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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”
46 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
|
CLT UPDATE
Saturday, May 30, 2020
Proposed income tax hike draws
scrutiny
Jump directly
to CLT's Commentary on the News
Most Relevant News Excerpts
(Full news reports follow
Commentary)
|
With gas prices
low but the economy strained, a significant public majority
still supports state action to raise new revenue for
transportation investments and to join a multi-state roadway
fuel cap-and-trade program, according to recent poll
results.
In a MassINC
Polling Group survey of 1,478 Massachusetts residents
released Wednesday, 74 percent of respondents said they
strongly or somewhat support generating more revenue to go
toward roadways and public transit while 67 percent strongly
or somewhat supported the still-in-development
Transportation and Climate Initiative. The poll was
conducted May 5 through May 13.
Public support
shifted only slightly from when MassINC pollsters asked the
same exact questions about revenue and TCI -- neither of
which specified the financial impact either proposal will
have on consumers -- in November.
In that poll of
600 registered Massachusetts voters, 77 percent strongly or
somewhat supported increasing revenue and 62 percent
strongly or somewhat supported TCI.
Net support for
higher revenue dropped from 62 percent in November to 56
percent in May, while it increased from 31 percent to 44
percent on the TCI question.
Both issues had
been center stage in Massachusetts this year before
officials pivoted in March to the public health crisis and
the widespread economic damage caused by COVID-19.
State House News
Service
Wednesday, May 27, 2020
Poll: Support Still High for Transpo Revenues, TCI
The hopes for a
sharp and immediate economic recovery in Massachusetts are
no longer realistic, a leading Beacon Hill fiscal watchdog
said Thursday, predicting a long and slow rebound that will
strain state resources and delay a full recovery until 2025.
The Massachusetts
Taxpayers Foundation on Thursday followed up a paper earlier
this month that downgraded its revenue estimates for the
fiscal year that begins July 1 with a newly pessimistic
outlook on the years to follow as well.
The group said
that following the economic downturns in Massachusetts in
2002 and the 2009 it took three years before tax revenues
rebounded to their pre-recession levels. The
new MTF paper said it is "reasonable" to assume it
would take at least as long this time given how steep and
widespread the slowdown has been....
"When the
potential structural changes to key pillars of the economy
are considered, it could take considerably longer for the
state to recoup tax revenues lost from this pandemic," the
paper concludes.
If tax revenues
grew at 6 percent a year beginning in fiscal 2022, MTF said
it would take until fiscal year 2025 for revenue to fully
recover, assuming a drop in tax revenues of 20 percent or
more in the near term. That rate of growth would also be one
point higher than the average rate of growth over the past
decade.
State House News
Service
Thursday, May 28, 2020
MTF: Slow Climb From Economic Mess Will Take Years
MTF recently
downgraded its FY 2021 tax revenue forecast to a loss of $6
billion, representing a nearly 20 percent decline from the
$31.15 billion consensus benchmark....
As a guide for
determining how long before Massachusetts tax revenues are
restored to pre-pandemic levels, we examined past
recessions. Following the recessionsof2002 and 2009, it took
three years for state tax revenues to recover to
pre-recession levels ,putting enormous strains on the
Commonwealth’s operating budgets during that period. Given
the steep and widespread decline in FY 2021 tax revenues ,it
is reasonable to assume that it will take at least as long
to recover as the two previous recessions....
LESSONS FROM THE
PAST TWO RECESSIONS
During the
recession of the early 2000s, state tax revenues fell from
$16.73 to $14.29 billion between FY 2001 and FY 2002, a drop
of 14.6 percent. It took three years – until FY 2005 – for
tax revenue collections of $17.09 billion to exceed the
pre-recession peak of $16.73 billion.
Similarly, during
the more recent recession caused by the financial crisis,
tax revenues peaked at $20.89 billion in FY 2008 before
falling 12.5 percent to $18.27 billion in FY 2009. Even with
a 25 percent hike in the sales tax rate from 5.0 percent to
6.25 percent in 2009 that added approximately $1 billion in
annual sales tax revenues, it took three years before FY
2012 tax collections surpassed FY 2008.
Despite infusions
of one-time revenues from trust fund sweeps, Stabilization
Fund withdrawals, and federal assistance, that represented
about $2 billion during the 2002 recession and $6 billion
during the2009 recession, other measures were necessary to
balance the budgets.
In 2002 and 2009,
tax and fee increases provided an additional $1 billion or
more in annual revenues, but spending cuts were still
necessary to balance the budgets. Notwithstanding these
measures, spending in FY 2004 was 5 percent, or about$1.1
billion, below what it was in FY2002. While less severe, the
2010 budget depicts a similar story. It was only $185
million higher than that of FY2008,representing an increase
of less than 1 percent. In contrast, expenditures grew by an
average of $1.6 billion, or 5.4 percent, every year for all
other budgets from 2001 through 2019.
