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Marblehead, Massachusetts 01945
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“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
46 years as “The Voice of Massachusetts Taxpayers”
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their Institutional Memory — |
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CLT UPDATE
Monday, October 12, 2020
It Always Starts This
Way
Jump directly
to CLT's Commentary on the News
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Most Relevant News Excerpts
(Full news reports follow
Commentary)
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Despite all the
gloom and doom among budget officials on Beacon Hill,
Massachusetts tax collections continue to roll along
surprisingly well.
The state
Department of Revenue said on Monday that tax revenues
in September were down 1.4 percent compared to the same
month last year, but overall through the first three
months of fiscal 2021 revenues were up 1 percent to
$7.27 billion.
In a cryptic
press release, the Department of Revenue said income
taxes withheld from paychecks and meals taxes were down,
while sales taxes, motor vehicle sales taxes, and
corporate and business taxes were up. The press release
said September typically accounts for 10 percent of the
state’s annual revenue, although it cautioned that the
numbers this September were probably lower than usual
because the due date for payments of certain sales,
meals, and room occupancy taxes had been put off until
May.
The growth in
tax revenue during the first quarter of the year is
fairly amazing, given the coronavirus pandemic, the
shutdown of much of the state and national economy, and
the resulting high unemployment....
House and
Senate lawmakers have been projecting a budget shortfall
of $4 billion to $6 billion this fiscal year. House
Speaker Robert DeLeo was the latest state leader to make
that forecast, urging Democrats and Republicans in
Washington to come together and pass another stimulus
package.
“Without the
assistance from Washington, which hasn’t been
forthcoming so far, we’re very concerned,” DeLeo said.
What none of
the state leaders has fully explained is how the
shortfall projection can be so high if revenue numbers
are keeping pace with last year. The possible answer:
Either the revenue numbers are surprising everyone, or
spending during the pandemic is running far above what
it was last year.
CommonWealth
Magazine
Tuesday, October 6, 2020
Mass. tax collections continue
to roll along
A coalition of
unions, community groups and faith groups is calling on
Beacon Hill to ratchet up taxes on corporations and the
state’s wealthiest to support the recovery from the
economic impact of the coronavirus.
During a
virtual meeting with lawmakers Thursday, members of the
group Raise Up Massachusetts and the North Shore Labor
Council said the economic fallout of the outbreak
continues to impact low-income families.
The advocates
suggested lawmakers increase taxes on corporations and
wealthy shareholders to drum up money that will offset
budget cuts and provide pandemic relief.
"Businesses
should be expected to contribute more to support the
communities they are profiting from," said Helina Fontes,
a Lynn-based mental health advocate.
Increasing the
tax on corporate profits from 8% to 9.5%, advocates say,
could generate another $450 million to $525 million a
year for the state’s coffers.
The groups
also want the state to tax a portion of profits that
corporations store away in offshore "tax havens" and
increase the 5% state tax rate on "unearned income" for
shareholders and other high-income individuals....
Senate
President Karen Spilka, D-Ashland, and House Speaker
Robert DeLeo, D-Winthrop, have both suggested tax
increases may be needed to offset the impact.
Liberal
economists have also pushed plans on Beacon Hill to
increase the state's personal income tax rate, which
finally dropped to 5% this year nearly two decades after
voters approved cutting the rate.
The Salem
News
Saturday, October 3, 2020
Groups push corporate tax increases to
fund recovery
From spending
cuts to tax hikes, “every option” is on the table for
lawmakers struggling to plug a gaping budget hole with
tax revenues predicted to nose dive between $2.76
billion and $5.23 billion this year amid the coronavirus
pandemic.
“Even under
the rosiest of projections, we still have some real
difficult decisions to make in relation to trying to
balance our books for FY 21,” House Ways and Means
Chairman Aaron Michlewitz said.
“Every option
is really on the table at the moment,” Michlewitz, a
North End Democrat, added.
Gov. Charlie
Baker has repeatedly said he would not support raising
taxes amid a pandemic that has wrought the worst
economic fallout in recorded history. Baker’s budget
chief, Administration and Finance Secretary Michael
Heffernan doubled down on that on Wednesday, telling
reporters, “from what we can see, we won’t need to raise
taxes.” The shortfall prediction comes from the
Department of Revenue.
Raising
progressive taxes like a wealth tax has gained
popularity among left-leaning organizations recently.
“Cuts will not
address the growing needs or help us prime our economy
for a robust and just recovery. Only new, progressive
revenue can do those things,” Marie-Francis Rivera of
the left-leaning Massachusetts Budget and Police center
said.
Last month, a
group of more than 150 Massachusetts organizations sent
a letter to lawmakers urging similar revenue-raising
measures.
The state
could draw on its $3.5 billion Rainy Day Fund to balance
the budget or make spending cuts....
Tufts Center
for State Policy Analysis, however, offered a more
optimistic picture, predicting revenue will come in $1.6
billion below the January benchmark.
Executive
Director Evan Horowitz encouraged lawmakers to rely on
the state’s rainy day fund to balance the FY 21 budget
and “avoid painful cuts.” Concerns about budget woes in
FY 22 are “overstated,” he said.
The Boston
Herald
Thursday, October 8, 2020
Spending cuts, tax hikes on the
table
More than 100
major corporations and higher education institutions
wrote to governors Thursday voicing "strong support"
for an in-development regional effort to curb
transportation greenhouse gas emissions that will raise
gasoline prices.
The
signatories, some of which rely on transportation
infrastructure for their business, urged leaders of 12
states and the District of Columbia to sign a memorandum
of understanding signaling their commitment to the
Transportation and Climate Initiative, known as TCI.
The companies
that signed on to the letter to Gov. Charlie Baker,
letter by the sustainability nonprofit Ceres, included
ride-hailing services Uber and Lyft, Wayfair, Novartis,
DHL, Blue Cross Blue Shield of Massachusetts, and Biogen....
If
implemented, TCI would impose a cap on emissions from
motor vehicles and require gasoline suppliers to
purchase allowances. Parties negotiating the system
estimate it could raise gas prices 5 to 17 cents per
gallon and generate hundreds of millions of dollars in
state revenues.
State House
News Service
Thursday, October 8, 2020
TCI Gets Corporate Push
State tax
collections this fiscal year could range anywhere from
$25.9 billion to $29.8 billion, according to estimates
offered Wednesday by economic experts that point to a
likelihood that the state will see a year-over-year
decline in tax receipts.
The estimates
all fall below the $31.15 billion revenue estimate that
the Ways and Means Committee chairs and Gov. Charlie
Baker's budget office agreed to in January, before
COVID-19 took hold in the United States, leading to
widespread business closures and restrictions and a
steep economic downturn.
Ten months
later, with the state still operating under temporary
budgets, chairmen Sen. Michael Rodrigues and Rep. Aaron
Michlewitz and Administration and Finance Secretary
Michael Heffernan convened a group of experts to offer
their latest forecasts and help inform the eventual
crafting of a spending plan for the remainder of fiscal
2021....
Reacting to
Snyder's testimony, Rodrigues said, "I've never seen
this large of a range before in forecasts."
The DOR
forecasts are based on projections from economic vendors
and tax collections for the first three months of fiscal
2021 -- $7.27 billion through September. The range
Snyder offered would represent a drop of anywhere from
4.1 percent to 12.4 percent from fiscal 2020
collections, or $2.764 billion to $5.233 billion below
initial fiscal 2021 estimates.
Like Snyder,
others who testified stressed that the pandemic and
efforts to control the virus will be major drivers of
the economy's path going forward.
"If we can't
get the spread of the virus down, we cannot maintain
much confidence that we can safely return to a
full-throated economic activity," said Jeffrey Thompson
of the Federal Reserve Bank of Boston.
State House
News Service
Wednesday, October 7, 2020
Most Experts See Year-Over-Year Tax
Revenue Decline
Better Than April, But Updated Forecasts Are Still Dim
Economists
painted a murky picture of the state's pandemic-battered
economy on Wednesday, saying the depth of a revenue
shortfall will depend on relief from Washington.
State budget
writers, economists and legislative leaders said fallout
from COVID-19 continues to dampen state revenues despite
recent upticks in tax collections.
Revenue
Commissioner Geoffrey Snyder told lawmakers during a
live-streamed hearing that the Baker administration
projected state revenues will decline between $2.8
billion to $5.2 billion this fiscal year. He said there
is "considerable uncertainty" in the estimates....
Eileen
McAnneny, president of the Massachusetts Taxpayers
Foundation, predicted a $3.9 billion drop in state tax
revenues, which will grow without federal relief.
"Even if there
is a fiscal aid package, the proposed funding may be
insufficient, especially if it's not properly targeted
to sustain the economy," she said....
"There's a lot
of political uncertainty and social unrest," McAnneny
said. "That's also contributing to people's unease about
the future."
David Tuerck,
president of the conservative Beacon Hill Institute,
offered a more optimistic outlook, suggesting a decline
in tax revenues of only around $1.3 billion.
State House
News Service
Wednesday, October 7, 2020
State's economic outlook still murky
Sales tax revenues expected to take $900M hit this
fiscal year
The
coronavirus pandemic has cratered revenue for
Massachusetts, and funding programs and making necessary
changes are slamming into the hard wall of reality.
In one
instance, a state agency is finding new ways to raise
cash — which may not please Boston drivers.
A proposal by
the Massachusetts Department of Conservation and
Recreation to add parking meters to certain
neighborhoods could up the ante on the frustration of
finding a spot....
Parking rates
will run $1.25 per hour.
A Boston
Herald editorial
Friday, October 9, 2020
Revenue shortfalls call the shots
as Mass. moves forward
The number of
Massachusetts workers counted as unemployed dropped by
more than 250,000 over the past two months, a decline of
more than a third that helped the state escape from a
short streak of owning the worst jobless rate in the
country.
About 114,000
more workers became employed in that span, too, a sign
of continued steps toward recovery following the
pandemic-related recession's low point in the spring.
But the
improving jobs numbers and unemployment rate likely mask
deeper, more lasting damage at both the state and
federal level: many people are dropping out of the
workforce altogether, hinting that some -- particularly
women, who disproportionately fill caretaker roles --
have given up attempts to find employment amid slow
hiring and uncertainty about the COVID-19 health
outlook.
"It's a
significant problem," Federal Reserve Bank of Boston
President and CEO Eric Rosengren said in a speech on
Thursday. "The longer the pandemic goes on, the more
you're going to see people leaving the labor force, not
only because they can't find a job, but because they
have to care for either elderly parents, people that are
sick because of the pandemic, or children that are not
able to go to school because schools have been closed
and there is not availability of daycare."
