 |
Post Office Box 1147
▪
Marblehead, Massachusetts 01945
▪ (781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
47 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
|
CLT UPDATE
Sunday, May 9, 2021
"Revenue Glut"
Overflows State Coffers, But More Is Never Enough
Jump directly
to CLT's Commentary on the News
|
Most Relevant News Excerpts
(Full news reports follow Commentary)
|
|
Massachusetts Department of Revenue (DOR) Commissioner
Geoffrey Snyder today announced that preliminary revenue
collections for April totaled $3.865 billion, which is
$1.885 billion or 95.1% more than the actual collections in
April 2020, and $385 million or 11.1% more than
benchmark.[1]
FY2021 year-to-date collections totaled approximately
$26.449 billion, which is $3.405 billion or 14.8% more than
collections in the same period of FY2020, and $1.830 billion
or 7.4% more than benchmark.
“April revenue included increases in most major categories
relative to benchmarks and collections in the same period of
FY2020,” said Commissioner Snyder. “However, historical
comparisons should be viewed with caution due to the
pandemic-induced recession, the late start to the 2021 tax
filing season, and responsive measures enacted in 2020 and
2021 designed to mitigate the impact of COVID-19.” ...
Preliminary April Revenue Collections
▪ Income tax collections for April were $2.181 billion, $114
million or 5.0% below benchmark, but $1.057 billion or 94.1%
more than April 2020. Due to extensions of filing and
payment deadlines in both this year and last year, income
tax collections in April 2021 and April 2020 are not
comparable.
▪ Withholding tax collections for April totaled $1.237
billion, $219 million or 21.5% above benchmark, and $183
million or 17.4% more than April 2020.
▪ Income tax estimated payments totaled $481 million for
April, $308 million or 177.7% more than benchmark, and $414
million or 618.5% more than April 2020. Given the extension
of last year’s first estimated payment installment to July
15, 2020, estimated payments in April 2021 and those in
April 2020 are not comparable.
▪ Income tax returns and bills totaled $788 million for
April, $790 million or 50.0% less than benchmark, but $595
million or 308.2% more than April 2020.
▪ Sales and use tax collections for April totaled $935
million, $164 million or 21.2% above benchmark, and $468
million or 100.4% more than April 2020. A law requiring the
early remittance of certain sales, meals and room occupancy
tax collections became effective this month, and partially
contributed to the increase in collections.
▪ Corporate and business tax collections for the month
totaled $543 billion, $249 million or 84.7% above benchmark,
and $330 million or 154.8% more than April 2020.
Massachusetts Department of Revenue
Wednesday, May 5, 2021
Press Release
April Revenue Collections Total $3.865 Billion
Monthly collections up $1.885 billion or 95.1% vs. April
2020 actual; $385 million above benchmark
Despite the tax filing deadline being moved from April to
May, the Department of Revenue collected $3.865 billion in
taxes from people and businesses last month -- $385 million
more than the Baker administration had estimated for the
month even before it extended the deadline.
The April receipts put the state roughly a month ahead of
the projections that DOR made in January for the second half
of the budget year and position Massachusetts to end fiscal
year 2021 within one percentage point of the pre-pandemic
revenue estimate for the year. Early on in the fiscal year,
lawmakers and economists were expecting they could fall
short of that estimate by as much as $8 billion,
expectations that were way off.
April tax collections came in just more than 11 percent
above DOR's monthly benchmark, continuing the trend of
actual tax collections blowing DOR's monthly estimates out
of the water. January collections beat the benchmark by 14.7
percent, February collections surpassed the benchmark by
24.8 percent and March revenues came in 26.8 percent over
expectations.
Through 10 months of fiscal 2021, state government has
collected $26.449 billion in tax revenue, up $3.405 billion
or 14.8 percent over the same period in fiscal 2020 and
$1.83 billion or 7.4 percent over DOR's benchmark.
Year-to-date collections through April are roughly equal to
the amount DOR expected to have collected through 11 months
of the year -- DOR said its midpoint estimate for
year-to-date collections through May was $26.513 billion.
If May and June revenues now come in at exactly the DOR
benchmarks -- and May's benchmark was determined before the
tax filing deadline was moved to May 17 -- Massachusetts
will have collected $30.92 billion in tax revenue in fiscal
year 2021.
That would be $1.83 billion or 6.3 percent more than what
the Baker administration projected it would collect this
fiscal year when it last updated its expectations in
January, $1.311 billion or 4.4 percent more than what was
collected during fiscal year 2020, and only about $230
million or 0.74 percent less than the pre-pandemic estimate
of $31.15 billion in tax revenue for fiscal year 2021.
It would also be about $800 million more than the consensus
revenue agreement being used as the House and Senate craft
the forthcoming fiscal year 2022 budget....
The over-benchmark fiscal 2021 collections, if they hold up,
could lead to a significant surplus this summer, which would
come just as state officials are making decisions about how
to spend billions of dollars in federal aid coming as part
of the American Rescue Plan Act. Legislators and the Baker
administration have said they hope to use available revenues
to limit rainy day fund withdrawals.
Fiscal year 2021 has been something of a wild ride for DOR,
state budget managers and analysts. Before the COVID-19
pandemic was on the horizon, lawmakers and the Baker
administration agreed to an estimate of $31.15 billion in
tax revenue for fiscal year 2021.
The fiscal 2021 budget-writing process was put on hold once
the pandemic began to ravage the economy and some economists
and lawmakers expected fiscal 2021 tax revenue could be
between $2 billion and $8 billion shy of that pre-pandemic
estimate.
When Gov. Charlie Baker filed a revised budget in October,
his administration forecasted that tax revenues would total
$27.6 billion. That estimate was upgraded by $459 million to
$28.44 billion in December and further revised in January to
$29.09 billion.
May revenue figures, which will capture the impact of the
new May 17 tax filing deadline, are expected to be reported
Thursday, June 3.
State House News Service
Wednesday, May 5, 2021
April Adds to Revenue Glut, Creating More Budget Options
Spending Decisions May Loom on ARPA, FY 2021 Surplus
While the unemployment rate makes its slow recovery from the
pandemic, rising to 6.1% instead of dropping to 5.8%, one
aspect of the government unemployment benefits is drawing
scrutiny because it’s exacerbating the problem.
After millions of Americans lost their jobs last year thanks
to the China Virus-inspired and state-imposed lockdowns, the
federal government adopted a relatively novel concept: Our
Washington caretakers supplied the cash to supplement state
unemployment benefits by $600 a week while expanding the
universe of those who could collect unemployment benefits to
include several classes of workers who previously would not
qualify, such as those who are self-employed, independent
contractors, or people who didn’t have enough time at the
job. All of these people suddenly became the recipients of
$600 a week from the federal government to go along with the
benefits for which their state deemed they qualified. (Some
states were more lenient in that regard than others.)
While that extra cash has since declined to $300 a week,
initially there was some symbolism in the amount. It just so
happens that $600 is the exact gross pay for a worker who
toils 40 hours a week at that magical wage of $15 per hour.
That became a bit of a problem, however, since many of those
who received these benefits were making less than $15 an
hour at the job from which they were furloughed. The
government was paying them more to not work than their job
was to clock in every day.
The Patriot Post
Friday, May 7, 2021
Government Funds the Labor Shortage
A little over a month after Gov. Charlie Baker signed a law
shoring up the unemployment system and reducing the premium
increases facing employers to fund jobless benefits,
lawmakers and administration officials are once again
looking for a way to provide businesses relief from spiking
costs.
The law Baker signed on April 1 authorized $7 billion in
borrowing to stabilize the state's unemployment insurance
trust fund, strained by a flood of joblessness during the
COVID-19 pandemic, and limited the average rate hike to 18.5
percent instead of the nearly 60 percent increase employers
would otherwise have to pay.
Some businesses soon found they were nonetheless facing
dramatic increases in their unemployment tax payments, as
one component of their UI costs, known as the solvency
assessments, jumped from a rate of 0.58 percent in 2020 to
9.23 percent in 2021, surprising many.
Mike Doheny, the undersecretary of labor and general counsel
at the Executive Office of Labor and Economic Development,
told participants in a virtual Small Business Day event
Wednesday that he could not yet offer definitive answers but
that the administration was "looking to be able to propose a
solution to this very, very shortly." ...
The Small Business Day event, which included panels on both
Tuesday and Wednesday, was hosted by groups including the
National Federation of Independent Business, the Retailers
Association of Massachusetts, the Massachusetts Restaurant
Association and local chambers of commerce.
Jon Hurst of the Retailers Association told participants
that many of the factors that contributed to the
multibillion-dollar deficit forecast for the unemployment
fund over the next few years were not the fault of business
owners -- he pointed to the benefit levels and qualification
standards in Massachusetts, government-mandated closures,
and fraudulent unemployment claims -- and said that there
"needs to be a shared responsibility with government."
"You need to tell them that every dollar you have to expend
in UI taxes, unfair UI taxes, is another dollar in wage
growth that is not going to happen," he said.
Speakers noted that the higher costs associated with the
solvency assessment land as the state is planning for a
fuller economic reopening, with an Aug. 1 date penciled in
for a complete lift of remaining business restrictions.
Bob Luz of the Massachusetts Restaurant Association said
Massachusetts is behind many other northeastern states in
the reopening process. Baker has said the Aug. 1 date could
be moved up depending on the progress in public health data,
and Luz said "we need to hold them to it."
NFIB state director Christopher Carlozzi said an earlier
full reopening would be particularly important to seasonal
businesses and regions like Cape Cod that rely on summertime
activity.
"Under this current scenario, we'll lose two good summer
months if we don't do something, if we don't move quicker in
Massachusetts," he said.
Carlozzi added, "It's very important we keep pace with our
neighbors, to not lose that revenue to our New Hampshires
and our Connecticuts and Rhode Islands. They have beaches,
too."
State House News Service
Wednesday, May 5, 2021
Fed Guidance Appears Holdup on UI Rate Relief Quest
Earlier Full Reopening Sought by Small Biz, Restaurants
Though the timing for a necessary legislative vote is still
uncertain, proponents of the constitutional amendment to
impose a surtax on household income over $1 million launched
a campaign Wednesday to grow and solidify what they said is
already strong support for the idea that could go before
voters in 2022.
Democrats on Beacon Hill have been pursuing the tax policy
change for years and supporters say the surtax could
generate more than $2 billion per year for education and
transportation in Massachusetts without dipping into the
pockets of most residents. But critics have long said it
could prompt wealthy residents to move out of the Bay State
and encourage employers to steer clear of Massachusetts,
especially as remote work trends become a more normal part
of society....
