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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
Sunday, May
12, 2019
Senate
up for tax hikes
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The House and Senate held a constitutional
convention and approved 156-37, (House approved 121-33,
Senate approved 35-4), a proposed constitutional amendment
that would allow a graduated income tax in Massachusetts and
impose an additional 4 percent income tax, in addition to
the current flat 5.1 [sic - 5.05] percent one, on taxpayers’ earnings of
more than $1 million. Language in the amendment requires
that “subject to appropriation” the revenue will go to fund
quality public education, affordable public colleges and
universities, and for the repair and maintenance of roads,
bridges and public transportation....
There was no debate on the proposal and no
amendments were considered despite efforts by GOP Minority
Leader Brad Jones (R-North Reading) to propose one. Jones
said that Senate President Karen Spilka, who presided over
the convention was intent on gaveling through the proposal
quickly and deflected his attempts to offer an amendment.
Jones said his amendment would have required that revenue
from the new tax be spent in addition to funds already
directed toward education and transportation, and not simply
replace those funds....
“If there was ever any doubt that the
Legislature would expedite the scheme to tax more, today’s
brief constitutional convention dispelled it,” said Chip
Ford, executive director of Citizens for Limited
Taxation. “It took longer to call the convention
to order than to actually vote on and advance the so-called
‘Millionaire’s Tax,’” Ford added. “A whopping billion
dollars in excess revenue above last April’s haul poured
into state coffers just last month alone but that’s still
not enough for the ‘spendoholics’ on Beacon Hill. More
never is.”
Beacon Hill Roll Call
Thursday, May 9, 2019
Massachusetts Legislature votes to tax millionaires another
4%
By Bob Katzen
The House and Senate gathered in a
Constitutional Convention on Wednesday to consider proposed
amendments to the state's constitution, including another
attempt to let voters decide whether to impose a higher tax
on household income over $1 million.
The so-called "millionaires tax," which was
opposed by business groups and knocked off the ballot by the
Supreme Judicial Court last summer, was advanced on an
overwhelming and mostly partisan procedural vote.
The 156 votes to advance the proposal were
considerably more than the 101 that will be required in June
for the Legislature to agree to the measure, and could
forecast an easy glide path....
Senate President Karen Spilka and Speaker
Robert DeLeo said it will be debated on June 12, when Spilka
said members will also have an opportunity to offer and
debate amendments. The vote expected at that time will be
the first of two votes in consecutive sessions needed to put
the question on the 2022 ballot.
"I think it's important to many of the
legislators and the residents of the commonwealth to put
this on the ballot and get it there," Spilka said.
State House News Service
Wednesday, May 8, 2019
Lawmakers advance income surtax on wealthy 156-37
An organization that was among the
plaintiffs who successfully squashed the first attempt to
impose an income surtax on high earners renewed its
opposition in letters sent to all 200 legislators ahead of a
possible debate Wednesday on a second pass at the so-called
millionaires tax.
The Massachusetts High Technology Council,
one of the groups that petitioned the Supreme Judicial Court
to throw the proposed 4 percent surtax on income above $1
million off last year's ballot, told lawmakers the proposed
constitutional amendment puts "a misplaced emphasis on
revenue-centric solutions and offer[s] hollow promises of
increased state investment" in a new round of letters....
In the letter, High Technology Council
President Chris Anderson writes that the state does not have
a shortage of revenue and should instead focus on making
Massachusetts a welcoming place for businesses and directing
state funding to programs that "have a data-supported
impact."
State House News Service
Wednesday, May 8, 2019
Group renews opposition to income surtax ahead of debate
The vault is suddenly bulging. And the
future could be green with money from millionaires....
Westport Democrat Michael Rodrigues, the
newly installed chairman of Senate Way and Means, pulled the
sheet off his first budget on Tuesday, revealing a spending
plan "to boldly move Massachusetts forward." ...
While Rodrigues's spending imagination may
have been confined by revenue projections arrived at in
January, he, the governor and House Ways and Means Chairman
Aaron Michlewitz could have a little more freedom to
daydream come July.
That's because an April revenue surge took
basically on-track tax collections for the fiscal year and
padded them by nearly $1 billion. Budget watchers are now
predicting a sizable surplus after June, and the question
will become how to allocate it.
Both Baker and Spilka cautioned that the
revenue glut is likely a one-time occurrence, and therefore
it's probably best to sock it away into savings.
The 156 members of the House and Senate who
advanced a constitutional amendment to tax the wealthy this
week were not thinking about the "rainy day" fund when they
voted to give the amendment initial approval.
Instead, the Democrats (and one Republican)
were looking to cash in by imposing a 4 percent surtax on
income over $1 million to spend on education and
transportation.
Spilka and Speaker Robert DeLeo said the
Legislature will debate the "millionaires tax" proposal in
full on June 12 when the Constitutional Convention will be
reconvened, amendments will be allowed and 101 votes will be
required to move the measure forward to the next Legislative
session.
State House News Service
Friday, May 10, 2019
Weekly Roundup - Act III: "To boldly move ..."
By Matt Murphy
Lawmakers this week voted in favor of a plan
to pull $2 billion in new tax revenue from wealthier
residents into state government, a vote that came days after
they learned tax collections for April alone exceeded last
year by $1 billion.
House Speaker Robert DeLeo has forecast a
debate over new revenues in the House sometime this year,
Senate President Karen Spilka has formed a working group to
scour the state tax code and make recommendations, and state
senators on Friday made it clear they're interested in using
this spring's budget deliberations to debate tax policy,
including both tax relief and tax increases.