The trend,
according to economist Alicia Sasser Modestino,
indicates that the recent improvement in the state's
unemployment situation might be "not as rosy as it might
seem." ...
A survey
Modestino conducted found that 13 percent of working
parents either reduced their hours or lost their jobs
because they had to take on child care duties during the
pandemic. The effects were more concentrated among
women, she said.
"Among women
who became unemployed during the pandemic, 25 percent of
them said it was solely due to child care," Modestino
said.
In February,
about 31 percent of Massachusetts claimants seeking
unemployment benefits were women, according to Modestino.
By July, that rate had jumped to more than 56 percent,
"a tremendous shift."
State House
News Service
Friday, October 9, 2020
Data Shows Many in Mass. Have Left the
Workforce
Departures Don't Show Up in Improving Unemployment Rate
It's raining.
But is it pouring?
Literal
weather-wise, it's still dry, with a critical drought
declared Friday in the southeastern part of the state
and significant drought levels elsewhere. On the fiscal
front, though, it's time for budget managers to figure
out just how much the climate has dampened since Gov.
Charlie Baker filed a $44.6 billion spending plan in
January, way back when the anticipated 2.8 percent
growth was considered modest after a couple years that
ended with surpluses.
By the time
Ways and Means Chairs Rep. Aaron Michlewitz and Sen.
Michael Rodrigues and Administration and Finance
Secretary Michael Heffernan convened economic experts on
Wednesday -- their third such huddle of this budget
cycle (December, April and October) -- any expectation
for the $31.15 in revenue collections that Baker built
his budget around had evaporated.
Instead, the
revenue projections that were described as "optimistic"
during the summit were those that, if you were more a
glass half-empty type, could also be called "least
bleak."
That includes
the $29.6 billion estimate put forth by Tufts
University's Center for State Policy Analysis, and the
$29.2 billion offered by the Beacon Hill Institute. The
Beacon Hill Institute's number, representing a decline
over last year's tax haul, could perhaps only be deemed
optimistic in comparison to the forecasts already shared
earlier in the day -- $27.27 billion from the
Massachusetts Taxpayers Foundation, and a range of $25.9
billion to $28.37 billion from the state Department of
Revenue.
However big
the gap is, it'll be up to Michlewitz and Rodrigues to
figure out how to plug it in the budget proposals they
ultimately put forward for their respective branches to
vote on. Whenever that ends up happening.
Their main
choices: cutting spending to match available revenues,
raising taxes -- an idea Heffernan threw cold water on,
saying the administration doesn't see a need for tax
hikes right now -- or dipping into the state's $3.5
billion rainy day fund.
Evan Horowitz,
from the Center for State Policy Analysis, said the $1.6
billion hole he was projecting was small enough to
"comfortably be filled" with money from the
stabilization fund, buying time until the relatively
sunnier days he envisions in fiscal 2022.
Treasurer Deb
Goldberg, though, suggested some caution around tapping
the rainy day fund as a first resort. Credit rating
agencies, Goldberg said, want to see other steps taken
before the umbrellas come out.
State House
News Service
Friday, October 9, 2020
Weekly Roundup - In the Red
While an
annual budget was due July 1 and people are now looking
to see if the Corner Office next week will seek a third
temporary budget to keep government operating in
November, Baker budget chief Michael Heffernan on
Wednesday said it was "still early" when asked if the
governor would file an entirely new fiscal 2021 budget
plan to take the place of the obsolete $44.6 billion
budget he filed in January.
If Baker
officially writes down state revenue expectations by
Thursday, he has 15 days, or until the end of October,
to publicly submit to the Legislature "corrective
amendments" to his January budget. State finance law
requires the administration to not only update state tax
revenue expectations, but also expectations of federal
receipts.
The amount of
federal aid Massachusetts will receive this fiscal year
is tied up in a perfect storm of pre-election Washington
politics marked by continuing discussion of a stimulus
bill, next week's vetting of a nominee who could shift
the balance of the U.S. Supreme Court, and the fight for
the presidency between Trump and Democrat Joseph Biden.
State House
News Service
Friday, October 9, 2020
Advances - Week of Oct. 11, 2020
A federal
court judge held off a ruling on a lawsuit that
challenges a string of executive orders by Gov. Charlie
Baker in response to the coronavirus pandemic and could
have broad implications for governors’ actions across
the nation.
Massachusetts
District Court Judge William Young said he is “taking
this matter under advisement” following a 35-minute
virtual bench trial on Monday. Young did not say when he
would render an opinion.
“Whatever I
declare in this case, one would think that a like case
could be brought three months, six months from now
because there is no end in sight,” Young said during
proceedings....
The 82-page
complaint argues that the governor overstepped his
authority by invoking the Civil Defense Act to justify
his shutdown of businesses, schools and churches and
placing restrictions on public gatherings at the onset
of the pandemic in March.
The suit calls
Baker’s order requiring people to wear masks
“irrational, arbitrary and capricious.” His lawyers’
argument purports the governor’s mask mandate and
restrictions on assembly, particularly in churches,
violate the First-Amendment rights of Vincent Delaney, a
Peabody man who initiated the lawsuit.
“We risk
suspending our constitutional liberties. This is not a
minor issue that has been laid out here. This is a
fundamental bedrock right about our country,” said
attorney Thomas Mason....
Baker’s
coronavirus response faces a similar challenge in the
state’s Supreme Judicial Court . . .
The Boston
Herald
Tuesday, October 6, 2020
No ruling yet on federal suit
challenging Charlie Baker’s coronavirus restrictions
Is Charlie
Baker a fiscal conservative?
Not really,
according to a new
report from the CATO Institute.
CATO put out
its annual fiscal policy report card for each of the 50
state’s governors. Baker received a D.
After a career
in the health care industry and state government,
Charlie Baker was elected governor in 2014. He ran as a
fiscal moderate and a social liberal.
He scored
poorly on the CATO report mainly because of his support
for a payroll tax to fund a new family medical and paid
leave program.
When running
for office in 2014, Baker said that he would not raise
taxes, but he has broken that promise several times.
Baker signed into law a tax on short-term rentals, such
as Airbnb, and he has approved increases in online sales
taxes. He has proposed increasing taxes on ride-sharing
services, such as Uber. And in 2020, Baker proposed
‘real-time’ sales tax remittance to boost state revenues
$300 million while raising compliance costs on
businesses.
Baker’s
largest tax increase came in July 2018, when he approved
a 0.63 percent payroll tax on private employers to fund
a new paid leave benefit. The law increased taxes on
workers in the state by $750 million or more a year.
For reference,
Republican governors Chris Sununu of New Hampshire and
Phil Scott of Vermont earned an A and B, respectively.
The New
Boston Post
Wednesday, October 7, 2020
CATO Institute Gives Charlie Baker A
Poor Mark For Fiscal Responsibility
Its
fund-raising has dwindled. Its share of registered
voters statewide is at a seven-decade low. Its
membership in the 40-seat state Senate is (back) down to
four.
And looming
above those Republican Party regressions is the schism
between Charlie Baker, its popular second-term governor,
and Jim Lyons, its staunchly pro-Trump party chairman.
Long the
minority, the Massachusetts Republican Party is trying
to avoid shrinking toward triviality this fall.
In a
presidential election year when record numbers of people
are expected to vote, the state GOP is hoping to protect
its small delegation at the State House, but hasn’t
grown its slate of challengers beyond those of recent
years. How it ultimately fares Nov. 3 could help tip the
direction of a state party whose divisions start at its
very top....
Never a true
threat to Democrats' grip on political power here, the
state GOP also is battling within itself. Its top
elected official, the moderate Trump critic Baker, has
been at odds with a party leadership that’s adopted the
president’s combative, more conservative tone, diverging
on everything from fund-raising to the reopening of the
state’s economy amid the pandemic.
Trump last
month directly attacked Baker as a “RINO" (Republican in
name only) after the governor bucked the president’s
monthslong criticisms of mail-in balloting. The
Massachusetts GOP later issued a statement backing
Trump’s concerns by citing local criticisms of a newly
launched ballot application portal.
The divide has
meant Baker has all but disconnected from the state
party apparatus he once led....
Within the
state’s 200-seat Legislature, Republicans are
challenging Democratic incumbents in 19 races, and the
party has candidates running for seven open seats. They
include Matt Kelly, who’s challenging Senator Becca
Rausch in a district previously held by Republicans, and
Susan Smiley, a state committeewoman, vying in an open
Worcester County race.
It’s the same
number of nonincumbent Republicans running as in 2016,
and a drop from 2018′s midterm elections, which are
generally viewed as more favorable to the GOP, when the
party put up 24 challengers and 13 open-seat
candidates....
As of August,
the Massachusetts GOP this cycle had pulled $1.55
million into its federal account, which it can use for
party operations. It’s an amount well behind the $5
million it raised during 2017 and 2018, and, party
leaders say, tied to limitations brought on by the
pandemic.
Compounding
the money crunch, just 3,300 voters have registered with
the GOP since Lyons was elected chairman, pushing its
total to roughly 460,000 statewide. That’s less than 9.9
percent of all Massachusetts voters, the party’s lowest
share since at least 1948.
The Boston
Globe
Thursday, October 1, 2020
Divided between Baker and Trump, Mass.
GOP
tries to avoid sliding into triviality in November |
Chip Ford's CLT
Commentary
It has predictably started.
It always starts this way. Always.
After months of denying tax hikes are
under consideration, the trial balloons for coming tax hikes are
being released.
In my commentary for the CLT Update of
April 12, 2020 ("Never
let a crisis go to waste") I wrote:
In his commentary on
Tuesday ("The
Endless Game of Whack-a-Tax") TV and radio
pundit Jon Keller noted . . .
Keller asked rhetorically,
"Could a resurgent economy amid public gratitude for
state and local government’s handling of the crisis
clear the way for a Prop 2½ takedown?"
I expect that question will be
broadened in the weeks and months ahead: Could a
resurgent economy amid public gratitude for state
and local government’s handling of the crisis clear
the way for all sorts of tax increases?
I won't be surprised if a
complacent, historically-challenged, and relieved
public buys a promise that any and all tax hikes
will be "only temporary, just to get us back on
track after this crisis."
Crises by definition are
temporary. Taxes never are.
We taxpayers and taxpayer
advocates know all too well, have learned that
bitter lesson the hard way: Any and all tax
hikes inevitably mutate into forever. . . .
