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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
Wednesday, December 4, 2019
A
Legislature in "Recess"
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The Legislature will drag into December its
deliberations on spending priorities for the fiscal year
that ended in June, stretching more than a month past a
statutory deadline as Democratic leaders have failed to find
consensus.
Both branches adjourned sessions Wednesday
to meet again on Monday, so they will be unable to take up
the bill, if a conference committee privately negotiating it
reaches agreement, until Dec. 2 at the earliest.
That would leave only a week and a half
before Dec. 11, a deadline set last week by Comptroller
Andrew Maylor who plans — absent an agreement on the bill —
to close the fiscal 2019 books unilaterally, leaving several
accounts with deficiencies, and to transfer the entirety of
the $1.1 billion surplus to the state's rainy day fund....
The ongoing delay adds to a pattern of late
state spending bills.
Massachusetts was the last state in the
country with a July 1 fiscal year start date to send its
fiscal 2020 budget to the governor. One year earlier, it was
the last state to put a final spending bill in place.
House and Senate leaders appear unwilling to
discuss why they struggle to find agreements in a timely
manner despite controlling branches with Democratic
supermajorities....
Most legislators have had little to say
about the budget stalemate, opting to just wait it out.
House Minority Leader Brad Jones called it a
"complete failure of the House and Senate Democratic
leadership to get this done," while his counterpart in the
Senate, Bruce Tarr, used the phrase "systemic failure."
State House News Service
Wednesday, November 27, 2019
Lawmakers Leave Budget Wreck, Break for Thanksgiving
House and Senate leaders broke for the
Thanksgiving holiday on Wednesday morning without settling
differences on how to allocate the $1.1 billion revenue
surplus taxpayers gifted Beacon Hill last fiscal year.
Legislative leaders are now taking the high-stakes budget
battle into December, a time when lawmakers, under their own
rules, are supposed to be taking a break from major
decision-making and legislating.
The extraordinary stalemate marks the second
time this year that House and Senate Democrats have blown
far past budget deadlines and means deliberations on fiscal
2019 spending (H 4132/S 2386) are about to collide with
fiscal 2021 budget talk at the State House....
House lawmakers, who are still working on a
transportation revenue proposal, will hold a public hearing
Thursday on bills that have been idling all year before the
Transportation Committee and could generate some of those
revenues.
State House News Service
Friday, November 28, 2019
Advances - Week of Dec. 1, 2019
For weeks, legislative leaders have been
unable to reach a compromise to close the books on last
fiscal year, leaving a relatively routine spending bill and
a $1.1 billion surplus that it is built on to languish.
But that impasse is affecting more than just
the state’s ledger: Hundreds of millions of dollars that the
policy-heavy legislation promises also remains in limbo,
affecting everything from the MBTA and school security to
helping ensure that public water supplies are safe.
The delay is prompting rounds of
hand-wringing and calendar-watching among advocates and
agencies, who are left to wonder not just when, but in what
shape, a bill could emerge before Dec. 11, when the state
comptroller said he intends to close the books himself....
Known as a supplemental budget, the
legislation is designed to formally wrap up the fiscal year
that ended on June 30, while pushing a deposit into the
state’s rainy day fund and parsing out money to various
accounts and programs.
But the House and Senate, which have
struggled for years to finish their annual budget
negotiations without delays, have been unable to reach a
compromise more than a month after both chambers passed
their own versions of the supplemental bill....
To others, the stalemate is now in uncharted
territory. Andrew W. Maylor, the state’s comptroller, told
lawmakers in a Nov. 21 letter that absent a budget deal, he
will unilaterally close the fiscal year 2019 books on Dec.
11 and transfer the surplus into the state’s rainy day fund.
That would mean the funding that legislators
had hoped to put toward the various programs and earmarks
would instead go into the state’s emergency savings account.
Maylor said he’s staring down deadlines to
file the state’s comprehensive annual financial report and
send information to federal officials that affects billions
of dollars that the state receives each year in federal
funds.
“I must emphasize that the Commonwealth is
in an unprecedented situation,” he said.
It’s also about to become an awkward one.
Even as they figure out a way to finalize spending from last
fiscal year, lawmakers will begin a new process Wednesday:
trying to reach agreement on what tax revenues will look
like in the next one.
The Boston Globe
Friday, November 29, 2019
A state budget plan is late. How late? It’s for the last
fiscal year
It’s the hackerama’s Christmas gift to
itself — the T.C.I., which stands for Transportation Climate
Initiative, but it’s really a T.A.X., a tax on gasoline.
The hacks are trying to keep this latest
heist as under the radar as possible, and for good reason —
it’s unconstitutional, because all new state taxes are
supposed to originate in the House of Representatives.
So Tall Deval and the rest of the climate
cultists at the State House are promoting this as a “carbon
fee” on gasoline, which would be simultaneously imposed on
11 or 12 already overburdened, failing, mostly blue
Northeastern and mid-Atlantic states.
Somebody call the bunco squad. TCI is a con,
a racket, a grift....
New Hampshire and Vermont both seem to be
figuring out that if Massachusetts pulls off this highway
robbery, it’ll be a much bigger shot in the arm for their
economies than the menthol-smoke ban.
Despite the best efforts of the hacks — who
in this case prefer to call themselves “activists” or
“advocates” — word is getting out, and the natives are
restless.
But not restless enough. Which is what this
column is all about. The proponents of this
taxation-without-representation stick-up have set up a
website for “TCI Regional Policy Design Stakeholder
Submissions.”
Stakeholders? So instead of victim-impact
statements, as at court sentencings, we will now have
stakeholder-impact statements.
I guess taxpayers are no longer to be
considered victims, merely “stakeholders.”
The Boston Herald
Saturday, November 30, 2019
With what amounts to a gas tax, ‘stakeholders’ will pay the
price
By Howie Carr
For public
officials around the nation looking to fix beat-up roads and
bridges or buy new buses and subway cars, it’s one of the
most reliable turns in the playbook: Raise the gas tax and
watch the money flow in.
But as the
Massachusetts Legislature prepares to debate a massive fix
to the state’s beleaguered transportation system — one that
could include a stiff increase in the gas tax — they might
take note that it may not be such a reliable source of
revenue for much longer....
The main driver
behind this trend is long-developing improvements in fuel
efficiency, as more and more motorists get around to
replacing older cars with hybrids and vehicles that get
significantly higher gas mileage.
Even supporters of
a gas tax increase acknowledge that it simply isn’t keeping
pace with the growth in driving and may not be reliable over
the long term....
Given the state of
traffic on pretty much any day of the week, one would think
the state would be rolling in money from the gas tax. And
true, collections were at an all-time high last fiscal year
— about $675 million....
Moreover,
officials in Massachusetts have outlined a goal to end the
sale of gas-powered vehicles in the state by 2040 ...