State House News Service
Friday, May 10, 2019
Advances - Week of May 12, 2019
With minimum-wage increases already locked
in for years to come and a new push for a surtax on high
earners underway, Senate President Karen Spilka told small
business owners on Thursday that she would continue to work
toward compromise even as lawmakers consider how to bring in
new revenues.
Spilka, the keynote speaker at the annual
Small Business Day, outlined in broad terms her desire to
see the Legislature take action to improve transportation
infrastructure, better fund education and reform health
care. She also touted the Senate's new tax-reform working
group that brings together a range of interests and
expertise.
"I believe that every issue we will tackle
this session is in some way an economic development issue,"
Spilka said....
Christopher Carlozzi, Massachusetts director
for the National Federation of Independent Businesses,
warned that a 4 percent surtax on income above $1 million —
which was thrown off the ballot last year by the courts but
has been redrafted by legislators for a second attempt —
could cut into retirement savings when owners sell their
businesses. One question posed to Spilka, after listing the
wage increase and a paid family leave program, concluded:
"When does it stop?"
"Some of the minimum wage, paid family and
medical leave — that was all part of the grand bargain and
getting rid of time-and-a-half (pay) on Sunday," Spilka
answered. "There were business groups at the table there.
That is a compromise that was done."
State House News Service
Thursday, May 9, 2019
Small Biz wants Beacon Hill to ease up on costly reforms
Unions and non-profits will be limited to
contributing $1,000 a year to a candidate for public office
starting next month after the Office of Campaign and
Political Finance followed through Thursday by submitting a
new rule that will close the controversial "union loophole"
in state regulation.
The rule holds unions to the same
contribution limits applied to individual donors, wiping
away the past practice of allowing labor groups to
contribute up to $15,000 before they must register as a
political action committee, even if the whole sum was given
to just one candidate.
Starting May 31, contribution limits for
unions will be set at $1,000 to a candidate, $500 to a
political action committee and $5,000 to a political party.
Any union or non-profit that exceeds the
$15,000 threshold will have to register as a PAC, though
contributions to super PACs will not count toward that
trigger....
Campaign finance regulators began revisiting
the current rules at the request of Common Cause after the
Supreme Judicial Court last year questioned the legal
strength of the so-called "union loophole" in a ruling
against the Massachusetts Fiscal Alliance, which upheld the
state's ban on corporate political donations....
Paul Craney, a spokesman for the
Massachusetts Fiscal Alliance, said his organization has
been fighting since 2013 to eliminate the loophole, which he
says unfairly advantages unions over businesses in the
political process.
"We are pleased to see it reduced but
disappointed it wasn’t eliminated altogether," Craney said
in a statement.
Craney added, "For the first time in a
generation, union bosses will not have the loudest voice
over everyone else. However, they still benefit by having
the only voice when compared to employers."
State House News Service
Thursday, May 9, 2019
Union giving power curtailed in final OCPF rule
The new regulations, released by the Office
of Campaign and Political Finance, replace decades-old rules
and mark a sea change in how labor groups can spend money in
support of political campaigns and parties in
Massachusetts....
The new regulations also ease some
restrictions.
Currently, any independent expenditures or
donations a union makes to a super PAC count toward the
$15,000 threshold. A super PAC, known in regulators’
parlance as an “independent expenditure PAC,” can raise and
spend unlimited amounts of money but is barred from giving
money directly to a candidate or coordinating with a
political campaign.
But the campaign finance office says it is
lifting that rule, meaning unions will be free to give as
much as they want to super PACs, as well as to
ballot-question committees, without running up against the
aggregate limit and the new requirement that they register
as PACs....
The Massachusetts Teachers Association
pushed the OCPF to allow unions to donate up to the $15,000
threshold to a PAC that a union itself creates. (Regulators
did not adopt the suggestion.) And the Professional
Firefighters of Massachusetts argued that it would put an
“undue administrative burden” on its 220-plus local fire
union affiliates, who it said lack the resources and staff
to organize as a PAC if they exceed the threshold.
Steven A. Tolman, president of the
Massachusetts AFL-CIO, told regulators at a March hearing
that the change was “unfair” and an “overreach.” ...
The final regulations include only a few
changes from the draft ones, including language specifying
that an entity that raises money only for electioneering
communications is not considered a political committee.
That change came in response to concerns
raised by the Fiscal Alliance Foundation, a nonprofit
created by the leaders at MassFiscal, according to the OCPF.
MassFiscal, which has resisted disclosing its donors, had in
the past regularly sent electioneering communications, such
as mailers, to voters before the Legislature passed a new
disclosure law in 2016.
The Boston Globe
Thursday, May 9, 2019
Regulators slash the dollar amount unions can donate to
candidates in Mass.
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Chip Ford's CLT
Commentary
“If there was ever any doubt that the
Legislature would expedite the scheme to tax more,
today’s brief constitutional convention dispelled it,” I
told Beacon Hill Roll Call this week. It honestly
took longer for the House and Senate to find seats in
the House chamber, settle in, and finally gavel the
Constitutional Convention to order than it did to bring
up, vote on and pass the proposed graduated income tax
amendment to the state Constitution. Believe me, I
was watching the ConCon in the background for almost an
hour, waiting. Then I blinked and missed the
actual vote total!