After CLT's two
separate, onerous, and expensive statewide petition
signature drives (1997-98 then again in 1999) and a
successful state ballot campaign in 2000; after the
Legislature then freezing our rollback of that
"temporary" income tax hike in 2002, replacing it
with its own "economic triggers"
—
the income tax was finally returned to its
historic rate of 5 percent just this year —
THIRTY YEARS after the promise of a
"temporary, only 18-months, trust us, we promise!"
tax hike.
Understandably, we won't be buying any more
"temporary" tax hike deceptions.
"Never let
a crisis go to waste."
Last Tuesday
CommonWealth Magazine reported ("Mass. tax collections
continue to roll along"):
Despite all
the gloom and doom among budget officials on Beacon
Hill, Massachusetts tax collections continue to roll
along surprisingly well.
The state
Department of Revenue said on Monday that tax revenues
in September were down 1.4 percent compared to the same
month last year, but overall through the first three
months of fiscal 2021 revenues were up 1 percent to
$7.27 billion.
In a cryptic
press release, the Department of Revenue said income
taxes withheld from paychecks and meals taxes were down,
while sales taxes, motor vehicle sales taxes, and
corporate and business taxes were up. The press release
said September typically accounts for 10 percent of the
state’s annual revenue, although it cautioned that the
numbers this September were probably lower than usual
because the due date for payments of certain sales,
meals, and room occupancy taxes had been put off until
May.
The growth in
tax revenue during the first quarter of the year is
fairly amazing, given the coronavirus pandemic, the
shutdown of much of the state and national economy, and
the resulting high unemployment....
House and
Senate lawmakers have been projecting a budget shortfall
of $4 billion to $6 billion this fiscal year. House
Speaker Robert DeLeo was the latest state leader to make
that forecast, urging Democrats and Republicans in
Washington to come together and pass another stimulus
package.
“Without the
assistance from Washington, which hasn’t been
forthcoming so far, we’re very concerned,” DeLeo said.
What none of
the state leaders has fully explained is how the
shortfall projection can be so high if revenue numbers
are keeping pace with last year. The possible answer:
Either the revenue numbers are surprising everyone, or
spending during the pandemic is running far above what
it was last year.
Nonetheless,
according to The Salem News on October 3 ("Groups push
corporate tax increases to fund recovery"):
A coalition of
unions, community groups and faith groups is calling on
Beacon Hill to ratchet up taxes on corporations and the
state’s wealthiest to support the recovery from the
economic impact of the coronavirus.
During a
virtual meeting with lawmakers Thursday, members of the
group Raise Up Massachusetts and the North Shore Labor
Council said the economic fallout of the outbreak
continues to impact low-income families.
The advocates
suggested lawmakers increase taxes on corporations and
wealthy shareholders to drum up money that will offset
budget cuts and provide pandemic relief.
"Businesses
should be expected to contribute more to support the
communities they are profiting from," said Helina Fontes,
a Lynn-based mental health advocate.
Increasing the
tax on corporate profits from 8% to 9.5%, advocates say,
could generate another $450 million to $525 million a
year for the state’s coffers.
The groups
also want the state to tax a portion of profits that
corporations store away in offshore "tax havens" and
increase the 5% state tax rate on "unearned income" for
shareholders and other high-income individuals....
Senate
President Karen Spilka, D-Ashland, and House Speaker
Robert DeLeo, D-Winthrop, have both suggested tax
increases may be needed to offset the impact.
Liberal
economists have also pushed plans on Beacon Hill to
increase the state's personal income tax rate, which
finally dropped to 5% this year nearly two decades after
voters approved cutting the rate.
Did you catch
that? "Liberal economists have also pushed
plans on Beacon Hill to increase the state's personal
income tax rate, which finally dropped to 5% this year
nearly two decades after voters approved cutting the
rate."
Rise Up Massachusetts is
the same Takers group that is responsible for the ongoing assault on
the state's flat income tax, with it's now five-year push for a
constitutional amendment that would open the door for a graduated
income tax, which they cleverly termed the "Fair Share Amendment" —
aka the "Millionaires Tax." (See CLT's news release from
August 5, 2015, five years ago when this latest assault was first
proposed ("CLT
still opposes Grad Tax schemes"). It is the same Takers
group that forced paid leave with its new tax and minimum wage
increases on employers large and small.
The Boston Herald reported
on Thursday ("Spending cuts, tax hikes on the table"):
From spending
cuts to tax hikes, “every option” is on the table for
lawmakers struggling to plug a gaping budget hole with
tax revenues predicted to nose dive between $2.76
billion and $5.23 billion this year amid the coronavirus
pandemic.
“Even under
the rosiest of projections, we still have some real
difficult decisions to make in relation to trying to
balance our books for FY 21,” House Ways and Means
Chairman Aaron Michlewitz said.
“Every option
is really on the table at the moment,” Michlewitz, a
North End Democrat, added.
Gov. Charlie
Baker has repeatedly said he would not support raising
taxes amid a pandemic that has wrought the worst
economic fallout in recorded history. Baker’s budget
chief, Administration and Finance Secretary Michael
Heffernan doubled down on that on Wednesday, telling
reporters, “from what we can see, we won’t need to raise
taxes.” The shortfall prediction comes from the
Department of Revenue.
Raising
progressive taxes like a wealth tax has gained
popularity among left-leaning organizations recently.
“Cuts will not
address the growing needs or help us prime our economy
for a robust and just recovery. Only new, progressive
revenue can do those things,” Marie-Francis Rivera of
the left-leaning Massachusetts Budget and Police center
said.
Last month, a
group of more than 150 Massachusetts organizations sent
a letter to lawmakers urging similar revenue-raising
measures.
The state
could draw on its $3.5 billion Rainy Day Fund to balance
the budget or make spending cuts....
Tufts Center
for State Policy Analysis, however, offered a more
optimistic picture, predicting revenue will come in $1.6
billion below the January benchmark.
Executive
Director Evan Horowitz encouraged lawmakers to rely on
the state’s rainy day fund to balance the FY 21 budget
and “avoid painful cuts.” Concerns about budget woes in
FY 22 are “overstated,” he said.
“Every option
is really on the table at the moment,” House Ways and
Means Chairman Aaron Michlewitz stated.
You too should be able to
clearly see where this is heading.
The State
House News Service reported on Thursday ("TCI
Gets Corporate Push"):
More than
100 major corporations and higher education
institutions
wrote to governors Thursday voicing "strong
support" for an in-development regional effort to
curb transportation greenhouse gas emissions that
will raise gasoline prices.
The
signatories, some of which rely on transportation
infrastructure for their business, urged leaders of
12 states and the District of Columbia to sign a
memorandum of understanding signaling their
commitment to the Transportation and Climate
Initiative, known as TCI.
The
companies that signed on to the letter to Gov.
Charlie Baker, letter by the sustainability
nonprofit Ceres, included ride-hailing services Uber
and Lyft, Wayfair, Novartis, DHL, Blue Cross Blue
Shield of Massachusetts, and Biogen....
If
implemented, TCI would impose a cap on emissions
from motor vehicles and require gasoline suppliers
to purchase allowances. Parties negotiating the
system estimate it could raise gas prices 5 to 17
cents per gallon and generate hundreds of millions
of dollars in state revenues.
CLT is a
member of the TCI opposition coalition comprised of
limited taxes, limited government, free market
organizations from the twelve states affected by this
multi-state boondoggle instigated and led by Gov. Baker
and Massachusetts. We are in the process of
drafting our response, which will be released very soon.
In the meantime you
can contact members of the Climate Change Conference Committee and
ask them to reject empowering the governor to unilaterally impose
TCI on Massachusetts motorists. Gov. Baker has demonstrated
shown what he does with unlimited power.
In my research of Ceres,
the organization and its virtue-signaling deep-pockets sponsors
behind this carbon tax scheme being promoted as the Transportation
Climate Initiative, I came across the following news release they
issued. It's an eye-opening indication of where it is coming
from.
Press Release:
We Stand In Solidarity With The Black Community [website]
| June 3, 2020
We have long
seen that the impacts of the climate crisis, water pollution and
scarcity, and other environmental harms fall disproportionately
on the poor, marginalized, and communities of color. The
compounding Covid-19 pandemic has shined a similar light on the
deep and long standing fissures of racial inequality that are so
searingly evident today and must be urgently addressed.
Systemic
racism demands systemic solutions. And they must be based on
listening, learning, empathy, solidarity, and action. We hear
you, and stand with you.
Now "Climate Change" has become a
"social justice" and "racial equality" crisis. If you oppose
gas tax hikes you must be — a "racist"!
Watch for more of this in the future.
It should come as no surprise that
Ceres
is headquartered at 99 Chauncy Street in Boston. It's second
national office is located in "progressive" San Francisco,
California.
In the CLT Update of September 23 ("The
Glass Half Fill") I noted:
A CLT member who is an
economist pointed out to me in a phone call how important the
labor force participation rate is while determining unemployment
numbers. If someone is out of work and seeking employment they
are included in the unemployment rate. If they are unemployed
and have given up seeking a job they are not included in
the unemployment rate:
What Is the Labor Force Participation Rate?
The Labor Force
Participation Rate is a measure of an economy’s active
workforce. The formula for the number is the sum of all
workers who are employed or actively seeking employment
divided by the total noninstitutionalized, civilian
working-age population. [The civilian noninstitutional
population refers to people 16 years of age and older
residing in the 50 States and the District of Columbia who
are not inmates of institutions (penal, mental facilities,
homes for the aged), and who are not on active duty in the
Armed Forces.]
Here are the
monthly labor force participation rates in Massachusetts since
the China Covid-19 Pandemic arrived:
While the official
unemployment rate in Massachusetts is decreasing, as you can see
in the above Federal Reserve Bank chart, so too is the labor
force participation rate — which automatically reduces the
unemployment rate as fewer are actually seeking jobs.
On Friday the State House News Service
confirmed our speculation last month in its report "Data Shows Many
in Mass. Have Left the Workforce; Departures Don't Show Up in
Improving Unemployment Rate":
The number of Massachusetts workers counted as unemployed
dropped by more than 250,000 over the past two months, a decline
of more than a third that helped the state escape from a short
streak of owning the worst jobless rate in the country.
About 114,000 more workers became employed in that span, too, a
sign of continued steps toward recovery following the
pandemic-related recession's low point in the spring.
But the improving jobs numbers and unemployment rate likely mask
deeper, more lasting damage at both the state and federal level:
many people are dropping out of the workforce altogether,
hinting that some -- particularly women, who disproportionately
fill caretaker roles -- have given up attempts to find
employment amid slow hiring and uncertainty about the COVID-19
health outlook.
