 |
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, June 6, 2021
Raking In More Cash
Than Ever Before But Still Not 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 May totaled $4.002 billion, which is $2.264
billion or 130.3% more than the actual collections in May
2020, and $2.109 billion or 111.4% more than benchmark.
FY2021 year-to-date collections totaled approximately
$30.451 billion, which is $5.689 billion or 23.0% more than
collections in the same period of FY2020, however,
historical comparisons should consider the impact of COVID-related
tax filing timing changes. Year-to-date collections are also
$3.938 billion or 14.9% more than the year-to-date benchmark
and exceed the full year benchmark by $1.360 billion.
Massachusetts Department of Revenue
Thursday, June 3, 2021
Press Release: May Revenue Collections Total
$4.002 Billion
Monthly collections up $2.264 billion or 130.3% vs. May 2020
actual; $2.109 billion above benchmark
The Department of Revenue collected more than twice as much
money from taxpayers last month than it had anticipated and
Massachusetts is now on pace to emerge from the
pandemic-plagued fiscal year 2021 having collected more tax
revenue than state officials projected before anyone here
had heard of COVID-19.
DOR announced Thursday that it collected $4.002 billion in
taxes from people and businesses in May -- $2.264 billion or
130.3 percent more than was collected in May 2020 and $2.109
billion or 111.4 percent more than the Baker administration
had estimated it would collect for the month. This year, the
tax filing deadline was May 17 but last year it was in July.
The May benchmark, which was not adjusted after the filing
deadline was postponed this year, was $1.893 billion....
With one month of fiscal 2021 remaining, state government
has collected $30.451 billion in tax revenue -- $1.360
billion more than DOR's most recent estimate for the full
12-month fiscal year. Year-to-date collections are up $5.689
billion or 23 percent over the same 11-month period in
fiscal 2020 and $3.938 billion or 14.9 percent over DOR's
expectations.
If June revenues now come in at exactly the DOR benchmark of
$2.578 billion, Massachusetts will have collected $33.029
billion in tax revenue for fiscal year 2021.
That would be $3.939 billion or 13.54 percent more than what
the Baker administration projected it would collect this
fiscal year when it last updated its expectations in
January, $3.42 billion or 11.55 percent more than what was
collected during fiscal year 2020, and about $1.879 billion
or 6 percent more than the pre-pandemic estimate of $31.15
billion in tax revenue for fiscal year 2021.
It would also be about $2.909 billion more than the
consensus revenue agreement of $30.12 billion the governor,
House and Senate used craft their fiscal year 2022 budget
proposals. As the budget bills passed by the House and
Senate head into conference committee negotiations in the
coming week, the six-member panel could decide to wield
considerable power by upping the revenue assumption to give
themselves additional money to dole out. Democratic leaders
in both branches have said they could consider increasing
the projection, in part to reduce their planned raid of the
state's rainy day fund.
The over-benchmark fiscal 2021 collections, if they hold up
for another month, would lead to a significant surplus this
summer, which could come into sharper focus just as the
governor and Legislature are making decisions about how to
spend $5.3 billion in federal aid received as part of the
American Rescue Plan Act.
Thursday's announcement of May tax collections also came
just hours after House Speaker Ronald Mariano and Senate
President Karen Spilka announced their plan to take up a
constitutional amendment to impose a surtax on household
income over $1 million during a Constitutional Convention
next week. If the proposal passed the joint session, it
would go to the voters on the 2022 statewide ballot.
"We stand with the residents of Massachusetts in exploring
new ways to increase revenue for the state as we envision
and invest in an equitable and hopeful future for the
Commonwealth," Mariano and Spilka said in a statement
Thursday.
State House News Service
Thursday, June 3, 2021
May Haul Puts State Taxes $5.689 Bil Ahead
of Last Year
State Awash in Extra Cash Ahead of Surtax Debate
Massachusetts residents and businesses are smashing tax
collection records and the federal government is pouring
billions of dollars into the state's already hot economy,
but the Massachusetts Legislature sees an opportunity to
grab even more revenue and they are poised to take it.
Lawmakers believe a 4 percent surtax on household incomes
above $1 million per year would put a dent in the problem of
income inequality and generate about $2 billion a year in
new tax revenue that will help make needed education and
transportation investments. Opponents are making the
slippery slope argument, alleging that amending the
Constitution to allow different income tax rates represents
a likely irreversible step that threatens the tax base by
making the state less economically competitive and could
eventually lead to more tax brackets and a graduated income
tax structure.
The Legislature on Wednesday plans to gavel into a
Constitutional Convention to advance the amendment to the
2022 ballot where it will be settled by voters.