Massachusetts
Taxpayers Foundation
Thursday, May 28, 2020
Massachusetts Fiscal Challenges Could Last Years
Policy Makers Face Tough Choices in New Reality
Read/Download the full MTF paper
The 91
Massachusetts economists who called on Gov. Charlie Baker
and legislative leaders to raise personal and corporate
taxes amid coronavirus-sparked revenue drops need a
summer-school refresher course in English vocabulary.
They describe the
move as the only “fair” way to balance next year’s budget
and avoid spending cuts — demonstrating that they don’t
really know what the word “fair” means.
“Fair” is finding
ways to boost the state economy without further burdening
its citizens — the ones who are not employed by academia and
therefore have been laid off in the hundreds of thousands.
“Fair” is understanding the coronavirus has had a
devastating effect on the fiscal well-being of Bay State
residents. Those who never faced food insecurity before have
found themselves on food pantry lines.
Many families had
hoped to send children to college in the fall — and those
dreams may be on hold, or evaporate, because of financial
setbacks caused by COVID-19. Of course, with fewer students
perhaps on campuses in September, that would seem to imperil
academics’ salaries. That is, if their pay wasn’t provided
or boosted by taxpayers.
The fair thing to
do is to take a look at spending and see what excesses can
be cut. The mega-buck payrolls of state universities, for
example.
A Boston Herald
editorial
Thursday, May 28, 2020
Economists’ ‘fair’ plan doesn’t add up
Thank you, “Tall
Deval”!
Tuesday’s Boston
Herald reported on a call for higher state income taxes from
91 “Massachusetts economists,” a phrase that — like
“Minnesota Nice” and “Rocky Mountain Oysters” — denotes
you’re not dealing with the real thing.
Hardly a surprise
that egghead academics who live off the public dole (and
thanks to student grants and loans, that’s true at private
colleges, too) want to keep the cash rolling in and don’t
care where it comes from.
Also no surprise
in the Herald’s reporting that Democrats like Karen Spilka
and Robert DeLeo “have both hinted at tax increases” to fill
the revenue hole created when the government orders
virtually every tax-paying private business to close.
Of course they’re
gonna raise taxes — they’re Massachusetts Democrats. Texas
Democrats want you to keep your guns, Vermont Democrats want
you to smoke your pot, and Massachusetts Democrats want you
to hand over your wallet. Expecting anything different would
be … unnatural.
Not to mention
dumb.
Thus my praise for
Gov. Charlie Baker, who has been saying for weeks he’s not
willing to raise taxes in response to the devastating damage
from the state’s economic lockdown. Is he personally
responsible for some of that damage? Yep. For maintaining
the lockdown long after “flattening the curve” had been
achieved? Definitely. Is his current teary-eyed clinging to
the rigid lockdown requirements based entirely on emotion
and politics, instead of data and reason? Or course!
But all that would
be true under a Democratic governor, too. The only
difference is that she would be champing at the bit to stick
the state with higher taxes at the same time while Gov.
Baker says no.
What more do you
want from a Massachusetts “Republican”?...
Expecting Charlie
Baker to act like a Republican is as ridiculous as expecting
Massachusetts economists to support free markets. Whaddayou
— nuts? You want an actual GOP governor? Move to New
Hampshire.
Michael Goodman at the University of Massachusetts
Dartmouth, one of the academics who signed the letter, says
Baker needs to “open his mind” to tax increases. Goodman
also likes to quote former Chicago Mayor Rahm Emanuel’s
“never let a good crisis go to waste,” as Goodman put it,
and views the COVID-19 crisis as a “kind of New Deal-style
opportunity” to force through socialized medicine and other
progressive plans....
Baker really and
truly is “not a Democrat.” That doesn’t make him an actual
Republican, or a supporter of individual liberty, but he’s
as close as you are gonna get in Massachusetts politics.
So thanks, Gov.
Baker. In Massachusetts’ politics, “it could be worse” is
about as good as it gets.
The Boston Herald
Thursday, May 28, 2020
Bravo to Charlie Baker for giving tax-spike idea the boot
By Michael Graham
As Congress
bickers over the size and scope of the next federal relief
package, the Massachusetts Taxpayers Foundation warned this
week that the pillars of the state's economy - health care,
higher education, tourism -- could be so fundamentally
shaken that a sharp "V" shaped recovery is no longer
possible.
A vaccine or
viable treatment for COVID-19 remains the Holy Grail to
resuming normal activities, and without it the fiscal
watchdog group predicted that state tax revenue may not
fully rebound until fiscal 2025.
What that means
for next year, however, is still anyone's guess. Much
remains unknown about how lawmakers will approach budgeting
for the fiscal year that begins July 1, and how much money
will be available to spend. MTF and others have predicted
that as much as $6 billion in anticipated revenues could
disappear. But that's just a guess, and Congress could fill
some of that hole.
More than 90
economists and the influential Raise Up Massachusetts
coalition of community, faith and labor organizations
implored Beacon Hill this week to consider tax increases . .
. before resorting to deep budget cuts that could erode
important safety nets for struggling families....