"It's a significant problem," Federal Reserve Bank of Boston
President and CEO Eric Rosengren said in a speech on Thursday.
"The longer the pandemic goes on, the more you're going to see
people leaving the labor force, not only because they can't find
a job, but because they have to care for either elderly parents,
people that are sick because of the pandemic, or children that
are not able to go to school because schools have been closed
and there is not availability of daycare."
The trend, according to economist Alicia Sasser Modestino,
indicates that the recent improvement in the state's
unemployment situation might be "not as rosy as it might seem."
...
A
survey Modestino conducted found that 13 percent of working
parents either reduced their hours or lost their jobs because
they had to take on child care duties during the pandemic. The
effects were more concentrated among women, she said.
"Among women who became unemployed during the pandemic, 25
percent of them said it was solely due to child care," Modestino
said.
In February, about 31 percent of Massachusetts claimants seeking
unemployment benefits were women, according to Modestino. By
July, that rate had jumped to more than 56 percent, "a
tremendous shift."
Excerpts from more information that
affect taxpayers' interest follows (full news reports are available
below), which I will leave to you without comment.
A
federal court judge held off a ruling on a lawsuit that
challenges a string of executive orders by Gov. Charlie Baker in
response to the coronavirus pandemic and could have broad
implications for governors’ actions across the nation.
Massachusetts District Court Judge William Young said he is
“taking this matter under advisement” following a 35-minute
virtual bench trial on Monday. Young did not say when he would
render an opinion.
“Whatever I declare in this case, one would think that a like
case could be brought three months, six months from now because
there is no end in sight,” Young said during proceedings....
The 82-page complaint argues that the governor overstepped his
authority by invoking the Civil Defense Act to justify his
shutdown of businesses, schools and churches and placing
restrictions on public gatherings at the onset of the pandemic
in March.
The suit calls Baker’s order requiring people to wear masks
“irrational, arbitrary and capricious.” His lawyers’ argument
purports the governor’s mask mandate and restrictions on
assembly, particularly in churches, violate the First-Amendment
rights of Vincent Delaney, a Peabody man who initiated the
lawsuit.
“We risk suspending our constitutional liberties. This is not a
minor issue that has been laid out here. This is a fundamental
bedrock right about our country,” said attorney Thomas Mason....
Baker’s coronavirus response faces a similar challenge in the
state’s Supreme Judicial Court . . .
The Boston Herald
Tuesday, October 6, 2020
No ruling yet on federal suit challenging Charlie Baker’s
coronavirus restrictions
Is Charlie Baker a fiscal conservative?
Not really, according to a new report from the CATO Institute.
CATO put out its
annual fiscal policy report card for each of the 50 state’s
governors. Baker received a D.
After a career in the health care industry and state government,
Charlie Baker was elected governor in 2014. He ran as a fiscal
moderate and a social liberal.
He scored poorly on the CATO report mainly because of his
support for a payroll tax to fund a new family medical and paid
leave program.
When running for office in 2014, Baker said that he would not
raise taxes, but he has broken that promise several times. Baker
signed into law a tax on short-term rentals, such as Airbnb, and
he has approved increases in online sales taxes. He has proposed
increasing taxes on ride-sharing services, such as Uber. And in
2020, Baker proposed ‘real-time’ sales tax remittance to boost
state revenues $300 million while raising compliance costs on
businesses.
Baker’s largest tax increase came in July 2018, when he approved
a 0.63 percent payroll tax on private employers to fund a new
paid leave benefit. The law increased taxes on workers in the
state by $750 million or more a year.
For reference, Republican governors Chris Sununu of New
Hampshire and Phil Scott of Vermont earned an A and B,
respectively.
The New Boston Post
Wednesday, October 7, 2020
CATO Institute Gives Charlie Baker A Poor Mark For Fiscal
Responsibility
Its fund-raising has dwindled. Its share of registered voters
statewide is at a seven-decade low. Its membership in the
40-seat state Senate is (back) down to four.
And looming above those Republican Party regressions is the
schism between Charlie Baker, its popular second-term governor,
and Jim Lyons, its staunchly pro-Trump party chairman.
Long the minority, the Massachusetts Republican Party is trying
to avoid shrinking toward triviality this fall.
In a presidential election year when record numbers of people
are expected to vote, the state GOP is hoping to protect its
small delegation at the State House, but hasn’t grown its slate
of challengers beyond those of recent years. How it ultimately
fares Nov. 3 could help tip the direction of a state party whose
divisions start at its very top....
Never a true threat to Democrats' grip on political power here,
the state GOP also is battling within itself. Its top elected
official, the moderate Trump critic Baker, has been at odds with
a party leadership that’s adopted the president’s combative,
more conservative tone, diverging on everything from
fund-raising to the reopening of the state’s economy amid the
pandemic.
Trump last month directly attacked Baker as a “RINO" (Republican
in name only) after the governor bucked the president’s
monthslong criticisms of mail-in balloting. The Massachusetts
GOP later issued a statement backing Trump’s concerns by citing
local criticisms of a newly launched ballot application portal.
The divide has meant Baker has all but disconnected from the
state party apparatus he once led....
Within the state’s 200-seat Legislature, Republicans are
challenging Democratic incumbents in 19 races, and the party has
candidates running for seven open seats. They include Matt
Kelly, who’s challenging Senator Becca Rausch in a district
previously held by Republicans, and Susan Smiley, a state
committeewoman, vying in an open Worcester County race.
It’s the same number of nonincumbent Republicans running as in
2016, and a drop from 2018′s midterm elections, which are
generally viewed as more favorable to the GOP, when the party
put up 24 challengers and 13 open-seat candidates....
As of August, the Massachusetts GOP this cycle had pulled $1.55
million into its federal account, which it can use for party
operations. It’s an amount well behind the $5 million it raised
during 2017 and 2018, and, party leaders say, tied to
limitations brought on by the pandemic.
Compounding the money crunch, just 3,300 voters have registered
with the GOP since Lyons was elected chairman, pushing its total
to roughly 460,000 statewide. That’s less than 9.9 percent of
all Massachusetts voters, the party’s lowest share since at
least 1948.
The Boston Globe
Thursday, October 1, 2020
Divided between Baker and Trump, Mass. GOP tries to avoid
sliding into triviality in November
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
Full News Reports Follow
(excerpted above) |
|
CommonWealth Magazine
Tuesday, October 6, 2020
Mass. tax collections continue to roll along
By Bruce Mohl – CommonWealth editor
Despite all the gloom and doom among budget officials on
Beacon Hill, Massachusetts tax collections continue to roll
along surprisingly well.
The state Department of Revenue said on Monday that tax
revenues in September were down 1.4 percent compared to the
same month last year, but overall through the first three
months of fiscal 2021 revenues were up 1 percent to $7.27
billion.
In a cryptic press release, the Department of Revenue said
income taxes withheld from paychecks and meals taxes were
down, while sales taxes, motor vehicle sales taxes, and
corporate and business taxes were up. The press release said
September typically accounts for 10 percent of the state’s
annual revenue, although it cautioned that the numbers this
September were probably lower than usual because the due
date for payments of certain sales, meals, and room
occupancy taxes had been put off until May.
The growth in tax revenue during the first quarter of the
year is fairly amazing, given the coronavirus pandemic, the
shutdown of much of the state and national economy, and the
resulting high unemployment.
The new numbers set an interesting stage for state officials
and economists, who are expected to gather via Zoom on
Wednesday to develop a consensus revenue forecast for the
remainder of the fiscal year. The House and Senate will then
get to work on a budget for the year, close to four months
after the start of the fiscal year. (The state has been
operating under a temporary budget using the same level of
spending as last year.)
House and Senate lawmakers have been projecting a budget
shortfall of $4 billion to $6 billion this fiscal year.
House Speaker Robert DeLeo was the latest state leader to
make that forecast, urging Democrats and Republicans in
Washington to come together and pass another stimulus
package.
“Without the assistance from Washington, which hasn’t been
forthcoming so far, we’re very concerned,” DeLeo said.
What none of the state leaders has fully explained is how
the shortfall projection can be so high if revenue numbers
are keeping pace with last year. The possible answer: Either
the revenue numbers are surprising everyone, or spending
during the pandemic is running far above what it was last
year.
Gov. Charlie Baker has provided the most detailed
explanation so far, saying he expects the state to “work our
way through” the current fiscal year, presumably by tapping
some of the state’s $3.5 billion rainy day fund. Baker has
warned that fiscal 2022, which doesn’t start until July
2021, will be the real problem. He has said more funding
from Washington will be needed if the state is to weather
shortfalls expected then.
The
Salem News
Saturday, October 3, 2020
Groups push corporate tax increases to fund recovery
By Christian M. Wade, Statehouse Reporter
A coalition of unions, community groups and faith groups is
calling on Beacon Hill to ratchet up taxes on corporations
and the state’s wealthiest to support the recovery from the
economic impact of the coronavirus.
During a virtual meeting with lawmakers Thursday, members of
the group Raise Up Massachusetts and the North Shore Labor
Council said the economic fallout of the outbreak continues
to impact low-income families.
The advocates suggested lawmakers increase taxes on
corporations and wealthy shareholders to drum up money that
will offset budget cuts and provide pandemic relief.
"Businesses should be expected to contribute more to support
the communities they are profiting from," said Helina Fontes,
a Lynn-based mental health advocate.
Increasing the tax on corporate profits from 8% to 9.5%,
advocates say, could generate another $450 million to $525
million a year for the state’s coffers.
The groups also want the state to tax a portion of profits
that corporations store away in offshore "tax havens" and
increase the 5% state tax rate on "unearned income" for
shareholders and other high-income individuals.
The advocates say corporations have made record profits
during the pandemic, and wealthy shareholders have used
loopholes, tax breaks and weak corporate disclosure laws to
avoid paying their fair share of taxes.
Advocates told North Shore area lawmakers who participated
in the briefing, including Sen. Brendan Crighton, D-Lynn and
Rep. Lori Ehrlich, D-Marblehead, that with unemployment
benefits running out and the state’s eviction moratorium set
to expire this month, state leaders shouldn't be considering
deep cuts.
"That's the worst thing for our economy," said Phineas
Baxandall, a senior policy analyst with the left-leaning
Massachusetts Budget and Policy Center, which is advocating
for tax increases. "It would suck the lifeblood out of our
economy."
House and Senate leaders are tied up in closed-door
negotiations on the state's nearly $45 billion budget for
the fiscal year that began July 1. The state is running on a
three-month, $16.5 billion interim budget that expires at
the end of October.
