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CLT UPDATE
Monday, May 31, 2021
Senate Unanimously Passed $47.7
Billion "Bundled" Budget
Jump directly
to CLT's Commentary on the News
|
Most Relevant News Excerpts
(Full news reports follow Commentary)
|
|
The Senate unanimously passed a $47.7 billion budget for
next year after three days of debate over how best to invest
state resources as Massachusetts looks to recover from the
hardships of the past year of the COVID-19 pandemic....
The vote sets the stage for negotiations with the House over
a range of issues, from the film tax credit to fees on Uber
and Lyft rides, but perhaps most consequential will be the
decision the two branches will have to make about revenues.
Both the House and Senate relied on revenue projections of
just over $30 billion in taxes for the fiscal year that
begins July 1. But with revenue continuing to pour in at a
clip that has exceeded expectations month after month,
Democratic leaders have said they could consider increasing
the projection.
The budget also did not tap into any of the $5.3 billion in
discretionary federal dollars the state is expecting to
receive from the American Rescue Plan Act, which Democratic
leaders have said they want to allocate through a separate
spending bill.
In keeping with that approach, senators rejected amendments
that would have steered federal funds to the unemployment
solvency fund to reduce the burden on business owners....
The budget that passed the Senate would increase spending by
close to $1.3 billion over fiscal 2021 after senators added
$63.7 million to the bottom line through amendments, putting
the final total on par with what was approved last month by
the House....
The Senate budget also relies on $1.55 billion in reserves,
which would leave the balance of the state's stabilization
account at $1.15 billion if all the funds authorized for use
are needed.
All three Republicans in the Senate voted for the budget and
Senate Minority Bruce Tarr lavished praise on Spilka and
Rodrigues for leading what he described as an inclusive
process that incorporated the ideas of the minority party
into a budget that did not raise taxes or wipe out reserves.
The Gloucester Republican said the Senate "should stand as a
beacon for how democracy should operate in this country,
which has seen too much division and too much rancor."
State House News Service
Thursday, May 27, 2021 (6:21 PM)
$47.7 Billion Senate Budget Passes Unanimously
Beacon Hill Roll Call records local senators’ votes on roll
calls from the week of May 24-28. All Senate roll calls are
on proposed amendments to the $47.72 billion fiscal 2022
budget. There were no roll calls in the House last week.
This was the Senate’s second state budget in the COVID-19
era and most senators participated virtually from their
homes or offices.
Of the of the 923 amendments filed by senators only 15 came
to a roll call vote. Many others were simply approved or
rejected one at a time on voice votes without debate.
To move things along even faster, the Senate also did its
usual “bundling” of many amendments. Instead of acting on
all the amendments one at a time, hundreds of the proposed
amendments are bundled and put into two piles—one pile that
will be approved and the other that will be rejected-with a
single vote on each pile.
Senate President Karen Spilka, or the senator who is filling
in for her at the podium, orchestrates the approval and
rejection of the bundled amendments with a simple: “All
those in favor say ‘aye,’ those opposed say ‘no.’ The ayes
have it and the amendments are approved.” Or “All those in
favor say ‘aye,’ those opposed say ‘no.’ The no’s have it
and the amendments are rejected.”
Senators don’t actually vote yes or no, and, in fact, they
don't say a word. The outcome was predetermined earlier
behind closed doors.
"The efficient Senate budget process this year reflected
lots of careful work by our Ways and Means Chair, Michael
Rodriques, and our Senate President, Karen Spilka, to build
consensus in the weeks before the budget," said Senate
President Pro Tempore Sen. Will Brownsberger (D-Belmont)....
[The process] more accurately highlights the increasingly
efficient use of the legislative rubber stamp,” said Chip
Ford, executive director of Citizens for Limited
Taxation. “Massachusetts doesn't need the cost of 200
legislators when a handful decide all legislation before it
comes for a vote. If the three token 'loyal opposition'
Republican senators weren’t taking up space taxpayers could
at least save the ‘leadership stipends’ they collect.”
“This type of process was not the norm only several years
ago." said said Massachusetts Fiscal Alliance Executive
Director Paul Craney. "Over the last few years, with new
legislative leadership, they rush through votes, often don’t
record the votes and don’t allow the public to gain access
to what is happening because most of the important work is
done behind closed doors. With that being said, the state
Senate is much more transparent than Speaker Ron Mariano and
Republican Brad Jones in the House. The House is arguably
the most opaque legislature in America.”
Beacon Hill Roll Call
Week of May 24-28, 2021
By Bob Katzen
State Senate Republicans want to pay jobless workers a
$1,200 get-back-to-work bonus over the next year to take a
job and get off unemployment by Sep. 4.
The pitch comes as one of the 923 amendments to the $47.6
billion Senate budget for fiscal 2022 that lawmakers will
debate starting Tuesday....
While nearly two dozen Republican-led states have moved to
cancel the federal unemployment boost in their states, Gov.
Charlie Baker told a Herald reporter earlier this month that
he had no plans to do so in Massachusetts....
Retailers Association of Massachusetts President Jon Hurst
said [Sen. Ryan] Fattman’s plan is “a terrific idea” but one
that’s unlikely to pass in a Legislature where Democrats
hold a supermajority....
Hurst did, however, take issue with Fattman’s plan for
paying for the sign-on bonus.
“The first cut in (American Rescue Plan) money has to be to
roll back the $7 billion tax increase on employers because
of a crisis that was not their fault. That should be the
first priority,” Hurst said, referencing massive increases
in unemployment taxes small businesses around the state are
facing as a result of the massive number of claims borne out
of the pandemic.
The Boston Herald
Tuesday, May 25, 2021
Lawmakers want to pay Massachusetts jobless $1,200 to go
back to work
The three-man Senate Republican caucus wants to give
unemployed people in Massachusetts taxpayer-funded bonuses
to return to work, but Senate Democrats swept their idea
into the dustbin of failed budget amendments.
Sens. Ryan Fattman, Patrick O'Connor and Bruce Tarr proposed
granting a $1,200 bonus to anyone collecting unemployment
benefits who returns to work between the adoption of the
fiscal 2022 budget and Aug. 7, 2021.
An aide to Sen. Fattman said the senator viewed his proposal
as a "decent incentive to get people back to work and off
unemployment" and a way to help the state address labor
shortages that are frustrating employers.
Senate Democrats this week have been dispensing with more
than 900 budget amendments in large part through private
talks that lead to the adoption of bundles of amendments,
and the rejection of other bundles. The Fattman amendment
(811) - dubbed the Time For The Commonwealth To Get Back To
Work Bonus - was dumped into a bundle of amendments that was
rejected on a voice vote without debate on Wednesday
afternoon.
State House News Service
Thursday, May 27, 2021
Senate Dems Reject GOP Bid for Return-to-Work Bonuses
The scam is over.
It’s time for all you freeloaders to get back to work.
I’m pleading with you, no more crackpot grifts to keep your
yearlong-plus vacations going — and $174,000-a-year state
judges, I’m most assuredly including you in the list of
layabouts.
