers.
Now, more than 1,200 of those receiving a T
pension — or about 22 percent — began collecting
before they turned 50, and Joe Pesaturo, a MBTA
spokesman, said there are 500 current employees
who are eligible to retire because they’ve
worked for more than 23 years.
Crawford, the fund spokesman, declined to
comment on what impact younger retirees have on
the pension system’s outlook, saying it relies
on an annual report provided by its actuary “to
identify trends.”
“I can’t speculate on generalities,” Crawford
said.
Currently, the largest pension belongs to Sean
McCarthy, a former chief operating officer who
retired at age 50 and has been collecting
$97,617 a year since 2015. He’s followed by
James M. O’Brien, the current president of the
Carmen’s Union, who retired two years ago at age
57 and is collecting $91,015 annually.
Lori A. Barrett, who left the T’s Power Systems
Maintenance Department at age 56, is earning the
highest pension among 2018 retirees, at $83,235
a year.
But that information — and its possible
ramifications on the taxpayer- and rider-funded
T — hasn’t always been easily accessible.
MBTA pension had been posted to the state’s
now-defunct Open Checkbook website, but it only
included information through 2015. State budget
officials shuttered the site in January 2018
after the state comptroller’s office created a
financial records platform called CTHRU. But
while CTHRU includes information on retired
state workers and teachers, it’s never included
data on pensions being collected by former T
employees.
After the Globe inquired about the data,
Pesaturo said the agency sent the comptroller’s
office retiree lists from 2017 and 2018. Jeffrey
Shapiro, the state’s first deputy comptroller,
said the office can’t require that agencies
provide such information, but it intends to
create an online portal for the T data as
“quickly as we can.”
“Our focus is to continue to put more and deeper
data on” CTHRU, Shapiro said. “It’s never our
intent to have less.”
The release of the new data could turn a
spotlight on a fight policy makers and union
officials have engaged in for years over the
MBTA Retirement Fund.
Two years ago, the T proposed drastically
changing its pensions rules, including creating
a new sliding scale to determine the pension
rate. For example, payouts to teachers and most
state workers are determined by multiplying
their years of service by an “age factor” — a
number that increases from 1.45 percent for
60-year-old retirees to 2.5 percent for those
over 67.
In contrast, at the T, the age factor is 2.46
percent for all eligible retirees, giving less
incentive to keep working.
Officials said at the time that any changes
would likely have to be negotiated. The pension
agreement between MBTA and its largest union,
the Boston Carmen’s Union Local 589, expired
last year, but talks have been ongoing for
months.
Amid the discussions, T and state officials have
focused on the agency’s contributions to the
pension system, which have ballooned from $30
million in fiscal year 2007 to $103 million this
year.
In 2017, the Legislature passed a measure pushed
by Governor Charlie Baker that allows — but does
not mandate — the state’s Pension Reserves
Investment Management Board and the state’s $70
billion pension fund to manage investments of
the MBTA Retirement Fund. But in the two years
since, there’s been little movement.
Now, some state lawmakers also want to reexamine
who’s a part of the fund. Representative William
M. Straus, the House chair of the Committee on
Transportation, is proposing the Legislature
create a commission to study the impact of
moving future T retirees directly into the state
pension system, a move the Carmen’s Union
opposes.
“We don’t have much luxury time left to address
this,” Straus said. “This could end up being the
most significant problem that the T faces in
having resources to perform its mission.”
The Newburyport Daily
News
Friday, April 19, 2019
A Newburyport Daily News editorial
T's young retirees a symbol of the challenge
You can’t fault MBTA employees who decide to
retire in their late 40s or early 50s and start
taking their pensions when they hit the minimum
number of years on the job. After all, the old
pension rules included a “23 and out” provision
that said T workers could retire with
substantial pensions and free health care after
23 years on the job, regardless of age.
A rule change that applies to hires on or after
Dec. 6, 2012, requires T employees to work 25
years and reach age 55 before they can qualify
for retirement benefits. Nevertheless, as The
Boston Globe reported this week, the average age
of a new MBTA retiree in 2018 was 59 years old,
and out of the nearly 200 employees who retired
in 2018, about 60 of them were 54 or younger.
Two dozen were in their 40s, including a
47-year-old woman who retired with a $63,406
annual pension, and one who retired at age 48
with a pension of just over $60,000, The Globe
reported.
MBTA spokesman Joe Pesaturo told the newspaper
that more than 1,200 of those receiving MBTA
pensions began collecting before they hit age
50. An additional 500 current employees are
eligible to retire because they have worked more
than 23 years, he said.
It’s not news that pension obligations – coupled
with the huge cost of delayed system maintenance
and replacement of aging subway cars –
contribute to the poor financial condition of
the transit agency. The repair backlog tops $7
billion alone, and a quarter of the T’s annual
budget goes toward paying down the debt.
The numbers show there are more MBTA pensioners
than workers paying into the pension system.
Taxpayers will continue to shoulder a major
burden for decades as this essential public
transit system tries to right itself.