As its formally kicked off its campaign Wednesday, Raise Up
Massachusetts also said 73 percent of the 600 Massachusetts
residents who responded to an online questionnaire said they
support adding a 4 percent surtax on annual household income
greater than $1 million. A MassINC poll of registered voters
found similar levels of support late last year....
Rep. Jim O'Day, who co-sponsored the amendment in the House,
said no date has been chosen for the Constitutional
Convention to consider the income surtax amendment proposal.
There is a joint session of the House and Senate planned for
May 12, but O'Day suggested the surtax will not be up for
debate next week.
"I was hopeful that maybe it would be May or June for us to
have the Constitutional Convention. That's not to say we
wouldn't, but I'm more apt to think that that timeline it
would probably be sometime September, October, November," he
said.
State House News Service
Wednesday, May 5, 2021
O’Day Sees Possible Fall Vote on Income Surtax
A so-called millionaires tax could finally be “on the right
path” to next year’s ballot.
Lawmakers and advocates said they aren’t “waiting around” as
they launched their campaign Wednesday amid unanswered
questions about the legislative process needed before
putting the issue before voters....
“We are not waiting around,” said Andrew Farnitano, a
spokesman for Raise Up. “We’re not waiting for that vote to
happen to start talking to voters and to start building the
statewide organization that we know is necessary to win in
next November.”
Opponents, too, have already come out slugging. A
recent Pioneer Institute study found the tax would also
hit middle-class people cashing out for retirement. Greg
Sullivan, research director for the fiscally conservative
group, has called the tax a “blank check” for government
spending.
The ballot measure would earmark funds for education and
transportation spending, but Paul Diego Craney of the
right-leaning Massachusetts Fiscal Alliance said Wednesday
that “there’s no guarantee” current spending stays where it
is.
“This is a typical bait and switch. It’s a scheme by
politicians who want to tax people … so they can spend more
money,” Craney told the Herald.
The Boston Herald
Wednesday, May 5, 2021
Millionaires tax ‘on the right path’ to 2022 ballot
The Senate on Friday rejected proposals to give senators
three to six additional hours to file budget amendments,
sticking with a deadline proposed by Senate leadership after
Democrat Sen. Diana DiZoglio criticized "a manipulation
tactic."
Senators adopted an order (S 2445) requiring amendments to
the Ways and Means Committee's upcoming fiscal 2022 spending
bill to be filed by 2 p.m. on Friday, May 14. On voice
votes, they turned down DiZoglio's calls to change the
deadline to either 5 p.m. or 8 p.m. next Friday.
DiZoglio on Thursday objected to the original order, raising
concerns that senators were not given any advance notice of
the amendment deadline before the order was offered.
At Friday's session, DiZoglio -- a Methuen Democrat who has
been a vocal critic of her chamber's leadership -- said she
admires and respects her colleagues while also warning about
the perils of "groupthink" and "gaslighting."
"I'll say this: trying to convince members that they've all
been inconvenienced because a colleague simply desires to
read a bill and offer an amendment, blaming, trying to use
peer pressure to get a dissenting voice to step into line so
that business as usual on Beacon Hill can continue,
unquestioned, without the annoyance of somebody raising
their hand and asking for an opportunity to be part of the
process is a manipulation tactic that we should all not only
understand is behavior associated with scapegoating and
gaslighting, but strongly reject," she said....
At the start of Friday's session, Ways and Means Chairman
Sen. Michael Rodrigues called the order "a standard,
procedural step we adopt each year" that is typically
negotiated between the Senate President and Senate minority
leader.
His committee plans to release its annual budget plan at 1
p.m. on Tuesday, giving senators 73 hours to read it and
propose changes. Rodrigues listed the number of hours
between budget release and the amendment deadline for each
fiscal year since 2012, all of which were fewer than will be
offered this year.
"The proposed deadline not only gives members and their
staff ample time for filing, but also provides Ways and
Means Staff critical hours to begin evaluation and review of
all the amendments that were filed," Rodrigues said.
State House News Service
Friday, May 7, 2021
Senate Adopts Budget Amendment Deadline
When it comes to climate change policy, there are two
parallel tracks at play on Beacon Hill: one focused on
implementing the climate law that Gov. Charlie Baker signed
in March, and another focused on passing legislation to set
even more ambitious goals than the ones that just became
law....
During separate but back-to-back virtual events Tuesday,
Energy and Environmental Affairs Secretary Kathleen
Theoharides explained what the Baker administration is
focused on as it begins to implement the law and then a
handful of lawmakers and advocates made their case for why
the so-called climate roadmap law is not enough.
Jacob Stern, Massachusetts chapter deputy director for the
Sierra Club, said the roadmap law is "an excellent first
step that charts the path for us" but that a bill up for
consideration this session that would require the state get
100 percent of electricity from clean and renewable sources
by 2035 and use 100 percent clean transportation and heating
by 2045 is "the vehicle, or the electric vehicle, that's
going to get us there." ...
The legislation (H 3288/S 2136) filed by Reps. Marjorie
Decker and Sean Garballey and Sen. Joe Boncore has not yet
been scheduled for a hearing before the Joint Committee on
Telecommunications, Utilities and Energy. It has 13 Senate
co-sponsors and 63 House co-sponsors, according to
Environment Massachusetts.
The bill would require investor-owned utilities to provide
100 percent clean electricity by 2035, with at least 80
percent coming from Class I resources through the state's
renewable portfolio standard. Municipal utilities would also
be required to provide 100 percent clean electricity by
2035. New buildings would be required to be built without
fossil fuel heating, Environment Massachusetts State
Director Ben Hellerstein said, and all new cars sold after
2035 would have to be electric vehicles....
During an earlier virtual event hosted Tuesday by the
sustainability-focused nonprofit Ceres, the state's top
energy and environment official said she thinks the greatest
challenge when it comes to wringing out greenhouse gas
emissions will be dealing with the many old and inefficient
buildings around the state.
"The building sector definitely represents a big challenge
here in Massachusetts, where we have really old building
stock. So leaky, energy inefficient, coupled with about
seven months of a heating season and then, increasingly, a
cooling season," Theoharides said. The secretary added, "I
think one of the key challenges is getting into homes and
businesses and large commercial spaces and industrial spaces
across the commonwealth, and really making sure they are
built to use as little energy as possible, retrofitted to
use as little energy as possible and, where we can, to
significantly ramp up electrification." ...
On Monday, the Department of Revenue's Division of Local
Services released its "initial guidance to local officials
regarding changes in local property tax laws" included in
the climate law that Baker signed at the end of March.
Among other tax-related provisions, portions of the law
provide a property tax exemption for certain categories of
solar- and wind-powered systems, authorize cities and towns
to enter into payment in lieu of taxes agreements with the
owner of a solar- or wind-powered system or energy storage
system, and create a new property tax exemption for
"qualified fuel cell powered system, the construction of
which was commenced after January 1, 2020, that is capable
of producing not more than 125 per cent of the annual energy
needs of the real property upon which it is located."
State House News Service
Tuesday, May 4, 2021
Clean Energy Roadmap Not Strong Enough, Activists Say
Baker raised just $9,429 in April, fueling chatter on social
media about his future, and Attorney General Maura Healey is
reportedly message testing for a potential run for governor.
But whether she takes the plunge or not, the state's
vaccination campaign and where it goes next figures to
feature prominently in next year's gubernatorial contest.
Healey spoke to the New England Council this week where she
defended her stance that public employees should be
vaccinated in order to return to work, although she
specified that she really means state workers who interface
with the public regularly. Even with that caveat, she is at
odds with Baker, who prefers persuasion over mandates for
state employees when it comes to the vaccine....
With the summer tourism season around the corner, the
Department of Revenue announced that it would be returning
to its regular schedule for the payment and remittance of
sales, meals and lodging taxes to the state on June 30.
Not that the state needs an advance on cash.
The April revenue report from DOR showed that the state is
way ahead of where it was last year through 10 months of the
fiscal year and well ahead of collecting what lawmakers
budgeted. So far, collections have exceeded projections by
$1.83 billion for the year, and that's with a delayed tax
filing deadline to May 17.
The $3.86 billion in taxes collected in April exceeded the
total from last April by 95 percent, for obvious reasons.
Less obvious, is how the Legislature and Baker will attempt
to spend what increasingly looks to be a surplus amassing
for the end of the fiscal year on top of the billions in
federal relief money that must be allocated.
The windfall might not end there, though.
When federal stimulus funding runs out and the economy
stabilizes, wealth tax advocates say the state will still
need the estimated $2 billion that could come from a
proposed surtax on millionaires to invest in education and
transportation.
The 4 percent surtax, which would be tacked on to household
earnings above $1 million, requires a second affirmative
vote of the Legislature to reach the 2022 ballot, and
advocates launched a campaign this week to remind lawmakers
why they supported the so-called "millionaires' tax " in the
first place.
Rep. Jim O'Day, the sponsor of the Constitutional amendment,
said it's likely the Legislature will wait on the "Fair
Share Amendment" until maybe the fall rather than vote next
week when a joint session of the Legislature will convene to
consider amendments to the constitution.
But O'Day thinks the proposal will get its vote, in spite of
renewed pushback from some business-backed think tanks who
are trying to slow it down.
"If you look at what's going on on Wall Street, you'll know
that Wall Street is doing just as well. Main Street, maybe
not quite as well as we need for Main Street to be doing.
So, for me, the excuse of the pandemic somehow raising
additional concerns, additional issues, with whether or not
this particular piece of legislation should not continue to
go forward is really a red herring," O'Day said.
State House News Service
Friday, May 7, 2021
Weekly Roundup - Achievement Unlocked
With tax collections far surpassing fiscal 2021 estimates
and on pace to even eclipse the tax revenue base for the
upcoming fiscal year 2022, Senate Democrats plan to roll out
their annual budget proposal on Tuesday.
The House and Gov. Charlie Baker each have developed plans
that would reach deeply into the state's shrinking rainy day
fund to boost spending at a time when the economy is surging
and taxpayers are already delivering the state with revenues
that are sufficient to fund current spending plans.
The Senate may do the same, although there's also a
possibility that House-Senate budget conferees this year
could take the unusual step of marking up expected revenues,
which would allow for greater spending or less reliance on
reserves.
The surging revenues being produced in-state are separate
from an unprecedented influx of federal aid aimed at helping
states emerge from the COVID-19 pandemic. State officials,
as well as municipal leaders who are also in store for
federal aid, are anxiously awaiting the arrival of U.S.
Treasury guidance on how that money may be spent. Officials
have said they expect the guidance by mid-May, and the
answers will influence an array of spending decisions,
including whether the relief funds may be used to soften the
blow to businesses of unemployment insurance system cost
increases....