Craig Carlson, a
Boston-based automotive consultant ... predicted that by
2025, electric vehicles may be popular enough to be a drag
on gas tax collections. Time wise, that’s not far away for a
state Legislature that has often let years go by between
major transportation initiatives....
Other funding
initiatives may be more productive in the long term, they
say, but would not immediately generate the money they
believe the roads and rails need right now. Most estimates
show that every 1-cent increase to the gas tax would raise
an additional $30 million in revenue.
“Yes, the world is
going to look different in 30 years,” said Chris Dempsey,
director of the nonprofit Transportation for Massachusetts.
But, “the reason to raise the gas tax isn’t to face a
30-year issue. It’s to face an issue today.” ...
Baker has also
said he opposes a gas tax hike, but is supporting a new kind
of fee on motor fuels. This would be instituted by states in
the Northeast on wholesale fuel suppliers as way to put a
price on carbon emissions from motor vehicles and ultimately
reduce tailpipe emissions. This, too, won wide support in
the poll.
The governor has
also largely opposed the idea of congestion pricing — using
tolls to discourage some driving in busy parts of Boston
while raising revenue to improve public transit. However he
has suggested the state will consider creating separate
travel lanes on highways where commuters can pay higher
tolls to bypass traffic in adjacent lanes.
The Boston Globe
Sunday, December 1, 2019
Driving is surging in Massachusetts. Gas tax revenue? Not so
much
State budget
writers began the fiscal year 2021 budget cycle Wednesday
with a hearing at which the Department of Revenue,
independent economists and think tanks sent the same
message: get ready for state tax revenue growth to start
slowing down.
The annual
consensus revenue hearing held by the Joint Committee on
Ways and Means and the Executive Office of Administration
and Finance is a chance for budget managers to probe the
status of the local economy, take into account other factors
and then guess about the availability of tax revenues for
budget-building purposes.
Tax revenue growth
estimates for the coming fiscal year ranged from a low of
0.8 percent to a high of 3.5 percent. By Jan. 15, state
officials must pick a growth number and base their spending
plans off of it....
At the outset of
Wednesday's hearing, both chairmen mentioned last year's
budget surplus but also the need to plan for years when the
state is not as flush with cash.
"Revenue
forecasting is difficult and an uncertain process. While we
had a $1.1 billion surplus this past fiscal year, we must
remain thoughtful as we plan for the future," Michlewitz
said.
For fiscal 2019,
which ended June 30, Massachusetts government revenue
collections totaled $29.693 billion, which was $1.1 billion
or 3.8 percent above expectations. The sum represented a 6.9
percent -- or $1.916 billion -- increase in actual
collections over fiscal 2018, a year when collections rose
8.5 percent. None of the groups that presented at
Wednesday's hearing projected similar growth for fiscal
2021.
State House News Service
Wednesday, December 4, 2019
Experts: Revenue Boom Will Fade in Next Budget Cycle
The credit rating
agency that knocked Massachusetts down a peg two years ago
is keeping an eye on the state and is not yet ready to
contemplate upgrading the state's rating, Treasurer Deborah
Goldberg told lawmakers Wednesday.
S&P Global Ratings
lowered its rating for Massachusetts bonds to AA from AA+ in
June 2017, largely due to the state diverting money from its
stabilization fund while the economy was growing....
Massachusetts had
$2.335 billion in its stabilization fund to end fiscal year
2007, but soon saw its balance drop to $670 million by the
end of fiscal year 2010. After being rebuilt to $1.652
billion at the end of fiscal 2012, the fund's balance again
declined to $1.252 billion at the end of fiscal 2015, when
Baker and Goldberg took over.
After being stung
by the credit downgrade, the stabilization fund balance has
increased to $2.858 billion as of Nov. 12, according to the
state comptroller's office.
State House News Service
Wednesday, December 4, 2019
Goldberg: S&P Not Ready for Mass. Rating Upgrade
Almost a year
after Massachusetts passed a law taxing and regulating
short-term vacation rentals, the state's revenue
commissioner said Wednesday that the new tax is "settling in
pretty well" after education and outreach efforts.
Under the law Gov.
Charlie Baker signed on Dec. 28, 2018, short-term rentals,
including those listed on platforms like Airbnb, became
subject to the state's 5.7 percent lodging tax, plus
additional taxes in certain communities....
As state budget
writers begin crafting next year's spending plan, Revenue
Commissioner Christopher Harding told them that short-term
rental tax collections so far have been roughly consistent
with estimates.
Harding's revenue
projections assumed the state will collect $27.5 million
this fiscal year and $30 million in fiscal 2021 from the
short-term rental tax.
"It's a new tax
type, a lot of questions and clarification, so we've spent
an awful lot of time on that," Harding told Ways and Means
Committee members and Administration and Finance Secretary
Michael Heffernan at an annual hearing where experts provide
their revenue estimates for the year to come.
State House News Service
Wednesday, December 4, 2019
New Rental Tax Tracking Toward $27.5 Mil Haul
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Chip Ford's CLT
Commentary
In theory the
Legislature is in "recess." Unlike all but a small
handful of states, in Massachusetts it never actually
ends — adjourn sine die
—annual sessions never end
and legislators never go home for the year, as happens
in all but a very few states. This justifies
Massachusetts legislators' "fulltime" pay to continue ad
infinitum.
During the
ongoing "informal sessions" for the remainder of the
year not much important legislation is passed, primarily
because a single legislator's opposition can and will
stop any bill that comes up. Assuming they know
it's coming, are motivated, and want it stopped.
My computer
system has needed an overhaul for many months now but
I've had to keep putting it off, finding workarounds,
patching and improvising as bugs and glitches kept
popping up more and more frequently. Things on
Beacon Hill were too crazy to have the system down for a
few days or longer that it'll take for the overdue and much-needed
rebuild. That time has come, was forced upon me
over the weekend when the monitors ceased working.
You can't work blind on a computer without a monitor!
After
wrestling with it for much of the weekend I still
couldn't get them to function (it is a dual-monitor
system), so had to call in a
technician on Monday morning. He arrived late
yesterday and finally got them working again, but also
recommended that the tired old system needs to be
updated, completely overhauled from scratch. At
least it got us through to this "recess"
— the best time a system
crash could possibly happen at CLT, if there's ever a
good time.
The complete
system overhaul will begin in the next day or two
— a period during which I
will have no computer access until the project is
completed, however long that takes. Better now than a month ago during the
Proposition 2˝ crisis battle,
though in the end all that fighting to save our law made
no difference.
As you can read, there's little of
real import going on at the State House since all the
damage was done with multiple large catch-all bills
rushed through on the final day/night of the session.