The other part of
reopening that doesn't get as much attention is that even as
businesses start to reawaken, consumers may not be in the
right headspace to go back to life as they knew it. A
MassINC Polling Center survey released this week found that
44 percent of people were likely to take fewer trips outside
their home than before the pandemic, and 28 percent said
those trips were more likely to be alone in their car.
In fact, 67
percent said they weren't fully comfortable with the idea of
returning to public transportation, underscoring the
challenge facing public officials of not just restoring
services like the MBTA, but restoring confidence in their
safety....
State House News
Service
Friday, May 29, 2020
Weekly Roundup - Too Close For Comfort
Calls from
progressive groups and economists for higher taxes are
growing louder on Beacon Hill where budget writers are
watching the state's tax revenue base implode and wondering
how much aid they can reliably expect from the federal
government....
Experts believe
state tax collections will fall next fiscal year back to
roughly fiscal 2018 levels. Part of that lost revenue could
be backfilled with draws from the state's $3.5 billion rainy
day fund or $2.7 billion in CARES Act funding, about a
quarter of which is already being doled out to cities and
towns (applications are due by June 5).
Meanwhile,
Treasurer Deb Goldberg, acting under the authority recently
granted through a special state law, has secured a $1.75
billion line of credit to make sure the state is able to pay
bills and meet its cash flow needs over the next month, the
last of fiscal 2020.
A return to growth
is the only long-term solution to the economic and fiscal
problems facing the state, but the challenge here is
heightened by the fact that the virus hit acutely in
Massachusetts and struck at three of its strongest sectors -
health care, higher education, and tourism....
State House News
Service
Friday, May 29, 2020
Advances - Week of May 31, 2020
|
Chip Ford's CLT
Commentary
The State House News
Service yesterday noted in its "Advances - Week of May
31, 2020":
Calls
from progressive groups and economists for higher taxes are growing
louder on Beacon Hill where budget writers are watching the state's
tax revenue base implode and wondering how much aid they can
reliably expect from the federal government.
In its Weekly Roundup of
the same date it reported:
More than
90 economists and the influential Raise Up Massachusetts coalition
of community, faith and labor organizations implored Beacon Hill
this week to consider tax increases . . . before resorting to deep
budget cuts that could erode important safety nets for struggling
families.
Our CLT News Release on May
27 ("Cruel
tax hike proposal deceives taxpayers, again") we
reminded everyone — as we
so often must:
But they assure us, “These tax rates could be phased
back as the economy returns to its pre-recession
level."
Perhaps their proposed tax hikes “could” be
phased back, so they are not outright lying —
but most of us know better. Their proposed tax hike
won’t be. Not without a long,
drawn-out-for-decades fight.
Crises are temporary. “Temporary” tax hikes are
forever.
We called the tax hike
proposal "cruel." The Boston Herald's editorial in
Thursday termed it anything but "fair":
They
describe the move as the only “fair” way to balance next year’s
budget and avoid spending cuts — demonstrating that they don’t
really know what the word “fair” means.
The Massachusetts Taxpayers
Foundation — while not
outright calling for tax increases
— reminded the governor, House Speaker, and
Senate president that they were imposed in response to
the last two recessions. In a
new MTF paper issued on Thursday it noted:
Similarly, during the more recent recession caused
by the financial crisis, tax revenues peaked at
$20.89 billion in FY 2008 before falling 12.5
percent to $18.27 billion in FY 2009. Even with a 25
percent hike in the sales tax rate from 5.0 percent
to 6.25 percent in 2009 that added approximately $1
billion in annual sales tax revenues, it took three
years before FY 2012 tax collections surpassed FY
2008.
Despite infusions of one-time revenues from trust
fund sweeps, Stabilization Fund withdrawals, and
federal assistance, that represented about $2
billion during the 2002 recession and $6 billion
during the2009 recession, other measures were
necessary to balance the budgets.
In
2002 and 2009, tax and fee increases provided an
additional $1 billion or more in annual revenues,
but spending cuts were still necessary to balance
the budgets. Notwithstanding these measures, spending
in FY 2004 was 5 percent, or about$1.1 billion,
below what it was in FY2002. While less severe, the
2010 budget depicts a similar story. It was only
$185 million higher than that of FY2008, representing
an increase of less than 1 percent. In contrast,
expenditures grew by an average of $1.6 billion, or
5.4 percent, every year for all other budgets from
2001 through 2019.
On that MTF paper, the
State House News Service reported on Thursday ("MTF:
Slow Climb From Economic Mess Will Take Years"):
If tax
revenues grew at 6 percent a year beginning in fiscal 2022, MTF said
it would take until fiscal year 2025 for revenue to fully recover,
assuming a drop in tax revenues of 20 percent or more in the near
term. That rate of growth would also be one point higher than the
average rate of growth over the past decade.
In its "Advances - Week of
May 31, 2020" the State House News Service added:
Experts
believe state tax collections will fall next fiscal year back to
roughly fiscal 2018 levels. Part of that lost revenue could be
backfilled with draws from the state's $3.5 billion rainy day fund
or $2.7 billion in CARES Act funding, about a quarter of which is
already being doled out to cities and towns (applications are due by
June 5).