State House News Service
Friday, June 4, 2021
Advances - Week of June 6, 2021
With an election year around the corner, DOR announced that
the state took in $4 billion in taxes in May, beating
estimates by more than $2.1 billion and putting the state on
track to collect nearly $4 billion more than it expected on
the year....
While some of that has to do with the fact that the tax
filing deadline was moved this year from April to May, it
still marked the continuation of a trend that has state
leaders contemplating a sizable surplus at the end of the
fiscal year.
That, too, will need to get spent, or saved, or perhaps
returned in the form of tax relief.
Spilka and Mariano did not foreclose the idea that federal
relief funds "may potentially be spread out over a number of
years to ensure our continued economic vitality," which
could form a bridge between today and the day millionaires
start paying higher income taxes.
The two Democrats announced that they planned to call a vote
next Wednesday on a constitutional amendment to impose a new
4 percent surtax on income over $1 million, with the
intention of spending it on transportation and education.
It's the second and final vote required before the question
would be put to voters on the 2022 ballot, and it is
expected to pass despite the current strength of the state's
financial footing.
State House News Service
Friday, June 4, 2021
Weekly Roundup - Taxing and Spending
Senate President Karen Spilka and House Speaker Ron Mariano
on Thursday teed up for a vote next week a constitutional
amendment that would raise the income tax on wealthy
Massachusetts residents at a time when the state is flush
with tax revenue and federal stimulus money.
The so-called millionaire's tax proposal has been years in
the making and is one vote of the Legislature short of being
put before voters on the 2022 statewide ballot. The proposal
would amend the state's Constitution to add a 4 percent
surtax on all household income above $1 million. The current
flat income tax rate in Massachusetts is 5 percent.
"As Massachusetts recovers from the COVID-19 pandemic, and
as we prepare for our future, we have a unique opportunity
to move towards a Commonwealth that truly works for all
residents," Spilka and Mariano said in a joint statement
Thursday.
The Democratic leaders said it is their intent to call for a
vote on the income tax amendment next Wednesday when the
Constitutional Convention -- a joint meeting of the two
branches of the Legislature -- gavels back in....
The Raise Up Coalition, a group of labor, faith and
community organizations that have championed the
millionaire's tax, said they appreciated the scheduling of
the vote and described its campaign as being in "full
swing," with more than a dozen local rallies planned this
month.
"Long before the pandemic, Massachusetts needed new
investments in our transportation and public education
systems. These investments are needed now more than ever to
lift up our economy for everyone and to ensure Massachusetts
remains a great place to live, work, and raise a family.
Massachusetts needs sustainable, long-term revenue for these
investments that doesn't require low- and middle-income
families to pay more," the coalition said in a statement.
State House News Service
Thursday, June 3, 2021
Income Surtax Vote Planned for Next
Week
|
Chip Ford's CLT
Commentary
Massachusetts is
rolling in more other people's cash than ever before
— ever before.
The Massachusetts Department of Revenue issued its monthly
revenue report this past Thursday, "May Revenue Collections
Total $4.002 Billion — Monthly
collections up $2.264 billion or 130.3% vs. May 2020 actual;
$2.109 billion above benchmark."
Massachusetts Department of Revenue
(DOR) Commissioner Geoffrey Snyder today announced that
preliminary revenue collections for May totaled $4.002
billion, which is $2.264 billion or 130.3% more than the
actual collections in May 2020, and $2.109 billion or
111.4% more than benchmark.
FY2021 year-to-date collections
totaled approximately $30.451 billion, which is $5.689
billion or 23.0% more than collections in the same
period of FY2020, however, historical comparisons should
consider the impact of COVID-related tax filing timing
changes. Year-to-date collections are also $3.938
billion or 14.9% more than the year-to-date benchmark
and exceed the full year benchmark by $1.360 billion.
State House News Service followed up on Thursday with its
report ("May Haul Puts State Taxes $5.689 Bil Ahead of Last
Year — State Awash in Extra
Cash Ahead of Surtax Debate"):
The Department of Revenue collected
more than twice as much money from taxpayers last month
than it had anticipated and Massachusetts is now on pace
to emerge from the pandemic-plagued fiscal year 2021
having collected more tax revenue than state officials
projected before anyone here had heard of COVID-19.
DOR announced Thursday that it
collected $4.002 billion in taxes from people and
businesses in May -- $2.264 billion or 130.3 percent
more than was collected in May 2020 and $2.109 billion
or 111.4 percent more than the Baker administration had
estimated it would collect for the month. This year, the
tax filing deadline was May 17 but last year it was in
July. The May benchmark, which was not adjusted after
the filing deadline was postponed this year, was $1.893
billion....
With one month of fiscal 2021
remaining, state government has collected $30.451
billion in tax revenue -- $1.360 billion more than DOR's
most recent estimate for the full 12-month fiscal year.