Wednesday, May 12, 2021
CONSTITUTIONAL CONVENTION: The Constitutional Convention
gavels in. Rep. James O'Day, a leading advocate of the 4
percent income surtax amendment that needs a favorable vote
to reach the 2022 ballot, said this week that he does not
expect a vote on that amendment until the fall. Under the
order authorizing the convention, remote participation and
voting procedures for members shall be governed by the
COVID-19 emergency rules in effect for that member's branch.
(Wednesday, 1 p.m., House Chamber)
State House News Service
Friday, May 7, 2021
Advances - Week of May 9, 2021 |
Chip Ford's CLT
Commentary
The Department of Revenue issued a press release on
Wednesday ("April Revenue Collections Total $3.865 Billion' Monthly
collections up $1.885 billion or 95.1% vs. April 2020 actual; $385
million above benchmark") in part noting:
Massachusetts Department of Revenue (DOR)
Commissioner Geoffrey Snyder today announced that preliminary
revenue collections for April totaled $3.865 billion, which is
$1.885 billion or 95.1% more than the actual collections in April
2020, and $385 million or 11.1% more than benchmark.
FY2021 year-to-date collections totaled
approximately $26.449 billion, which is $3.405 billion or 14.8% more
than collections in the same period of FY2020, and $1.830 billion or
7.4% more than benchmark.
“April revenue included increases in most major
categories relative to benchmarks and collections in the same period
of FY2020,” said Commissioner Snyder.
The State House News
Service reported on the DOR's news release ("April
Adds to Revenue Glut, Creating More Budget Options"):
Despite the tax filing deadline
being moved from April to May, the Department of Revenue
collected $3.865 billion in taxes from people and
businesses last month -- $385 million more than the
Baker administration had estimated for the month even
before it extended the deadline.
The April receipts put the state
roughly a month ahead of the projections that DOR made
in January for the second half of the budget year and
position Massachusetts to end fiscal year 2021 within
one percentage point of the pre-pandemic revenue
estimate for the year. Early on in the fiscal year,
lawmakers and economists were expecting they could fall
short of that estimate by as much as $8 billion,
expectations that were way off.
April tax collections came in just
more than 11 percent above DOR's monthly benchmark,
continuing the trend of actual tax collections blowing
DOR's monthly estimates out of the water. January
collections beat the benchmark by 14.7 percent, February
collections surpassed the benchmark by 24.8 percent and
March revenues came in 26.8 percent over expectations.
Through 10 months of fiscal 2021,
state government has collected $26.449 billion in tax
revenue, up $3.405 billion or 14.8 percent over the same
period in fiscal 2020 and $1.83 billion or 7.4 percent
over DOR's benchmark.
Year-to-date collections through
April are roughly equal to the amount DOR expected to
have collected through 11 months of the year -- DOR said
its midpoint estimate for year-to-date collections
through May was $26.513 billion.
If May and June revenues now come
in at exactly the DOR benchmarks -- and May's benchmark
was determined before the tax filing deadline was moved
to May 17 -- Massachusetts will have collected $30.92
billion in tax revenue in fiscal year 2021.
That would be $1.83 billion or 6.3
percent more than what the Baker administration
projected it would collect this fiscal year when it last
updated its expectations in January, $1.311 billion or
4.4 percent more than what was collected during fiscal
year 2020, and only about $230 million or 0.74 percent
less than the pre-pandemic estimate of $31.15 billion in
tax revenue for fiscal year 2021.
It would also be about $800 million
more than the consensus revenue agreement being used as
the House and Senate craft the forthcoming fiscal year
2022 budget....
The over-benchmark fiscal 2021
collections, if they hold up, could lead to a
significant surplus this summer, which would come just
as state officials are making decisions about how to
spend billions of dollars in federal aid coming as part
of the American Rescue Plan Act. Legislators and the
Baker administration have said they hope to use
available revenues to limit rainy day fund withdrawals.
Fiscal year 2021 has been something
of a wild ride for DOR, state budget managers and
analysts. Before the COVID-19 pandemic was on the
horizon, lawmakers and the Baker administration agreed
to an estimate of $31.15 billion in tax revenue for
fiscal year 2021.
The fiscal 2021 budget-writing
process was put on hold once the pandemic began to
ravage the economy and some economists and lawmakers
expected fiscal 2021 tax revenue could be between $2
billion and $8 billion shy of that pre-pandemic
estimate.
When Gov. Charlie Baker filed a
revised budget in October, his administration forecasted
that tax revenues would total $27.6 billion. That
estimate was upgraded by $459 million to $28.44 billion
in December and further revised in January to $29.09
billion.
May revenue figures, which will
capture the impact of the new May 17 tax filing
deadline, are expected to be reported Thursday, June 3.
This April DOR report
doesn't even account for the state tax-filing deadline being moved
into May, so those anticipated tax receipts have still not come in as expected and
won't until next month — so this report for
April is even more astounding, and May's tax haul will reflect those
anticipated funds left over from April.
I've mentioned before
how the state's hauling in of more tax dollars during a full year of
pandemic lockdown and astronomical unemployment rates (with
Massachusetts leading the nation with the highest for much of the
lockdowns) than it did pre-pandemic economy baffles me. Well not
so much anymore.
The Wall Street Journal
reported on Thursday ("Millions
Are Unemployed. Why Can’t Companies Find Workers?):
Many people are receiving more in unemployment
benefits than they would earn in the available jobs.... In a
red-hot economy coming out of a pandemic and lockdowns, with
unemployment still far higher than it was pre-Covid, the country is
in a striking predicament. Businesses can’t find enough people
to hire.... A University of Chicago study found 42% of those
on benefits receive more than they did [at] their prior jobs, and
the share is higher when factoring in temporary health insurance
offered through relief bills.
Both state and federal
unemployment benefits are taxed as regular income. If roughly half
of those laid-off workers are receiving more income by collecting
unemployment benefits than they were paid while working, thus are paying income
taxes on those combined benefits, then they are paying more into the
state coffers in income taxes than they otherwise would have. Where the
state lost income taxes from former-workers it reaped an increase in
income taxes from the unemployed.
If the unemployed had
to depend on only the state's expanded unemployment benefits,
even to those who once were not eligible for them
— without the additional $600 a week in supplemental
federal unemployment benefits — the
state's income tax haul and Massachusetts DOR's monthly revenue reports
would be markedly different.
The Patriot Post astutely noted on Friday ("Government Funds
the Labor Shortage"):
. . . While the unemployment rate
makes its slow recovery from the pandemic, rising to
6.1% instead of dropping to 5.8%, one aspect of the
government unemployment benefits is drawing scrutiny
because it’s exacerbating the problem.
After millions of Americans lost
their jobs last year thanks to the China Virus-inspired
and state-imposed lockdowns, the federal government
adopted a relatively novel concept: Our Washington
caretakers supplied the cash to supplement state
unemployment benefits by $600 a week while expanding the
universe of those who could collect unemployment
benefits to include several classes of workers who
previously would not qualify, such as those who are
self-employed, independent contractors, or people who
didn’t have enough time at the job. All of these people
suddenly became the recipients of $600 a week from the
federal government to go along with the benefits for
which their state deemed they qualified. (Some states
were more lenient in that regard than others.)
While that extra cash has since
declined to $300 a week, initially there was some
symbolism in the amount. It just so happens that $600 is
the exact gross pay for a worker who toils 40 hours a
week at that magical wage of $15 per hour.
That became a bit of a problem,
however, since many of those who received these benefits
were making less than $15 an hour at the job from which
they were furloughed. The government was paying them
more to not work than their job was to clock in every
day.
Keep this in mind when
we hear the gnashing of teeth on Beacon Hill over the state's bankrupt,
heavily in debt unemployment trust fund that those businesses (fortunate
enough to somehow still be in business) are burdened with
replenishing it directly due to the lockdowns and lay-offs which Gov.
Baker unilaterally imposed on them for over the past year and continues
to impose.
On Wednesday the State House News Service reported on just
that crisis for every small business around the state ("Fed Guidance
Appears Holdup on UI Rate Relief Quest; Earlier Full Reopening Sought by
Small Biz, Restaurants"):
A little over a month after Gov. Charlie Baker
signed a law shoring up the unemployment system and reducing the
premium increases facing employers to fund jobless benefits,
lawmakers and administration officials are once again looking for a
way to provide businesses relief from spiking costs.
The law Baker signed on April 1 authorized $7
billion in borrowing to stabilize the state's unemployment insurance
trust fund, strained by a flood of joblessness during the COVID-19
pandemic, and limited the average rate hike to 18.5 percent instead
of the nearly 60 percent increase employers would otherwise have to
pay.
Some businesses soon found they were
nonetheless facing dramatic increases in their unemployment tax
payments, as one component of their UI costs, known as the solvency
assessments, jumped from a rate of 0.58 percent in 2020 to 9.23
percent in 2021, surprising many.
Mike Doheny, the undersecretary of labor and
general counsel at the Executive Office of Labor and Economic
Development, told participants in a virtual Small Business Day event
Wednesday that he could not yet offer definitive answers but that
the administration was "looking to be able to propose a solution to
this very, very shortly." ...
The Small Business Day event, which included
panels on both Tuesday and Wednesday, was hosted by groups including
the National Federation of Independent Business, the Retailers
Association of Massachusetts, the Massachusetts Restaurant
Association and local chambers of commerce.
Jon Hurst of the Retailers Association told
participants that many of the factors that contributed to the
multibillion-dollar deficit forecast for the unemployment fund over
the next few years were not the fault of business owners -- he
pointed to the benefit levels and qualification standards in
Massachusetts, government-mandated closures, and fraudulent
unemployment claims -- and said that there "needs to be a shared
responsibility with government."
"You need to tell them that every dollar you
have to expend in UI taxes, unfair UI taxes, is another dollar in
wage growth that is not going to happen," he said.
Speakers noted that the higher costs associated
with the solvency assessment land as the state is planning for a
fuller economic reopening, with an Aug. 1 date penciled in for a
complete lift of remaining business restrictions.
Bob Luz of the Massachusetts Restaurant
Association said Massachusetts is behind many other northeastern
states in the reopening process. Baker has said the Aug. 1 date
could be moved up depending on the progress in public health data,
and Luz said "we need to hold them to it."
NFIB state director Christopher Carlozzi said
an earlier full reopening would be particularly important to
seasonal businesses and regions like Cape Cod that rely on
summertime activity.
"Under this current scenario, we'll lose two
good summer months if we don't do something, if we don't move
quicker in Massachusetts," he said.
Carlozzi added, "It's very important we keep
pace with our neighbors, to not lose that revenue to our New
Hampshires and our Connecticuts and Rhode Islands. They have
beaches, too."