Pay special attention to the size of those
respective budgets, according to the Massachusetts Taxpayers
Foundation's analysis — and how much the
state budget, the state's revenue receipts, and state spending have
swelled over the past two decades.
|
State Tax Revenue When Recent Recessions Arrived: |
|
2001: $16.73 billion (pre-2002 recession) |
|
2008: $20.89
billion (pre-2009 recession) |
|
2020: $31.15 billion (was anticipated
pre-pandemic) |
Since
2001 Massachusetts has almost doubled its revenue
— and spent it just as
fast.
According to the
Massachusetts Taxpayers Foundation paper:
"In
contrast, expenditures grew by an average of $1.6 billion, or 5.4
percent, every year for all other budgets from 2001 through 2019."
It's concerning, or should
be, how willing so many residents seem to be to pay
higher taxes for gas. The telling fact that is
little mentioned was again quietly dropped into analysis
of the latest poll:
"Public
support shifted only slightly from when MassINC pollsters asked the
same exact questions about revenue and TCI — neither of which
specified the financial impact either proposal will have on
consumers — in November."
Do you suppose that small
detail might have an impact on the poll results
— if the cost of a state gas tax
hike and/or the Transportation Climate Initiative on
motorists was included in the poll questions when asked?
When the cost of the gas tax hike schemes are
included in a
legitimate poll the responses change abruptly.
Jim Eltringham of
Advantage Inc., a D.C.-based polling company which produced an
independent poll, said: “Every data set tells a story and it
really does tell a story. When people are asked if they support a
measure to help environment that has this price tag from their own
wallet, that’s when you start seeing the dip.”
His poll in January,
sponsored by Mass Fiscal Alliance, "found that just over 61 percent of
people said they strongly or somewhat oppose Massachusetts joining TCI
if neighboring states decide not to join."
Imagine that!
Wait until the
"experts" and "economists" start polling on a hike in the income tax, or
some other scheme!
|
 |
 |
|
Chip Ford
Executive Director |
|
|
Full News Reports Follow
(excerpted above)
|
State House
News Service
Wednesday, May 27, 2020
Poll: Support Still High for Transpo Revenues, TCI
By Chris Lisinski
With gas prices low but the economy strained, a significant
public majority still supports state action to raise new
revenue for transportation investments and to join a
multi-state roadway fuel cap-and-trade program, according to
recent poll results.
In a MassINC Polling Group survey of 1,478 Massachusetts
residents released Wednesday, 74 percent of respondents said
they strongly or somewhat support generating more revenue to
go toward roadways and public transit while 67 percent
strongly or somewhat supported the still-in-development
Transportation and Climate Initiative. The poll was
conducted May 5 through May 13.
Public support shifted only slightly from when MassINC
pollsters asked the same exact questions about revenue and
TCI -- neither of which specified the financial impact
either proposal will have on consumers -- in November.
In that poll of 600 registered Massachusetts voters, 77
percent strongly or somewhat supported increasing revenue
and 62 percent strongly or somewhat supported TCI.
Net support for higher revenue dropped from 62 percent in
November to 56 percent in May, while it increased from 31
percent to 44 percent on the TCI question.
Both issues had been center stage in Massachusetts this year
before officials pivoted in March to the public health
crisis and the widespread economic damage caused by
COVID-19.
With Massachusetts unemployment at a record 15.1 percent and
both state and local budgets already facing massive gaps,
many stakeholders have hinted the transportation tax package
the House approved in March -- before the pandemic hit the
state in full force -- does not have a future.
While Senate President Karen Spilka said last month that she
is "not certain that now is the time to be talking about
taxes," progressive groups and economists in recent days
have come out in support of major tax increases, saying that
approach, while difficult in a recession, is better than
major spending cuts.
State House
News Service
Thursday, May 28, 2020
MTF: Slow Climb From Economic Mess Will Take Years
By Matt Murphy
The hopes for a sharp and immediate economic recovery in
Massachusetts are no longer realistic, a leading Beacon Hill
fiscal watchdog said Thursday, predicting a long and slow
rebound that will strain state resources and delay a full
recovery until 2025.
The Massachusetts Taxpayers Foundation on Thursday followed
up a paper earlier this month that downgraded its revenue
estimates for the fiscal year that begins July 1 with a
newly pessimistic outlook on the years to follow as well.
The group said that following the economic downturns in
Massachusetts in 2002 and the 2009 it took three years
before tax revenues rebounded to their pre-recession levels.
The
new MTF paper said it is "reasonable" to assume it
would take at least as long this time given how steep and
widespread the slowdown has been.
"When the potential structural changes to key pillars of the
economy are considered, it could take considerably longer
for the state to recoup tax revenues lost from this
pandemic," the paper concludes.
If tax revenues grew at 6 percent a year beginning in fiscal
2022, MTF said it would take until fiscal year 2025 for
revenue to fully recover, assuming a drop in tax revenues of
20 percent or more in the near term. That rate of growth
would also be one point higher than the average rate of
growth over the past decade.