The Massachusetts Taxpayers Foundation predicts the state
will see a $6 billion drop in tax revenues this fiscal year,
which could sink further depending on how long people are
out of work or if a second wave of COVID-19 infections
prompts the state to rollback its reopening plans.
Senate President Karen Spilka, D-Ashland, and House Speaker
Robert DeLeo, D-Winthrop, have both suggested tax increases
may be needed to offset the impact.
Liberal economists have also pushed plans on Beacon Hill to
increase the state's personal income tax rate, which finally
dropped to 5% this year nearly two decades after voters
approved cutting the rate.
Republican Gov. Charlie Baker has repeatedly said he would
not consider raising taxes amid the pandemic.
Republican lawmakers are also cool to the idea of increasing
corporate taxes.
"We should be looking at cutting wasteful state spending,
not increasing taxes," said Rep. Lenny Mirra, R-Georgetown.
"And these corporations will just find some other way to
hide their money."
The Boston
Herald
Thursday, October 8, 2020
Spending cuts, tax hikes on the table
as coronavirus takes estimated $3-5 billion bite from
revenues
By Erin Tiernan
From spending cuts to tax hikes, “every option” is on the
table for lawmakers struggling to plug a gaping budget hole
with tax revenues predicted to nose dive between $2.76
billion and $5.23 billion this year amid the coronavirus
pandemic.
“Even under the rosiest of projections, we still have some
real difficult decisions to make in relation to trying to
balance our books for FY 21,” House Ways and Means Chairman
Aaron Michlewitz said.
“Every option is really on the table at the moment,”
Michlewitz, a North End Democrat, added.
Gov. Charlie Baker has repeatedly said he would not support
raising taxes amid a pandemic that has wrought the worst
economic fallout in recorded history. Baker’s budget chief,
Administration and Finance Secretary Michael Heffernan
doubled down on that on Wednesday, telling reporters, “from
what we can see, we won’t need to raise taxes.” The
shortfall prediction comes from the Department of Revenue.
Raising progressive taxes like a wealth tax has gained
popularity among left-leaning organizations recently.
“Cuts will not address the growing needs or help us prime
our economy for a robust and just recovery. Only new,
progressive revenue can do those things,” Marie-Francis
Rivera of the left-leaning Massachusetts Budget and Police
center said.
Last month, a group of more than 150 Massachusetts
organizations sent a letter to lawmakers urging similar
revenue-raising measures.
The state could draw on its $3.5 billion Rainy Day Fund to
balance the budget or make spending cuts.
While Massachusetts is “clearly in a rainy day,” State
Treasurer Deb Goldberg warned drawing too much from the
state’s savings account could lead to a downgrading by
crediting agencies
“We don’t know how long the rainy day will last,” she said,
noting agencies first “want to see the state has used all
available, public finance tools, including cutting
discretionary.”
Uncertainties with federal aid make it hard to pin down
exactly how big the state’s budget hole is, Eileen McAnneny
of the Massachusetts Taxpayers Foundation said.
Should another federal relief package not materialize,
McAnneny said “the revenue shortfall will grow massively.”
Senate Ways and Means Chairman Michael Rodrigues described
“glaring federal dysfunction” by the feds and said it was up
to the state to “close an anticipated budget shortfall
without federal assistance for at least the foreseeable
future.”
Tufts Center for State Policy Analysis, however, offered a
more optimistic picture, predicting revenue will come in
$1.6 billion below the January benchmark.
Executive Director Evan Horowitz encouraged lawmakers to
rely on the state’s rainy day fund to balance the FY 21
budget and “avoid painful cuts.” Concerns about budget woes
in FY 22 are “overstated,” he said.
State House
News Service
Thursday, October 8, 2020
TCI Gets Corporate Push
By Chris Lisinski
More than 100 major corporations and higher education
institutions
wrote to governors Thursday voicing "strong support" for
an in-development regional effort to curb transportation
greenhouse gas emissions that will raise gasoline prices.
The signatories, some of which rely on transportation
infrastructure for their business, urged leaders of 12
states and the District of Columbia to sign a memorandum of
understanding signaling their commitment to the
Transportation and Climate Initiative, known as TCI.
The companies that signed on to the letter to Gov. Charlie
Baker, letter by the sustainability nonprofit Ceres,
included ride-hailing services Uber and Lyft, Wayfair,
Novartis, DHL, Blue Cross Blue Shield of Massachusetts, and
Biogen.
Implementing a regional cap-and-trade program that increases
costs at the pump could help curb emissions, they argued,
particularly for "overburdened and underserved communities"
that face the most pollution, and it could also raise
revenue to fund much-needed improvements.
"The existing transportation system is a roadblock to our
economic and our climate goals," the signatories concluded.
"We feel an urgency to create a transportation future that
enables economic growth and substantial decarbonization."
If implemented, TCI would impose a cap on emissions from
motor vehicles and require gasoline suppliers to purchase
allowances. Parties negotiating the system estimate it could
raise gas prices 5 to 17 cents per gallon and generate
hundreds of millions of dollars in state revenues.
State House
News Service
Wednesday, October 7, 2020
Most Experts See Year-Over-Year Tax Revenue Decline
Better Than April, But Updated Forecasts Are Still Dim
By Katie Lannan
State tax collections this fiscal year could range anywhere
from $25.9 billion to $29.8 billion, according to estimates
offered Wednesday by economic experts that point to a
likelihood that the state will see a year-over-year decline
in tax receipts.
The estimates all fall below the $31.15 billion revenue
estimate that the Ways and Means Committee chairs and Gov.
Charlie Baker's budget office agreed to in January, before
COVID-19 took hold in the United States, leading to
widespread business closures and restrictions and a steep
economic downturn.
Ten months later, with the state still operating under
temporary budgets, chairmen Sen. Michael Rodrigues and Rep.
Aaron Michlewitz and Administration and Finance Secretary
Michael Heffernan convened a group of experts to offer their
latest forecasts and help inform the eventual crafting of a
spending plan for the remainder of fiscal 2021.
The projections received Wednesday also reflect a host of
unpredictable factors that experts said will shape the state
and national fiscal pictures, including the trajectory of
the coronavirus pandemic and future federal government
policies and actions.
The state Department of Revenue projected a tax haul in the
range of $25.918 billion to $28.387 billion. Three other
speakers offered estimates in the area of $29 billion, shy
of the $29.596 billion collected in fiscal 2020.
"There's tremendous uncertainty in these forecasts," Revenue
Commissioner Geoffery Snyder said. "The trajectory of the
pandemic, the timing of the development of vaccines and
therapeutics, the measures governments have taken to control
the pandemic and to mitigate its impacts, and the
uncertainty surrounding potential action at the federal
level have combined to create unprecedented challenges in
revenue forecasting for the commonwealth."
Reacting to Snyder's testimony, Rodrigues said, "I've never
seen this large of a range before in forecasts."
The DOR forecasts are based on projections from economic
vendors and tax collections for the first three months of
fiscal 2021 -- $7.27 billion through September. The range
Snyder offered would represent a drop of anywhere from 4.1
percent to 12.4 percent from fiscal 2020 collections, or
$2.764 billion to $5.233 billion below initial fiscal 2021
estimates.
Like Snyder, others who testified stressed that the pandemic
and efforts to control the virus will be major drivers of
the economy's path going forward.
"If we can't get the spread of the virus down, we cannot
maintain much confidence that we can safely return to a
full-throated economic activity," said Jeffrey Thompson of
the Federal Reserve Bank of Boston.
Mass. Taxpayers Foundation
Massachusetts Taxpayers Foundation President Eileen McAnneny
said she expected economic recovery to be "up-and-down and
perhaps spotty" until the pandemic is controlled. She
projected tax revenues would land at $27.27 billion this
fiscal year, $3.9 billion or 12.5 percent below the initial
consensus estimate. While still a "sizeable" shortfall,
McAnneny said, it's lower than the $6 billion figure her
organization offered in June.
"For the first quarter of FY21, the Massachusetts' economy
has been propped up by various forms of federal financial
assistance," she said in written testimony. "As these
sources of income are exhausted amidst growing uncertainty,
the state's fiscal situation is expected to deteriorate."
MTF projected that "stalled employment growth" through the
rest of the fiscal year would lead to a $1.27 billion or 8.8
percent decline in withholding income tax, and a $940
million or 12.7 percent decline in sales tax revenues.
Beacon Hill Institute
Testifying after both McAnneny and Snyder, David Tuerck of
the Beacon Hill Institute described his forecast as
"considerably more optimistic than our predecessors." He
projected a tax haul of $29.214 billion in fiscal 2021, and
$30.07 billion in fiscal 2022.
"We understand that whatever number is chosen could have
political implications," he said. "We feel confident in our
number. We think that it's as important not to underestimate
the tax revenues as it is not to overestimate."
Tuerck noted that Massachusetts "does continue to have a
relatively big problem in terms of its unemployment rate,"
which stood at 11.3 percent in August.
Center for State Policy Analysis
The Center for State Policy Analysis, at Tufts University's
Tisch College, is anticipating about $29.6 billion in fiscal
2021 revenues, representing a drop of $1.6 billion below
initial estimates. Evan Horowitz, the center's director,
said his estimate is based on a predictive model that uses
the national gross domestic product.
"If actual tax collections do match these estimates, as they
have through September... it doesn't seem like the FY '21
budget will require dramatic actions on either side of the
ledger, be it spending cuts or tax increases."
Horowitz said a $1.6 billion gap "could comfortably be
filled" with money from the state's $3.5 billion
stabilization fund.
He described the outlook for fiscal 2022 as "relatively
bright" and said he did not "see any evidence of a
substantial gap in FY '22 at this point."
"Obviously all the normal caveats apply -- it's a long way
away, a lot of bad things can happen, but there's also a lot
of upside potential, and I think of FY '22 as either near or
certainly approaching the old levels of state tax revenue."
Alan Clayton-Matthews
Northeastern University Professor Alan Clayton-Matthews also
presented budget-writers with a range of estimates, saying
he projected this year's tax collections to end up somewhere
between $29.324 billion and $29.834 billion.
Clayton-Matthews said federal stimulus initiatives so far
have "lifted incomes, and that has both direct and indirect
effects on tax revenues."
Mass. Budget and Policy Center
The Massachusetts Budget and Policy Center decided not to
prepare a revenue estimate number for this hearing, said its
president, Marie-Frances Rivera, citing "all the uncertainty
and variables."