The State House News Service reported:
Senate President Karen Spilka has formed a
working group to scour the state tax code and
make recommendations, and state senators on
Friday made it clear they're interested in using
this spring's budget deliberations to debate tax
policy, including both tax relief and tax
increases.
Apparently in the Senate it has been concluded that the
recently passed House budget is in fact a "money
bill" open to additional new taxes and tax hikes
in the upcoming Senate budget. Already it includes Gov.
Baker's proposed taxes on opioid manufactures and
e-cigarettes – which the House
budget did not have in theirs. But last Friday
I warned of a hole in the House's budget, a flaw
– or an intentional Trojan
Horse:
. . . When
it gets to the Senate watch for whether it will be
deemed a "money
bill" due to the House's inclusion of Minority
Leader Brad Jones' (R-North Reading) amendment to
expand the conservation tax credit. His amendment
was adopted unanimously with the support of
all House Democrats and Republicans. In its July
2015 ruling on what constitutes a "money bill" the
State House News Service reported on the ruling of
the state's highest court:
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.
It appears
the House failed to learn from its previous mistake
– or without dissent,
it intentionally again expanded the
conservation tax credit to knowingly open the
tax floodgate in the Senate.
The House passed its budget on Thursday
night, April 25. This past Tuesday the Senate Ways and
Means Committee released its budget for the upcoming Senate
debate. It included proposed taxes on opioid
manufactures and e-cigarettes. It appears that hiking
taxes despite – or in light of
– the House's action was in the
Beacon Hill playbook all along.
The House was apparently intent on sabotaging its own budget, touted as free of tax hikes.
This was demonstrated by
the House quietly but unanimously inserting a small poison pill to make it a
"money bill." The House needed to do nothing
more than exactly what it had done "wrong" just
four years before.
Aware that the state's highest court had
ruled in 2015 that "expansion of a tax credit for land
conservation" made the House budget a money bill open to tax
hikes in the Senate, the House simply included another "expansion of a tax
credit for land conservation" –
opening their "no new taxes" FY 2020 budget to "more new taxes" when it
reached the Senate.
I suspect that every member of the House,
Democrat and Republican
– at least the leadership including
Minority Leader Rep. Brad Jones, the poison pill's sponsor –
hopes none of their ignorant constituents will ever notice either
House members' unanimous stupidity, or collective duplicity, when
tax-hike schemes are rolled out and included in the upcoming Senate's budget when
it's voted on.
Some good news for a change. The state
Office of Campaign and Political Finance
– which regulates campaign
fund-raising and spending –
issued its long-awaited new ruling this week, stripping
unions from a longstanding advantage in political influence
peddling. The Boston Globe noted:
"Currently, labor unions can give up to $15,000
annually to a single candidate. The new
regulations, effective May 31, cut that limit to
$1,000 while capping donations to political
action committees at $500 and to a political
party’s own committee at $5,000. . . .
Unions are
still bound by a $15,000 aggregate limit — meaning
they could theoretically give 15 candidates $1,000
each. But if a union goes above that $15,000 limit,
it must register as a political action committee.
Once organized as a PAC, it would be capped at
giving $500 a year to each candidate. . . .
"The changes unveiled Thursday, while effectively
bringing unions under the same limits imposed on
individuals, also eliminates a decades-old
advantage that labor organizations have enjoyed
in state and local elections in Massachusetts.
The higher donation limit, set in the 1980s,
applied to unions and nonprofits that aren’t
corporate-funded."
CLT's 2˝ PAC – like
all political action committees – is limited to contributing
not more than $500 to any candidate's campaign committee in
a calendar year. Businesses are forbidden from making
any contribution whatsoever to a state candidate's campaign
committee. Unions have been free to contribute up to
$15,000 to any candidate's committee and often did – and
that frequently made all the difference in the outcome on
election day.
Paul Craney of Mass
Fiscal Alliance responded to the new OCPF rule astutely:
"For the first time in a generation, union
bosses will not have the loudest voice over
everyone else. However, they still benefit
by having the only voice when compared to employers."
In royal blue
Massachusetts this won't be a game-changer – but it's at
least a start at leveling the political playing field a bit,
a welcomed nudge in the right direction.
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Chip Ford
Executive Director |
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Beacon Hill Roll
Call
Thursday, May 9, 2019
Massachusetts Legislature votes to tax
millionaires another 4%
By Bob Katzen
The House and Senate held a constitutional
convention and approved 156-37, (House approved
121-33, Senate approved 35-4), a proposed
constitutional amendment that would allow a
graduated income tax in Massachusetts and impose
an additional 4 percent income tax, in addition
to the current flat 5.1 [sic - 5.05] percent one, on
taxpayers’ earnings of more than $1 million.
Language in the amendment requires that “subject
to appropriation” the revenue will go 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). In order to go on the ballot for
voters to decide, it needs to twice have 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.
There was no debate on the proposal and no
amendments were considered despite efforts by
GOP Minority Leader Brad Jones (R-North Reading)
to propose one. Jones said that Senate President
Karen Spilka, who presided over the convention
was intent on gaveling through the proposal
quickly and deflected his attempts to offer an
amendment. Jones said his amendment would have
required that revenue from the new tax be spent
in addition to funds already directed toward
education and transportation, and not simply
replace those funds.
Senate President Karen Spilka said there will be
debate and the opportunity to propose amendments
when the proposal is debated again on June 12.