The Legislature still hasn't agreed on how to spend the
billion-dollars-plus surplus (over-taxation) left over
from last year's budget (that ended in June) so
that it can be closed out —
a record delay that's creating an unnecessary and very
expensive crisis. Hearings are being held,
information is being gathered to supposedly determine
how much the state will have available to spend in the
upcoming FY2021 budget — and perhaps most importantly,
how much more "revenue" (tax increases) will be needed
to fund all of the "necessary spending" — current, and
for whatever they dream up next.
The State House New Service
reported in its Advances on Friday:
House lawmakers, who are still working on a
transportation revenue proposal, will hold a public hearing
Thursday on bills that have been idling all year before the
Transportation Committee and could generate some of those
revenues.
That's tomorrow, folks.
I'll catch you up on what we've
missed after I'm done rebuilding the computer system and
it's up and running again.
The
following is part of what I'd expected to send out to
you over the weekend —
until the system monitors crashed:
Looking back
at last week's passage of the education finance reform
bill
— which in the end included a sentence concerning
a want to "mitigate the constraints of Proposition 2˝"
—
I'm still stunned by the betrayal of taxpayers by the
inaction of Gov. Charlie Baker when it counted.
What a
turnabout in Charlie Baker from when he first ran to be
governor. Back in 2010 he sought Barbara
Anderson's support — not
that he needed to, as she'd idolized him even before he
went to work in the Bill Weld administration, had
encouraged him to run for governor for many years.
Back then, Charlie was a big supporter of Proposition 2˝.
In fact, before his job with the Weld administration he'd
worked for the Massachusetts High Tech Council, which
was CLT's primary partner and ally in the campaign to establish
Proposition 2˝ in 1980.
At the celebration of life event
we held for Barbara, on June 5, 2016 shortly after she
passed away, Charlie showed up unexpectedly. In
his remembrance of her he asserted to the large roomful of
attendees: “Prop 2˝ was probably the single most
important thing to happen to fiscal and economic policy
in the Commonwealth of Mass in my lifetime. Period. Anyone who suggests otherwise is just kidding
themselves.”
Here is
a photo report of the State House "Protect
Proposition 2˝" rally
back in 2010,
organized by the Baker/Tisei campaign, with Barbara as
their featured speaker, when our property tax limitation
law was then under assault in 2010. In the end
that year, Charlie lost to incumbent Gov. Deval Patrick.
In the end this year, it made no
difference to taxpayers.
CLT had successfully defended,
preserved and protected our law and property taxpayers
for decades — until now. (See the history below)
It took Gov. Charlie Baker, an erstwhile
Republican, to allow it without the slightest resistance
to finally be weakened.
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History of Attacks on Proposition 2˝
Gov. Baker Sells Out Taxpayers
Allows
Proposition 2˝ to be weakened
― 2019
CLICK
HERE
CLT Saves
Proposition 2˝ Again ― 2018
from "Community Benefit Districts"
Another devious end-round around Prop 2˝
CLICK
HERE
CLT Saves Proposition 2˝ Again
― 2010
Defeats Municipal Tax Exclusion Bill
A devious end-round around Prop 2˝
CLICK HERE
CLT Saves Proposition 2˝
― 2002
Halts Rep's effort to "gut it" — Auto excise tax hike also
derailed
CLICK HERE |
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Chip Ford
Executive Director |
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State House News
Service
Wednesday, November 27, 2019
Lawmakers Leave Budget Wreck, Break for
Thanksgiving
By Chris Lisinski and Colin A. Young
The Legislature will drag into December its
deliberations on spending priorities for the
fiscal year that ended in June, stretching more
than a month past a statutory deadline as
Democratic leaders have failed to find
consensus.
Both branches adjourned sessions Wednesday to
meet again on Monday, so they will be unable to
take up the bill, if a conference committee
privately negotiating it reaches agreement,
until Dec. 2 at the earliest.
That would leave only a week and a half before
Dec. 11, a deadline set last week by Comptroller
Andrew Maylor who plans — absent an agreement on
the bill — to close the fiscal 2019 books
unilaterally, leaving several accounts with
deficiencies, and to transfer the entirety of
the $1.1 billion surplus to the state's rainy
day fund.
Lawmakers won't say what's holding up their
negotiations, instead repeating that they are
hopeful to resolve the budget soon even as they
simultaneously question the other branch's
approach and comments.
House Speaker Robert DeLeo wrote a letter to the
Baker administration and Maylor on Monday
floating passage of a close-out bill that would
pay outstanding bills but omit all proposed
discretionary spending. A day later, Senate
President Karen Spilka said she had not spoken
to DeLeo about the proposal and does not "know
even what exactly that would mean."
DeLeo then said Wednesday he was not sure why
Spilka claimed to be unaware about his
suggestion.
"As we speak now, there are conversations that
are going on," DeLeo told the News Service after
a bill-signing ceremony. "I would believe she
got a copy of the letter. I honestly don't know
that. But as we speak right now, we're working
with the Senate and with the governor on this
most important piece of legislation."
Branch leaders last week finally agreed to move
past a procedural hurdle during the last formal
session of the year, but after appointing a
six-member conference committee led by the Ways
and Means chairs, lawmakers still have not found
agreement on the surplus spending bill itself.
Gov. Charlie Baker confirmed Wednesday that his
administration has waded into the protracted
negotiations.
"There are conversations that are going on right
now between the House, the Senate and our
administration about trying to get what I would
call the final act done on the budget for fiscal
19 before that Dec. 11 date," Baker said at a
bill-signing press conference. "I'm hopeful
we'll be able to put something together."
Maylor "did the right thing" by putting the
Legislature and administration on notice that
their inaction could result in him unilaterally
closing the books and depositing all surplus
funds into the rainy day account, the governor
said.
"It's important for him to close the books on a
relatively timely basis for the rating agencies,
for the bondholders who hold bonds associated
with the commonwealth of Mass. and any of our
other independent agencies that have bonds in
the market, and he has to issue a CAFR,
Comprehensive Annual Financial Report, early
next year," he said.
The bill would spend the $1.1 billion surplus by
directing hundreds of millions of dollars toward
earmarks, $50 million to accelerate MBTA
improvements, $17 million on local scholarships,
$1 million on security at non-profits such as
synagogues and more. It also called for a
deposit of hundreds of millions of dollars in
the state's long-term savings account.
Spilka said Tuesday that the holdup is "not
about spending." However, negotiators remain at
odds over a corporate tax change the House
backed and the Senate did not.
House Ways and Means Chairman Aaron Michlewitz
said there are "a number of issues still to be
resolved" in conversation between the branches.
"They're still ongoing. I don't want to get into
the details of the discussions or the back and
forth," Michlewitz said of the budget talks.
Senate Ways and Means Committee Chair Michael
Rodrigues said in a statement to the News
Service that "the Senate Conferees continue to
work to reach a reasonable resolution and we
remain confident we can get it done."