In April, MassBudget said that if patterns from prior
recessions hold and there is some limited growth, fiscal
2021 collections could land between $5 billion and $5.7
billion shy of the estimates budget writers agreed to in
January.
"We think that there's a budgetary crisis that's happening
and we all have to be just fully aware and eyes-open about
that," Rivera said Wednesday. "There's danger because all of
the public goods that we're relying on to guide us through
this public health economic crisis, whether it's health
care, whether it's housing people, whether it's educating
our young people, a lot of these are in jeopardy and the
needs are growing."
State House
News Service
Wednesday, October 7, 2020
State's economic outlook still murky
Sales tax revenues expected to take $900M hit this fiscal
year
By Christian M. Wade, Statehouse Reporter
Economists painted a murky picture of the state's
pandemic-battered economy on Wednesday, saying the depth of
a revenue shortfall will depend on relief from Washington.
State budget writers, economists and legislative leaders
said fallout from COVID-19 continues to dampen state
revenues despite recent upticks in tax collections.
Revenue Commissioner Geoffrey Snyder told lawmakers during a
live-streamed hearing that the Baker administration
projected state revenues will decline between $2.8 billion
to $5.2 billion this fiscal year. He said there is
"considerable uncertainty" in the estimates.
He cited the timing of a COVID-19 vaccine, whether the
coronavirus can be contained and uncertainty around Congress
and the White House as factors that "have combined to create
unprecedented challenges in revenue forecasting."
In Washington, a new relief package is tied up amid partisan
disagreements. President Donald Trump issued conflicting
statements this week about whether the White House will walk
away from negotiations with Democrats.
House Ways and Means Committee Chairman Aaron Michlewitz,
D-Boston, said the collapse of talks and a lack of progress
on federal aid to state and local governments will have a
"drastic, negative impact" on the state's finances.
"I think I speak for all of us in the Legislature when I
call on Congress and the president to get back to the
negotiating table and strike a deal that helps all 50
states," he said.
Eileen McAnneny, president of the Massachusetts Taxpayers
Foundation, predicted a $3.9 billion drop in state tax
revenues, which will grow without federal relief.
"Even if there is a fiscal aid package, the proposed funding
may be insufficient, especially if it's not properly
targeted to sustain the economy," she said.
Sales tax collections — a major source of state revenue —
will take a projected $900 million hit in this fiscal year,
she said. Virus-wary consumers are putting off major
purchases such as homes and cars.
"There's a lot of political uncertainty and social unrest,"
McAnneny said. "That's also contributing to people's unease
about the future."
David Tuerck, president of the conservative Beacon Hill
Institute, offered a more optimistic outlook, suggesting a
decline in tax revenues of only around $1.3 billion.
Economists noted that conditions have gradually improved as
businesses reopen and more people return to work, but that's
not been enough to offset overall tax revenue losses.
The state is running on a three-month, $16.5 billion budget
signed by Gov. Charlie Baker in August. It will keep the
government funded until Oct. 31, when the Legislature is
expected to consider a final spending plan for fiscal 2021.
Baker filed a preliminary $44.6 billion budget in January,
months before the virus forced the state to shutter the
economy.
Uncertainty over the budget has created fiscal problems for
a host of entities that depend on state funding, from
nonprofits to health care providers. Meanwhile, city and
town leaders struggling to finalize their budgets worry
there will be deep cuts to local aid and school funding.
The Boston
Herald
Friday, October 9, 2020
A Boston Herald editorial
Revenue shortfalls call the shots as Mass. moves forward
The coronavirus pandemic has cratered revenue for
Massachusetts, and funding programs and making necessary
changes are slamming into the hard wall of reality.
In one instance, a state agency is finding new ways to raise
cash — which may not please Boston drivers.
A proposal by the Massachusetts Department of Conservation
and Recreation to add parking meters to certain
neighborhoods could up the ante on the frustration of
finding a spot.
According to its web site, the department wants to expand
curbside meters along certain parkways and parking areas in
metro Boston.
The sites targeted by the DCR include:
• The Fenway, Boylston Street to Avenue Louis Pasteur
• Park Drive, Peterborough to Beacon streets
• Charlesgate East, Boylston to Newbury streets
• Memorial Drive, Cambridge, 1 Memorial Drive to Fowler
Street
• Cambridge Parkway, Cambridge
• Dealtry Pool, Watertown
• Revere Beach Boulevard, Revere, Eliot Circle to Carey
Circle
Parking rates will run $1.25 per hour.
On the one hand, for non-residents vexed by streets taken up
by resident-only parking, the chance to find a metered spot
could count as a win. But for residents, the loss of any
parking real estate is a cause for concern.
The department will put its case before the people at a
virtual public meeting Oct. 14.
But why even propose such a plan, sure to be decried as a
cash grab?
It is, but not unexpected considering the economic gut-punch
of the coronavirus pandemic.
According to the agency, a significant portion of revenues
collected under the meter program, which the DCR has
targeted to launch in late spring of next year, will be
earmarked to support the statewide park system.
It’s hard to knock the necessity of Massachusetts’ parks,
but it’s also difficult to feel good about any loss of
residential parking.
But as life goes on amid virus-induced revenue shortfalls,
this sort of funding solution may be the new normal.
One thing that the pandemic brought into stark relief is the
disproportionate impact it had across different
demographics. As the State House News Service reported, the
Health Equity Task Force, a panel of public health experts
and elected officials is looking at legislative action to
address the inequities, but the Bay State’s bruised budget
may have the last word.
Jeffrey Sanchez, an adviser at Rasky Partners who previously
served as chair of the House Ways and Means Committee, urged
the task force to underscore which ideas are most achievable
when it publishes its report next week.
“This end of the year, $700 million in the hole, up to $4
billion going into next year — so there’s not going to be
that much money,” Sanchez said. “Where’s the opportunity to
highlight, right now, for Oct. 14, what can we do?”
Among its suggestions, the task force is looking at enacting
emergency paid sick leave legislation to help employees not
covered by a similar COVID-era federal program and
continuing funding for “isolation hotels.”
Several lawmakers asked the task force to develop cost
estimates. There was pushback.
Sen. Sonia Chang-Diaz noted, “The charge to this task force
is not for the public health experts here to tell us what we
can afford as a state.
“The Legislature stood up this task force in order to get
public health advice from public health experts about what
it will take to close these disparities,” Chang-Diaz said.
“The Legislature will have to make those difficult
decisions.”
True. But presenting affordable solutions may be the only
way to get to “yes” in these cash-strapped times.
State House
News Service
Friday, October 9, 2020
Data Shows Many in Mass. Have Left the Workforce
Departures Don't Show Up in Improving Unemployment Rate
By Chris Lisinski
The number of Massachusetts workers counted as unemployed
dropped by more than 250,000 over the past two months, a
decline of more than a third that helped the state escape
from a short streak of owning the worst jobless rate in the
country.
About 114,000 more workers became employed in that span,
too, a sign of continued steps toward recovery following the
pandemic-related recession's low point in the spring.
But the improving jobs numbers and unemployment rate likely
mask deeper, more lasting damage at both the state and
federal level: many people are dropping out of the workforce
altogether, hinting that some -- particularly women, who
disproportionately fill caretaker roles -- have given up
attempts to find employment amid slow hiring and uncertainty
about the COVID-19 health outlook.
"It's a significant problem," Federal Reserve Bank of Boston
President and CEO Eric Rosengren said in a speech on
Thursday. "The longer the pandemic goes on, the more you're
going to see people leaving the labor force, not only
because they can't find a job, but because they have to care
for either elderly parents, people that are sick because of
the pandemic, or children that are not able to go to school
because schools have been closed and there is not
availability of daycare."
The trend, according to economist Alicia Sasser Modestino,
indicates that the recent improvement in the state's
unemployment situation might be "not as rosy as it might
seem."
Between January and August, the working-age population in
Massachusetts grew 13,400, according to data published by
state labor officials based on a household survey. In that
same span, the labor force -- which counts both people who
are employed and those who are unemployed but actively
seeking work -- shrunk by 290,000.
The drop was not limited to the earlier days of the COVID-19
crisis, when job cuts were severe. In July and August, a
span in which the employed population grew and the
unemployed population shrunk, the labor force declined by
138,500 -- more than the 114,000 jobs added.
While both Massachusetts and the country as a whole have
seen workers depart the market, the trends have taken
different patterns.
Nationally, the rate of working-age adults participating in
the labor force has been slowly but steadily climbing,
reaching 61.7 percent in August after dropping to 60.2
percent in April. In Massachusetts, the rate fell to 60.3
percent in April, rebounded to 65.1 percent in June, and
then fell back down again to 62.6 percent in August,
household survey labor data show.
"We seem to be moving in the opposite direction from the
country in terms of the number of people who are
participating in the labor force, which means that our
improvement in the unemployment rate is maybe not as rosy as
it might seem," Modestino, who is associate director of the
Dukakis Center for Urban and Regional Policy at Northeastern
University, told the News Service. "If some of that
improvement is coming from people dropping out of the labor
force, that's not how we usually like to improve the
unemployment rate during a recession."
Both the fluctuating pattern and the scale of the changes
are unusual. In general, the labor force shrinks during
recessions and grows during expansions, but -- like so much
else about the pandemic -- this economic slowdown is
unprecedented.
Alan Clayton-Matthews, another Northeastern professor who is
a senior research associate at the Dukakis Center, said the
more acute labor-force changes in recent months reflect the
new reality of the pandemic.
"In some sectors, you know you can't get a job right now,"
Clayton-Matthews said in an interview. "In a normal
recession, you might have stayed in the labor force, but in
this one where, because of COVID, there's a virtual
certainty that you're not going to be able to get a job, you
drop out of the labor force."
Another factor, he said, was the now-expired increase in
unemployment aid offered through federal programs to blunt
the impact of massive layoffs.
While experts said the volatility in the labor force figures
raises red flags, they stressed that the state-level data do
not offer a clear picture of why workers have departed.
Some could have opted to halt working over health concerns,
some could have resigned themselves to not finding a job in
the current strained economy, some might need to shift their
focus to caretaking, and some might have simply retired
during the pandemic.
Many experts agree, though, that the employment impacts have
been disproportionately concentrated among people of color,
who are more likely to work low-wage jobs prone to
disruption, and among women, who often perform a larger
share of parenting and caretaking duties.
A survey Modestino conducted found that 13 percent of
working parents either reduced their hours or lost their
jobs because they had to take on child care duties during
the pandemic. The effects were more concentrated among
women, she said.