Please, no more handouts. Right now in Maskachusetts the
gainfully unemployed are grabbing an extra $300 a week for
snoozing on their mom’s couch. And now these same COVID
grifters may be offered $1,200 to get off their fat
rear-ends and start looking for work.
Good luck with that, especially now that weed has been
legalized.
And spare us the charade of this phony-baloney
you-have-to-apply-for-three-jobs-every-week nonsense either.
That’s a bigger scam than the Earned Income Tax Credit.
The goal with this whole Panic was to get rid of President
Donald J. Trump. Mission accomplished, OK? Move on,
everybody....
Last week, a Rasmussen poll showed that 44% of respondents
said the increased unemployment benefits “are making it too
easy for unemployed Americans not to work.”
This no-work scam has produced endless spinoff grifts. Think
about the Payroll Protection Program — bailouts for
businesses that didn’t exist. The PPP was like blowing a dog
whistle for every convicted fraudster and paroled embezzler
in the country, and apparently every last one of them heard
it.
How about the eviction “moratorium?” As if the non-working
classes grabbing an extra $600 or $300 a week in welfare, er,
unemployment, were suddenly destitute.
By the way, did the landlords get a moratorium on paying
their property taxes? Or utilities? ...
This is the War on Poverty on steroids. The lesson of that
disaster was that you get more of whatever you subsidize,
and the U.S. subsidized all kinds of social dysfunction,
including family dissolution and out-of-wedlock pregnancies.
Guess what we got more of....
Have you tried to get in any government buildings lately –
like, in the last 15 months? The problem is, if they
actually truly reopened the buildings again, all the hacks
would be expected to come back to work, not just a “skeleton
crew.”
And that ain’t happening.
Thank God for Charlie Parker, though. There’s a reason why
he’s the Pope of Panic Porn. He defends his indolent public
sector workforce – the ones who’ve been on vacation since
March 2020.
Monday, he filed legislation “providing for a temporary
suspension of certain open-meeting law requirements.”
In other words, all Charlie Parker’s buildings can remain
closed!
The scam is over. Long live the scam.
The Boston Herald
Tuesday, May 25, 2021
Time to get off the couch and earn a paycheck
By Howie Carr
State budget managers can probably use about $1.5 billion of
the incoming American Rescue Plan Act funding to replace
revenue the state lost in 2020 due to the pandemic but will
not be able to use it to replenish the state's rainy day
fund, a Massachusetts Taxpayers Foundation analyst said last
week.
One of the four primary buckets of allowable uses of the
ARPA money being sent to states and local governments is
revenue replacement, but until the U.S. Treasury issued its
guidance on how ARPA funds can and cannot be used it was
unclear just how much of the roughly $5.3 billion in state
fiscal relief headed for Massachusetts could be used to,
essentially, help balance the budget.
"You could come up with some pretty reasonable scenarios in
which your ability to use revenue replacement was
essentially nil, and you can come up with scenarios in which
you could use almost the entire award for revenue
replacement. So that's why this guidance was so key," Doug
Howgate, the executive vice president of the Massachusetts
Taxpayers Foundation, said....
Using tax revenue, which is going to be the bulk of how
revenue replacement is calculated, you can come up with a
ballpark, and my estimate for the first calculation of
revenue replacement is it will probably allow us to use
about call it $1.3 to $1.6 billion in revenue replacement in
this first time period," he said as he presented a slide
that estimated about $1.563 billion in allowed revenue
replacement in calendar year 2020....
But states cannot just run the calculation once -- the
Treasury guidelines require state and local governments to
calculate their allowed revenue replacement once upon
receiving the ARPA money, then again on Jan. 1 of 2022, 2023
and 2024.
"It's going to make planning this money somewhat challenging
because we're not going to know exactly how much revenue
replacement we can bring to bear until later on in the
process," Howgate said....
"There was some feeling before that maybe we could fund some
spending with the stabilization fund and then rebuild it
with federal resources. You can't do that," he said,
highlighting one of the "hiccups" in the Treasury rules. "So
the order of operations of how we use these resources to
balance the budget, it really matters because once that
money's out of the stabilization fund these fiscal recovery
funds cannot be used to replenish that." ...
Administration officials and legislative leaders have said
they would like to limit draws against the state's
stabilization fund, which has a balance of $3.52 billion
before accounting for potential spending from that fund of
up to $1.7 billion this budget year. Gov. Charlie Baker
proposed a withdrawal of up to $1.6 billion from the fund in
fiscal 2022, the House passed a budget that proposes pulling
$1.875 billion from the fund, and the Senate on Tuesday will
begin debating a fiscal 2022 budget that would draw up to
$1.55 billion from the fund....
The months-long and ongoing pattern of state tax collections
obliterating expectations could also help limit what is
actually taken out of the rainy day fund and provide
lawmakers with a source of funds to start to build the
reserve account's balance back up. 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 the Department of Revenue's expectations.
Through May 14, DOR had collected $1.190 billion from
taxpayers -- about 63 percent of the $1.893 billion the
agency expects to bring in by the end of this month.
State House News Service
Monday, May 24, 2021
Fed Guidance Limits ARPA Use for Revenue Replacement
Howgate: You Can't Use ARPA to Rebuild Rainy Day Fund
As the new normal dawns and the state budget dips into the
darkness of closed House-Senate negotiations, lawmakers are
under pressure in early June to decide which pandemic-era
policies to save before the COVID-19 state of emergency
lifts on June 15 and to come up with ways to put to work
some of the federal stimulus funds that the federal
government has showered on the states.
Budget bills topping $47.7 billion in spending are headed
for a conference committee to be led by Rep. Aaron
Michlewitz and Sen. Michael Rodrigues.
A critical report on May tax receipts is due out next week.
Since January alone, tax collections have exceeded budget
estimates by $1.8 billion, according to the Massachusetts
Taxpayers Foundation.
The state of play means the budget conference could mark up
revenue expectations to sharply reduce their planned raid of
the state's rainy day fund at a time when the economy is
accelerating and they are not permitted to use special
federal aid to backfill the state's stabilization reserve.
The conferees must also settle House-Senate differences over
transportation network company fee increases and tax
incentives to encourage film industry work in Massachusetts.
The Senate this week also loaded its budget with policy
proposals unrelated to spending. The foundation late
Thursday reported that 455 budget amendments were adopted
over three days, including 83 policy proposals that were
added to the 60 policy riders already in the Senate budget.
The advancement of the policy proposals comes at a time in
the session when most bills calling for new policies have
not been vetted and have yet to even advance to the public
hearing stage. The House and Senate also also have yet to
agree on basic ground rules governing the transparency of
committee testimony and voting.
State House News Service
Friday, May 28, 2021
Advances - Week of May 30, 2021
House and Senate employees received raises of 6 percent this
month and one-time stipends of $500 to defray the cost of
working from home over the last year as employees have
become increasingly vocal about the challenge of supporting
themselves in Greater Boston on a legislative staff
salary....
Speaker Ron Mariano said House employees went "above and
beyond" over the past year and thanked them for the
"commitment and their service," while Senate President Karen
Spilka said the Senate "has always valued feedback from its
employees and will continue to look for ways to improve the
work environment and compensation for staff." ...