The ongoing delay adds to a pattern of late
state spending bills.
Massachusetts was the last state in the country
with a July 1 fiscal year start date to send its
fiscal 2020 budget to the governor. One year
earlier, it was the last state to put a final
spending bill in place.
House and Senate leaders appear unwilling to
discuss why they struggle to find agreements in
a timely manner despite controlling branches
with Democratic supermajorities.
"I don't want to get into it," Michlewitz said
when asked Wednesday why the two branches
struggled recently to come to terms on budget
bills. "But as I said before, there are a lot of
complexities related to this process — not the
process itself — but the legislation itself.
We're working on it, though."
DeLeo aides ended his interview as a reporter
posed a similar question, and the speaker did
not answer while walking away. On Tuesday,
Spilka also did not answer if communication was
a problem between the two branches while walking
away from a reporter.
Most legislators have had little to say about
the budget stalemate, opting to just wait it
out.
House Minority Leader Brad Jones called it a
"complete failure of the House and Senate
Democratic leadership to get this done," while
his counterpart in the Senate, Bruce Tarr, used
the phrase "systemic failure."
State House News
Service
Friday, November 28, 2019
Advances - Week of Dec. 1, 2019
House and Senate leaders broke for the
Thanksgiving holiday on Wednesday morning
without settling differences on how to allocate
the $1.1 billion revenue surplus taxpayers
gifted Beacon Hill last fiscal year. Legislative
leaders are now taking the high-stakes budget
battle into December, a time when lawmakers,
under their own rules, are supposed to be taking
a break from major decision-making and
legislating.
The extraordinary stalemate marks the second
time this year that House and Senate Democrats
have blown far past budget deadlines and means
deliberations on fiscal 2019 spending (H 4132/S
2386) are about to collide with fiscal 2021
budget talk at the State House. House and Senate
Democrats, who often tout their ability to work
with the minority party, won't say why they're
having so much trouble with budget deadlines and
agreeing on spending priorities during a period
marked by budget riches.
Republican leaders have described the situation
as a failure, but most lawmakers, perhaps
mindful that the ultimate spending bill will
include earmarks for projects in their
districts, have said little about the situation.
Budget bill troubles can pull energy away from
other legislative priorities, but House and
Senate Democrats have a bit more bandwidth now
since they completed work this month and Gov.
Charlie Baker quickly signed their bills
addressing education funding, distracted
driving, flavored tobacco products, and campaign
finance reporting.
As fiscal 2019 talks linger on, lawmakers and
the Baker administration on Wednesday gavel in
the annual hearing to talk about how much money
they might have available to spend in fiscal
2021.
House lawmakers, who are still working on a
transportation revenue proposal, will hold a
public hearing Thursday on bills that have been
idling all year before the Transportation
Committee and could generate some of those
revenues.
Immigration law enforcement issues will be front
and center on Monday, when people on both sides
of the Safe Communities Act plan to explain why
state and local law enforcement should, or
should not, be involved in aiding federal
immigration law enforcement efforts.
Also next week, the field of potential 2020
ballot questions will be whittled down as it
becomes clear on Wednesday which initiative
petition campaigns filed the necessary amount of
certified voter signatures to stay alive in the
process.
The Boston
Globe
Friday, November 29, 2019
A state budget plan is late. How late? It’s for
the last fiscal year
By Matt Stout
For weeks, legislative leaders have been unable
to reach a compromise to close the books on last
fiscal year, leaving a relatively routine
spending bill and a $1.1 billion surplus that it
is built on to languish.
But that impasse is affecting more than just the
state’s ledger: Hundreds of millions of dollars
that the policy-heavy legislation promises also
remains in limbo, affecting everything from the
MBTA and school security to helping ensure that
public water supplies are safe.
The delay is prompting rounds of hand-wringing
and calendar-watching among advocates and
agencies, who are left to wonder not just when,
but in what shape, a bill could emerge before
Dec. 11, when the state comptroller said he
intends to close the books himself.
“It’s mind-boggling to me that this did not
pass,” said Kyla Bennett, the director for
Public Employees for Environmental
Responsibility in New England, which has
advocated for $28.4 million that both the House
and Senate bills allocate to test for and
address “forever chemicals” — per- and
polyfluoroalkyl chemicals known as PFAS — in
town water supplies.
“This delay is forcing all of us at the customer
level to buy filtration systems and worry,” she
said. “It’s a national crisis. I thought
Massachusetts was on top of it, but apparently
not as much as I thought.”
Known as a supplemental budget, the legislation
is designed to formally wrap up the fiscal year
that ended on June 30, while pushing a deposit
into the state’s rainy day fund and parsing out
money to various accounts and programs.
But the House and Senate, which have struggled
for years to finish their annual budget
negotiations without delays, have been unable to
reach a compromise more than a month after both
chambers passed their own versions of the
supplemental bill.
The legislation differs on a wide range of
fronts, with the Senate version adding tens of
millions of dollars more in appropriations and
eliminating a corporate tax change that the
House backed, among other things.
Even on pots of money where there’s broad
agreement, the two chambers don’t always see eye
to eye on the specifics.
The legislation, for example, includes $50
million for the Massachusetts Bay Transportation
Authority, an agency that House Speaker Robert
A. DeLeo once dubbed in “crisis.” It’s an
infusion that Governor Charlie Baker has called
for since June to fund a new team of engineers,
maintenance workers, and contractors to speed
projects and repairs. But unlike the House, the
Senate also requires the agency to produce
reports updating the progress of its capital
projects as part of receiving the funding.
Lisa Battiston, an MBTA spokeswoman, said
planned projects are still moving forward but
the funding would help the agency do more
proactive inspections and maintenance.
The T — which this year has been battered by
high-profile service disruptions and frustration
over fare hikes — would also add contracts “to
focus on accelerating construction and
infrastructure projects” if the funding is
approved, Battiston said.
The bills include closely watched policy
proposals, as well, such as a much-debated
decision to move the state primary date next
year to Sept. 1. It also features language that
DeLeo said would ratify several collective
bargaining contracts, including with unions
representing community college staff and
registry of deeds workers.
In a letter Monday, DeLeo floated the idea of
passing a bill that strips out discretionary
spending and includes only funding to shore up
deficient “budgeted accounts” and time-sensitive
policy proposals, such as setting the primary
date.
But it’s unclear if there’s an appetite
elsewhere for such a move. A spokesman for
Baker’s budget office, which DeLeo asked to
produce a list of accounts with deficiencies,
said Friday it’s still reviewing DeLeo’s letter.
A spokesman for Senator Michael J. Rodrigues,
the chamber’s budget chairman, said he was
unable to reach the Westport Democrat on Friday.