Supporters say the amendment will affect only
20,000 extremely wealthy individuals and will
generate up to $2 billion annually in additional
tax revenue. They argue that using the funds for
education and for the repair and maintenance of
roads, bridges and public transportation will
benefit millions of Bay State taxpayers. They
note the hike would help lower income families
which are now paying a higher share of their
income in taxes.
Opponents argue the new tax will result in the
loss of 9,500 private sector jobs, $405 million
annually in personal disposable income and some
millionaires moving out of state. They say 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 for
anything.
“The new revenue that would be raised by the
Fair Share Amendment 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
Sen. Jason Lewis (D-Winchester), the Senate
sponsor of the proposal. “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. I’m pleased that the
Legislature’s action today moves the Fair Share
Amendment one step closer to the ballot.”
“The Massachusetts Fiscal Alliance (MFA) stands
with the voters, who on five separate occasions
voted against making Massachusetts a graduated
income tax state, and with the state’s highest
court which recently rejected a similar scheme
as unconstitutional,” said Paul Craney,
spokesman for the MFA. “Some lawmakers think
history started in 2019, but this policy idea is
the most rejected in the state’s history. The
answer should always be ‘no,’ when considering
removing our constitutionally protected
guarantees of equal taxation.”
“Community, faith, and labor groups all across
Massachusetts strongly support the Fair Share
Amendment because it’s the most fair,
progressive and sustainable way to raise the
major new revenue Massachusetts needs to invest
in transportation and public education,” said
Andrew Farnitano, the spokesman for Raise Up
Massachusetts. “We thank the Legislature for
moving the Fair Share Amendment forward today.”
“If there was ever any doubt that the
Legislature would expedite the scheme to tax
more, today’s brief constitutional convention
dispelled it,” said Chip Ford, executive
director of Citizens for Limited Taxation.
“It took longer to call the convention to order
than to actually vote on and advance the
so-called ‘Millionaire’s Tax,’ Ford added.
“A whopping billion dollars in excess revenue
above last April’s haul poured into state
coffers just last month alone but that’s still
not enough for the ‘spendoholics’ on Beacon
Hill. More never is.”
State House News
Service
Wednesday, May 8, 2019
Lawmakers advance income surtax on wealthy
156-37
By Matt Murphy
House and Senate Democratic leaders look to be
sitting on a comfortable cushion of support for
a revived constitutional amendment to increase
taxes on the wealthy, easily advancing a
"millionaires tax" proposal on Wednesday, and
making plans to debate it next month.
The House and Senate gathered in a
Constitutional Convention on Wednesday to
consider proposed amendments to the state's
constitution, including another attempt to let
voters decide whether to impose a higher tax on
household income over $1 million.
The so-called "millionaires tax," which was
opposed by business groups and knocked off the
ballot by the Supreme Judicial Court last
summer, was advanced on an overwhelming and
mostly partisan procedural vote.
The 156 votes to advance the proposal were
considerably more than the 101 that will be
required in June for the Legislature to agree to
the measure, and could forecast an easy glide
path.
"I think we're in pretty good shape," said Rep.
James O'Day, who filed the constitutional
amendment. O'Day predicted that with the new
legislators in the House and Senate the margin
could be higher than the last time the
Legislature voted in 2017 and the amendment got
134 votes.
Senate President Karen Spilka and Speaker Robert
DeLeo said it will be debated on June 12, when
Spilka said members will also have an
opportunity to offer and debate amendments. The
vote expected at that time will be the first of
two votes in consecutive sessions needed to put
the question on the 2022 ballot.
"I think it's important to many of the
legislators and the residents of the
commonwealth to put this on the ballot and get
it there," Spilka said.
O'Day and Sen. Jason Lewis both filed identical
proposals to tax income over $1 million at an
additional 4 percent, generating as much as $2
billion in additional revenue for the state that
would be directed toward transportation and
education needs.
The Legislature advanced O'Day's amendment (H
86) to third reading on a 156-37 vote, but only
after Democratic leaders tried to move it
forward on a voice vote. The House voted 121-33
in favor, while the Senate vote was 35-4. Rep.
Colleen Garry of Dracut was the only Democrat to
vote against moving the proposal forward, and
Sen. Patrick O'Connor of Weymouth was the only
Republican to support it.
Rep. Brad Jones, who forced the roll call vote,
was visibly frustrated on the floor, and
afterward lashed out Spilka and Democratic
leaders, who he said blocked him from filing an
amendment.
Spilka, who presides over the Constitutional
Convention, seemed to be trying to quickly gavel
through several votes she intended for the day,
when Jones and Rep. Brad Hill both rose to
question a voice vote to suspend the rules to
consider the "millionaires tax" proposal.
Before they said anything, Spilka conferred with
the Senate clerk and told the two Republicans
they were too late. Both men sat down, but
Spilka then recognized Senate Minority Leader
Bruce Tarr, who doubted the vote and was allowed
to request a roll call, for which there wasn't
enough support.
"You know what it is? You can quote me. It's
bullshit. That's what it is," Jones told the
News Service later about Spilka not recongizing
him to speak.
The North Reading Republican said he wanted to
offer an amendment, but was denied the
opportunity. His amendment, he said, would have
proposed to ensure that money raised from the
wealth tax be spent in addition to funds already
directed toward education and transportation,
and not simply replace those funds.
Jones filed a similar amendment in 2016, and it
failed.
"I wanted to debate that today. But today was
all about ramming it through because they wanted
to get the tax train moving," Jones said.
The Republican leader did not try after his
first attempt to offer the amendment again,
though he was recognized a second time when he
doubted a voice vote and requested a roll call
on ordering the bill to a third reading.