Staffers in both branches got identical 6 percent
cost-of-living adjustments in their paychecks this month,
plus the $500 stipend, according to Mariano and Spilka's
office. Raises are typically handed out every two years. The
Senate has also expanded its parental leave program from
eight to 16 weeks of full pay for the birth, adoption or
foster placement of a child.
State House News Service
Monday, May 24, 2021
Legislative Staffers Got Raises, $500 Stipends
|
Chip Ford's CLT
Commentary
On Memorial Day we
remember all those who gave the ultimate sacrifice defending these
United States of America and its citizens from all enemies foreign and
domestic. After events of the past few years with so many trying
to tear down that which the fallen defended and protected with their
lives we must pray that in the end those countless heroes' lives were
not given in vain. Our duty is to do all that we are able to
insure that their legacies were not wasted nor will be forgotten.
On Thursday at 6:21 PM the State House News Service reported
("$47.7 Billion Senate Budget Passes Unanimously"):
The Senate unanimously passed a $47.7 billion
budget for next year after three days of debate over how best to
invest state resources as Massachusetts looks to recover from the
hardships of the past year of the COVID-19 pandemic....
The vote sets the stage for negotiations with
the House over a range of issues, from the film tax credit to fees
on Uber and Lyft rides, but perhaps most consequential will be the
decision the two branches will have to make about revenues.
Both the House and Senate relied on revenue
projections of just over $30 billion in taxes for the fiscal year
that begins July 1. But with revenue continuing to pour in at a clip
that has exceeded expectations month after month, Democratic leaders
have said they could consider increasing the projection.
The budget also did not tap into any of the
$5.3 billion in discretionary federal dollars the state is expecting
to receive from the American Rescue Plan Act, which Democratic
leaders have said they want to allocate through a separate spending
bill.
In keeping with that approach, senators
rejected amendments that would have steered federal funds to the
unemployment solvency fund to reduce the burden on business
owners....
The budget that passed the Senate would
increase spending by close to $1.3 billion over fiscal 2021 after
senators added $63.7 million to the bottom line through amendments,
putting the final total on par with what was approved last month by
the House....
The Senate budget also relies on $1.55 billion
in reserves, which would leave the balance of the state's
stabilization account at $1.15 billion if all the funds authorized
for use are needed.
All three Republicans in the Senate voted for
the budget and Senate Minority Bruce Tarr lavished praise on Spilka
and Rodrigues for leading what he described as an inclusive process
that incorporated the ideas of the minority party into a budget that
did not raise taxes or wipe out reserves.
The Gloucester Republican said the Senate
"should stand as a beacon for how democracy should operate in this
country, which has seen too much division and too much rancor."
On Friday Beacon Hill Roll Call reported ("Week of May
24-28, 2021"):
Beacon Hill Roll Call records local senators’
votes on roll calls from the week of May 24-28. All Senate roll
calls are on proposed amendments to the $47.72 billion fiscal 2022
budget. There were no roll calls in the House last week.
This was the Senate’s second state budget in
the COVID-19 era and most senators participated virtually from their
homes or offices.
Of the of the 923 amendments filed by senators
only 15 came to a roll call vote. Many others were simply approved
or rejected one at a time on voice votes without debate.
To move things along even faster, the Senate
also did its usual “bundling” of many amendments. Instead of acting
on all the amendments one at a time, hundreds of the proposed
amendments are bundled and put into two piles—one pile that will be
approved and the other that will be rejected-with a single vote on
each pile.
Senate President Karen Spilka, or the senator
who is filling in for her at the podium, orchestrates the approval
and rejection of the bundled amendments with a simple: “All those in
favor say ‘aye,’ those opposed say ‘no.’ The ayes have it and the
amendments are approved.” Or “All those in favor say ‘aye,’ those
opposed say ‘no.’ The no’s have it and the amendments are rejected.”
Senators don’t actually vote yes or no, and, in
fact, they don't say a word. The outcome was predetermined earlier
behind closed doors.
"The efficient Senate budget process this year
reflected lots of careful work by our Ways and Means Chair, Michael
Rodriques, and our Senate President, Karen Spilka, to build
consensus in the weeks before the budget," said Senate President Pro
Tempore Sen. Will Brownsberger (D-Belmont)....
[The process] more accurately highlights the
increasingly efficient use of the legislative rubber stamp,” said
Chip Ford, executive director of Citizens for Limited
Taxation. “Massachusetts doesn't need the cost of 200
legislators when a handful decide all legislation before it comes
for a vote. If the three token 'loyal opposition' Republican
senators weren’t taking up space taxpayers could at least save the
‘leadership stipends’ they collect.”
“This type of process was not the norm only
several years ago." said said Massachusetts Fiscal Alliance
Executive Director Paul Craney. "Over the last few years, with new
legislative leadership, they rush through votes, often don’t record
the votes and don’t allow the public to gain access to what is
happening because most of the important work is done behind closed
doors. With that being said, the state Senate is much more
transparent than Speaker Ron Mariano and Republican Brad Jones in
the House. The House is arguably the most opaque legislature in
America.”
Much of the focus
behind closed doors in the Senate last week
was on the 923 amendments to their budget
— which ones did and which didn't get
included in one of the "bundles," all but 15 amendments and bundles
adopted on voice votes leaving no fingerprints behind. This is
where I suspected the next attack on Proposition 2½
if there is to be one could be buried, but finding those amendments was
impossible. Just yesterday (Sunday) morning — three days after the
vote — I finally discovered them available on the Legislature's website
[here]
and am in the process of reading through them to see if anything
threatening was snuck into the Senate's budget.
On Friday in its
Advances for the coming week the State House News Service
reported:
A critical report on May tax receipts is due
out next week. Since January alone, tax collections have exceeded
budget estimates by $1.8 billion, according to the Massachusetts
Taxpayers Foundation.
The state of play means the budget conference
could mark up revenue expectations to sharply reduce their planned
raid of the state's rainy day fund at a time when the economy is
accelerating and they are not permitted to use special federal aid
to backfill the state's stabilization reserve.
The conferees must also settle House-Senate
differences over transportation network company fee increases and
tax incentives to encourage film industry work in Massachusetts.
The Senate this week also loaded its budget
with policy proposals unrelated to spending. The foundation late
Thursday reported that 455 budget amendments were adopted over three
days, including 83 policy proposals that were added to the 60 policy
riders already in the Senate budget.
The advancement of the policy proposals comes
at a time in the session when most bills calling for new policies
have not been vetted and have yet to even advance to the public
hearing stage. The House and Senate also have yet to agree on basic
ground rules governing the transparency of committee testimony and
voting.
"455 budget amendments were adopted over three days,
including 83 policy proposals that were added to the 60
policy riders already in the Senate budget."
Does
anyone actually know what was included among that flurry of last-minute
remote activity, what was voted on and passed unanimously? I'm
still digging for any hint of another stealth attack on Proposition 2½
or some other subterfuge.