“There’s a lot of priorities for many of us in
both versions of the supplemental budget, in the
House and the Senate,” said Representative Aaron
Michlewitz, the chairman of the House Ways and
Means Committee. “I’m hopeful, and continue to
be eager to come to a resolution on this that
can move the ball forward.”
Meanwhile, loads of earmarks hang in the wind.
The legislation sets aside millions for grants
to help schools beef up security, including for
installing new door locks, security cameras, or
active-shooter detection systems. Both versions
also would push an additional $1 million into a
nonprofit grant program designed to help houses
of worship and other organizations add new
security measures.
Aaron Agulnek — director of government affairs
for the Jewish Community Relations Council of
Greater Boston, which publicizes the nonprofit
grants’ availability to local centers and
synagogues — said the grant process is moving
forward as expected after the program received
$500,000 in the current state budget. But the
delay has left unclear exactly how many
applicants could ultimately benefit.
“The fact remains, it’s unfortunate that with so
many areas of consensus . . . which real people
and real priorities are impacted by, that
[lawmakers] haven’t been able to move forward,”
Agulnek said of the budget bill.
To others, the stalemate is now in uncharted
territory. Andrew W. Maylor, the state’s
comptroller, told lawmakers in a Nov. 21 letter
that absent a budget deal, he will unilaterally
close the fiscal year 2019 books on Dec. 11 and
transfer the surplus into the state’s rainy day
fund.
That would mean the funding that legislators had
hoped to put toward the various programs and
earmarks would instead go into the state’s
emergency savings account.
Maylor said he’s staring down deadlines to file
the state’s comprehensive annual financial
report and send information to federal officials
that affects billions of dollars that the state
receives each year in federal funds.
“I must emphasize that the Commonwealth is in an
unprecedented situation,” he said.
It’s also about to become an awkward one. Even
as they figure out a way to finalize spending
from last fiscal year, lawmakers will begin a
new process Wednesday: trying to reach agreement
on what tax revenues will look like in the next
one.
The Boston
Herald
Saturday, November 30, 2019
With what amounts to a gas tax, ‘stakeholders’
will pay the price
By Howie Carr
It’s the hackerama’s Christmas gift to itself —
the T.C.I., which stands for Transportation
Climate Initiative, but it’s really a T.A.X., a
tax on gasoline.
The hacks are trying to keep this latest heist
as under the radar as possible, and for good
reason — it’s unconstitutional, because all new
state taxes are supposed to originate in the
House of Representatives.
So Tall Deval and the rest of the climate
cultists at the State House are promoting this
as a “carbon fee” on gasoline, which would be
simultaneously imposed on 11 or 12 already
overburdened, failing, mostly blue Northeastern
and mid-Atlantic states.
Somebody call the bunco squad. TCI is a con, a
racket, a grift.
California has already imposed this TCI scam,
and gasoline prices have skyrocketed to way over
$4 a gallon. How’s that working out for the
Golden State?
New Hampshire and Vermont both seem to be
figuring out that if Massachusetts pulls off
this highway robbery, it’ll be a much bigger
shot in the arm for their economies than the
menthol-smoke ban.
Despite the best efforts of the hacks — who in
this case prefer to call themselves “activists”
or “advocates” — word is getting out, and the
natives are restless.
But not restless enough. Which is what this
column is all about. The proponents of this
taxation-without-representation stick-up have
set up a website for “TCI Regional Policy Design
Stakeholder Submissions.”
Stakeholders? So instead of victim-impact
statements, as at court sentencings, we will now
have stakeholder-impact statements.
I guess taxpayers are no longer to be considered
victims, merely “stakeholders.”
The woke crowd thought they could flood this
website with the usual NPR-type nonsense from
“nonprofits,” like this one: “Jurisdictions have
designed a work plan with the goal of developing
a policy that accelerates the transition to a
low-carbon transportation future and delivers a
better, clever, more resilient transportation
system …”
The centerpiece of which would be “resilient
multi-modal transportation needs.” Also known as
bicycles.
So now we need more victims, I mean
stakeholders, contributing contrary viewpoints
to this message board, before this latest
stealth attack on taxpayers is publicly rolled
out by the Friends of Al Gore and Greta
Thunberg.
For obvious reasons, the hacks don’t want you to
find out about this site for comments, which is
why Mass. Fiscal Alliance has posted a link to
it at their website, massfiscal.org. Go there
and you will be directed to the “stakeholders”
site.
Here are a few samples from Massachusetts
taxpayers, although stakeholders in the other
states under assault are also contributing very
pointed commentary:
Gordon Nelson, Attleboro: “It is another
ill-defined, pie-in-the-sky political
boondoggle. It’s all about handing over more
money to a bloated bureaucracy and generating
more hack jobs. You are not fooling anybody.”
Robert Johnson, Belchertown: “The waste and
fraud in government need to be addressed before
any further money is stolen from the taxpayers.”
Beth Bamberg, Wilmington: “You should be ashamed
of yourselves. You are nothing more than pigs
wallowing in the crap that you have made this
state overflow with.”
Martin Joyce, Weymouth: “Don’t sneak in a gas
tax … Mass voters already VOTED AGAINST IT!”
Great point, even in all capital letters. In
2014, the electorate repealed an automatic gas
tax increase at the ballot box. In that
referendum campaign, the hacks outspent the
taxpayers 30-1, and we still defeated the greedy
grabbers by a comfortable 53-47 margin.
Back to the comments already on the record:
Joseph DeSouza, Natick: “Since the state already
spends 4 times as much per mile as NH and twice
as much as NY, it is unconscionable to ask for
more money until the most basic of fiscal
controls are placed on their expenditures.”
John Delaney, Lynnfield: “BS attempt to force us
to bow down to climate-change religion. No
warming for 15 years!”
Leo St. Pierre, Springfield: “Less Waste, Less
Hack Hiring, Rescind Legislative Pay Raises,
Lower Bloated State Salaries … My wife and I
will be leaving this state as soon as possible.”
Cathy Collins, Douglas: “Carbon footprints come
from people who fly and have pleasure boats, not
the working POOR. Governors are not kings or
dictators and need to stop behaving that way.”
Don’t tell that to Tall Deval, not after all
he’s done to improve the RMV, the state police,
the MBTA, etc. Plus he’s outlawed menthol
cigarettes. Now he wants to jack up the gas tax
— the voters (and the Legislature) be damned.
You’re a “stakeholder,” let Tall Deval and the
rest of the tax-fattened hacks know how you
feel. And if you’re really angry, don’t be
afraid to write in ALL CAPITAL LETTERS!
Check out Howie’s latest podcasts at
howiecarrshow.com
The
Boston Globe
Sunday, December 1, 2019
Driving is surging in Massachusetts. Gas tax
revenue? Not so much
By Adam Vaccaro
For public officials around the nation looking
to fix beat-up roads and bridges or buy new
buses and subway cars, it’s one of the most
reliable turns in the playbook: Raise the gas
tax and watch the money flow in.