"Among women who became unemployed during the pandemic, 25
percent of them said it was solely due to child care,"
Modestino said.
In February, about 31 percent of Massachusetts claimants
seeking unemployment benefits were women, according to
Modestino. By July, that rate had jumped to more than 56
percent, "a tremendous shift."
A similar trend is occurring nationally. Between February
and September, the percent of men aged 25 to 54
participating in the labor force dropped 1.6 percentage
points, according to Bureau of Labor Statistics data based
on the Current Population Survey. For women in the same age
range, the labor force participation rate dropped 2.8
percentage points over that span.
"In a pandemic, where many schools are closing, when many
people in the 25 to 54 age bracket are having children, many
families have to make a choice of whether or not they can
continue to work because they have children at home,"
Rosengren said in his remarks. "Sometimes, that is borne by
the husband, but frequently it is borne by the wife."
The long-term effects of discouraged workers may not become
clear for months or years, particularly amid enormous
uncertainty over the public health outlook.
Key questions remain unanswered, such as when consumers will
feel comfortable resuming pre-pandemic routines, when a
vaccine or treatment will be available, and whether Congress
will approve another stimulus package -- that appears less
likely after President Donald Trump said Tuesday he would
withdraw from negotiations.
Clayton-Matthews described the risk of federal aid falling
through as "the biggest sword of Damocles hanging over us."
"The economy seems to be weakening, and without another
stimulus, I don't see how it's going to get by until there's
a vaccine widely available," he said. "We could see a
prolonged recession if there's not more support for incomes
like there was in the beginning of this pandemic."
State House
News Service
Friday, October 9, 2020
Weekly Roundup - In the Red
Recap and analysis of the week in state government
By Katie Lannan
It's raining. But is it pouring?
Literal weather-wise, it's still dry, with a critical
drought declared Friday in the southeastern part of the
state and significant drought levels elsewhere. On the
fiscal front, though, it's time for budget managers to
figure out just how much the climate has dampened since Gov.
Charlie Baker filed a $44.6 billion spending plan in
January, way back when the anticipated 2.8 percent growth
was considered modest after a couple years that ended with
surpluses.
By the time Ways and Means Chairs Rep. Aaron Michlewitz and
Sen. Michael Rodrigues and Administration and Finance
Secretary Michael Heffernan convened economic experts on
Wednesday -- their third such huddle of this budget cycle
(December, April and October) -- any expectation for the
$31.15 in revenue collections that Baker built his budget
around had evaporated.
Instead, the revenue projections that were described as
"optimistic" during the summit were those that, if you were
more a glass half-empty type, could also be called "least
bleak."
That includes the $29.6 billion estimate put forth by Tufts
University's Center for State Policy Analysis, and the $29.2
billion offered by the Beacon Hill Institute. The Beacon
Hill Institute's number, representing a decline over last
year's tax haul, could perhaps only be deemed optimistic in
comparison to the forecasts already shared earlier in the
day -- $27.27 billion from the Massachusetts Taxpayers
Foundation, and a range of $25.9 billion to $28.37 billion
from the state Department of Revenue.
However big the gap is, it'll be up to Michlewitz and
Rodrigues to figure out how to plug it in the budget
proposals they ultimately put forward for their respective
branches to vote on. Whenever that ends up happening.
Their main choices: cutting spending to match available
revenues, raising taxes -- an idea Heffernan threw cold
water on, saying the administration doesn't see a need for
tax hikes right now -- or dipping into the state's $3.5
billion rainy day fund.
Evan Horowitz, from the Center for State Policy Analysis,
said the $1.6 billion hole he was projecting was small
enough to "comfortably be filled" with money from the
stabilization fund, buying time until the relatively sunnier
days he envisions in fiscal 2022.
Treasurer Deb Goldberg, though, suggested some caution
around tapping the rainy day fund as a first resort. Credit
rating agencies, Goldberg said, want to see other steps
taken before the umbrellas come out.
"Clearly, we're in a rainy day. However, we do not know how
long that rainy day is going to last," she said. "And so,
consequently, the way that the rating agencies look at that
is, yes, it is quite possible that spending from the rainy
day fund will be appropriate. However, simultaneously, they
want to see other budget considerations on the spending
side. So if one were to not do any cuts or adjustments on
the spending side and solely spend from the rainy day fund,
then that would be viewed very adversely."
Technically, whatever tool budget-writers ultimately deploy,
it won't be their first move. The initial strategy of
waiting to see definitive aid numbers from the federal
government hasn't so far borne fruit, and the end-of-month
expiration date for the state's current temporary budget is
inching closer.
But, when it comes to stimulus talks in Washington, D.C.
lately, negotiations can restart as quickly as they're
called off, and stall as suddenly as they pick up speed.
President Donald Trump, back in the White House after being
hospitalized last weekend with COVID-19 and still infected
with the virus, said in a Tuesday tweet that he'd
"instructed my representatives to stop negotiating until
after the election when, immediately after I win, we will
pass a major Stimulus Bill that focuses on hardworking
Americans and Small Business."
By Thursday, he told Fox Business host Maria Bartiromo that
talks were now "starting to work out" and becoming "very
productive." Speaking to the same cable news channel Friday,
White House economic advisor Larry Kudlow said the president
had signed off on a "revised" stimulus package and "would
like to do a deal."
The sides do appear getting closer to a number in the
middle, but what happens next is anyone's bet.
State House
News Service
Friday, October 9, 2020
Advances - Week of Oct. 11, 2020
Gov. Charlie Baker faces a deadline Thursday to mark down
expected tax revenues and begin the process of bringing
state spending in line with expected receipts, which may yet
still be impacted by the on-again-off-again federal talks
over economic stimulus measures.
While an annual budget was due July 1 and people are now
looking to see if the Corner Office next week will seek a
third temporary budget to keep government operating in
November, Baker budget chief Michael Heffernan on Wednesday
said it was "still early" when asked if the governor would
file an entirely new fiscal 2021 budget plan to take the
place of the obsolete $44.6 billion budget he filed in
January.
If Baker officially writes down state revenue expectations
by Thursday, he has 15 days, or until the end of October, to
publicly submit to the Legislature "corrective amendments"
to his January budget. State finance law requires the
administration to not only update state tax revenue
expectations, but also expectations of federal receipts.
The amount of federal aid Massachusetts will receive this
fiscal year is tied up in a perfect storm of pre-election
Washington politics marked by continuing discussion of a
stimulus bill, next week's vetting of a nominee who could
shift the balance of the U.S. Supreme Court, and the fight
for the presidency between Trump and Democrat Joseph
Biden....
Decision Time Again on Budget
The Baker administration is required by statute to determine
by Oct. 15 whether to revisit the state budget's consensus
revenue estimate, which set the expectation that
Massachusetts would collect $31.151 billion in tax revenue
this fiscal year.
That pre-pandemic estimate is outdated and the Department of
Revenue this week said it now expects fiscal year 2021 tax
revenues will total between $25.918 billion and $28.387
billion -- between $2.76 billion and $5.23 billion below the
assumption agreed to before the pandemic upended the
economy. For comparison's sake, the state collected $29.596
billion in taxes in fiscal 2020.
Section 5B of Chapter 29 of the Mass. General Laws requires
the secretary of administration and finance, with the
governor's approval, to "prepare estimates of budgeted
revenues which in the secretary's judgment will be available
for both the current year and for the annual budget for the
ensuing fiscal year" on or before Oct. 15 each year. In a
typical year, a lowering of the estimate would trigger
unilateral budget cuts under the governor's special
executive "9C" powers, but this year is different since the
Legislature has not yet even debated a budget for the fiscal
year that began July 1.
An alteration this year is more likely to kick-start the
budget process, which has been on ice since Baker proposed a
$44.6 billion spending plan for fiscal 2021 back in January.
Instead, a revision of revenue estimates from Baker and A&F
Secretary Michael Heffernan this year could trigger a
provision of Section 7H of Chapter 29 of the Mass. General
Laws that calls for the governor to update his budget
proposal if he determines "that the tax revenues or non-tax
revenues supporting the general appropriation bill have
materially decreased."
The law requires Baker to "submit to the general court by
message recommended corrective amendments to the governor's
original budget submission" within 15 days of his
determination. That means Beacon Hill could have a fresh
budget proposal to read the weekend of Halloween and that
the Legislature could begin debating sometime after all 200
seats are on the Nov. 3 ballot.
Heffernan said Wednesday that the administration is still
charting its path forward. State government has run on a
series of temporary budgets since FY21 began July 1 and the
current budget is expected to expire at the end of this
month. Baker could file a third temporary budget for this
fiscal year, in tandem with or before his potential filing
of corrective amendments later this month. - Colin A. Young
Voting Continues, Accelerates
Mail-in voting has already begun and Massachusetts on
Saturday, Oct. 17 commences an early voting period that runs
through Oct. 30. Four days of weekend voting will be held in
every community during that period.
"Those planning to vote in person do not need to submit
their Vote by Mail applications," Secretary of State William
Galvin's office clarified in a Sept. 11 press release
advising voters about vote-by-mail applications. Citing
advice from the U.S. Postal Service, the secretary has asked
voters to submit their vote-by-mail applications no later
than Oct. 20. Mail-in ballots that are not received by local
election officials on or before Election Day (Nov. 3) must
arrive no later than Nov. 6 and be postmarked by Nov. 3 in
order to be counted.
Elected officials in Massachusetts have defended the massive
mail-in system as a properly functioning one, rejecting the
claims of President Donald Trump who is trying to sow doubt
about the integrity of mail-in voting and its expanded use
across the nation. - Michael P. Norton
The Boston
Herald
Tuesday, October 6, 2020
No ruling yet on federal suit challenging Charlie Baker’s
coronavirus restrictions
By Erin Tiernan
A federal court judge held off a ruling on a lawsuit that
challenges a string of executive orders by Gov. Charlie
Baker in response to the coronavirus pandemic and could have
broad implications for governors’ actions across the nation.
Massachusetts District Court Judge William Young said he is
“taking this matter under advisement” following a 35-minute
virtual bench trial on Monday. Young did not say when he
would render an opinion.
“Whatever I declare in this case, one would think that a
like case could be brought three months, six months from now
because there is no end in sight,” Young said during
proceedings.
Baker declared a state of emergency on March 10, and has
issued dozens of executive orders in an effort to slow the
spread of the coronavirus in Massachusetts. His evolving
orders have ranged from ordering businesses deemed
nonessential to shutter physical operations to closing
public schools to limiting how many people can gather in one
place.