The report said medical and economic experts are no longer
predicting a "V" shaped recovery, which would indicate a
sharp rebound back to pre-pandemic economic activity. The
consensus now, MTF said, is that the recovery will like look
more like a "U" or even and "L," and if a second surge of
the virus occurs in the fall there could be peaks and
valleys like a "W."
The Congressional Budget Office is using a new metaphor -
the Nike "Swoosh" -- to described what the recovery might
look like on a graph.
"To state the implications straightforwardly: the
Commonwealth will have limited budgetary flexibility for the
next several years as tax revenues slowly rebound,
particularly if the demand for safety net services resulting
from an ailing economy and an aging population drive up
expenditures," MTF said in the report.
The Boston
Herald
Thursday, May 28, 2020
Bravo to Charlie Baker for giving tax-spike idea the boot
By Michael Graham
Thank you, “Tall Deval”!
Tuesday’s Boston Herald reported on a call for higher state
income taxes from 91 “Massachusetts economists,” a phrase
that — like “Minnesota Nice” and “Rocky Mountain Oysters” —
denotes you’re not dealing with the real thing.
Hardly a surprise that egghead academics who live off the
public dole (and thanks to student grants and loans, that’s
true at private colleges, too) want to keep the cash rolling
in and don’t care where it comes from.
Also no surprise in the Herald’s reporting that Democrats
like Karen Spilka and Robert DeLeo “have both hinted at tax
increases” to fill the revenue hole created when the
government orders virtually every tax-paying private
business to close.
Of course they’re gonna raise taxes — they’re Massachusetts
Democrats. Texas Democrats want you to keep your guns,
Vermont Democrats want you to smoke your pot, and
Massachusetts Democrats want you to hand over your wallet.
Expecting anything different would be … unnatural.
Not to mention dumb.
Thus my praise for Gov. Charlie Baker, who has been saying
for weeks he’s not willing to raise taxes in response to the
devastating damage from the state’s economic lockdown. Is he
personally responsible for some of that damage? Yep. For
maintaining the lockdown long after “flattening the curve”
had been achieved? Definitely. Is his current teary-eyed
clinging to the rigid lockdown requirements based entirely
on emotion and politics, instead of data and reason? Or
course!
But all that would be true under a Democratic governor, too.
The only difference is that she would be champing at the bit
to stick the state with higher taxes at the same time while
Gov. Baker says no.
What more do you want from a Massachusetts “Republican”?
This is why I’ve never understood the juvenile “Tall Deval”
foot-stomping from the talk-radio crowd. Expecting Charlie
Baker to act like a Republican is as ridiculous as expecting
Massachusetts economists to support free markets. Whaddayou
— nuts? You want an actual GOP governor? Move to New
Hampshire.
Michael Goodman at the University of Massachusetts
Dartmouth, one of the academics who signed the letter, says
Baker needs to “open his mind” to tax increases. Goodman
also likes to quote former Chicago Mayor Rahm Emanuel’s
“never let a good crisis go to waste,” as Goodman put it,
and views the COVID-19 crisis as a “kind of New Deal-style
opportunity” to force through socialized medicine and other
progressive plans.
If Baker were in fact just a more vertically enhanced
version of Deval Patrick, the answer from the corner office
would be, “Let’s do it! And get me some new drapes while
we’re at it.”
But he’s not. Baker really and truly is “not a Democrat.”
That doesn’t make him an actual Republican, or a supporter
of individual liberty, but he’s as close as you are gonna
get in Massachusetts politics.
If you disagree, if you think there’s some Trumpian army
ready to rise up and rule in Massachusetts, check out last
week’s special election results. Republicans are down to
just four seats in the 40-seat state senate. Any fewer and
they’ll be eligible for special protection from the
Department of Fish and Wildlife.
Republicans bashing Baker should enjoy the luxury of their
“Tall Deval” cheap shots while they can. When he’s gone, his
replacement will be an actual Deval — an unapologetic,
big-spending, tax-raising liberal.
So thanks, Gov. Baker. In Massachusetts’ politics, “it could
be worse” is about as good as it gets.
Michael Graham is a regular contributor to the Boston
Herald. Follow him on Twitter @IAmMGraham.
State House
News Service
Friday, May 29, 2020
Weekly Roundup - Too Close For Comfort
Recap and analysis of the week in state government
By Matt Murphy
The global pandemic that has brought state economies to
their knees may wind up being more than just a trim off the
top. If the hope was for something akin to Gov. Charlie
Baker's once-a-year charity buzz cut, the reality might look
more like a shave with a rusty Bic razor.
The governor did, as it turns out, get his hair cut early
Tuesday morning as barbershops and salons were among the
businesses to get the go-ahead from the state this week to
resume operations. He and his barber wore masks, his
temperature was checked at the door, and Plexiglas separated
his chair from other cutting stations.