But as the Massachusetts Legislature prepares to
debate a massive fix to the state’s beleaguered
transportation system — one that could include a
stiff increase in the gas tax — they might take
note that it may not be such a reliable source
of revenue for much longer.
Gas tax collections by the state have barely
increased over the past five years — just 2.5
percent since fiscal year 2015, the first full
year after lawmakers last increased the tax, by
3 cents, to 24 cents a gallon, according to
Massachusetts tax collection data.
This, despite a period of powerful economic
growth in Greater Boston that added hundreds of
thousands of more vehicles to the roads, and saw
the rise of Uber and Lyft from spunky upstarts
to transportation powerhouses providing more
than 80 million rides in a year, as well as
high-speed delivery service from Amazon and
other retailers that have flooded streets with
trucks.
The main driver behind this trend is
long-developing improvements in fuel efficiency,
as more and more motorists get around to
replacing older cars with hybrids and vehicles
that get significantly higher gas mileage.
Even supporters of a gas tax increase
acknowledge that it simply isn’t keeping pace
with the growth in driving and may not be
reliable over the long term.
“The gas tax is not, and should not be, a
sustainable revenue stream for supporting our
ongoing investment in transportation
infrastructure,” said James Rooney, president of
the Greater Boston Chamber of Commerce, which
backs a 15-cent gas tax phased in over three
years. “We’re trying to reduce emissions and
consumption of gasoline,” he said, adding that
“at some point,” gasoline will fade away as a
fuel source for vehicles.
Given the state of traffic on pretty much any
day of the week, one would think the state would
be rolling in money from the gas tax. And true,
collections were at an all-time high last fiscal
year — about $675 million.
But that’s not much more than the $658 million
the state collected between July 2014 and June
2015. Meanwhile, the rate of driving in
Massachusetts since around then has surged by at
least 8.9 percent, according to data the state
reports to the federal government.
The erosion of gas tax collections is only going
to accelerate with the emergence of electric
cars. They’re still in their advent around
Massachusetts. But while sales remain modest,
they are accelerating fast, almost doubling in a
single year, to around 9,000 in 2018, according
to the Association of Global Automakers.
Moreover, officials in Massachusetts have
outlined a goal to end the sale of gas-powered
vehicles in the state by 2040, and auto
manufacturers seem increasingly close to
breaking into the mass market with new models of
electric cars — from the midpriced Tesla sedan
to Ford’s debut of a new electric Mustang muscle
car.
“The electric cars are getting better, there’s
more charging, people are getting more
comfortable with electric,” said Craig Carlson,
a Boston-based automotive consultant.
Carlson predicted that by 2025, electric
vehicles may be popular enough to be a drag on
gas tax collections. Time wise, that’s not far
away for a state Legislature that has often let
years go by between major transportation
initiatives.
Right now, there aren’t a lot of viable
alternatives to the gas tax in use. Earlier this
year, the Federal Highway Administration said it
awarded seven states, including New Hampshire
and California, a total of $10 million to study
other ways to raise money for road works. Most
of these efforts revolve around charging
motorists based on how much they drive rather
than how much gas they buy.
Oregon has a program that charges car owners by
the mile — currently 1.7 cents; participants
volunteer to be in the program and receive a
credit on the fuel taxes they pay through the
year. Utah is launching a pilot program that
will waive annual registration fees for owners
of electric and hybrid vehicles and instead
charge them 1.5 cents for every mile they drive.
Efforts to undertake similar experiments have
waxed and waned in Massachusetts. Even so, local
transit advocates and business leaders note that
an increase in the gas tax would still raise
gobs of money upfront, crucial for a state with
a public transit system that has a seemingly
inexhaustible amount of repairs and upgrades to
make.
Other funding initiatives may be more productive
in the long term, they say, but would not
immediately generate the money they believe the
roads and rails need right now. Most estimates
show that every 1-cent increase to the gas tax
would raise an additional $30 million in
revenue.
“Yes, the world is going to look different in 30
years,” said Chris Dempsey, director of the
nonprofit Transportation for Massachusetts. But,
“the reason to raise the gas tax isn’t to face a
30-year issue. It’s to face an issue today.”
A gas tax hike was widely expected to be a major
component in a House of Representatives
initiative to generate new transportation
revenue this fall. But House leaders delayed
action until at least this winter as members
struggled to finalize a plan.
Key lawmakers in the House were not available
for comment last week.
The last gas tax increase, in 2013, was the
first adjustment in two decades. At the time,
lawmakers also indexed the tax to the rate of
inflation so it would rise automatically. But
voters repealed that aspect of the law a year
later. Since then, gas tax receipts have risen
at less than the rate of inflation, according to
Bureau of Labor Statistics.
Massachusetts has the 31st highest gas tax in
the country, according to the Tax Foundation, a
Washington, D.C., tax policy nonprofit.
The falling value of the gas tax has also been a
concern of those who study transportation at the
federal level. The national gas tax has remained
at the same level since 1993, and economists
have cited increasing fuel efficiency as a
reason to explore other ways to fund roads, such
as through tolls or mileage-based fees.
Massachusetts lawmakers flirted with this
concept in 2016, when they agreed to test a
program that would charge drivers based on miles
driven, because of concerns that the gas tax may
eventually become obsolete. The measure was
vetoed by Governor Charlie Baker, who said he
could not support such a fee if it was in
addition to the gas tax.
Meanwhile, some environmental advocates caution
against assigning specific taxes or fees to
electric vehicles too soon. Today, the lower
cost of operating an electric vehicle is a major
factor for people in abandoning gas-powered
cars, said Staci Rubin, an attorney with the
Conservation Law Foundation.
“We need to incentivize them,” she said. “If
we’re at a point in the future where we have
widespread electric vehicles, that’s great and
then we can rethink revenue.”
While the gas tax would likely be part of a
legislative package, some business leaders have
called on lawmakers to take a more comprehensive
approach that at least acknowledges that gas
taxes are likely to have less power over time.
At the chamber of commerce, for example, Rooney
wants the Legislature to create a task force to
study other forms of pricing the roads, such as
increased tolls or other technology, to account
for a future with fewer gas-powered cars, and to
report back with a plan in a year.
That idea won more support from Rooney’s peers
in the business community than a gas tax hike,
which has divided employer groups across the
state.
Associated Industries of Massachusetts, for
example, has argued it would be unfair to
lower-income people or those with no
alternatives to driving. But according to a
survey compiled by the chamber, there is more
support within the business community for
studying alternative roadway pricing ideas.
A gas tax hike would likely be divisive among
voters, too, as a recent poll by the MassINC
Polling Group found. Most voters would oppose a
one-time 15-cent increase, though the poll found
narrow support for three 5-cent increases phased
in over time.