Also on Wednesday the
State House News Service reported ("O’Day Sees Possible Fall Vote on Income Surtax"):
Though the timing for a necessary legislative vote is still
uncertain, proponents of the constitutional amendment to
impose a surtax on household income over $1 million launched
a campaign Wednesday to grow and solidify what they said is
already strong support for the idea that could go before
voters in 2022.
Democrats on Beacon Hill have been pursuing the tax policy
change for years and supporters say the surtax could
generate more than $2 billion per year for education and
transportation in Massachusetts without dipping into the
pockets of most residents. But critics have long said it
could prompt wealthy residents to move out of the Bay State
and encourage employers to steer clear of Massachusetts,
especially as remote work trends become a more normal part
of society....
As its formally kicked off its campaign Wednesday, Raise Up
Massachusetts also said 73 percent of the 600 Massachusetts
residents who responded to an online questionnaire said they
support adding a 4 percent surtax on annual household income
greater than $1 million. A MassINC poll of registered voters
found similar levels of support late last year....
Rep. Jim O'Day, who co-sponsored the amendment in the House,
said no date has been chosen for the Constitutional
Convention to consider the income surtax amendment proposal.
There is a joint session of the House and Senate planned for
May 12, but O'Day suggested the surtax will not be up for
debate next week.
"I was hopeful that maybe it would be May or June for us to
have the Constitutional Convention. That's not to say we
wouldn't, but I'm more apt to think that that timeline it
would probably be sometime September, October, November," he
said.
The Boston
Herald added ("Millionaires tax ‘on the right path’ to 2022 ballot"):
A so-called millionaires tax could finally be “on the right
path” to next year’s ballot.
Lawmakers and advocates said they aren’t “waiting around” as
they launched their campaign Wednesday amid unanswered
questions about the legislative process needed before
putting the issue before voters....
“We are not waiting around,” said Andrew Farnitano, a
spokesman for Raise Up. “We’re not waiting for that vote to
happen to start talking to voters and to start building the
statewide organization that we know is necessary to win in
next November.”
Opponents, too, have already come out slugging. A
recent Pioneer Institute study found the tax would also
hit middle-class people cashing out for retirement. Greg
Sullivan, research director for the fiscally conservative
group, has called the tax a “blank check” for government
spending.
The ballot measure would earmark funds for education and
transportation spending, but Paul Diego Craney of the
right-leaning Massachusetts Fiscal Alliance said Wednesday
that “there’s no guarantee” current spending stays where it
is.
“This is a typical bait and switch. It’s a scheme by
politicians who want to tax people … so they can spend more
money,” Craney told the Herald.
When have
The Takers ever 'waited around' to scheme to take
other people's money? Their eternal jihad to rob
producers and earners has never slowed in my memory
— it's been one brazen jealous
assault on taxpayers after another to benefit themselves and
others of their ilk. When they lose they're right back
grabbing for more, more, always more of other people's
money. A recent
Boston Herald
editorial boiled down their insatiable greed as best and
as simply as I've ever seen:
"We need money, you
have money, it’s only fair you give it to us."
In its
Advances published on Friday the News Service reported"
With tax collections far surpassing fiscal 2021 estimates
and on pace to even eclipse the tax revenue base for the
upcoming fiscal year 2022, Senate Democrats plan to roll out
their annual budget proposal on Tuesday.
The House and Gov. Charlie Baker each have developed plans
that would reach deeply into the state's shrinking rainy day
fund to boost spending at a time when the economy is surging
and taxpayers are already delivering the state with revenues
that are sufficient to fund current spending plans.
The Senate may do the same, although there's also a
possibility that House-Senate budget conferees this year
could take the unusual step of marking up expected revenues,
which would allow for greater spending or less reliance on
reserves.
On Friday
the News Service also reported on some rare internal
friction having arisen in the Senate over its budget
process-as-usual ("Senate Adopts Budget Amendment Deadline"):
The Senate on Friday rejected proposals to give senators
three to six additional hours to file budget amendments,
sticking with a deadline proposed by Senate leadership after
Democrat Sen. Diana DiZoglio criticized "a manipulation
tactic."
Senators adopted an order (S 2445) requiring amendments to
the Ways and Means Committee's upcoming fiscal 2022 spending
bill to be filed by 2 p.m. on Friday, May 14. On voice
votes, they turned down DiZoglio's calls to change the
deadline to either 5 p.m. or 8 p.m. next Friday.
DiZoglio on Thursday objected to the original order, raising
concerns that senators were not given any advance notice of
the amendment deadline before the order was offered.
At Friday's session, DiZoglio -- a Methuen Democrat who has
been a vocal critic of her chamber's leadership -- said she
admires and respects her colleagues while also warning about
the perils of "groupthink" and "gaslighting."
"I'll say this: trying to convince members that they've all
been inconvenienced because a colleague simply desires to
read a bill and offer an amendment, blaming, trying to use
peer pressure to get a dissenting voice to step into line so
that business as usual on Beacon Hill can continue,
unquestioned, without the annoyance of somebody raising
their hand and asking for an opportunity to be part of the
process is a manipulation tactic that we should all not only
understand is behavior associated with scapegoating and
gaslighting, but strongly reject," she said....
At the start of Friday's session, Ways and Means Chairman
Sen. Michael Rodrigues called the order "a standard,
procedural step we adopt each year" that is typically
negotiated between the Senate President and Senate minority
leader.
His committee plans to release its annual budget plan at 1
p.m. on Tuesday, giving senators 73 hours to read it and
propose changes. Rodrigues listed the number of hours
between budget release and the amendment deadline for each
fiscal year since 2012, all of which were fewer than will be
offered this year.
"The proposed deadline not only gives members and their
staff ample time for filing, but also provides Ways and
Means Staff critical hours to begin evaluation and review of
all the amendments that were filed," Rodrigues said.
Democrat Sen. Diana DiZoglio — "who
has been a vocal critic of her chamber's leadership
— objected to the original
order, raising concerns that senators were not given any
advance notice of the amendment deadline before the order
was offered," labeling it "a manipulation
tactic" and warning her Senate colleagues "about the perils
of 'groupthink; and 'gaslighting.'"
"I'll say this: trying to convince members that they've all
been inconvenienced because a colleague simply desires to
read a bill and offer an amendment, blaming, trying to use
peer pressure to get a dissenting voice to step into line so
that business as usual on Beacon Hill can continue,
unquestioned, without the annoyance of somebody raising
their hand and asking for an opportunity to be part of the
process is a manipulation tactic that we should all not only
understand is behavior associated with scapegoating and
gaslighting, but strongly reject," she said....
Senator
DiZoglio must realize by now that reading a bill before
voting to rubber-stamp its passage is not permitted in the
Massachusetts Legislature. Legislators must simply
follow the orders of leadership —
or will be punished as only they can, stripped of committee
assignments that fatten pay checks. After consulting
with the burning bush Moses has descended from the heights
of Mount Sinai and delivered the Tablets unto you, Senator
DiZoglio. Senate Ways and Means Committee Chairman
Michael Rodrigues has spoken and all are expected to bow in
subservience. (Some may
remember
the unscrupulous Rodrigues from a previous, less lofty
position.)
Courage
like hers is rare in "The Great and General Court"
— truly an endangered species
if not entirely extinct.
Yet another
example of "More Is Never Enough (MINE) and never will be"
was reported by the State House News Service on Tuesday ("Clean Energy Roadmap Not Strong Enough, Activists Say"):
When it comes to climate change policy, there are two
parallel tracks at play on Beacon Hill: one focused on
implementing the climate law that Gov. Charlie Baker signed
in March, and another focused on passing legislation to set
even more ambitious goals than the ones that just became
law....
During separate but back-to-back virtual events Tuesday,
Energy and Environmental Affairs Secretary Kathleen
Theoharides explained what the Baker administration is
focused on as it begins to implement the law and then a
handful of lawmakers and advocates made their case for why
the so-called climate roadmap law is not enough.
Jacob Stern, Massachusetts chapter deputy director for the
Sierra Club, said the roadmap law is "an excellent first
step that charts the path for us" but that a bill up for
consideration this session that would require the state get
100 percent of electricity from clean and renewable sources
by 2035 and use 100 percent clean transportation and heating
by 2045 is "the vehicle, or the electric vehicle, that's
going to get us there." ...
The legislation (H 3288/S 2136) filed by Reps. Marjorie
Decker and Sean Garballey and Sen. Joe Boncore has not yet
been scheduled for a hearing before the Joint Committee on
Telecommunications, Utilities and Energy. It has 13 Senate
co-sponsors and 63 House co-sponsors, according to
Environment Massachusetts.
The bill would require investor-owned utilities to provide
100 percent clean electricity by 2035, with at least 80
percent coming from Class I resources through the state's
renewable portfolio standard. Municipal utilities would also
be required to provide 100 percent clean electricity by
2035. New buildings would be required to be built without
fossil fuel heating, Environment Massachusetts State
Director Ben Hellerstein said, and all new cars sold after
2035 would have to be electric vehicles....
During an earlier virtual event hosted Tuesday by the
sustainability-focused nonprofit Ceres, the state's top
energy and environment official said she thinks the greatest
challenge when it comes to wringing out greenhouse gas
emissions will be dealing with the many old and inefficient
buildings around the state.
"The building sector definitely represents a big challenge
here in Massachusetts, where we have really old building
stock. So leaky, energy inefficient, coupled with about
seven months of a heating season and then, increasingly, a
cooling season," Theoharides said. The secretary added, "I
think one of the key challenges is getting into homes and
businesses and large commercial spaces and industrial spaces
across the commonwealth, and really making sure they are
built to use as little energy as possible, retrofitted to
use as little energy as possible and, where we can, to
significantly ramp up electrification." ...
On Monday, the Department of Revenue's Division of Local
Services released its "initial guidance to local officials
regarding changes in local property tax laws" included in
the climate law that Baker signed at the end of March.
Among other tax-related provisions, portions of the law
provide a property tax exemption for certain categories of
solar- and wind-powered systems, authorize cities and towns
to enter into payment in lieu of taxes agreements with the
owner of a solar- or wind-powered system or energy storage
system, and create a new property tax exemption for
"qualified fuel cell powered system, the construction of
which was commenced after January 1, 2020, that is capable
of producing not more than 125 per cent of the annual energy
needs of the real property upon which it is located."
The
"climate change" zealots haven't begun tightening the screws
on the Bay State population yet and already they're
screaming for more, more, always more.
Here's Gov.
Charlie Baker’s then-Under Secretary for Climate Change
David Ismay’s direct quote back in January
— before he was
caught red-handed and
forced to resign:
“So let me say that again, 60% of
our emissions that need to be reduced come from you, the
person across the street, the senior on fixed income,
right… there is no bad guy left, at least in
Massachusetts to point the finger at, to turn the screws
on, and you know, to break their will, so they stop
emitting. That’s you. We have to break your will. Right,
I can’t even say that publicly.”