Offices everywhere but Boston were also allowed to reopen
under limited capacities, as were retail stores for curbside
pickup and car washes and pet groomers. But it's going to
take more than just a few new hair-dos to stabilize the
state's fiscal slide.
As Congress bickers over the size and scope of the next
federal relief package, the Massachusetts Taxpayers
Foundation warned this week that the pillars of the state's
economy - health care, higher education, tourism -- could be
so fundamentally shaken that a sharp "V" shaped recovery is
no longer possible.
A vaccine or viable treatment for COVID-19 remains the Holy
Grail to resuming normal activities, and without it the
fiscal watchdog group predicted that state tax revenue may
not fully rebound until fiscal 2025.
What that means for next year, however, is still anyone's
guess. Much remains unknown about how lawmakers will
approach budgeting for the fiscal year that begins July 1,
and how much money will be available to spend. MTF and
others have predicted that as much as $6 billion in
anticipated revenues could disappear. But that's just a
guess, and Congress could fill some of that hole.
More than 90 economists and the influential Raise Up
Massachusetts coalition of community, faith and labor
organizations implored Beacon Hill this week to consider tax
increases -- namely on businesses -- before resorting to
deep budget cuts that could erode important safety nets for
struggling families.
But a vaccine or treatment is critical to more than just
economic vibrancy. It's necessary, under Gov. Baker's
reopening strategy, to unlock Phase 4 - "New Normal."
Without it, Boston Mayor Marty Walsh and the Boston Athletic
Association determined that it was just too risky to try to
run the iconic Boston marathon in September.
Officials had postponed the 123-year-old road race from
April 20 to Sept. 14 with the hope that a large gathering of
athletes and spectators from around the world might be safe
by late summer. That is no longer the case. And so for the
first time since 1897, there will be no official 26.2-mile
road race. No special state holiday to celebrate that feat
of athleticism. And no excuse to play morning baseball.
Walsh is proceeding much slower than what it would take to
pull off any of that. For now, finding ways to clear
sidewalk and street space for outdoor dining feel more
achievable.
Baker and Lt. Gov. Karyn Polito said Friday that restaurants
would be allowed to reopen to diners for outdoor service at
the start of Phase 2, which won't begin until June 8 at the
earliest. Indoor dining will follow in Phase 2, but just not
at the start, and parties will be limited to 6, with no
seating at the bar.
The governor said he will make the call on whether to
proceed to the next phase of reopening on Saturday, June 6,
depending on the health metrics that for much of this week
showed encouraging, if slow, progress.
The other part of reopening that doesn't get as much
attention is that even as businesses start to reawaken,
consumers may not be in the right headspace to go back to
life as they knew it. A MassINC Polling Center survey
released this week found that 44 percent of people were
likely to take fewer trips outside their home than before
the pandemic, and 28 percent said those trips were more
likely to be alone in their car.
In fact, 67 percent said they weren't fully comfortable with
the idea of returning to public transportation, underscoring
the challenge facing public officials of not just restoring
services like the MBTA, but restoring confidence in their
safety.
MBTA General Manager Steve Poftak said that part of his
agency's strategy will be to implement new "crowding
thresholds" on buses and trains to enable mask-wearing
passengers to also keep socially distant. Once that
threshold is reached, Poftak said the T is looking at ways
to bring on additional service, or to offer alternate but
overlapping modes of transit, to help people safely get
where they're going.
Convincing people to return to public transit is not the
only sales pitch officials will be making this summer.
Education Commissioner Jeff Riley said that while it will
ultimately be the governor's call, it's his intention to
have K-12 schools "up and running" in the fall when classes
would normally resume. This school year, obviously, got cut
short, and Riley said the plan is also for high school
sophomores that were supposed to take English and math MCAS
exams this spring to instead get the test this winter.
As challenging, perhaps, as one of those MCAS questions, the
state budget has understandably flummoxed legislators who
can feel the fiscal ground shifting underneath them on a
daily basis, but another matter that has vexed leaders for
weeks got done.
The House and Senate finally came together to send Gov.
Baker a bill that would require substantially more reporting
on the impact of COVID-19 and testing efforts.
But there's no doubt the bill would have packed more punch
if the branches didn't spend over a month passing it back
and forth and arguing over who cares more about seniors. It
took a "still, still, still further amendment" from the
Senate to get the details just right, which is legislative
parlance for too many changes.
In the intervening time, the administration's Command Center
significantly ramped up its reporting efforts on the reach
of COVID-19, especially at long-term care facilities. The
state began publishing what will be new daily and weekly
updates on testing at nursing homes, deaths by long-term
care facility, city and town testing totals and positive
test rates by municipality, among other metrics.
So will Baker sign it? He answered that question with a
question Friday. "Can I read it first?" he asked.
The Legislature's bill does cover the state-run soldiers'
homes in Chelsea and in Holyoke, where the governor was
reluctant this week to say much, other than to defer to the
special investigation he commissioned into the outbreak at
the Holyoke hospital for veterans.