The State House News Service reported on Thursday ("Senate
Dems Reject GOP Bid for Return-to-Work Bonuses"):
"The three-man Senate
Republican caucus wants to give unemployed people in Massachusetts
taxpayer-funded bonuses to return to work"
The Boston Herald reported on the proposal earlier in the
week on Tuesday ("Lawmakers want to pay Massachusetts
jobless $1,200 to go back to work"), adding :
. . . While nearly two dozen Republican-led
states have moved to cancel the federal unemployment boost in their
states, Gov. Charlie Baker told a Herald reporter earlier this month
that he had no plans to do so in Massachusetts....
Retailers Association of Massachusetts
President Jon Hurst said [Sen. Ryan] Fattman’s plan is “a terrific
idea” but one that’s unlikely to pass in a Legislature where
Democrats hold a supermajority....
Hurst did, however, take issue with Fattman’s
plan for paying for the sign-on bonus.
“The first cut in (American Rescue Plan) money
has to be to roll back the $7 billion tax increase on employers
because of a crisis that was not their fault. That should be the
first priority,” Hurst said, referencing massive increases in
unemployment taxes small businesses around the state are facing as a
result of the massive number of claims borne out of the pandemic.
To motivate
former-workers who are now enjoying better compensation for doing
nothing but sitting home and collecting enhanced unemployment benefits,
while employers can't find willing help to hire to keep their businesses
afloat, the solution is not for the state (actually its taxpayers) to
pay the willfully unemployed more to come back to work.
The solution is to stop
handing them those excessive unemployment benefits that pay them more
than working and save taxpayers money on both ends! Once the free
government spigot is shut off they'll find their way back into the labor
force, killing two birds with one stone —
three birds if you consider that they'll then begin contributing
into the bankrupt state unemployment trust fund.
Read Howie Carr's
Boston Herald column below, "Time to get off the couch and earn a
paycheck."
In the News Service's
report on passage of the Senate budget ("$47.7 Billion Senate Budget
Passes Unanimously") it noted:
The Senate
budget also relies on $1.55 billion in reserves, which would leave
the balance of the state's stabilization account at $1.15 billion if
all the funds authorized for use are needed.
On Monday it noted in its earlier report ("Fed Guidance
Limits ARPA Use for Revenue Replacement
— Howgate: You Can't Use ARPA
to Rebuild Rainy Day Fund"):
State budget managers can probably use about
$1.5 billion of the incoming American Rescue Plan Act funding to
replace revenue the state lost in 2020 due to the pandemic but will
not be able to use it to replenish the state's rainy day fund, a
Massachusetts Taxpayers Foundation analyst said last week.
One of the four primary buckets of allowable
uses of the ARPA money being sent to states and local governments is
revenue replacement, but until the U.S. Treasury issued its guidance
on how ARPA funds can and cannot be used it was unclear just how
much of the roughly $5.3 billion in state fiscal relief headed for
Massachusetts could be used to, essentially, help balance the
budget.
"You could come up with some pretty reasonable
scenarios in which your ability to use revenue replacement was
essentially nil, and you can come up with scenarios in which you
could use almost the entire award for revenue replacement. So that's
why this guidance was so key," Doug Howgate, the executive vice
president of the Massachusetts Taxpayers Foundation, said....
Using tax revenue, which is going to be the
bulk of how revenue replacement is calculated, you can come up with
a ballpark, and my estimate for the first calculation of revenue
replacement is it will probably allow us to use about call it $1.3
to $1.6 billion in revenue replacement in this first time period,"
he said as he presented a slide that estimated about $1.563 billion
in allowed revenue replacement in calendar year 2020....
"There was some feeling before that maybe we
could fund some spending with the stabilization fund and then
rebuild it with federal resources. You can't do that," he said,
highlighting one of the "hiccups" in the Treasury rules. "So the
order of operations of how we use these resources to balance the
budget, it really matters because once that money's out of the
stabilization fund these fiscal recovery funds cannot be used to
replenish that." ...
Administration officials and legislative
leaders have said they would like to limit draws against the state's
stabilization fund, which has a balance of $3.52 billion before
accounting for potential spending from that fund of up to $1.7
billion this budget year. Gov. Charlie Baker proposed a withdrawal
of up to $1.6 billion from the fund in fiscal 2022, the House passed
a budget that proposes pulling $1.875 billion from the fund, and the
Senate on Tuesday will begin debating a fiscal 2022 budget that
would draw up to $1.55 billion from the fund....
The months-long and ongoing pattern of state
tax collections obliterating expectations could also help limit what
is actually taken out of the rainy day fund and provide lawmakers
with a source of funds to start to build the reserve account's
balance back up. 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 the Department of Revenue's expectations.
Through May 14, DOR had collected $1.190
billion from taxpayers -- about 63 percent of the $1.893 billion the
agency expects to bring in by the end of this month.
Assuming the
Massachusetts Taxpayers Foundation's assessment is accurate, the state
can use a good amount of that American Rescue Act federal bailout
funding to balance the budget — but it
cannot use any of it to replenish the state's weakened "rainy day"
stabilization fund. It would seem prudent to not raid what remains
in that emergency fund and base state spending on what revenue is
available to spend — which has been
overflowing the state's coffers by billions of dollars more than was
anticipated.
During my research last
week I happened across a report that presents an intriguing perspective
on comparisons of state taxation. As the Bay State this weekend
finally sheds its legend as "Maskachusetts" fear not. It can fall
back on its longstanding mantle of "Taxachusetts! This report was
presented by Self, Inc., which describes itself:
About Self.
Inc.
"We're helping hundreds of thousands of people build a strong financial
future.
"We are hardworking, passionate, financial geeks. Building credit and
building savings used to be mutually exclusive goals. With Self, we've
created a responsible way for people to build credit and savings at the
same time."
Self, Inc.
| Money
What Americans Will Pay in Taxes Over a Lifetime
Website/Interactive
Chart:
https://www.self.inc/info/life-of-tax/
The US government collects over $5.3 trillion in taxes each year, but
how much will the average American pay in taxes throughout their
lifetime?
We used the Bureau of Labor Statistics’ expenditure numbers to see what
we as Americans were spending each day to work out what taxes we would
be paying until we’re no longer able to contribute financially. It’s a
lot.
We’ve analyzed this data specific to each state so you can see what you
may be giving to your local government in taxes across your entire life.
Key statistics:
• The average American will pay $525,037 in taxes throughout their
lifetime
• That’s an average of 34.3% of all lifetime earnings spent on taxes
• Residents of New Jersey will pay the most in lifetime taxes ($931,000)
and people in West Virginia will pay the least ($321,000)
• Tax on earnings is where most tax will come from, with the average
American paying $339,173 in a lifetime
• Owning a car will cost an additional $29,521 in tax payments alone
• Tax on property will set you back an additional $128,581 above the
property price and maintenance
• Taxpayers in California will pay the most on everyday expenses
($40,084), followed by New Yorkers ($39,745)
How much tax will the average American pay in their lifetime?
Using our state averages, we can see that the average American will pay
$525,037 over their lifetime, almost 65% of this will purely be tax on
earnings. This amount varies drastically by state but uses averages for
earnings, expenditures, property and auto taxes.