Massachusetts passed and is preparing to implement the
toughest, most expensive "climate change" policies in the
nation, behind only the crazies in California. Baker
is still pushing to add to the recently-passed "climate
change" laws his Transportation and Climate Initiative
(TCI), unilaterally if none of the other dozen states sign
on to the tentative agreement, which will jack up the cost
of gas by an estimated 5 to 37 cents per gallon
— to start. Still, the
zealots already howl, "This is not enough!"
(H 3288/S
2136) filed by Reps. Marjorie Decker and Sean Garballey and
Sen. Joe Boncore intends to rectify that.
On Tuesday
Baker's Secretary of Energy and Environmental Affairs,
Kathleen Theoharides, said:
"I think one of the key challenges
is getting into homes and businesses and large
commercial spaces and industrial spaces across the
commonwealth, and really making sure they are built to
use as little energy as possible, retrofitted to use as
little energy as possible... the greatest challenge when
it comes to wringing out greenhouse gas emissions will
be dealing with the many old and inefficient buildings
around the state."
"Challenge"
for who — the unelected,
unaccountable bureaucrats and zealots, or those who will be
forced to pay the costs of "retrofitting" their home or
business?
I mentioned
above that Massachusetts is steadily following the lead of
extremist California. This is where it has taken
Californians:
MSN-Money
reported on March 27, 2021 ("So
why are prices so much higher in California specifically?"):
$4.30 — the price for a gallon of
gas at some stations in San Francisco this week — is
enough to force a double take...
“The overall differential is due
largely to higher taxes and environmental fees like cap
and trade and the low carbon fuel standard,” in
California, said Severin Borenstein, a UC Berkeley
energy economist.
That's
coming to a gas station near you soon, courtesy of the
"climate change" zealots which includes Gov. Baker and the
Massachusetts Legislature.
And that's not touching
the cost of banning the sale of new gas-powered cars by 2035 or
retrofitting homes and businesses across the state.
Let me reiterate what I
said in the last CLT Update: "You ready to retrofit you house to
'save the planet'? Might want to begin thinking about it, planning
ahead."
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
Full News Reports Follow
(excerpted above) |
|
Massachusetts Department of Revenue
Wednesday, May 5, 2021
Press Release
April Revenue Collections Total $3.865 Billion
Monthly collections up $1.885 billion or 95.1% vs. April
2020 actual; $385 million above benchmark
Massachusetts Department of Revenue (DOR) Commissioner
Geoffrey Snyder today announced that preliminary revenue
collections for April totaled $3.865 billion, which is
$1.885 billion or 95.1% more than the actual collections in
April 2020, and $385 million or 11.1% more than benchmark.[1]
FY2021 year-to-date collections totaled approximately
$26.449 billion, which is $3.405 billion or 14.8% more than
collections in the same period of FY2020, and $1.830 billion
or 7.4% more than benchmark.
“April revenue included increases in most major categories
relative to benchmarks and collections in the same period of
FY2020,” said Commissioner Snyder. “However, historical
comparisons should be viewed with caution due to the
pandemic-induced recession, the late start to the 2021 tax
filing season, and responsive measures enacted in 2020 and
2021 designed to mitigate the impact of COVID-19.”
Examples of COVID-19 response measures include, but are not
limited to:
▪ The extension of last year’s income tax filing and payment
deadline from April 15, 2020 to July 15, 2020.
▪ The extension of the April 15, 2020 income tax estimated
payment installment to July 15, 2020.
▪ Penalty waivers for certain corporate excise returns and
payments due in 2020.
▪ The extension of this year’s income tax filing and payment
deadline from April 15, 2021 to May 17, 2021.
▪ The extension of the payment deadline for certain regular
sales tax, meals tax and room occupancy excise payments.
Details:
Preliminary April Revenue Collections
▪ Income tax collections for April were $2.181 billion, $114
million or 5.0% below benchmark, but $1.057 billion or 94.1%
more than April 2020. Due to extensions of filing and
payment deadlines in both this year and last year, income
tax collections in April 2021 and April 2020 are not
comparable.
▪ Withholding tax collections for April totaled $1.237
billion, $219 million or 21.5% above benchmark, and $183
million or 17.4% more than April 2020.
▪ Income tax estimated payments totaled $481 million for
April, $308 million or 177.7% more than benchmark, and $414
million or 618.5% more than April 2020. Given the extension
of last year’s first estimated payment installment to July
15, 2020, estimated payments in April 2021 and those in
April 2020 are not comparable.
▪ Income tax returns and bills totaled $788 million for
April, $790 million or 50.0% less than benchmark, but $595
million or 308.2% more than April 2020. Due to extensions of
filing and payment deadlines in both this year and last
year, income tax returns and bills payments in April 2021
and those in April 2020 are not comparable.
▪ Income tax cash refunds in April totaled $326 million in
outflows, $149 million or 31.4% less than benchmark, but
$135 million or 71.2% more than April 2020. Due to the late
start of this year’s tax filing season and recent tax law
changes, including the extension of the income tax filing
deadline from April 15 to May 17, income tax cash refunds in
April 2021 and those in April 2020 are not comparable.
▪ Sales and use tax collections for April totaled $935
million, $164 million or 21.2% above benchmark, and $468
million or 100.4% more than April 2020. A law requiring the
early remittance of certain sales, meals and room occupancy
tax collections became effective this month, and partially
contributed to the increase in collections.
▪ Corporate and business tax collections for the month
totaled $543 billion, $249 million or 84.7% above benchmark,
and $330 million or 154.8% more than April 2020.
▪ Other tax collections for April totaled $206 million, $86
million or 71.5% above benchmark, and $29 million or 16.2%
more than April 2020.
[1] The original benchmark for
fiscal year 2021 was $28.390 billion. On January 15, 2021,
as part of the fiscal year 2022 Consensus Revenue process,
the fiscal year 2021 benchmark was adjusted to $29.090
billion. The adjustment is reflected in DOR’s revenue
releases beginning in January 2021.
State House News Service
Wednesday, May 5, 2021
April Adds to Revenue Glut, Creating More Budget Options
Spending Decisions May Loom on ARPA, FY 2021 Surplus
By Colin A. Young
Despite the tax filing deadline being moved from April to
May, the Department of Revenue collected $3.865 billion in
taxes from people and businesses last month -- $385 million
more than the Baker administration had estimated for the
month even before it extended the deadline.
The April receipts put the state roughly a month ahead of
the projections that DOR made in January for the second half
of the budget year and position Massachusetts to end fiscal
year 2021 within one percentage point of the pre-pandemic
revenue estimate for the year. Early on in the fiscal year,
lawmakers and economists were expecting they could fall
short of that estimate by as much as $8 billion,
expectations that were way off.
April tax collections came in just more than 11 percent
above DOR's monthly benchmark, continuing the trend of
actual tax collections blowing DOR's monthly estimates out
of the water. January collections beat the benchmark by 14.7
percent, February collections surpassed the benchmark by
24.8 percent and March revenues came in 26.8 percent over
expectations.
Through 10 months of fiscal 2021, state government has
collected $26.449 billion in tax revenue, up $3.405 billion
or 14.8 percent over the same period in fiscal 2020 and
$1.83 billion or 7.4 percent over DOR's benchmark.
Year-to-date collections through April are roughly equal to
the amount DOR expected to have collected through 11 months
of the year -- DOR said its midpoint estimate for
year-to-date collections through May was $26.513 billion.
If May and June revenues now come in at exactly the DOR
benchmarks -- and May's benchmark was determined before the
tax filing deadline was moved to May 17 -- Massachusetts
will have collected $30.92 billion in tax revenue in fiscal
year 2021.
That would be $1.83 billion or 6.3 percent more than what
the Baker administration projected it would collect this
fiscal year when it last updated its expectations in
January, $1.311 billion or 4.4 percent more than what was
collected during fiscal year 2020, and only about $230
million or 0.74 percent less than the pre-pandemic estimate
of $31.15 billion in tax revenue for fiscal year 2021.
It would also be about $800 million more than the consensus
revenue agreement being used as the House and Senate craft
the forthcoming fiscal year 2022 budget.
As the fiscal 2022 revenue estimate began last month to look
like it could be overly conservative, House Ways and Means
Chairman Aaron Michlewitz said any change in the fiscal 2022
revenue assumption would come about after discussions
between the House, Senate and administration.
"I don't think we're ready to do that yet. As we know, the
income tax filing deadline was pushed back to May [17] so
there's still a lot of things that have to play out here
over the rest of the fiscal year before we can feel any
certainty about moving that number," he said in April.
By April 15, DOR already had an indication that April tax
collections were coming in strong. By mid-month, DOR had
already collected $1.757 billion -- roughly double what had
been collected during the same half-month period last year
and almost 90 percent of the $1.981 billion that was
collected during all of April 2020. Last year, the tax
filing deadline was moved from April 15 to July 15.
The over-benchmark fiscal 2021 collections, if they hold up,
could lead to a significant surplus this summer, which would
come just as state officials are making decisions about how
to spend billions of dollars in federal aid coming as part
of the American Rescue Plan Act. Legislators and the Baker
administration have said they hope to use available revenues
to limit rainy day fund withdrawals.
Fiscal year 2021 has been something of a wild ride for DOR,
state budget managers and analysts. Before the COVID-19
pandemic was on the horizon, lawmakers and the Baker
administration agreed to an estimate of $31.15 billion in
tax revenue for fiscal year 2021.
The fiscal 2021 budget-writing process was put on hold once
the pandemic began to ravage the economy and some economists
and lawmakers expected fiscal 2021 tax revenue could be
between $2 billion and $8 billion shy of that pre-pandemic
estimate.
When Gov. Charlie Baker filed a revised budget in October,
his administration forecasted that tax revenues would total
$27.6 billion. That estimate was upgraded by $459 million to
$28.44 billion in December and further revised in January to
$29.09 billion.
May revenue figures, which will capture the impact of the
new May 17 tax filing deadline, are expected to be reported
Thursday, June 3.
The Patriot Post
Friday, May 7, 2021
Government Funds the Labor Shortage
Lavish unemployment benefits (a.k.a. income redistribution)
are creating economic trouble.
By Michael Swartz
The U.S. added 266,000 jobs in April, which sounds great
until you realize that economists were giddily predicting
one million new jobs. Axios reports that is “the biggest
miss, relative to expectations, in decades.”
If that wasn’t bad enough, March’s numbers were revised
downward from 916,000 to 770,000.
All Joe Biden had to do was take the baton from Donald
Trump’s stellar pandemic recovery and run with it. Instead,
he’s stumbling up the stairs.