The 82-page complaint argues that the governor overstepped
his authority by invoking the Civil Defense Act to justify
his shutdown of businesses, schools and churches and placing
restrictions on public gatherings at the onset of the
pandemic in March.
The suit calls Baker’s order requiring people to wear masks
“irrational, arbitrary and capricious.” His lawyers’
argument purports the governor’s mask mandate and
restrictions on assembly, particularly in churches, violate
the First-Amendment rights of Vincent Delaney, a Peabody man
who initiated the lawsuit.
“We risk suspending our constitutional liberties. This is
not a minor issue that has been laid out here. This is a
fundamental bedrock right about our country,” said attorney
Thomas Mason.
The state’s lawyer Amy Spector argued Delaney’s rights
haven’t actually been violated because “he’s never been
denied entry or right to communion.”
Many of the orders referenced in Delaney’s complaint have
changed as the pandemic has evolved in Massachusetts and are
likely to change again.
Delaney is leading the charge in a second suit seeking to
curb the Baker administration’s coronavirus response. On
Friday, a group of 11,000 Massachusetts residents filed a
lawsuit challenging the flu shot mandate.
Protesters crowded outside the Moakley Courthouse in
Boston’s Seaport on Monday as the bench trial for Delaney’s
initial suit carried on via live stream.
Baker’s coronavirus response faces a similar challenge in
the state’s Supreme Judicial Court.
State officials have contended that Baker was within his
authority to lean on the Civil Defense Act when he declared
a public health emergency on March 10. Although the order
does not use the word “pandemic” outright, state lawyers
argue it grants broad authority for the governor.
The New Boston
Post
Wednesday, October 7, 2020
CATO Institute Gives Charlie Baker A Poor Mark For Fiscal
Responsibility
Is Charlie Baker a fiscal conservative?
Not really, according to a new report from the CATO
Institute.
CATO put out its
annual fiscal policy report card for each of the 50
state’s governors. Baker received a D.
After a career in the health care industry and state
government, Charlie Baker was elected governor in 2014. He
ran as a fiscal moderate and a social liberal.
He scored poorly on the CATO report mainly because of his
support for a payroll tax to fund a new family medical and
paid leave program.
When running for office in 2014, Baker said that he would
not raise taxes, but he has broken that promise several
times. Baker signed into law a tax on short-term rentals,
such as Airbnb, and he has approved increases in online
sales taxes. He has proposed increasing taxes on
ride-sharing services, such as Uber. And in 2020, Baker
proposed ‘real-time’ sales tax remittance to boost state
revenues $300 million while raising compliance costs on
businesses.
Baker’s largest tax increase came in July 2018, when he
approved a 0.63 percent payroll tax on private employers to
fund a new paid leave benefit. The law increased taxes on
workers in the state by $750 million or more a year.
For reference, Republican governors Chris Sununu of New
Hampshire and Phil Scott of Vermont earned an A and B,
respectively.
A spokesman for Governor Baker could not immediately be
reached for comment on Wednesday, October 7.
Paul Craney, spokesman for the Massachusetts Fiscal
Alliance, said Baker’s grade from the CATO Institute
reflects the state’s misplaced priorities.
“Cato’s study examines a wide variety of tax and spending
choices governors have made in recent years,” Craney said in
an email statement. “Cato’s ‘D’ grade for Governor Baker
once again demonstrates the need for Massachusetts to cut
low value state spending programs and pursue more growth
enhancing tax reforms. Unfortunately, those conversations
rarely, if ever, take place at the State House.”
The Boston
Globe
Thursday, October 1, 2020
Divided between Baker and Trump, Mass. GOP tries to avoid
sliding into triviality in November
By Matt Stout
Its fund-raising has dwindled. Its share of registered
voters statewide is at a seven-decade low. Its membership in
the 40-seat state Senate is (back) down to four.
And looming above those Republican Party regressions is the
schism between Charlie Baker, its popular second-term
governor, and Jim Lyons, its staunchly pro-Trump party
chairman.
Long the minority, the Massachusetts Republican Party is
trying to avoid shrinking toward triviality this fall.
In a presidential election year when record numbers of
people are expected to vote, the state GOP is hoping to
protect its small delegation at the State House, but hasn’t
grown its slate of challengers beyond those of recent years.
How it ultimately fares Nov. 3 could help tip the direction
of a state party whose divisions start at its very top.
“2020 is not the ideal year for Republicans to run races in
Massachusetts," said Tom Mountain, the state party’s vice
chairman. Drafting more candidates is a challenge, he
acknowledged, but added: “We don’t like to recruit people."
“Recruiting people means you’re basically convincing people
to run,” he said. "We want people to come to us. We want
people to show initiative, to show enthusiasm.”
Never a true threat to Democrats' grip on political power
here, the state GOP also is battling within itself. Its top
elected official, the moderate Trump critic Baker, has been
at odds with a party leadership that’s adopted the
president’s combative, more conservative tone, diverging on
everything from fund-raising to the reopening of the state’s
economy amid the pandemic.
Trump last month directly attacked Baker as a “RINO"
(Republican in name only) after the governor bucked the
president’s monthslong criticisms of mail-in balloting. The
Massachusetts GOP later issued a statement backing Trump’s
concerns by citing local criticisms of a newly launched
ballot application portal.
The divide has meant Baker has all but disconnected from the
state party apparatus he once led. He and Lieutenant
Governor Karyn Polito, for example, are planning their own
virtual fund-raisers for individual legislative candidates
this fall while the party’s basic infrastructure is in flux.
One of its accounts is on pace for its worst fund-raising
cycle since 2008; it currently doesn’t have an executive
director, and it’s short a full slate of 80 state committee
members.
The situation has prompted bubbling frustration within the
party ranks about its ability not just to help down-ballot
candidates this November, but to expand the party beyond the
conservative corners Lyons has solidified since winning the
chairmanship in 2019.
“I don’t understand the methodology and the overall game
plan that the party has been going after," said state
Representative Shawn Dooley, a Republican from Norfolk who’s
also a state party committeeman. "It doesn’t seem to be
strategic. It doesn’t seem to be targeted in particular
areas. It’s more pandering to the echo chamber.”
Party leaders reject that, saying messaging, in particular,
is left to the individual candidates.
“Some have distanced themselves from whatever Trump-related
messaging, and other candidates have embraced it. That’s
their choice to make,” said Janet Fogarty, the party’s
national committeewoman. “Our intent is to grow the party
from all different viewpoints.”
It has nevertheless raised the question: Should Trump lose
in November, what’s next for a state party whose leadership
has embraced Trump’s views over those of Baker, who has not
said whether he’ll seek a third term in 2022?
Lyons, who is up for reelection as chairman in January, did
not respond to requests for comment.
“This is an odd situation to be in,” said Rob Gray, a
veteran Republican consultant. “I imagine the results of the
presidential election will be a reckoning, one way or
another.”
The state GOP has fielded candidates for the US Senate,
where Kevin O’Connor is challenging Senator Edward Markey,
as well as for five of the state’s nine congressional seats.
That includes the Ninth District, where its nominee, Helen
Brady, lives 40 miles outside its borders. (Members of
Congress have to live in the state they represent, but not
the district.)
Within the state’s 200-seat Legislature, Republicans are
challenging Democratic incumbents in 19 races, and the party
has candidates running for seven open seats. They include
Matt Kelly, who’s challenging Senator Becca Rausch in a
district previously held by Republicans, and Susan Smiley, a
state committeewoman, vying in an open Worcester County
race.
It’s the same number of nonincumbent Republicans running as
in 2016, and a drop from 2018′s midterm elections, which are
generally viewed as more favorable to the GOP, when the
party put up 24 challengers and 13 open-seat candidates.
While Baker easily won reelection by 33 percentage points
that year, the party actually lost ground on Beacon Hill
after a Democrat flipped an open Republican district, and
two Republican incumbents lost, including Lyons, who served
four terms in the House.
The results reignited intraparty criticisms that holding the
governor’s office came at the expense and focus of
down-party contests, where the GOP’s gubernatorial coattails
have rarely extended.
This year, Republican candidates are generally promoting the
effort of “getting our schools open completely" amid the
pandemic, said Mountain, the party vice chairman, and
supporting police amid a nationwide movement, including in
Massachusetts, to tighten accountability for law
enforcement.
The party also has adopted the catch phrase “Had enough?” in
social media posts — a campaign mantra Baker used in his
unsuccessful 2010 gubernatorial effort that even supporters
said came off as “angry."
So far this year, Republicans have largely faced losses. The
GOP’s state Senate caucus, which counted seven members as
recently as 2018, was slashed to four in the spring after
Democrats won special elections in Republican-held
districts. The party also lost a seat in the House, where
its caucus sits at 31 members in the 160-seat body.
Democrats view Republican Senator Dean A. Tran of Fitchburg
as vulnerable this fall after an ethics investigation found
he intertwined his public and political work, and his Senate
colleagues took the extraordinary step of barring him from
interacting with his taxpayer-funded staff except through
official e-mails.
Tran, who has denied wrongdoing, faces a challenge from
Democrat John Cronin, a 30-year-old West Point graduate and
Army combat veteran who has both outraised the Republican
and poured $30,000 of his own money into the race. (Tran did
not respond to a request for comment.)
“I don’t know how you can run a high-functioning Senate
office if you’re not allowed to speak with your staff,” said
Cronin, of Lunenberg. “I think ethical leadership and
integrity are on the ballot.”
The party is, to a degree, removed from the representative
pits it found itself in after the 2006 election, when it was
on the wrong end of what was the biggest political monopoly
by either party in any state. But after doubling, from 16,
the number of Republican state representatives it had in
2010 — the same year Scott Brown won and for three years
afterward held a US Senate seat — the party has struggled to
make significant gains beyond Baker’s two victories.
As of August, the Massachusetts GOP this cycle had pulled
$1.55 million into its federal account, which it can use for
party operations. It’s an amount well behind the $5 million
it raised during 2017 and 2018, and, party leaders say, tied
to limitations brought on by the pandemic.
Compounding the money crunch, just 3,300 voters have
registered with the GOP since Lyons was elected chairman,
pushing its total to roughly 460,000 statewide. That’s less
than 9.9 percent of all Massachusetts voters, the party’s
lowest share since at least 1948.
“I didn’t like the direction that [the party] took after Jim
Lyons took over,” said state Representative Randy Hunt, who
is not seeking reelection to his seat on Cape Cod. “I
understand that the committee is committed to Republicans. I
get that. I just don’t think being a Republican in
Massachusetts, this year in 2020, that there’s an advantage
of being out there and being a 100-percent Trump person.”
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