A majority of respondents also said they would
oppose adding tolls to Routes 95 or 93, and were
closely divided over whether to charge higher
tolls at peak periods, with 46 percent in
support and 47 percent opposed.
More popular ideas were to tap into real estate
developers for money and apply higher fees to
ride-hailing trips.
But the overwhelming majority of those polled
agreed on one thing: 77 percent said the state
needs more transportation revenue. The Baker
administration has long argued that it does not
need to increase taxes or fees to pay for
transportation, though it has implemented two
MBTA fare hikes within the last four years to
help fill transit budget gaps.
Baker has also said he opposes a gas tax hike,
but is supporting a new kind of fee on motor
fuels. This would be instituted by states in the
Northeast on wholesale fuel suppliers as way to
put a price on carbon emissions from motor
vehicles and ultimately reduce tailpipe
emissions. This, too, won wide support in the
poll.
The governor has also largely opposed the idea
of congestion pricing — using tolls to
discourage some driving in busy parts of Boston
while raising revenue to improve public transit.
However he has suggested the state will consider
creating separate travel lanes on highways where
commuters can pay higher tolls to bypass traffic
in adjacent lanes.
State House News Service
Wednesday, December 4, 2019
Experts: Revenue Boom Will Fade in Next Budget
Cycle
By Colin A. Young and Katie Lannan
State budget writers began the fiscal year 2021
budget cycle Wednesday with a hearing at which
the Department of Revenue, independent
economists and think tanks sent the same
message: get ready for state tax revenue growth
to start slowing down.
The annual consensus revenue hearing held by the
Joint Committee on Ways and Means and the
Executive Office of Administration and Finance
is a chance for budget managers to probe the
status of the local economy, take into account
other factors and then guess about the
availability of tax revenues for budget-building
purposes.
Tax revenue growth estimates for the coming
fiscal year ranged from a low of 0.8 percent to
a high of 3.5 percent. By Jan. 15, state
officials must pick a growth number and base
their spending plans off of it.
"Slower growth. Still growth, but slower growth,
certainly not a recession. It's been consistent
with the message that we've been hearing for the
last few months, that we are still growing, just
at a slower rate," Senate Ways and Means
Chairman Sen. Michael Rodrigues said after the
three-hour hearing.
House Chairman Rep. Aaron Michlewitz noted that
the range of growth estimates "seems a little
tighter" than in previous years and added that
"there's a lot of uncertainty" in play when
trying to project how the economy will act more
than a year from now.
At the outset of Wednesday's hearing, both
chairmen mentioned last year's budget surplus
but also the need to plan for years when the
state is not as flush with cash.
"Revenue forecasting is difficult and an
uncertain process. While we had a $1.1 billion
surplus this past fiscal year, we must remain
thoughtful as we plan for the future,"
Michlewitz said.
For fiscal 2019, which ended June 30,
Massachusetts government revenue collections
totaled $29.693 billion, which was $1.1 billion
or 3.8 percent above expectations. The sum
represented a 6.9 percent -- or $1.916 billion
-- increase in actual collections over fiscal
2018, a year when collections rose 8.5 percent.
None of the groups that presented at Wednesday's
hearing projected similar growth for fiscal
2021.
Dept. of Revenue
Revenue Commissioner Christopher Harding told
budget writers he is not projecting a recession
to begin this fiscal year or next. He said
there's an "upside potential" beyond the fiscal
2020 revenue estimate of up to $250 million and
pegged the midpoint of the agency's fiscal 2021
revenue forecast at $30.805 billion -- 2.3
percent growth in actual tax collections.
"The FY21 forecast assumes a deceleration in the
economic growth environment and a moderate
decrease in the non-withheld personal income tax
category, which is mostly from investment,
business, pass-through and other income,
including capital gains, which at this time is a
potentially volatile swing factor," Harding
said.
The commissioner also foreshadowed the next
round of tax relief once the state income tax
falls to 5 percent on Jan. 1. Automatic tax
relief associated with charitable donation
deductions will result in a $64 million hit to
the fiscal 2021 state budget and a $300 million
impact in fiscal 2022.
Numbers released after Wednesday's hearing
showed tax collections over the first five
months of fiscal 2020 exceeding the state's
benchmarks by $271 million, and up 5.4 percent
over the same period in fiscal 2019. Harding
cautioned lawmakers at the hearing that $160
million in over-benchmark revenues this fiscal
year are associated with the "volatile" estate
tax.
Mass. Taxpayers Foundation
Massachusetts Taxpayers Foundation President
Eileen McAnneny said the state appears poised to
return to the slower revenue growth rates of
fiscal 2016 and fiscal 2017, rather than the
"super-charged" growth rates of fiscal 2018 and
fiscal 2019.
The business-backed organization projected a
more limited revenue growth rate -- 2 percent in
fiscal 2020 and 2.5 percent in fiscal 2021.
The "largest drag" on the forecast and the
state's economy as a whole, McAnneny said, is
the tightening labor market as the workforce
continues to age and the unemployment rate
remains low. MTF cautioned that "anemic" growth
in the number of jobs created "is likely to have
a material impact on income withholding and
sales tax revenue going forward."
McAnneny said that if an economic downturn does
hit, the federal government "may not be a
reliable partner" given the combination of low
interest rates and the rising national deficit.
"I think the federal government will just not be
in a position to provide bailouts as they have
done in other recessions," she said.
Professor Alan Clayton-Matthews
Northeastern University economics professor Alan
Clayton-Matthews, a senior contributing editor
of MassBenchmarks, told the Joint Ways and Means
Committee that he expects state tax revenues to
total $31.804 billion in fiscal 2021 -- a 3.5
percent rate of growth.
"Economic growth is expected to continue but at
a slowing rate reflecting constraints on labor
force growth due to an aging workforce,"
Clayton-Matthews said. "Growth in Massachusetts
payroll employment, for example, is projected to
be 0.8 percent in FY2020 and 0.5 percent in
FY2021."
Beacon Hill Institute
Economists at the Beacon Hill Institute offered
the most cautious take, forecasting growth of
1.9 percent to $30.2 billion in fiscal 2020
followed by a 0.8 percent increase in fiscal
2021. William Burke, the institute's director of
research, said the state's economic outlook
"remains solid," though growth is likely to
moderate.
Whatever the eventual rate of growth ends up
being, Rodrigues said he's confident that the
administration and Legislature will have the
money they need to craft the state's budget.
"Oh yeah. I'm confident there will be enough
there. It's still growth," Rodrigues said. "I've
been around long enough that I've been here when
there's been shrinkage, and we're not moving in
that direction."