A ballot question in 2013 to have an automatic
gas tax, with a portion going to fund the MBTA,
was defeated at the polls by about 53 percent of
voters. Discussions about a “millionaires tax”
now could bring some hope – if it was approved
and helped fund public transportation. That’s a
big “if” and may not be a solution at all. But
serious measures are needed to give the MBTA a
leg up and to take a little of the burden off
the average taxpayers of Massachusetts.
The New Boston Post
Thursday, April 18, 2019
Massachusetts Near Bottom
When It Comes To ‘Tax Freedom,’ Think Tank Says
By Matt McDonald
The symbolic date when Massachusetts residents
are said to start working for themselves instead
of merely paying their tax burden to government
is coming up next week, according to an
organization that tracks taxes.
Massachusetts is tied for 43rd in the nation
this year for earliest Tax Freedom Day, which
this year occurs on Tuesday, April 23, according
to the Tax Foundation, a pro-growth think tank
in Washington D.C. that is skeptical about
taxes.
Oil-rich Alaska is number one, on March 25.
High-tax New York is 50th, at May 3. (That’s the
same date as Washington D.C., the nation’s
capital.)
Among New England states, New Hampshire’s Tax
Freedom Day comes the earliest, on April 19. But
even with no state income tax or state sales
tax, it still isn’t among the top half of the
country in per-capita tax burden, according to
the Tax Foundation – it ranks 35th.
Maine ranks 38th, at April 20, not among the
highest in part because of the policies of
former Governor Paul LePage, who resisted tax
hikes and sometimes didn’t spend appropriations
the state legislature approved.
New Hampshire’s higher-tax neighbor, Vermont,
ranks 42nd, at April 22.
Massachusetts, at 43rd, beats out only Rhode
Island and Connecticut, tied for 46th at April
25.
Paul Craney, spokesman for the Massachusetts
Fiscal Alliance, said earlier this week that
recently approved taxes in Massachusetts, such
as the one on Airbnb short-term rentals,
endanger the already-tenuous restraint the state
has when it comes to taxing. Craney noted that
the Airbnb tax passed the legislature in
December 2018 without a roll call vote.
Using Tax Freedom Day as a jumping-off point, he
said the tax situation in Massachusetts is bad
and in danger of getting worse.
“Your compensation for all work done since
January essentially goes right into the pockets
of the tax collectors until April 23. This date
puts Massachusetts at # 43 in the country. Even
California is better ranked. Only Connecticut
and Rhode Island are worse than Massachusetts in
New England,” Craney said in a written
statement. “While we view that as atrociously
low, Beacon Hill leadership likely see it as
giving them some ‘wiggle-room’ for new ‘revenue
enhancements’.”
But some advocates think Massachusetts doesn’t
have enough taxes. High on their list of
priorities is a 4 percent surtax on individual
incomes of $1 million or more, which they hope
state legislators will put on the general
election ballot for voters to decide in 2022 as
a constitutional amendment. The measure is
called the Millionaires’ Tax or the Fair Share
Amendment.
Supporters project tax revenues of $2 billion a
year if the Millionaires’ Tax becomes law, which
they say is sorely needed to improve
deteriorating roads and bridges and the
Massachusetts Bay Transportation Authority
subway system as well as public schools. They
also say the current flat income tax rate of
5.05 percent isn’t fair to poor people because
it hits them harder than it does richer people.
Opponents say the Millionaires’ Tax would drive
out rich people who are already highly mobile
because of their wealth, drying up capital for
new business ventures in the state as well as
tax revenue. They also say a flat tax rate is
fair because everyone pays the same rate but
richer people pay more money than poorer people
do.
Marie-Frances Rivera, president of the
Massachusetts Budget and Policy Center, which
supports the surtax on million-dollar incomes,
described public spending as “investments” when
she addressed a legislative committee last week,
and said Massachusetts doesn’t make enough of
them when it comes to public education and
public transportation.
“Progressive revenue raising policies, such as
the Fair Share Amendment would be a
straightforward way to make investments today
that would benefit generations to come,” Rivera
said in written testimony to the Massachusetts
Legislature’s Joint Committee on Revenue on
Thursday, April 11.
Tax Freedom Day for Americans overall this year
is April 16. That’s the same as it was in 2018,
but five days earlier than it was in 2017,
thanks to the Trump income and corporate tax cut
of that year.
To calculate Tax Freedom Day for the country the
Tax Foundation takes all federal, state, and
local taxes and divides them by the aggregate
income of Americans. According to the
foundation, “In 2019 Americans will pay $3.42
million in federal taxes and $1.86 trillion in
state and local taxes, for a total tax bill of
$5.29 trillion …” That’s 29 percent of the
nation’s projected aggregate income for the
year. Twenty-nine percent of 365 days in the
year is approximately 106 days, and the 106th
day of the year is April 16 – which is why the
Tax Foundation calls it Tax Freedom Day.
For states, the foundation performs a similar
calculation, using the total amount of taxes for
all levels of government that residents pay and
dividing it by aggregate income.
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only. For more information go to:
http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ (781) 639-9709
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