What
Americans Will Pay in Taxes Over a Lifetime
|
HIGHEST
TAXED STATES |
LOWEST TAXED
STATES |
|
 |
 |
Comparing states by taxes
paid over a lifetime is a new perspective for me. I'm not sure
it's plausible to calculate such based on living in one state over
an entire lifetime but it's an intriguing measurement. The
results aren't shocking. Though its footnoted sources are
respectable I do have some questions about what they consider "Tax on
Earnings" in this report as New Hampshire, Florida, Tennessee and
other income tax-free states seem to rank too high in costs in that
category, but aside from that it's an interesting snapshot.
Whenever comparisons such
as this are available I can't help but compare what I know from my
own experience — though I'm one of
those who disproves that "lifetime" in any one state criteria.
Getting to a lower-cost state at my age isn't going to lower my
lifetime average tax payment by very much, but it does make
me feel good.
|
"IT
DOESN'T HAVE TO BE THE MASSACHUSETTS WAY"
A COMPARISON OF TWO STATES I KNOW
BY THE "LIFETIME TAXES" PAID TO EACH |
MASSACHUSETTS
TOTAL COMBINED LIFETIME TAXES
#2. Massachusetts —
$827,185 |
KENTUCKY
TOTAL COMBINED LIFETIME TAXES
#43. Kentucky — $346,778 |
TAX ON EARNINGS
#3. Massachusetts —
$508,045 |
TAX ON EARNINGS
#39. Kentucky
—
$225,828 |
TAX ON PERSONAL SPENDING
#25. Massachusetts —
$29,156 |
TAX ON PERSONAL SPENDING
#42. Kentucky —
$23,671 |
TAX ON PROPERTY
#3. Massachusetts —
$244,044 |
TAX ON PROPERTY
#44. Kentucky —
$63,278 |
TAX ON CARS
#11. Massachusetts —
$45,940 |
TAX ON CARS
#19. Kentucky —
$34,002 |
|
|
|
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
Full News Reports Follow
(excerpted above) |
|
State House News Service
Thursday, May 27, 2021 (6:21 PM)
$47.7 Billion Senate Budget Passes Unanimously
Revenue Markup, Film Tax Credit and Rideshare Fees Bound for
Conference Talks
By Matt Murphy
The Senate unanimously passed a $47.7 billion budget for
next year after three days of debate over how best to invest
state resources as Massachusetts looks to recover from the
hardships of the past year of the COVID-19 pandemic.
Senate President Karen Spilka said the budget that passed
40-0 would put Massachusetts on "stable fiscal footing" and
begin to restitch the fabric of society that had frayed over
the last year, while Senate Ways and Means Chairman Michael
Rodrigues said the bill would help get the state "back to
better."
"Overall, we have charted a hopeful path forward," Rodrigues
said.
The vote sets the stage for negotiations with the House over
a range of issues, from the film tax credit to fees on Uber
and Lyft rides, but perhaps most consequential will be the
decision the two branches will have to make about revenues.
Both the House and Senate relied on revenue projections of
just over $30 billion in taxes for the fiscal year that
begins July 1. But with revenue continuing to pour in at a
clip that has exceeded expectations month after month,
Democratic leaders have said they could consider increasing
the projection.
The budget also did not tap into any of the $5.3 billion in
discretionary federal dollars the state is expecting to
receive from the American Rescue Plan Act, which Democratic
leaders have said they want to allocate through a separate
spending bill.
In keeping with that approach, senators rejected amendments
that would have steered federal funds to the unemployment
solvency fund to reduce the burden on business owners. They
also turned aside amendments to extend the authorization for
restaurants to serve to-go cocktails beyond the COVID-19
state of emergency as House and Senate leaders are working
on a separate review of pandemic policies they might want to
extend.
The budget that passed the Senate would increase spending by
close to $1.3 billion over fiscal 2021 after senators added
$63.7 million to the bottom line through amendments, putting
the final total on par with what was approved last month by
the House.
Both branches are in agreement on a $219.6 million increase
in Chapter 70 funding for public schools that lawmakers said
would finance one-sixth of the 2019 school finance reform
law and put the funding schedule back on track after 2020.
The Senate budget also relies on $1.55 billion in reserves,
which would leave the balance of the state's stabilization
account at $1.15 billion if all the funds authorized for use
are needed.
All three Republicans in the Senate voted for the budget and
Senate Minority Bruce Tarr lavished praise on Spilka and
Rodrigues for leading what he described as an inclusive
process that incorporated the ideas of the minority party
into a budget that did not raise taxes or wipe out reserves.
The Gloucester Republican said the Senate "should stand as a
beacon for how democracy should operate in this country,
which has seen too much division and too much rancor."
New spending approved through amendments bulked up support
for everything from the METCO school desegregation program
and a $50,000 Senate internship program geared toward
under-represented students to funding for the Executive
Office of Energy and Environmental Affairs to hire new staff
to implement this year's climate law.
The Senate waded through 923 amendments over the course of
three days and avoided the late nights that are typically a
hallmark of budget debates in both chambers of the
Legislature.
Rodrigues will almost certainly be tasked with leading
negotiations for the Senate opposite House Ways and Means
Chairman Aaron Michlewitz as the branches' competing budget
bills move before a six-member conference committee.
One of the more high-profile issues to be ironed out is the
future of the film tax credit. The House voted to eliminate
the program's January 2023 sunset date, while the Senate
budget extends the sunset by four years and reforms the
program by requiring a production company to spend at least
75 percent of its filming budget or conduct at least 75
percent of principal photography days in Massachusetts,
capping salaries eligible for the credit at $1 million, and
banning the transfer of the credits.
House Speaker Ron Mariano has been an ardent defender of the
film tax credit as a local job producer, but Senate leaders
have questioned the cost and support it gives to wealthy
actors and out-of-state production companies.
The Senate also voted this week to scrap three additional
tax credits and exemptions for harbor maintenance, medical
device company user fees and certain patent-related income
that were not part of the House budget.
With COVID-19 restrictions being lifted and many workers and
residents returning to their daily commutes and travel
schedules, the Senate's vote this week to add increased fees
on ride-hailing services to the budget also stands out as a
major difference with the House.
Sen. Joseph Boncore's proposal would increase the current
flat 20 cent fee per trip to 40 cents for a shared ride,
$1.20 for a non-shared ride and $2.20 for a luxury ride. It
would also put an additional 20-cent fee on rides that start
and end in the MBTA's service area.
The House has voted in the past for higher fees on ride
services as a way to address traffic congestion, but the
pandemic changed a lot of the nature of the debate about how
people were using those services.
Beacon Hill Roll Call
Volume 46-Report No. 22
Week of May 24-28, 2021
By Bob Katzen
THE HOUSE AND SENATE: Beacon Hill Roll Call records local
senators’ votes on roll calls from the week of May 24-28.
All Senate roll calls are on proposed amendments to the
$47.72 billion fiscal 2022 budget. There were no roll calls
in the House last week.
This was the Senate’s second state budget in the COVID-19
era and most senators participated virtually from their
homes or offices.