While the unemployment rate makes its slow recovery from the
pandemic, rising to 6.1% instead of dropping to 5.8%, one
aspect of the government unemployment benefits is drawing
scrutiny because it’s exacerbating the problem.
After millions of Americans lost their jobs last year thanks
to the China Virus-inspired and state-imposed lockdowns, the
federal government adopted a relatively novel concept: Our
Washington caretakers supplied the cash to supplement state
unemployment benefits by $600 a week while expanding the
universe of those who could collect unemployment benefits to
include several classes of workers who previously would not
qualify, such as those who are self-employed, independent
contractors, or people who didn’t have enough time at the
job. All of these people suddenly became the recipients of
$600 a week from the federal government to go along with the
benefits for which their state deemed they qualified. (Some
states were more lenient in that regard than others.)
While that extra cash has since declined to $300 a week,
initially there was some symbolism in the amount. It just so
happens that $600 is the exact gross pay for a worker who
toils 40 hours a week at that magical wage of $15 per hour.
That became a bit of a problem, however, since many of those
who received these benefits were making less than $15 an
hour at the job from which they were furloughed. The
government was paying them more to not work than their job
was to clock in every day.
Thus, the Wall Street Journal reports, “In a red-hot economy
coming out of a pandemic and lockdowns, with unemployment
still far higher than it was pre-Covid, the country is in a
striking predicament. Businesses can’t find enough people to
hire.” The anecdotal evidence is certainly there. Ask any
restauranteur near you if he’s been able to find enough
workers.
James Freeman, also of the Journal, says we’re in the middle
of the worst worker shortage ever. Factors include closed
schools and continued fear of COVID, but the elephant in the
room is “supplemental unemployment benefits that discourage
work.”
Naturally, there were studies last summer revealing that
this additional payment would be a disincentive to go back
to work, though others contended that most workers who
returned to work were taking a pay cut to return to their
job because they realized the benefits were temporary.
(Again, it was relative since states often waived the
requirement that recipients return to their old job based on
self-reported health or family issues.) In the latter study,
it’s worth noting that the author, Ernie Tedeschi, now works
for the Council of Economic Advisers in the Biden
administration.
Some states, however, have seen enough and are siding with
those who believe the supplemented unemployment payment is a
disincentive to work. Florida will soon require proof that
residents receiving unemployment benefits are actually
looking for work, a stipulation waived during the pandemic.
“Normally when you’re getting unemployment, the whole idea
is that’s temporary, and you need to be looking for work to
be able to get off unemployment,” Governor Ron DeSantis
said. “It was a disaster [at the beginning of the pandemic],
so we suspended those job search requirements. I think it’s
pretty clear now, we have an abundance of job openings.”
South Carolina Governor Henry McMaster is taking similar
action to cease special COVID provisions regarding
unemployment.
And the state of Montana announced this week that it will no
longer add the $300 weekly subsidy after June 27. However,
the state’s stick comes with the carrot of a $1,200 bonus
for workers who are currently unemployed to find a job and
retain it for four weeks. The funding for that program comes
from federal COVID relief money allocated to states in
March.
While Montana is taking a necessary step by eliminating the
subsidy, one gets the sense that the side of rationality is
losing the argument. If you think a little outside the box,
ask yourself why the federal government came up with the
idea of paying a direct and bigger subsidy to a larger group
of recipients as opposed to shoring up state unemployment
insurance funds and simply extending benefits for months as
it did a decade ago during the Great Recession.
There’s a deeper problem, though.
You may not remember Democrat 2020 presidential candidate
Andrew Yang, but his main platform plank — one that kept him
in the race through the New Hampshire primary — was that of
universal basic income. It’s not really a new idea, though.
The stimulus payments sent out by both Presidents George W.
Bush and Barack Obama softened resistance to the later
checks from Presidents Donald Trump and Joe Biden — making
it four presidents in a row who have sent out a special
government stimulus check during economic downturns. Now add
to this the enhanced unemployment benefits and we continue
to build the expectation that one of Uncle Sam’s primary
jobs is to assist people financially.
Thanks to the avalanche of government money, if there is a
crisis and shortage in this country, it may be that of work
ethic. Trust us, we all pray for a “prove us wrong” moment
on that one.
State House News Service
Wednesday, May 5, 2021
Fed Guidance Appears Holdup on UI Rate Relief Quest
Earlier Full Reopening Sought by Small Biz, Restaurants
By Katie Lannan
A little over a month after Gov. Charlie Baker signed a law
shoring up the unemployment system and reducing the premium
increases facing employers to fund jobless benefits,
lawmakers and administration officials are once again
looking for a way to provide businesses relief from spiking
costs.
The law Baker signed on April 1 authorized $7 billion in
borrowing to stabilize the state's unemployment insurance
trust fund, strained by a flood of joblessness during the
COVID-19 pandemic, and limited the average rate hike to 18.5
percent instead of the nearly 60 percent increase employers
would otherwise have to pay.
Some businesses soon found they were nonetheless facing
dramatic increases in their unemployment tax payments, as
one component of their UI costs, known as the solvency
assessments, jumped from a rate of 0.58 percent in 2020 to
9.23 percent in 2021, surprising many.
Mike Doheny, the undersecretary of labor and general counsel
at the Executive Office of Labor and Economic Development,
told participants in a virtual Small Business Day event
Wednesday that he could not yet offer definitive answers but
that the administration was "looking to be able to propose a
solution to this very, very shortly."
"I want everyone to know that the administration is working
on this issue - the rate notices that went out earlier - is
aware of course of the hardship that it's caused so many
businesses, and we really are looking for a way to find some
relief for not all only small businesses but frankly all
businesses in the commonwealth," Doheny said.
Last month, the Department of Unemployment Assistance
notified employers that the due date for their first quarter
UI payments would be pushed back from April 30 to June 1,
saying the administration was "evaluating the solvency rate
increase and will provide more information at a later date."
Speaking at the same virtual event as Doheny, Senate
Minority Leader Bruce Tarr said state officials are aware
that "the clock is ticking" as June inches closer.
"In my opinion, it would be better to solve this problem in
advance before those bills are due rather than have folks
have to pay them and then have us have to figure out a
system of maybe rebating a payment that was in excess of
what ultimately it needs to be," the Gloucester Republican
said. "We're trying to accelerate this effort as much as we
possibly can."
One complicating factor, Tarr said, is that while the state
stands to receive billions of dollars in federal aid through
the American Rescue Plan Act, detailed guidance on how that
money can be spent is not expected until mid-May.
"You can understand that there's hesitance to necessarily
commit funds from that act in advance to the issue of
addressing the solvency assessment," he said.
"Notwithstanding that, there are a number of us that
continue to press for that very thing to be the case."
Tarr and House Minority Leader Brad Jones in April sent a
letter to Baker, House Speaker Ronald Mariano and Senate
President Karen Spilka, urging them to use ARPA money or
other federal dollars to replenish the UI trust fund and
alleviate the assessment rate sticker shock facing
businesses.
Fifty-five lawmakers, Democrats and Republicans from both
the House and Senate, signed onto that letter, Tarr said. He
said he hears regularly from colleagues looking to take some
sort of action on the issue, and that any forthcoming fix
would likely "be a standalone kind of approach" rather than
contained in the state budget.
The Small Business Day event, which included panels on both
Tuesday and Wednesday, was hosted by groups including the
National Federation of Independent Business, the Retailers
Association of Massachusetts, the Massachusetts Restaurant
Association and local chambers of commerce.
Jon Hurst of the Retailers Association told participants
that many of the factors that contributed to the
multibillion-dollar deficit forecast for the unemployment
fund over the next few years were not the fault of business
owners -- he pointed to the benefit levels and qualification
standards in Massachusetts, government-mandated closures,
and fraudulent unemployment claims -- and said that there
"needs to be a shared responsibility with government."
"You need to tell them that every dollar you have to expend
in UI taxes, unfair UI taxes, is another dollar in wage
growth that is not going to happen," he said.
Speakers noted that the higher costs associated with the
solvency assessment land as the state is planning for a
fuller economic reopening, with an Aug. 1 date penciled in
for a complete lift of remaining business restrictions.
Bob Luz of the Massachusetts Restaurant Association said
Massachusetts is behind many other northeastern states in
the reopening process. Baker has said the Aug. 1 date could
be moved up depending on the progress in public health data,
and Luz said "we need to hold them to it."
NFIB state director Christopher Carlozzi said an earlier
full reopening would be particularly important to seasonal
businesses and regions like Cape Cod that rely on summertime
activity.
"Under this current scenario, we'll lose two good summer
months if we don't do something, if we don't move quicker in
Massachusetts," he said.
Carlozzi added, "It's very important we keep pace with our
neighbors, to not lose that revenue to our New Hampshires
and our Connecticuts and Rhode Islands. They have beaches,
too."
State House News Service
Wednesday, May 5, 2021
O’Day Sees Possible Fall Vote on Income Surtax
By Colin A. Young
Though the timing for a necessary legislative vote is still
uncertain, proponents of the constitutional amendment to
impose a surtax on household income over $1 million launched
a campaign Wednesday to grow and solidify what they said is
already strong support for the idea that could go before
voters in 2022.
Democrats on Beacon Hill have been pursuing the tax policy
change for years and supporters say the surtax could
generate more than $2 billion per year for education and
transportation in Massachusetts without dipping into the
pockets of most residents. But critics have long said it
could prompt wealthy residents to move out of the Bay State
and encourage employers to steer clear of Massachusetts,
especially as remote work trends become a more normal part
of society.
"Working families here in the commonwealth are tapped out
with the high cost of housing, health care, transportation,
child care and other day-to-day expenses. ... Although they
would greatly benefit from greatly increased public
investments in K-12, preschool, higher ed, and a better
transportation system, they cannot afford to pay any higher
taxes to fund these investments," Sen. Jason Lewis, the
Senate co-sponsor of the amendment, said. "Wealthy families
that have benefited the most from the economic growth of the
past four decades, and over the past year during the
pandemic, can certainly afford to pay slightly higher income
taxes to fund these critical investments."
As its formally kicked off its campaign Wednesday, Raise Up
Massachusetts also said 73 percent of the 600 Massachusetts
residents who responded to an online questionnaire said they
support adding a 4 percent surtax on annual household income
greater than $1 million. A MassINC poll of registered voters
found similar levels of support late last year.
In June 2019, House and Senate members voted 147-48 in favor
of the amendment (H 86) that would impose the 4 percent
surtax on income above $1 million. The change is proposed as
an amendment to the constitution because the constitution
currently requires that a tax on income be applied evenly to
all residents. The state income tax rate is currently 5
percent.
The amendment must also win at least 101 votes of support
among the 200 state legislators at a Constitutional
Convention in the current legislative session in order to go
before voters on the November 2022 ballot.