Baker maintains that he and Health and Human Services
Secretary Marylou Sudders didn't find out about the outbreak
in Holyoke until one Sunday night in March when it was too
late to contain. By morning superintendent Bennett Walsh had
been removed, and Baker hired an outside lawyer to probe
what had happened.
But Walsh's lawyer this week released emails, according to
reports, that he and Walsh say prove that the superintendent
had kept Veterans' Affairs Secretary Francisco Urena and
Medicaid Director Dan Tsai apprised of what was happening
with COVID-19 infections at the home throughout the
outbreak.
Holyoke isn't the only long-term care facility in the
crosshairs of investigators.
Attorney General Maura Healey said this week her office
would be investigating Life Care Center of Nashoba Valley,
where U.S. Rep. Lori Trahan said more than 20 residents and
health care workers have died and dozens have tested
positive.
STORY OF THE WEEK: Slow, but hopefully steady, is the game
now.
State House
News Service
Friday, May 29, 2020
Advances - Week of May 31, 2020
Calls from progressive groups and economists for higher
taxes are growing louder on Beacon Hill where budget writers
are watching the state's tax revenue base implode and
wondering how much aid they can reliably expect from the
federal government.
As his counterparts in other states openly plead with
Washington to rescue state and local budgets and ensure that
government services are there for the planned economic
recovery, an aide confirmed to the News Service this week
that Gov. Charlie Baker has not formally communicated with
Congress about his desires for the next round of aid. The
U.S. House passed a $3 trillion "phase four" aid package and
Senate Republican leader Mitch McConnell this week said he's
considering a smaller package, in the range of $1 trillion.
State senators from both parties are urging Washington to
pass another significant aid bill to help Massachusetts
"weather this crisis."
While the timetable for action in Congress is fuzzy, Rep.
Aaron Michlewitz and the House Ways and Means Committee are
about a month away from their delayed deadline to release a
fiscal 2021 state budget proposal, and will learn next week
about final tax collection levels in May.
Experts believe state tax collections will fall next fiscal
year back to roughly fiscal 2018 levels. Part of that lost
revenue could be backfilled with draws from the state's $3.5
billion rainy day fund or $2.7 billion in CARES Act funding,
about a quarter of which is already being doled out to
cities and towns (applications are due by June 5).
Meanwhile, Treasurer Deb Goldberg, acting under the
authority recently granted through a special state law, has
secured a $1.75 billion line of credit to make sure the
state is able to pay bills and meet its cash flow needs over
the next month, the last of fiscal 2020.
A return to growth is the only long-term solution to the
economic and fiscal problems facing the state, but the
challenge here is heightened by the fact that the virus hit
acutely in Massachusetts and struck at three of its
strongest sectors - health care, higher education, and
tourism.
The gears of government are starting to turn regarding
efforts to help businesses bring jobs back online without
risking the recent progress in reducing COVID-19 infections,
as well as efforts to couple one-time funds associated with
emergency relief with recurring revenues. On Friday, state
officials outlined guidance to enable restaurants and
lodging operations to eventually ramp up operations.
In the week ahead, Gov. Baker must decide whether to
accelerate the recovery to the next step by launching phase
two of his economic reopening plan, which could begin on
Monday, June 8, if he believes it is safe to do so.
Baker said Friday that an announcement will be made on
Saturday, June 6 about the timing of phase two and offered a
positive assessment of "real progress" in fighting the
virus. "People are starting to get back to work," Baker
said. "Outdoor and recreational activities are starting to
come back."
The governor also announced that on Monday he will issue an
executive order providing detail on sectors included in
upcoming phases of reopening. Social distancing,
mask-wearing, handwashing and disinfecting are part of the
routine now, changes that officials are hoping will enable
the economy to gain some steam without risking a second
surge of the virus.
Scientists are also further along in their efforts to come
up with a treatment or vaccine, creating hope that efforts
to keep the virus down could transition seamlessly into a
medical breakthrough.
For now, the small steps toward reopening are continuing,
with Boston on Monday poised to allow companies to reopen
offices at up to 25 percent capacity, a big step that will
also test the MBTA's ability to safely transport more
passengers. - Michael P. Norton
-- CORONAVIRUS RELIEF FUND APPLICATION DEADLINE:
While debate continues in Washington over how much
additional support to make available to states and
municipalities that face enormous budget pressures,
Massachusetts cities and towns face a Friday deadline to
access their share of half a billion dollars already on the
table.
The $502 million available from the Coronavirus Relief Fund,
which the federal government directed toward the state as
part of the CARES Act, can help address budget deficits or
other necessary expenditures incurred between March 1 and
Dec. 30, 2020 to meet residents' needs during the outbreak,
according to the Baker administration. Cities and towns are
eligible for varying amounts in fiscal years 2020 and 2021,
but they cannot use the money to substitute for lost revenue
or to replace state or municipal spending.
Unlike the federal government, many local and state
governments are required to produce balanced annual budgets,
which will be a significant challenge because of the holes
the pandemic punched in tax revenues.