Of the of the 923 amendments filed by senators only 15 came
to a roll call vote. Many others were simply approved or
rejected one at a time on voice votes without debate.
To move things along even faster, the Senate also did its
usual “bundling” of many amendments. Instead of acting on
all the amendments one at a time, hundreds of the proposed
amendments are bundled and put into two piles—one pile that
will be approved and the other that will be rejected-with a
single vote on each pile.
Senate President Karen Spilka, or the senator who is filling
in for her at the podium, orchestrates the approval and
rejection of the bundled amendments with a simple: “All
those in favor say ‘aye,’ those opposed say ‘no.’ The ayes
have it and the amendments are approved.” Or “All those in
favor say ‘aye,’ those opposed say ‘no.’ The no’s have it
and the amendments are rejected.”
Senators don’t actually vote yes or no, and, in fact, they
don't say a word. The outcome was predetermined earlier
behind closed doors.
"The efficient Senate budget process this year reflected
lots of careful work by our Ways and Means Chair, Michael
Rodriques, and our Senate President, Karen Spilka, to build
consensus in the weeks before the budget," said Senate
President Pro Tempore Sen. Will Brownsberger (D-Belmont).
Despite repeated requests from Beacon Hill Roll Call, Senate
President Karen Spilka's office did not respond to a request
to comment on the bundled amendments and the small number of
roll calls. And no response was received from Spilka's
leadership team of Sens. Cindy Creem (D-Newton), Joan Lovely
(D-Salem), Mike Barrett (D-Lexington) and Sal DiDomenico
(D-Everett).
"Roll call requests are based on a number of factors that
are the subject of both continuing and contemporaneous
discussions within the caucus based on specific issues,"
said GOP Minority Leader Bruce Tarr (R-North Reading).
[The process] more accurately highlights the increasingly
efficient use of the legislative rubber stamp,” said Chip
Ford, executive director of Citizens for Limited
Taxation. “Massachusetts doesn't need the cost of 200
legislators when a handful decide all legislation before it
comes for a vote. If the three token 'loyal opposition'
Republican senators weren’t taking up space taxpayers could
at least save the ‘leadership stipends’ they collect.”
“This type of process was not the norm only several years
ago." said said Massachusetts Fiscal Alliance Executive
Director Paul Craney. "Over the last few years, with new
legislative leadership, they rush through votes, often don’t
record the votes and don’t allow the public to gain access
to what is happening because most of the important work is
done behind closed doors. With that being said, the state
Senate is much more transparent than Speaker Ron Mariano and
Republican Brad Jones in the House. The House is arguably
the most opaque legislature in America.”
The Boston Herald
Tuesday, May 25, 2021
Lawmakers want to pay Massachusetts jobless $1,200 to go
back to work
By Erin Tiernan
State Senate Republicans want to pay jobless workers a
$1,200 get-back-to-work bonus over the next year to take a
job and get off unemployment by Sep. 4.
The pitch comes as one of the 923 amendments to the $47.6
billion Senate budget for fiscal 2022 that lawmakers will
debate starting Tuesday.
“For several weeks, I’ve heard from employers in my district
— whether they are restaurants or seasonal-type businesses
like a drive-in movie theater, the trucking industry and
others — that they are having trouble finding people to come
back to work,” said state Sen. Ryan Fattman, R-Webster, who
submitted the amendment. “The No.1 hurdle is that wages are
maybe a little more competitive or on par with unemployment
benefits.”
Fattman says his “sign-on bonus” of up to $1,200 would serve
as an incentive to get people back to work and encourage
them to keep their jobs. The bonus would be paid out in
three increments: $400 for securing a job before Sept. 4,
$400 upon proof of employment after six months and the final
$400 payment would come after a full year of continuous
employment.
His proposal would rely on a portion of the $5.3 billion in
coronavirus aid headed to the state from President Biden’s
$1.9 trillion American Rescue Plan.
The federal government has been supplementing unemployment
benefits since the beginning of the pandemic, first by $600
in additional assistance per week, now $300 per week.
Fattman said it’s time to put an end to the “unusually
generous” unemployment benefits that “made a lot of sense
back at the height of the pandemic.”
While nearly two dozen Republican-led states have moved to
cancel the federal unemployment boost in their states, Gov.
Charlie Baker told a Herald reporter earlier this month that
he had no plans to do so in Massachusetts.
His comments came despite an outcry from employers over a
shortage of workers and as the unemployment rate — hovering
at 6.5% as of April — remains more than double what it was
at the outset of the coronavirus pandemic.
Retailers Association of Massachusetts President Jon Hurst
said Fattman’s plan is “a terrific idea” but one that’s
unlikely to pass in a Legislature where Democrats hold a
supermajority.
So far, the Senate’s two other Republicans — Sens. Patrick
O’Connor of Weymouth and Sen. Bruce Tarr of Gloucester —
have signed on. House lawmakers also declined to draw on any
of the American Rescue Plan funds in their 2022 budget.
Hurst did, however, take issue with Fattman’s plan for
paying for the sign-on bonus.
“The first cut in (American Rescue Plan) money has to be to
roll back the $7 billion tax increase on employers because
of a crisis that was not their fault. That should be the
first priority,” Hurst said, referencing massive increases
in unemployment taxes small businesses around the state are
facing as a result of the massive number of claims borne out
of the pandemic.
State lawmakers are considering a separate bill that would
allow pandemic claims to paid off over 20 years, including
interest.
Fattman argued the best way to serve small businesses is “to
get people back to work.”
State House News Service
Thursday, May 27, 2021
Senate Dems Reject GOP Bid for Return-to-Work Bonuses
By Michael P. Norton
The three-man Senate Republican caucus wants to give
unemployed people in Massachusetts taxpayer-funded bonuses
to return to work, but Senate Democrats swept their idea
into the dustbin of failed budget amendments.
Sens. Ryan Fattman, Patrick O'Connor and Bruce Tarr proposed
granting a $1,200 bonus to anyone collecting unemployment
benefits who returns to work between the adoption of the
fiscal 2022 budget and Aug. 7, 2021.
An aide to Sen. Fattman said the senator viewed his proposal
as a "decent incentive to get people back to work and off
unemployment" and a way to help the state address labor
shortages that are frustrating employers.
Senate Democrats this week have been dispensing with more
than 900 budget amendments in large part through private
talks that lead to the adoption of bundles of amendments,
and the rejection of other bundles. The Fattman amendment
(811) - dubbed the Time For The Commonwealth To Get Back To
Work Bonus - was dumped into a bundle of amendments that was
rejected on a voice vote without debate on Wednesday
afternoon.
Under the proposal, the bonus would have been allocated in
three $400 increments, with an initial payment made upon
verification of an individual's return to work, a second
payment after six months of verified continuous employment,
and the last payment delivered upon verification of one year
of continuous employment.
The GOP senators hoped their proposal would be paid for with
funding included in the federal American Rescue Plan (ARPA),
which was adopted in Congress over the objections of
Republicans. House Speaker Ron Mariano has said he hopes
ARPA spending plans will emerge in June, in a vehicle
separate from the annual state budget.