Even with slower growth projections, lawmakers
will need to begin including substantial new
K-12 education funding in next year's budget, in
keeping with a $1.5 billion, seven-year school
funding reform plan Gov. Charlie Baker signed
into law last week.
Baker is due to file his fiscal year 2021 budget
proposal by Jan. 22.
State House News Service
Wednesday, December 4, 2019
Goldberg: S&P Not Ready for Mass. Rating Upgrade
By Colin A. Young
The credit rating agency that knocked
Massachusetts down a peg two years ago is
keeping an eye on the state and is not yet ready
to contemplate upgrading the state's rating,
Treasurer Deborah Goldberg told lawmakers
Wednesday.
S&P Global Ratings lowered its rating for
Massachusetts bonds to AA from AA+ in June 2017,
largely due to the state diverting money from
its stabilization fund while the economy was
growing. Earlier this year, Goldberg met with
S&P and other rating agencies, meetings that the
chairs of the Legislature's Ways and Means
committees were eager to learn more about at
Wednesday's annual hearing on the state's
revenue outlook.
"I assume you met with Standard and Poor's and
we know back in 2017 they downgraded our rating.
Since then we've more than doubled our deposit
into the Rainy Day Fund, the Stabilization Fund.
Any type of insight you want to give about
whether or not you think Standard & Poor's is
going to upgrade our rating?" Senate chairman
Sen. Michael Rodrigues asked the treasurer.
Goldberg said she and Gov. Charlie Baker
emphasized to S&P that the state has worked to
bolster its reserves and that things are now run
by "a different team of a different governor and
a different treasurer."
"They still harbor a little bit of skepticism.
They are very happy about us transferring to the
Rainy Day Fund and they'd like to see us
continue to do so. I think time will tell. There
was no expression of interest in doing an
upgrade," Goldberg told Rodrigues. "I would say,
they still mentioned several times that we had a
statutory obligation to not spend down in good
times."
Massachusetts had $2.335 billion in its
stabilization fund to end fiscal year 2007, but
soon saw its balance drop to $670 million by the
end of fiscal year 2010. After being rebuilt to
$1.652 billion at the end of fiscal 2012, the
fund's balance again declined to $1.252 billion
at the end of fiscal 2015, when Baker and
Goldberg took over.
After being stung by the credit downgrade, the
stabilization fund balance has increased to
$2.858 billion as of Nov. 12, according to the
state comptroller's office.
House Ways and Means Chairman Rep. Aaron
Michlewitz asked Goldberg if the rating agency
gave an indication as to what it would consider
an appropriate balance for the state's rainy day
fund.
"I think general practice is that we would be,
with a budget around $40 billion we would be at
around $4 [billion]. I want to remind everybody
that we were at $1.25 [billion] ... so we've
made tremendous progress," Goldberg said. "I
think what they'll be observing is that
continued progress and that we don't just sit
back and sit on our laurels. I think it will
take a few more trips."
Goldberg, Baker and Administration and Finance
Secretary Michael Heffernan flew to New York
City in April to meet with representatives from
rating agencies Moody's, Standard and Poor's,
and Fitch. Modeled after a similar trip they
took in June 2016, Goldberg had suggested last
year that the Bay State make its case to the
rating agencies directly to tell a story of
improved financial management.
In August, Moody's Investor Services completed a
"periodic review" of its rating for
Massachusetts (Aa1) and made note of a few
things about Massachusetts.
"The Aa1 rating reflects Massachusetts' growing
economy, anchored by education, healthcare and
technology sectors. Robust economic growth,
combined with close monitoring of revenues and
ample executive authority to make mid-year cuts,
have resulted in balanced budgets," the agency
wrote in a press release. "Strong year-over-year
tax revenue growth, along with prudent planning,
have afforded the commonwealth the opportunity
to build reserves."
State House News Service
Wednesday, December 4, 2019
New Rental Tax Tracking Toward $27.5 Mil Haul
By Katie Lannan
Almost a year after Massachusetts passed a law
taxing and regulating short-term vacation
rentals, the state's revenue commissioner said
Wednesday that the new tax is "settling in
pretty well" after education and outreach
efforts.
Under the law Gov. Charlie Baker signed on Dec.
28, 2018, short-term rentals, including those
listed on platforms like Airbnb, became subject
to the state's 5.7 percent lodging tax, plus
additional taxes in certain communities.
Supporters of taxing short-term rentals said it
would put that type of lodging on equal footing
with taxed hotel rooms. For consumers though,
the tax can translate to additional costs.
On Airbnb, a two-night stay in a Beacon Hill
studio that rents at $100 a night carries with
it $45 in taxes, and the same length trip to a
four-bedroom, $308-a-night cabin in Lee incurs a
tax of $102.
As state budget writers begin crafting next
year's spending plan, Revenue Commissioner
Christopher Harding told them that short-term
rental tax collections so far have been roughly
consistent with estimates.
Harding's revenue projections assumed the state
will collect $27.5 million this fiscal year and
$30 million in fiscal 2021 from the short-term
rental tax.
"It's a new tax type, a lot of questions and
clarification, so we've spent an awful lot of
time on that," Harding told Ways and Means
Committee members and Administration and Finance
Secretary Michael Heffernan at an annual hearing
where experts provide their revenue estimates
for the year to come.
"I don't want to get ahead of myself but I think
we're settling in pretty well as we get ready to
exit the year here," Harding said. He said,
"We're actually tracking nicely right now on our
revenue projections there."
The law required short-term rental hosts to
register with the Department of Revenue, and
exempted hosts who rent their property for 14
days or less from collecting taxes. The tax also
does not apply to properties rented for less
than $15 per day.
In addition to the 5.7 percent room occupancy
tax, short-term rentals can also be subject to a
local option excise tax and community impact
fee, depending on the municipality where they're
located. In Boston, Worcester, Cambridge,
Springfield, West Springfield and Chicopee, a
2.75 percent convention center finance fee also
applies, and in municipalities that are members
of the Cape Cod and Island Water Protection
Fund, there is another 2.75 percent excise.
The two lawmakers who led negotiations on the
short-term rental legislation, Rep. Aaron
Michlewitz and Sen. Michael Rodrigues, now chair
the budget-writing Ways and Means Committee.
Michlewitz, a Boston Democrat, asked Harding
during the hearing what his short-term rental
revenue projections looked like.
Baker signed the law on a Friday last year, and
the next business day was New Year's Eve.
Returning after the New Year's Day holiday,
Harding said the revenue department's "phones
were blowing up" with questions from realtors,
people on the Cape and islands, and others.
"I'll characterize the last year as a lot of
education and collaboration, a tremendous amount
of effort that went into that," he said.
Harding said about 300 intermediaries --
companies like Airbnb and Expedia -- have
registered to date, and more than 5,000
operators.
The tax took effect on July 1, with the start of
the fiscal year.
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