U.S. House Democrats proposed spending another $500 billion
to help state governments and $375 billion to help city and
town governments overcome those obstacles, but their
legislation so far has stalled amid Republican opposition. -
Chris Lisinski
-- PREPARING FOR PHASE TWO: The earliest that the
second phase of the state's economic restart could possibly
begin is Monday, June 8, but the COVID-19 public health data
that comes in between June 1 and June 6 will determine
whether the second wave of reopenings can actually begin
then.
Gov. Baker and Lt. Gov. Polito said Friday that the
administration will announce next Saturday, June 6, when
phase two will be allowed to begin. "With phase one of the
reopening now underway and more sectors of the economy
slowly reopening, this data indicates that we are trending
in the right direction," Baker said this week. He added that
"moving from phase one to phase two or from phase two to
phase three is ... going to be based on, you know, the
scoreboard, the data that we look at each day."
Under the second phase of the state's reopening plan, the
limit on gathering size -- currently at 10 -- will be
"determined based on trends" and additional sectors of the
economy will be allowed to resume business. Restaurants will
be allowed to reopen under specific state guidelines, first
by offering outdoor dining. Later in phase two, Polito said
Friday, restaurants will be allowed to seat diners indoors.
The lodging industry, which has been mostly shuttered during
the pandemic, can return in phase two with restrictions,
such as a requirement to advise all guests to quarantine for
two weeks if they are traveling from out of state.
Retailers will be allowed to welcome customers back inside
their stores rather than just fulfilling orders for curbside
pickup. Though they will not know when they can reopen,
businesses that fall into phase two will be allowed to bring
some employees back starting next week to prepare to reopen,
Polito said. -- Colin A. Young
-- TRANSPORTATION / OFFICE REOPENINGS IN BOSTON:
Transportation system managers and businesses with offices
in Boston face a big challenge in the week ahead when
offices in the city begin hosting workers again on Monday.
Reopening commercial spaces will be gradual, with offices
capped at 25 percent capacity. Face coverings, socially
distanced workspaces, limited elevator use, and one-way foot
traffic flows in stores could all become common sights under
the detailed recommendations Mayor Martin Walsh's office
released for businesses preparing to return. While the next
step involves a limited population, it could reflect the
start of long-term trends in transportation.
The MBTA is not scheduled to return service to pre-pandemic
levels until the third phase of the reopening plan, and will
have a chance to see how it performs in connection with its
new crowding standard as non-essential Boston workers return
to trains and buses. The new standards do not feature a hard
cap in vehicle capacity, but officials say they will be more
vigilant about deploying additional buses and trains to meet
needs.
The agency, which struggled with delays and crowded service
before the pandemic, now faces what could be an even more
difficult task - needing to keep service flowing while
trying to prevent throngs of riders on its trains and buses,
as well as on its platforms and stations where commuters
gather while waiting to board trains and buses.
Eyes will be on the roads as well. Traffic has been
historically low in recent months, but could strike back
with a vengeance if workers opt to commute alone in cars to
keep their distance from others, a trend forecast by recent
polling. - Chris Lisinski
-- BIG WEEK IN CAMPAIGNS AND ELECTIONS: Monday marks
three months until the Sept. 1 state primary elections, and
the week ahead will be a busy one on the electoral front. On
Monday evening, Democratic U.S. Senate candidates Sen. Ed
Markey and Rep. Joe Kennedy III will square off in their
first debate since February.
Voters in a pair of House districts, on the South Coast and
in central Massachusetts, will pick new state
representatives on Tuesday. The rescheduled special
elections will fill the vacancies created by the
resignations of Taunton Mayor Shaunna O'Connell, a
Republican, and Lunenburg Democrat Jennifer Benson, who is
now the head of the Alliance for Business Leadership.
In Benson's old district, the candidates are Democrat
Danillo Sena of Acton and Republican Cathy Clark of
Lunenburg.
The candidates for what had been O'Connell's seat are
Republican Kelly Dooner and Democrat Carol Doherty, both of
Taunton.
Gov. Baker has endorsed both Clark and Dooner.
Democrats prevailed in both Senate special elections held
last week, flipping two seats last held by Republicans and
bumping the Senate's Democratic supermajority up to 36 of 40
seats. The Senate elections also created a third vacancy in
the House -- newly sworn-in Sen. John Velis of Westfield had
served in the House since 2014. Democrats also have a
supermajority in the House, holding 125 seats to the
Republicans' 31, with Rep. Susannah Whipps of Athol as the
one unenrolled lawmaker.
Beyond the special elections, candidates for state, district
and county races have until 5 p.m. on Tuesday to submit
their nomination papers to Secretary of State William
Galvin's office to earn a spot on the September ballot. That
deadline was originally set for May 26, but got pushed back
by a court order that took into account the added challenges
of socially distanced signature-gathering during a pandemic.
Election reform advocates have been pushing for lawmakers to
approve measures they say would help protect voters from
health risks, including expanded use of mail-in ballots, and
Galvin has said he hoped to begin printing ballots as soon
as nomination papers were turned in. - Katie Lannan
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