"I'm going to file it as soon as I possibly can
if they allow amendments," Jones said. "I have a
healthy mistrust and I think that mistrust was
validated today."
Spilka indicated that the House and Senate would
consider an order at some point in advance of
the June 12 debate establishing a process for
amendments to be filed.
"I don't think we'll see a ton of amendments,"
O'Day said. "I do believe that the business
community will probably try to turn up the heat
a little bit over the next several weeks and see
if they can't get a few more members to move
their position."
The Massachusetts High Technology Council, one
of the groups that successfully petitioned the
SJC to throw the proposed 4 percent surtax on
income above $1 million off last year's ballot,
told lawmakers in a new round of letters this
week that the proposed amendment puts "a
misplaced emphasis on revenue-centric solutions
and offer[s] hollow promises of increased state
investment."
Opponents have also expressed concern that it
would harm small business owners and drive
wealthy residents out of state. Christopher
Carlozzi, state director of the National
Federation of Independent Businesses, said many
small business owners sell their company for
retirement, and now would pay a 9.05 percent tax
on much of that "nest egg."
"The proponents of this initiative claim they
are targeting high-income earners, but small,
independent, entrepreneurs and main street
businesses would be hit by this tax surcharge.
About 75 percent of all businesses, mostly
smaller ones, pay their business taxes through
their personal income tax filings, making them
subject to this tax even if they are just
middle-income earners," Carlozzi said.
O'Day said that even if the lobbying efforts
intensify, he's not worried about losing the
support the amendment needs.
"I think knowing the needs that we have in our
commonwealth relative to education, the
education foundation, transportation,
infrastructure and what this is designed to do
is really funnel this money toward those issues,
so with that in mind we'll be fine," O'Day said.
The court last summer threw out the citizen's
initiative petition because they ruled it
unlawfully commingled topics by raising a tax,
and also directing money to be spent on
education and transportation. Democrats have
gotten around that rule this year by having
legislators, who are not bound by the same
restrictions, file the petition directly.
Voters have rejected past attempts over the
decades to amend the constitution to allow for a
graduated income tax, rather than a flat tax,
but this current proposal has polled strongly.
Massachusetts Fiscal Alliance spokesman Paul
Craney said his group continues to stand with
the voters who have rejected graduated income
taxes.
"Some lawmakers think history started in 2019,
but this policy idea is the most rejected in the
state’s history. The answer should always be NO,
when considering removing our constitutionally
protected guarantees of equal taxation," Craney
said.
State House News
Service
Wednesday, May 8, 2019
Group renews opposition to income surtax ahead
of debate
By Colin A. Young
An organization that was among the plaintiffs
who successfully squashed the first attempt to
impose an income surtax on high earners renewed
its opposition in letters sent to all 200
legislators ahead of a possible debate Wednesday
on a second pass at the so-called millionaires
tax.
The Massachusetts High Technology Council, one
of the groups that petitioned the Supreme
Judicial Court to throw the proposed 4 percent
surtax on income above $1 million off last
year's ballot, told lawmakers the proposed
constitutional amendment puts "a misplaced
emphasis on revenue-centric solutions and
offer[s] hollow promises of increased state
investment" in a new round of letters.
The House and Senate are planning to meet in a
Constitutional Convention on Wednesday afternoon
and could begin the multi-year process of
amending the state Constitution to levy a surtax
on high earners and direct the funds to
education and transportation initiatives. The
measure needs 101 votes in favor in two
successive Legislatures to reach the 2022
ballot.
In the letter, High Technology Council President
Chris Anderson writes that the state does not
have a shortage of revenue and should instead
focus on making Massachusetts a welcoming place
for businesses and directing state funding to
programs that "have a data-supported impact."
"The Council is committed instead to advancing
real solutions to our shared challenges by
addressing actual impediments identified by
policymakers, job creators, and other impacted
stakeholders including: Expanding and improving
project planning and delivery capacity at
transportation agencies; Enabling and enhancing
the use of public-private partnerships to
deliver state services and projects; and A $1.1
billion, multi-year proposed increase in state
investment and support for K-12 public schools,
targeted towards the highest need students and
schools," Anderson wrote.
State House News
Service
Friday, May 10, 2019
Weekly Roundup - Act III: "To boldly move ..."
Recap and analysis of the week in state
government
By Matt Murphy
The vault is suddenly bulging. And the future
could be green with money from millionaires.
But between now and fiscal 2024 there are four
annual budgets to build, starting with the one
for fiscal 2020. And the Senate Ways and Means
Committee, under new leadership, took its crack
at writing a $42.7 billion spending plan using
the revenues it could comfortably predict.
Westport Democrat Michael Rodrigues, the newly
installed chairman of Senate Way and Means,
pulled the sheet off his first budget on
Tuesday, revealing a spending plan "to boldly
move Massachusetts forward."
He even bolded the font.
The bill that will be debated a little over a
week from now deviated from the budget approved
by House lawmakers by adopting Gov. Charlie
Baker's proposed taxes on opioid manufactures
and e-cigarettes, and also put some of the teeth
back into Baker's proposal to bring
pharmaceutical companies to the negotiating
table with MassHealth over drug prices.
Expect MassBIO CEO Bob Coughlin to rev up the
outrage machine over the next week as he tries
to persuade senators to ease back from what he
called a "radical, unproven policy with
unrealistic cost saving estimates" in the same
way he was able to convince House lawmakers to
modify the drug pricing plan.