The Boston Herald
Tuesday, May 25, 2021
Time to get off the couch and earn a paycheck
By Howie Carr
The scam is over.
It’s time for all you freeloaders to get back to work.
I’m pleading with you, no more crackpot grifts to keep your
yearlong-plus vacations going — and $174,000-a-year state
judges, I’m most assuredly including you in the list of
layabouts.
Please, no more handouts. Right now in Maskachusetts the
gainfully unemployed are grabbing an extra $300 a week for
snoozing on their mom’s couch. And now these same COVID
grifters may be offered $1,200 to get off their fat
rear-ends and start looking for work.
Good luck with that, especially now that weed has been
legalized.
And spare us the charade of this phony-baloney
you-have-to-apply-for-three-jobs-every-week nonsense either.
That’s a bigger scam than the Earned Income Tax Credit.
The goal with this whole Panic was to get rid of President
Donald J. Trump. Mission accomplished, OK? Move on,
everybody.
It’s time to go back to work — whether it’s punching a time
clock, or making cold calls, or (if I can get personal)
answering the Herald’s FOIA requests for information about
crooked cops and civil sexual-harassment lawsuits against
local politicians.
No more sob stories about how people are “afraid” to go back
to work. No kidding they’re frightened, but it’s not the
virus they’re afraid of, it’s the job itself.
Oh, you say you have in fact still been working. You’re
“telecommuting?” Yeah, right.
Last week, a Rasmussen poll showed that 44% of respondents
said the increased unemployment benefits “are making it too
easy for unemployed Americans not to work.”
This no-work scam has produced endless spinoff grifts. Think
about the Payroll Protection Program — bailouts for
businesses that didn’t exist. The PPP was like blowing a dog
whistle for every convicted fraudster and paroled embezzler
in the country, and apparently every last one of them heard
it.
How about the eviction “moratorium?” As if the non-working
classes grabbing an extra $600 or $300 a week in welfare, er,
unemployment, were suddenly destitute.
By the way, did the landlords get a moratorium on paying
their property taxes? Or utilities?
Then there was the proposed “forgiveness” of student-loan
debt because of the … emergency. Thankfully, that proposal
turned out to be a bridge too far even for Dementia Joe
Biden.
But now the new Leisure Class is complaining about that too
— and never mind that the government hasn’t been requiring
student-loan repayments since the Fauci flim-flam started,
and won’t again until at least the fall.
Monday I saw a giant sign hanging outside the Needham Post
Office — “We Are Hiring.” And it’s not even Christmas. When
the Post Office can’t find anybody for government work, you
know you’ve got a problem.
The two coffee shops I used to walk to from my house were
both killed off last year by Gov. Charlie Parker’s idiotic
lockdowns. So I went to a different place the other morning.
The line was out the door — the only person behind the
counter was the manager. She apologized that she couldn’t
get any of her help to come in for the morning rush.
On the Cape, the bigger restaurants and resorts are openly
poaching workers from the smaller places, even more so than
usual.
When Obamacare was passed more than a decade ago, Nancy
Pelosi said it would free her shiftless constituents from
“job lock.” Everybody laughed, but now, it’s apparently a
human right, not to have to worry about “job lock.”
This is the War on Poverty on steroids. The lesson of that
disaster was that you get more of whatever you subsidize,
and the U.S. subsidized all kinds of social dysfunction,
including family dissolution and out-of-wedlock pregnancies.
Guess what we got more of.
Then there was “job training.” That scam was, as long as you
were being trained, you didn’t have to get off welfare. Mike
Dukakis used to brag about Massachusetts’ job training
programs — a national model, he said.
Then a Democrat state senator got the list of trainees — as
I recall about 5,000 teen moms and illegal aliens had been
“trained” for approximately 50,000 jobs, maybe 100 of which
they’d actually taken.
I see much more job training in the near future.
Have you tried to get in any government buildings lately –
like, in the last 15 months? The problem is, if they
actually truly reopened the buildings again, all the hacks
would be expected to come back to work, not just a “skeleton
crew.”
And that ain’t happening.
Thank God for Charlie Parker, though. There’s a reason why
he’s the Pope of Panic Porn. He defends his indolent public
sector workforce – the ones who’ve been on vacation since
March 2020.
Monday, he filed legislation “providing for a temporary
suspension of certain open-meeting law requirements.”
In other words, all Charlie Parker’s buildings can remain
closed!
The scam is over. Long live the scam.
State House News Service
Friday, May 28, 2021
Advances - Week of May 30, 2021
As the new normal dawns and the state budget dips into the
darkness of closed House-Senate negotiations, lawmakers are
under pressure in early June to decide which pandemic-era
policies to save before the COVID-19 state of emergency
lifts on June 15 and to come up with ways to put to work
some of the federal stimulus funds that the federal
government has showered on the states.
Budget bills topping $47.7 billion in spending are headed
for a conference committee to be led by Rep. Aaron
Michlewitz and Sen. Michael Rodrigues.
A critical report on May tax receipts is due out next week.
Since January alone, tax collections have exceeded budget
estimates by $1.8 billion, according to the Massachusetts
Taxpayers Foundation.
The state of play means the budget conference could mark up
revenue expectations to sharply reduce their planned raid of
the state's rainy day fund at a time when the economy is
accelerating and they are not permitted to use special
federal aid to backfill the state's stabilization reserve.
The conferees must also settle House-Senate differences over
transportation network company fee increases and tax
incentives to encourage film industry work in Massachusetts.
The Senate this week also loaded its budget with policy
proposals unrelated to spending. The foundation late
Thursday reported that 455 budget amendments were adopted
over three days, including 83 policy proposals that were
added to the 60 policy riders already in the Senate budget.
The advancement of the policy proposals comes at a time in
the session when most bills calling for new policies have
not been vetted and have yet to even advance to the public
hearing stage. The House and Senate also also have yet to
agree on basic ground rules governing the transparency of
committee testimony and voting.
Storylines in Progress
The Baker administration heads into the last 19 months of
Baker's term with an acting transportation secretary (Jamey
Tesler), an acting public health commissioner (Margret
Cooke) and a public safety secretary (Tom Turco) who is
staying on the job even though he had planned to retire last
year
... The Legislature's new committee focused on emergency
preparedness examines a non-COVID-19 issue on Friday:
readiness for hurricane season
... The State House is fast becoming one of the last places
in Massachusetts without a reopening plan
... Pandemic-era voting reforms are expiring next month and
legislative leaders have yet to coalesce around a single
plan to extend mail-in and early voting, or to decide on
same-day registration, a reform that could be in place for
this year's elections if lawmakers were to act soon
... Changes to the governance and management structure of
the Holyoke Soldiers' Home appear inevitable, but 15 months
after the deadly COVID-19 outbreak there is still no
agreement among lawmakers and Gov. Baker on a path forward
... Unions are closely monitoring House Speaker Ron Mariano
to see whether he'll initiate an override vote to ensure a
project labor agreement is in place for the construction of
a new Holyoke Home
... Gov. Baker and Lt. Gov. Polito, along with their family
members, plan to talk about a possible re-election effort,
Gov. Baker said Friday, as the next governor's race gathers
more momentum. Like Baker, Sen. Sonia Chang-Diaz and Harvard
professor Danielle Allen haven't committed to running for
governor, but are thinking about it....