Rep. Jim O'Day, who co-sponsored the amendment in the House,
said no date has been chosen for the Constitutional
Convention to consider the income surtax amendment proposal.
There is a joint session of the House and Senate planned for
May 12, but O'Day suggested the surtax will not be up for
debate next week.
"I was hopeful that maybe it would be May or June for us to
have the Constitutional Convention. That's not to say we
wouldn't, but I'm more apt to think that that timeline it
would probably be sometime September, October, November," he
said.
The Boston Herald
Wednesday, May 5, 2021
Millionaires tax ‘on the right path’ to 2022 ballot
By Erin Tiernan
A so-called millionaires tax could finally be “on the right
path” to next year’s ballot.
Lawmakers and advocates said they aren’t “waiting around” as
they launched their campaign Wednesday amid unanswered
questions about the legislative process needed before
putting the issue before voters.
The controversial measure, also called the Fair Share
Amendment, would tack a 4% surtax on annual household
incomes in excess of $1 million for a total tax rate of 9%.
An earlier attempt at passage failed when the Supreme
Judicial Court in 2018 deemed it unconstitutional.
Bill sponsor state Rep. Jim O’Day, D-Worcester, said the
bill is “now on the right path,” but couldn’t say when it
would earn necessary legislative approvals.
“We are not waiting around,” said Andrew Farnitano, a
spokesman for Raise Up. “We’re not waiting for that vote to
happen to start talking to voters and to start building the
statewide organization that we know is necessary to win in
next November.”
Opponents, too, have already come out slugging. A recent
Pioneer Institute study found the tax would also hit
middle-class people cashing out for retirement. Greg
Sullivan, research director for the fiscally conservative
group, has called the tax a “blank check” for government
spending.
The ballot measure would earmark funds for education and
transportation spending, but Paul Diego Craney of the
right-leaning Massachusetts Fiscal Alliance said Wednesday
that “there’s no guarantee” current spending stays where it
is.
“This is a typical bait and switch. It’s a scheme by
politicians who want to tax people … so they can spend more
money,” Craney told the Herald.
State House News Service
Friday, May 7, 2021
Senate Adopts Budget Amendment Deadline
By Chris Lisinski
The Senate on Friday rejected proposals to give senators
three to six additional hours to file budget amendments,
sticking with a deadline proposed by Senate leadership after
Democrat Sen. Diana DiZoglio criticized "a manipulation
tactic."
Senators adopted an order (S 2445) requiring amendments to
the Ways and Means Committee's upcoming fiscal 2022 spending
bill to be filed by 2 p.m. on Friday, May 14. On voice
votes, they turned down DiZoglio's calls to change the
deadline to either 5 p.m. or 8 p.m. next Friday.
DiZoglio on Thursday objected to the original order, raising
concerns that senators were not given any advance notice of
the amendment deadline before the order was offered.
At Friday's session, DiZoglio -- a Methuen Democrat who has
been a vocal critic of her chamber's leadership -- said she
admires and respects her colleagues while also warning about
the perils of "groupthink" and "gaslighting."
"I'll say this: trying to convince members that they've all
been inconvenienced because a colleague simply desires to
read a bill and offer an amendment, blaming, trying to use
peer pressure to get a dissenting voice to step into line so
that business as usual on Beacon Hill can continue,
unquestioned, without the annoyance of somebody raising
their hand and asking for an opportunity to be part of the
process is a manipulation tactic that we should all not only
understand is behavior associated with scapegoating and
gaslighting, but strongly reject," she said.
Senate President Karen Spilka's office declined to comment
Friday.
At the start of Friday's session, Ways and Means Chairman
Sen. Michael Rodrigues called the order "a standard,
procedural step we adopt each year" that is typically
negotiated between the Senate President and Senate minority
leader.
His committee plans to release its annual budget plan at 1
p.m. on Tuesday, giving senators 73 hours to read it and
propose changes. Rodrigues listed the number of hours
between budget release and the amendment deadline for each
fiscal year since 2012, all of which were fewer than will be
offered this year.
"The proposed deadline not only gives members and their
staff ample time for filing, but also provides Ways and
Means Staff critical hours to begin evaluation and review of
all the amendments that were filed," Rodrigues said.
State House News Service
Tuesday, May 4, 2021
Clean Energy Roadmap Not Strong Enough, Activists Say
Theoharides: Inefficient Buildings Loom as Challenge
By Colin A. Young
When it comes to climate change policy, there are two
parallel tracks at play on Beacon Hill: one focused on
implementing the climate law that Gov. Charlie Baker signed
in March, and another focused on passing legislation to set
even more ambitious goals than the ones that just became
law.
After taking a long, winding and sometimes contentious road
through all of the last legislative session and the earliest
days of the current one, the governor in March signed
long-discussed legislation designed to commit Massachusetts
to achieve net-zero carbon emissions by 2050, establish
interim emissions goals between now and the middle of the
century, adopt energy efficiency standards for appliances,
authorize another 2,400 megawatts of offshore wind power and
address needs in environmental justice communities.
During separate but back-to-back virtual events Tuesday,
Energy and Environmental Affairs Secretary Kathleen
Theoharides explained what the Baker administration is
focused on as it begins to implement the law and then a
handful of lawmakers and advocates made their case for why
the so-called climate roadmap law is not enough.
Jacob Stern, Massachusetts chapter deputy director for the
Sierra Club, said the roadmap law is "an excellent first
step that charts the path for us" but that a bill up for
consideration this session that would require the state get
100 percent of electricity from clean and renewable sources
by 2035 and use 100 percent clean transportation and heating
by 2045 is "the vehicle, or the electric vehicle, that's
going to get us there."
"It lays out real tangible steps to address energy sourcing
in each of our economy's main emissions-producing sectors as
well as reducing harmful pollution, providing direction for
assisting workers who will be displaced by the transition
from fossil fuels, and of course, ensuring equitable
deployment of clean energy technologies," Stern said, noting
that he had just listened in on the webinar that featured
Theoharides.
The legislation (H 3288/S 2136) filed by Reps. Marjorie
Decker and Sean Garballey and Sen. Joe Boncore has not yet
been scheduled for a hearing before the Joint Committee on
Telecommunications, Utilities and Energy. It has 13 Senate
co-sponsors and 63 House co-sponsors, according to
Environment Massachusetts.
The bill would require investor-owned utilities to provide
100 percent clean electricity by 2035, with at least 80
percent coming from Class I resources through the state's
renewable portfolio standard. Municipal utilities would also
be required to provide 100 percent clean electricity by
2035. New buildings would be required to be built without
fossil fuel heating, Environment Massachusetts State
Director Ben Hellerstein said, and all new cars sold after
2035 would have to be electric vehicles.
"I think a really important piece of the bill ... is
ensuring a just transition for workers and environmental
justice communities," he said. "And so the bill would
establish a couple of offices within state government to
make sure that workers and EJ communities are included in
the transition to renewable energy, and it would ensure as
well that public hearings are held in EJ communities and
that folks have the opportunity to participate and make
their voices heard in these decisions."
When Hellerstein first sat down with Decker and Garballey in
2016, he said, Hawaii was the only state in the country that
had passed a bill requiring 100 percent renewable
electricity. Since then, he said, seven other states,
Washington, D.C., and Puerto Rico have passed similar
legislation and other states have set a similar goal through
executive orders.
"I think we have some catch-up to do in terms of matching
some of these commitments that have already been made in
other states," Hellerstein said. "But we can even go above
and beyond as well and really reclaim our role as a leader
in clean energy, and that's really what this bill would
enable us to do."
During an earlier virtual event hosted Tuesday by the
sustainability-focused nonprofit Ceres, the state's top
energy and environment official said she thinks the greatest
challenge when it comes to wringing out greenhouse gas
emissions will be dealing with the many old and inefficient
buildings around the state.
"The building sector definitely represents a big challenge
here in Massachusetts, where we have really old building
stock. So leaky, energy inefficient, coupled with about
seven months of a heating season and then, increasingly, a
cooling season," Theoharides said. The secretary added, "I
think one of the key challenges is getting into homes and
businesses and large commercial spaces and industrial spaces
across the commonwealth, and really making sure they are
built to use as little energy as possible, retrofitted to
use as little energy as possible and, where we can, to
significantly ramp up electrification."
While some of the earliest work to implement the new law is
ongoing -- the first interim plan required by the new law
must be in place along with the 2025 emissions limit by July
1, 2022 -- Theoharides said the Baker administration will
also convene a first-in-the-nation commission on clean heat,
to look into ways to get people to adopt solutions like air
source heat pumps and to set a declining cap on heating fuel
emissions.
"We obviously have our work cut out for us," the secretary
said.
On Monday, the Department of Revenue's Division of Local
Services released its "initial guidance to local officials
regarding changes in local property tax laws" included in
the climate law that Baker signed at the end of March.
Among other tax-related provisions, portions of the law
provide a property tax exemption for certain categories of
solar- and wind-powered systems, authorize cities and towns
to enter into payment in lieu of taxes agreements with the
owner of a solar- or wind-powered system or energy storage
system, and create a new property tax exemption for
"qualified fuel cell powered system, the construction of
which was commenced after January 1, 2020, that is capable
of producing not more than 125 per cent of the annual energy
needs of the real property upon which it is located."
State House News Service
Friday, May 7, 2021
Weekly Roundup - Achievement Unlocked
Recap and analysis of the week in state government
By Matt Murphy
Vaccinate 70 percent of the adult population with at least
one dose by July 4? No sweat. Already done. What's next?
President Joe Biden set a new vaccination goal for the
country this week as Americans seek their independence from
the COVID-19 pandemic, but with Massachusetts already there
what's next is a new, more targeted phase in the state's
vaccine campaign.
Gov. Charlie Baker announced that he would begin to phase
out mass vaccinations sites, with four of the seven slated
to close by the end of the June. As Gillette Stadium, the
Danvers DoubleTree Hotel, the Hynes Convention Center and
the Natick Mall end their runs as vaccine centers, the
administration plans to divert more of its vaccine supply to
regional sites, mobile clinics and primary care doctors.
The administration hopes this will help reach some of the
people who have been harder to coax into getting a shot,
particularly in communities of color.
The state had its own goal when it started putting vaccine
in arms in December: to fully vaccinate 4.1 million Bay
State residents. It's on track to reach that milestone by
early June, as supply seems to have finally caught up to
demand.
"This represents an incredible achievement. The people of
Massachusetts are outperforming the rest of the country by
leaps and bounds," Baker told reporters at a State House
press conference.
The vaccine program in Massachusetts was once a political
soft spot for Baker, but rather quickly it has hardened into
something the governor boasts about quite often. That
warrants watching as Baker considers whether to seek a third
a term and Democrats size up the once untouchable
Republican.