The Rodrigues budget also boosted Chapter 70
funding for local schools by about $50 million
over the House plan. But because budgeting is a
zero sum game, that meant tradeoffs, including
less money for charter school reimbursements and
nursing home payments, and no special fund for
low-income students proposed by the House.
"We think there is adequate revenues in the
state's coffers without raising new revenues to
fully invest in our priorities," said Rodrigues.
UMass President Marty Meehan might disagree,
voicing his displeasure, along with the campus
chancellors in the system, that the Senate
couldn't find the $10.2 million the university
says it needs to avoid tuition hikes.
The Senate budget proposal, as its stands now,
would include the same funding recommended by
the governor and the House, but would also order
UMass to freeze tuition rates. The campuses
responded by warning students of $22 million in
dire faculty and program cuts.
Senate President Karen Spilka said she thought
UMass should be pleased with the budget bump
it's currently in line to receive, but will meet
with Meehan in the coming days to hash it out,
nonetheless.
While Rodrigues's spending imagination may have
been confined by revenue projections arrived at
in January, he, the governor and House Ways and
Means Chairman Aaron Michlewitz could have a
little more freedom to daydream come July.
That's because an April revenue surge took
basically on-track tax collections for the
fiscal year and padded them by nearly $1
billion. Budget watchers are now predicting a
sizable surplus after June, and the question
will become how to allocate it.
Both Baker and Spilka cautioned that the revenue
glut is likely a one-time occurrence, and
therefore it's probably best to sock it away
into savings.
The 156 members of the House and Senate who
advanced a constitutional amendment to tax the
wealthy this week were not thinking about the
"rainy day" fund when they voted to give the
amendment initial approval.
Instead, the Democrats (and one Republican) were
looking to cash in by imposing a 4 percent
surtax on income over $1 million to spend on
education and transportation.
Spilka and Speaker Robert DeLeo said the
Legislature will debate the "millionaires tax"
proposal in full on June 12 when the
Constitutional Convention will be reconvened,
amendments will be allowed and 101 votes will be
required to move the measure forward to the next
Legislative session.
"I think we're in pretty good shape," said Rep.
James O'Day, the West Boylston Democrat who
sponsored the constitutional amendment.
On paper, the "millionaires tax" does look to
comfortably have the support it needs this year
to stay alive. But incoming Associated
Industries of Massachusetts CEO John Regan said
he isn't ready to throw in the towel just yet.
Regan, who has run AIM's government affairs shop
since 2007, was announced this week as the
successor to Rick Lord, who will retire on May
20 after 20 years leading the powerful business
lobbying group.
Though he said he doesn't want AIM to be known
as simply "anti-tax," the group does oppose the
millionaires tax and Regan said there may be a
small opening to avert a 2022 ballot fight.
"I think there's one thought that the Senate
conversation on revenue could be a proxy for not
having a ballot question. Maybe there are some
other things that could happen ..." Regan said.
AIM is also working with the Raise Up Coalition
to propose what they're calling fixes to the
paid family and medical leave law approved last
summer. Regan said to expect more cooperation
between the business association and progressive
groups in an attempt to avoid the type of costly
ballot campaigns that the business community has
been on the losing side of lately.
After the Tuesday budget rollout and Wednesday
ConCon, the Senate was supposed to complete its
trifecta in the spotlight with a Thursday debate
over banning hand-held cellphone use while
driving.
Some of the pressure to perform, however, was
taken off Wednesday when Senate Minority Leader
Bruce Tarr indicated a willingness to use
procedural tactics at his disposal to delay the
debate at least beyond Thursday.
With members focused on filing 1,142 amendments
to the budget by the mid-Friday deadline,
leadership went along and rescheduled the
distracted driving bill debate for June 6.
Sen. Mark Montigny, who has filed the hands-free
cellphone bill session after session, said he's
encouraged that both the House and governor seem
ready to join the Senate this year in supporting
a law.
But the delay, he said, felt like being an
athlete who was excited to be starting a race at
the finish line only to have a storm delay the
start time.
The budget storm clouds have already moved
through the House's wing of the building,
however, and DeLeo said he sees no reason for
his membership not to take up a similar bill
next week, as planned.
State House News
Service
Friday, May 10, 2019
Advances - Week of May 12, 2019
Lawmakers this week voted in favor of a plan to
pull $2 billion in new tax revenue from
wealthier residents into state government, a
vote that came days after they learned tax
collections for April alone exceeded last year
by $1 billion.
House Speaker Robert DeLeo has forecast a debate
over new revenues in the House sometime this
year, Senate President Karen Spilka has formed a
working group to scour the state tax code and
make recommendations, and state senators on
Friday made it clear they're interested in using
this spring's budget deliberations to debate tax
policy, including both tax relief and tax
increases.
In addition to new taxes on vaping and opioid
manufacturers that are already in the Senate
Ways and Means Committee's budget proposal,
senators filed 1,142 budget amendments,
including additional tax policy proposals. All
of the amendments will be dispensed with
beginning on Tuesday, May 21.
Senators will spend the week ahead working
behind the scenes to figure out which amendments
will pass, or at least have a chance, and which
will be withdrawn or rejected based on lack of
support.
The Senate does not plan to hold any formal
sessions next week, but the House, according to
Speaker Robert DeLeo, plans next week to take up
a bill restricting drivers to using only
hands-free electronic devices, rather than
handheld phones.