FULL REOPENING ARRIVES: Virtually all remaining COVID-19
restrictions will lift on Saturday and the state's face
covering order will be replaced with an advisory as the
Baker administration fully reopens Massachusetts after more
than a year.
All industries will be allowed to open and operate at 100
percent capacity, industry-specific restrictions will end,
and the state will no longer place a limit on gathering
sizes.
The new face covering advisory will encourage those who are
not yet vaccinated to continue wearing masks and distancing
in most settings. Masks will still be required for everyone
regardless of vaccination status on public and private
transportation such as MBTA and rideshares, in health care
facilities, congregate care settings, rehabilitative day
services, and for both students and staff indoors at K-12
schools and early education providers. (Saturday, May 29)
State House News Service
Monday, May 24, 2021
Fed Guidance Limits ARPA Use for Revenue Replacement
Howgate: You Can't Use ARPA to Rebuild Rainy Day Fund
By Colin A. Young
State budget managers can probably use about $1.5 billion of
the incoming American Rescue Plan Act funding to replace
revenue the state lost in 2020 due to the pandemic but will
not be able to use it to replenish the state's rainy day
fund, a Massachusetts Taxpayers Foundation analyst said last
week.
One of the four primary buckets of allowable uses of the
ARPA money being sent to states and local governments is
revenue replacement, but until the U.S. Treasury issued its
guidance on how ARPA funds can and cannot be used it was
unclear just how much of the roughly $5.3 billion in state
fiscal relief headed for Massachusetts could be used to,
essentially, help balance the budget.
"You could come up with some pretty reasonable scenarios in
which your ability to use revenue replacement was
essentially nil, and you can come up with scenarios in which
you could use almost the entire award for revenue
replacement. So that's why this guidance was so key," Doug
Howgate, the executive vice president of the Massachusetts
Taxpayers Foundation, said.
And the Treasury's guidance, though it also presents a few
"hiccups" for budget overseers, also "allows for probably
some pretty significant revenue replacement" for
Massachusetts, Howgate told the House Committee on Federal
Stimulus and Census Oversight on Friday.
"Using tax revenue, which is going to be the bulk of how
revenue replacement is calculated, you can come up with a
ballpark, and my estimate for the first calculation of
revenue replacement is it will probably allow us to use
about call it $1.3 to $1.6 billion in revenue replacement in
this first time period," he said as he presented a slide
that estimated about $1.563 billion in allowed revenue
replacement in calendar year 2020.
The Treasury guidance calls for revenue replacement to be
calculated by comparing actual collected revenue to "an
alternative representing what could have been expected to
occur in the absence of the pandemic."
Howgate explained that a state's allowed revenue replacement
could be calculated by starting with actual fiscal year 2019
collections (the last full fiscal year before the pandemic)
and increasing them by the 4.1 percent annual growth rate
prescribed in the Treasury guidance. The difference between
what a state could have collected under the 4.1 percent
annual growth scenario and what the state actually collected
is the amount of ARPA money that can be used for revenue
replacement.
But states cannot just run the calculation once -- the
Treasury guidelines require state and local governments to
calculate their allowed revenue replacement once upon
receiving the ARPA money, then again on Jan. 1 of 2022, 2023
and 2024.
"It's going to make planning this money somewhat challenging
because we're not going to know exactly how much revenue
replacement we can bring to bear until later on in the
process," Howgate said. "I think that was intentional,
probably, to make sure that states are a little deliberate
in how they're using this money."
Zeroing in on the first calculation for Massachusetts could
take some time and cooperation between the Legislature,
governor's office and the comptroller's office, he said. For
one thing, revenue replacement is done on a calendar year
basis and Massachusetts doesn't typically do financial
reporting on a calendar year basis.
Lawmakers will also have to be mindful of the restrictions
on revenue replacement when they wrap up the accounting on
fiscal year 2021 and put a fiscal year 2022 budget into
place, Howgate told them.
"There was some feeling before that maybe we could fund some
spending with the stabilization fund and then rebuild it
with federal resources. You can't do that," he said,
highlighting one of the "hiccups" in the Treasury rules. "So
the order of operations of how we use these resources to
balance the budget, it really matters because once that
money's out of the stabilization fund these fiscal recovery
funds cannot be used to replenish that."
Administration officials and legislative leaders have said
they would like to limit draws against the state's
stabilization fund, which has a balance of $3.52 billion
before accounting for potential spending from that fund of
up to $1.7 billion this budget year. Gov. Charlie Baker
proposed a withdrawal of up to $1.6 billion from the fund in
fiscal 2022, the House passed a budget that proposes pulling
$1.875 billion from the fund, and the Senate on Tuesday will
begin debating a fiscal 2022 budget that would draw up to
$1.55 billion from the fund.
The months-long and ongoing pattern of state tax collections
obliterating expectations could also help limit what is
actually taken out of the rainy day fund and provide
lawmakers with a source of funds to start to build the
reserve account's balance back up. 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 the Department of Revenue's expectations.
Through May 14, DOR had collected $1.190 billion from
taxpayers -- about 63 percent of the $1.893 billion the
agency expects to bring in by the end of this month.
State House News Service
Monday, May 24, 2021
Legislative Staffers Got Raises, $500 Stipends
By Matt Murphy
House and Senate employees received raises of 6 percent this
month and one-time stipends of $500 to defray the cost of
working from home over the last year as employees have
become increasingly vocal about the challenge of supporting
themselves in Greater Boston on a legislative staff salary.
The group Beacon B.L.O.C. on Monday released the results of
the survey it publicized in early May that found just about
10 percent of legislative staffers felt they were fairly
paid for the hours and responsibilities that come with the
job.
Speaker Ron Mariano said House employees went "above and
beyond" over the past year and thanked them for the
"commitment and their service," while Senate President Karen
Spilka said the Senate "has always valued feedback from its
employees and will continue to look for ways to improve the
work environment and compensation for staff."
The survey was based on responses from what Beacon B.L.O.C,
a coalition of Black staffers and allies, described as 210
anonymous staffers, or about a quarter of State House
workforce. It was unclear based on the survey whether the
respondents worked in the House or Senate, which operate
separate human resources departments.
Staffers in both branches got identical 6 percent
cost-of-living adjustments in their paychecks this month,
plus the $500 stipend, according to Mariano and Spilka's
office. Raises are typically handed out every two years. The
Senate has also expanded its parental leave program from
eight to 16 weeks of full pay for the birth, adoption or
foster placement of a child.
"As Senate President, I will never stop working to make the
Massachusetts State Senate a safe, inclusive and responsive
workplace where our employees are valued and appreciated,"
Spilka said in a statement.
Mariano said the House recently updated its human resources
operation, including new rules and the establishment of an
employee engagement officer position to work with employees
on ways to improve the professional environment of the
House.
"The House is committed to fostering an open and inclusive
environment for all employees, and we are open to
suggestions on how we can improve our efforts," Mariano
said. |
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