Baker raised just $9,429 in April, fueling chatter on social
media about his future, and Attorney General Maura Healey is
reportedly message testing for a potential run for governor.
But whether she takes the plunge or not, the state's
vaccination campaign and where it goes next figures to
feature prominently in next year's gubernatorial contest.
Healey spoke to the New England Council this week where she
defended her stance that public employees should be
vaccinated in order to return to work, although she
specified that she really means state workers who interface
with the public regularly. Even with that caveat, she is at
odds with Baker, who prefers persuasion over mandates for
state employees when it comes to the vaccine.
As an employer getting ready to welcome its workforce back,
the state has not had the cash-flow problems that many small
businesses have had over the last year - small businesses
like Vivian and Juan Acevedo's Panela Restaurant in Lowell.
Panela was a recipient this year of one of the more than
15,000 relief grants handed out by the Baker administration
to help companies weather the pandemic, but just as the
federal Paycheck Protection Program ran out of money this
week, the administration's $687 million business relief
program also ran dry. Baker was in Lowell to hand out the
final $5 million.
The grants may have helped some employers keep their workers
on the payroll, but many business still face steep bills for
unemployment insurance after layoffs and furloughs depleted
that state's UI fund.
Business owners have been given an extension on their first
quarter bills while lawmakers and the administration try to
figure out what to do, but the policymakers are not closer
to a solution as they wait to hear from the federal
government whether they can use some of the billions of
dollars from the American Rescue Act to shore up the fund.
Despite a weak national jobs reports that showed hiring
slowing with 266,000 jobs added in April, Bay State
businesses remain bullish on the recovery. Associated
Industries of Massachusetts's business confidence index
dipped ever so slightly in April, but employers are still
expecting a solid rebound this summer, and that is evident
in place like Cape Cod.
"Everyone has got the help wanted sign out," said Wendy
Northcross, CEO of the Cape Cod Chamber of Commerce. "It's
actually a good time to be a prospective employee, and
you're sort of in the driver's seat now."
Sen. Julian Cyr, of Truro, said the problem could now become
a shortage of workers, citing the lack of affordable
workforce housing as a growing problem, as well as the
region's reliance on foreign workers for the summer months.
With the summer tourism season around the corner, the
Department of Revenue announced that it would be returning
to its regular schedule for the payment and remittance of
sales, meals and lodging taxes to the state on June 30.
Not that the state needs an advance on cash.
The April revenue report from DOR showed that the state is
way ahead of where it was last year through 10 months of the
fiscal year and well ahead of collecting what lawmakers
budgeted. So far, collections have exceeded projections by
$1.83 billion for the year, and that's with a delayed tax
filing deadline to May 17.
The $3.86 billion in taxes collected in April exceeded the
total from last April by 95 percent, for obvious reasons.
Less obvious, is how the Legislature and Baker will attempt
to spend what increasingly looks to be a surplus amassing
for the end of the fiscal year on top of the billions in
federal relief money that must be allocated.
The windfall might not end there, though.
When federal stimulus funding runs out and the economy
stabilizes, wealth tax advocates say the state will still
need the estimated $2 billion that could come from a
proposed surtax on millionaires to invest in education and
transportation.
The 4 percent surtax, which would be tacked on to household
earnings above $1 million, requires a second affirmative
vote of the Legislature to reach the 2022 ballot, and
advocates launched a campaign this week to remind lawmakers
why they supported the so-called "millionaires' tax " in the
first place.
Rep. Jim O'Day, the sponsor of the Constitutional amendment,
said it's likely the Legislature will wait on the "Fair
Share Amendment" until maybe the fall rather than vote next
week when a joint session of the Legislature will convene to
consider amendments to the constitution.
But O'Day thinks the proposal will get its vote, in spite of
renewed pushback from some business-backed think tanks who
are trying to slow it down.
"If you look at what's going on on Wall Street, you'll know
that Wall Street is doing just as well. Main Street, maybe
not quite as well as we need for Main Street to be doing.
So, for me, the excuse of the pandemic somehow raising
additional concerns, additional issues, with whether or not
this particular piece of legislation should not continue to
go forward is really a red herring," O'Day said.
STORY OF THE WEEK: Mass vax sites were once pitched as the
gold standard, but their usefulness is waning.
State House News Service
Friday, May 7, 2021
Advances - Week of May 9, 2021
With tax collections far surpassing fiscal 2021 estimates
and on pace to even eclipse the tax revenue base for the
upcoming fiscal year 2022, Senate Democrats plan to roll out
their annual budget proposal on Tuesday.
The House and Gov. Charlie Baker each have developed plans
that would reach deeply into the state's shrinking rainy day
fund to boost spending at a time when the economy is surging
and taxpayers are already delivering the state with revenues
that are sufficient to fund current spending plans.
The Senate may do the same, although there's also a
possibility that House-Senate budget conferees this year
could take the unusual step of marking up expected revenues,
which would allow for greater spending or less reliance on
reserves.
The surging revenues being produced in-state are separate
from an unprecedented influx of federal aid aimed at helping
states emerge from the COVID-19 pandemic. State officials,
as well as municipal leaders who are also in store for
federal aid, are anxiously awaiting the arrival of U.S.
Treasury guidance on how that money may be spent. Officials
have said they expect the guidance by mid-May, and the
answers will influence an array of spending decisions,
including whether the relief funds may be used to soften the
blow to businesses of unemployment insurance system cost
increases.
Senators will spend next week drafting and filing amendments
to the Senate budget.
COVID-19, Reopening and Vaccinations
Massachusetts continues to come down from a surge in
COVID-19 cases and the slide corresponds with the rapidly
growing segment of the population that has received
vaccinations. The week ahead brings more changes.
The state mass vaccination sites at the Hynes Convention
Center and Reggie Lewis Center in Boston, the Natick Mall,
the DoubleTree Hotel in Danvers, the former Circuit City in
Dartmouth and the Eastfield Mall in Springfield are slated
to begin offering COVID-19 vaccines on a walk-in basis
Monday. Vaccine seekers do not need to have previously
booked an appointment.
The Baker administration is transitioning the state's
vaccination strategy toward more local and mobile efforts.
And the White House has also announced that more than 15,000
local pharmacies will be ready across the nation to
vaccinate 12- to 15-year-olds should the FDA issue an
emergency use authorization of the Pfizer vaccine for
individuals in that age bracket.
Massachusetts is also inching ahead in its reopening process
Monday as amusement parks, theme parks and outdoor water
parks become allowed to operate at 50 percent capacity after
submitting safety plans to the Department of Public Health.
The allowable capacity for large indoor and outdoor venues,
including arenas, ballparks and stadiums, rises from 12
percent to 25 percent.
Youth and adult amateur sports tournaments will be allowed
for sports deemed moderate- and high-risk, and road races
and other large, outdoor organized group athletic events can
take place with staggered starts, after organizers submit
safety plans to state or local health officials.
With distancing in place, singing will be permitted indoors
at restaurants, event and performance venues, and other
businesses.
In Boston, most of these changes will instead take effect on
June 1, though the city on Monday will allow large venues,
like Fenway Park, to increase their capacity to 25
percent....
Monday, May 10, 2021
NEW REOPENING STEPS: Massachusetts inches ahead in its
reopening process Monday as amusement parks, theme parks and
outdoor water parks become allowed to operate at 50 percent
capacity after submitting safety plans to the Department of
Public Health. The allowable capacity for large indoor and
outdoor venues, including arenas, ballparks and stadiums,
rises from 12 percent to 25 percent. Youth and adult amateur
sports tournaments will be allowed for sports deemed
moderate- and high-risk, and road races and other large,
outdoor organized group athletic events can take place with
staggered starts, after organizers submit safety plans to
state or local health officials. With distancing in place,
singing will be permitted indoors at restaurants, event and
performance venues, and other businesses. In Boston, most of
these changes will instead take effect on June 1, though the
city on Monday will allow large venues, like Fenway Park, to
increase their capacity to 25 percent. (Monday) ...
Tuesday, May 11, 2021
SENATE FY22 BUDGET RELEASE: Senate Ways and Means Committee
meets in a remote executive session to release its fiscal
2022 budget bill, the final of the three proposals that will
emerge ahead of a consensus version. Gov. Baker proposed a
$45.6 billion FY22 budget, and the House in April approved a
$47.7 billion rewrite of the spending bill that accounts for
a significant increase in expected MassHealth spending not
captured in Baker's bill. The Baker and House budgets rely
on significant withdrawals from the rainy day fund, and
Baker and both branches are moving ahead with budget bills
without taking into account a tax revenue estimate that
appears overly conservative based on tax collection trends.
Senate leaders plan to begin debating amendments to the
budget bill on Tuesday, May 25. Once senators finish their
work on the bill, both branches will appoint three members
each to a conference committee that will privately negotiate
a final version to send to Baker. Livestream (Tuesday, 1
p.m.) ...
Wednesday, May 12, 2021
CONSTITUTIONAL CONVENTION: The Constitutional Convention
gavels in. Rep. James O'Day, a leading advocate of the 4
percent income surtax amendment that needs a favorable vote
to reach the 2022 ballot, said this week that he does not
expect a vote on that amendment until the fall. Under the
order authorizing the convention, remote participation and
voting procedures for members shall be governed by the
COVID-19 emergency rules in effect for that member's branch.
(Wednesday, 1 p.m., House Chamber) ...
Friday, May 14, 2021
UI TRUST FUND COMMISSION: A commission created under an
unemployment system stabilization bill Gov. Baker signed in
April convenes its first virtual meeting, where the
Department of Unemployment Assistance will discuss the
current solvency projection for the state's unemployment
trust fund. The Unemployment Insurance Trust Fund Study
Commission will hear opening remarks from its co-chairs,
DUA's presentation, and an update on the implementation of
the new law, which authorized $7 billion in borrowing to
steady the unemployment fund after a flood of COVID-related
claims depleted its regular revenues and forced borrowing to
keep benefits flowing. The law required the creation of the
21-member commission and tasked it with drafting
recommendations on achieving long-term solvency for the
trust fund. While the commission starts its work, businesses
are awaiting an update from the Baker administration on
whether the state can use federal stimulus funding to
relieve an unexpected spike in the solvency fund assessments
they pay that fell through the cracks of the stabilization
bill. Details (Friday, 1 p.m.) ...
SENATE BUDGET AMENDMENTS DUE: Amendments are due to the
Senate Ways and Means Committee's fiscal year 2022 budget
bill. The committee plans to release its spending proposal
at 1 p.m. on Tuesday, May 11, and the Senate will begin
debate on the budget bill on Tuesday, May 25. (Friday, 2
p.m.) ...
|
NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to:
http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ (781) 639-9709
BACK TO CLT
HOMEPAGE
|