State House News
Service
Thursday, May 9, 2019
Small Biz wants Beacon Hill to ease up on costly
reforms
By Chris Lisinski
With minimum-wage increases already locked in
for years to come and a new push for a surtax on
high earners underway, Senate President Karen
Spilka told small business owners on Thursday
that she would continue to work toward
compromise even as lawmakers consider how to
bring in new revenues.
Spilka, the keynote speaker at the annual Small
Business Day, outlined in broad terms her desire
to see the Legislature take action to improve
transportation infrastructure, better fund
education and reform health care. She also
touted the Senate's new tax-reform working group
that brings together a range of interests and
expertise.
"I believe that every issue we will tackle this
session is in some way an economic development
issue," Spilka said.
The tenor of the event was somewhat more muted
than last year when lawmakers faced a frustrated
crowd amid debate over a minimum-wage increase
that would soon be approved in the so-called
"grand bargain."
But the strain was still apparent.
Christopher Carlozzi, Massachusetts director for
the National Federation of Independent
Businesses, warned that a 4 percent surtax on
income above $1 million — which was thrown off
the ballot last year by the courts but has been
redrafted by legislators for a second attempt —
could cut into retirement savings when owners
sell their businesses. One question posed to
Spilka, after listing the wage increase and a
paid family leave program, concluded: "When does
it stop?"
"Some of the minimum wage, paid family and
medical leave — that was all part of the grand
bargain and getting rid of time-and-a-half (pay)
on Sunday," Spilka answered. "There were
business groups at the table there. That is a
compromise that was done."
Some of Spilka's remarks were well-received. She
drew applause when she mentioned that the
Employer Medical Assistance Contribution
assessments, a push to collect $200 million from
some businesses to offset MassHealth costs,
would sunset by the end of the year as required
by law, and again when she spoke about online
retailers being required to collect and remit
sales tax as brick-and-mortar stores do.
On health care more broadly, Spilka said
Thursday that the Senate plans to revive
components of its past push for omnibus
legislation aimed at reducing costs and
improving access. Components of the 2017 bill —
a wide-ranging package that aimed to increase
access to telemedicine, minimize out-of-network
charges, and more — will be considered this
session, she said, after the House and Senate
were unable to reach a final compromise on the
topic last session.
After the event, Spilka declined to identify
which specific provisions will be the subject of
the new health care push, telling the News
Service it was "premature" to do so until the
Joint Committee on Health Care Financing could
examine them in more depth.
The Senate passed its version of the health care
bill in November 2017, but the House did not
take up the issue until June of the following
year, and negotiators failed to strike a deal by
July 31. Spilka said she is optimistic an
earlier start this time around will bring
success, though she did not put a timeline on
when the Senate might be ready to debate a bill.
"It was late in the year, so we're hoping that
things are done earlier," she said. "I think
that might help and give us time. These are very
complicated issues. Health care is probably
among the most complicated issue that we'll be
dealing with, so I think that will help, too."
Business leaders also used Thursday's event as
an opportunity to advocate for and against bills
they said would affect them, outlining their
cases before visiting elected officials later in
the day.
One bill, S 1110, would require retail,
hospitality and food service businesses with
more than 50 employees to post work schedules a
minimum of 14 days in advance and pay extra when
hours or shifts are changed within that range.
Massachusetts Restaurant Association President
Bob Luz said the proposal is "potentially going
to break the camel's back on each one of us."
"The reality is none of our employees are asking
for this," Luz said. "It's folks outside of our
industry that believe this is necessary."
Another proposal particularly relevant to the
restaurant industry is one to implement a lower
wage for minors or for those who are training
for a new job. Several different approaches to
the idea are currently circulating on Beacon
Hill, from a Rep. Shawn Dooley bill (H 1612)
that would allow employees 18 and younger to be
paid the federal minimum wage — currently $7.25
per hour — to one from Rep. Shauna O'Connell (H
1671) that would allow businesses to pay
teenagers up to 20 percent less than the
Massachusetts minimum wage.
Brian Houghton, senior vice president of
government affairs and communications for the
Massachusetts Food Association, said a decrease
in wages for trainees and young employees is
necessary to offset a "perfect storm" of
increasing labor costs, health care and overhead
such as real estate.
"You've got to put all these things in the
bucket and look at how it affects every bucket,"
Houghton said.
Associated Industries of Massachusetts Senior
Vice President of Government Affairs Bob Rio
also warned about rising energy costs driven by
mandated fees to subsidize renewable energy,
describing it as "death by a thousand cuts."
State House News
Service
Thursday, May 9, 2019
Union giving power curtailed in final OCPF rule
By Matt Murphy
Unions and non-profits will be limited to
contributing $1,000 a year to a candidate for
public office starting next month after the
Office of Campaign and Political Finance
followed through Thursday by submitting a new
rule that will close the controversial "union
loophole" in state regulation.
The rule holds unions to the same contribution
limits applied to individual donors, wiping away
the past practice of allowing labor groups to
contribute up to $15,000 before they must
register as a political action committee, even
if the whole sum was given to just one
candidate.
Starting May 31, contribution limits for unions
will be set at $1,000 to a candidate, $500 to a
political action committee and $5,000 to a
political party.
Any union or non-profit that exceeds the $15,000
threshold will have to register as a PAC, though
contributions to super PACs will not count
toward that trigger.
Campaign finance regulators began revisiting the
current rules at the request of Common Cause
after the Supreme Judicial Court last year
questioned the legal strength of the so-called
"union loophole" in a ruling against the
Massachusetts Fiscal Alliance, which upheld the
state's ban on corporate political donations.
The final rule was expected by May 1, but the
agency took a little extra time before
submitting it to the Secretary of State's office
on Thursday. It won't take effect until it's
published on May 31.
Paul Craney, a spokesman for the Massachusetts
Fiscal Alliance, said his organization has been
fighting since 2013 to eliminate the loophole,
which he says unfairly advantages unions over
businesses in the political process.
"We are pleased to see it reduced but
disappointed it wasn’t eliminated altogether,"
Craney said in a statement.
Craney added, "For the first time in a
generation, union bosses will not have the
loudest voice over everyone else. However, they
still benefit by having the only voice when
compared to employers."
The Boston Globe
Thursday, May 9, 2019
Regulators slash the dollar amount unions can
donate to candidates in Mass.
By Matt Stout
State campaign finance officials moved Thursday
to dramatically slash what labor unions can give
to their preferred political candidates, while
loosening rules on donations they can make to
super PACs.
The new regulations, released by the Office of
Campaign and Political Finance, replace
decades-old rules and mark a sea change in how
labor groups can spend money in support of
political campaigns and parties in
Massachusetts.
Currently, labor unions can give up to $15,000
annually to a single candidate. The new
regulations, effective May 31, cut that limit to
$1,000 while capping donations to political
action committees at $500 and to a political
party’s own committee at $5,000.
The limits, which state officials proposed in
February, are “more consistent with the
statutory framework of lower contribution limits
that was created in the 1970s,” OCPF regulators
wrote in a letter explaining their decision.
Unions are still bound by a $15,000 aggregate
limit — meaning they could theoretically give 15
candidates $1,000 each. But if a union goes
above that $15,000 limit, it must register as a
political action committee. Once organized as a
PAC, it would be capped at giving $500 a year to
each candidate.
Under the current rules, unions that exceed the
threshold are subject to the same limitations,
but are not required to register as PACs.
The new regulations also ease some restrictions.
Currently, any independent expenditures or
donations a union makes to a super PAC count
toward the $15,000 threshold. A super PAC, known
in regulators’ parlance as an “independent
expenditure PAC,” can raise and spend unlimited
amounts of money but is barred from giving money
directly to a candidate or coordinating with a
political campaign.
But the campaign finance office says it is
lifting that rule, meaning unions will be free
to give as much as they want to super PACs, as
well as to ballot-question committees, without
running up against the aggregate limit and the
new requirement that they register as PACs.
Derided by critics as a loophole for unions, the
$15,000 cap survived a challenge before the
Supreme Judicial Court in September, when the
justices upheld the longstanding ban on direct
corporate gifts. But even then, the court
implied — in a footnote — that the campaign
finance office should review the regulation
about the cap.
Common Cause Massachusetts, a good-government
watchdog, petitioned regulators to modify it.
The changes unveiled Thursday, while effectively
bringing unions under the same limits imposed on
individuals, also eliminates a decades-old
advantage that labor organizations have enjoyed
in state and local elections in Massachusetts.
The higher donation limit, set in the 1980s,
applied to unions and nonprofits that aren’t
corporate-funded.
Unions have at times used the advantage to pour
thousands of dollars into the campaigns of
individual candidates, with the 2013 Boston
mayoral race being a notable example. That year,
now-Mayor Martin J. Walsh received nearly
$329,000 through just 22 donations from labor
unions, many of them hailing from out of state.
The Massachusetts Fiscal Alliance, a
conservative nonprofit whose founder, Rick
Green, was behind the lawsuit to eliminate the
corporate donation ban, cheered the new
regulations. The group had pushed to have unions
banned from making any political donations, as
companies are.
“For the first time in a generation, union
bosses will not have the loudest voice over
everyone else,” said Paul D. Craney, a
MassFiscal spokesman. “However, they still
benefit by having the only voice when compared
to employers.”
Since state officials published proposed rules
three months ago, labor officials have urged
regulators to reverse them, fearing they could
curtail their ability to be politically active
on behalf of their members.
The Massachusetts Teachers Association pushed
the OCPF to allow unions to donate up to the
$15,000 threshold to a PAC that a union itself
creates. (Regulators did not adopt the
suggestion.) And the Professional Firefighters
of Massachusetts argued that it would put an
“undue administrative burden” on its 220-plus
local fire union affiliates, who it said lack
the resources and staff to organize as a PAC if
they exceed the threshold.
Steven A. Tolman, president of the Massachusetts
AFL-CIO, told regulators at a March hearing that
the change was “unfair” and an “overreach.”
“I’m disappointed. That’s the best way to say
it,” Tolman said Thursday. “Twenty people can
have a cocktail party — wealthy people — and
raise a ton of money. This was a way for working
people to have a little sway. But we’ll live
within the rules. We just adapt to it.”
Regulators had planned to release the final
regulations by May 1, but missed their
self-imposed deadline to do “some fine-tuning,”
a spokesman said.
The final regulations include only a few changes
from the draft ones, including language
specifying that an entity that raises money only
for electioneering communications is not
considered a political committee.
That change came in response to concerns raised
by the Fiscal Alliance Foundation, a nonprofit
created by the leaders at MassFiscal, according
to the OCPF. MassFiscal, which has resisted
disclosing its donors, had in the past regularly
sent electioneering communications, such as
mailers, to voters before the Legislature passed
a new disclosure law in 2016.
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