Year-to-date collections are up $5.689 billion or 23
percent over the same 11-month period in fiscal 2020 and
$3.938 billion or 14.9 percent over DOR's expectations.
If June revenues now come in at
exactly the DOR benchmark of $2.578 billion,
Massachusetts will have collected $33.029 billion in tax
revenue for fiscal year 2021.
That would be $3.939 billion or
13.54 percent more than what the Baker administration
projected it would collect this fiscal year when it last
updated its expectations in January, $3.42 billion or
11.55 percent more than what was collected during fiscal
year 2020, and about $1.879 billion or 6 percent more
than the pre-pandemic estimate of $31.15 billion in tax
revenue for fiscal year 2021.
It would also be about $2.909
billion more than the consensus revenue agreement of
$30.12 billion the governor, House and Senate used craft
their fiscal year 2022 budget proposals. As the budget
bills passed by the House and Senate head into
conference committee negotiations in the coming week,
the six-member panel could decide to wield considerable
power by upping the revenue assumption to give
themselves additional money to dole out. Democratic
leaders in both branches have said they could consider
increasing the projection, in part to reduce their
planned raid of the state's rainy day fund.
The over-benchmark fiscal 2021
collections, if they hold up for another month, would
lead to a significant surplus this summer, which could
come into sharper focus just as the governor and
Legislature are making decisions about how to spend $5.3
billion in federal aid received as part of the American
Rescue Plan Act.
Thursday's announcement of May tax
collections also came just hours after House Speaker
Ronald Mariano and Senate President Karen Spilka
announced their plan to take up a constitutional
amendment to impose a surtax on household income over $1
million during a Constitutional Convention next week. If
the proposal passed the joint session, it would go to
the voters on the 2022 statewide ballot.
"We stand with the residents of
Massachusetts in exploring new ways to increase revenue
for the state as we envision and invest in an equitable
and hopeful future for the Commonwealth," Mariano and
Spilka said in a statement Thursday.
In its Advances on Friday the News Service noted:
Massachusetts residents and
businesses are smashing tax collection records and the
federal government is pouring billions of dollars into
the state's already hot economy, but the Massachusetts
Legislature sees an opportunity to grab even more
revenue and they are poised to take it.
Lawmakers believe a 4 percent
surtax on household incomes above $1 million per year
would put a dent in the problem of income inequality and
generate about $2 billion a year in new tax revenue that
will help make needed education and transportation
investments. Opponents are making the slippery slope
argument, alleging that amending the Constitution to
allow different income tax rates represents a likely
irreversible step that threatens the tax base by making
the state less economically competitive and could
eventually lead to more tax brackets and a graduated
income tax structure.
The Legislature on Wednesday plans
to gavel into a Constitutional Convention to advance the
amendment to the 2022 ballot where it will be settled by
voters.
Massachusetts is receiving an additional $5.3 billion
in federal aid
—
on top of its own state revenue bonanza
—
bringing the total unanticipated revenue to a
staggering some TEN BILLION DOLLARS
($10,000,000,000).
That's $10 Billion more than it had to squander in
the year before the Wuhan Chinese Pandemic was released on
mankind and shut down the state, the nation, and the world
(excluding China)
—
back when the Trump economy was roaring.
Yet still
the Legislature is expected to ram through its graduated
income tax scheme (aka, "The Millionaires Tax," or "Fair
Share Amendment") on Wednesday, setting up the next battle
for the 2022 ballot.
There's
only one reason at this moment that the Democrat
super-majority in the Legislature (hopefully without a vote
of support from a single Republican) will do this:
Simply
because they can.
In its
Weekly Roundup on Friday ("Taxing and Spending") the State
House News Service added:
With an election year around the
corner, DOR announced that the state took in $4 billion
in taxes in May, beating estimates by more than $2.1
billion and putting the state on track to collect nearly
$4 billion more than it expected on the year....
While some of that has to do with
the fact that the tax filing deadline was moved this
year from April to May, it still marked the continuation
of a trend that has state leaders contemplating a
sizable surplus at the end of the fiscal year.
That, too, will need to get spent,
or saved, or perhaps returned in the form of tax relief.
Spent,
saved, or returned as tax relief. This being
Taxachusetts which do you suppose it will be?
Other
states finding themselves in this sudden embarrassment of
riches predicament are taking a humble and rational
approach, for example look what Ohio is doing with its
inexplicable pandemic revenue windfall: Income tax
cuts, with each branch of state government vying to outdo
the other!
The
Washington D.C.- based Tax Foundation reported on Thursday
("Ohio
Lawmakers Ponder Tax Relief after Rosy Revenue Outlook"):
Ohio is one of a growing number of
states which experienced revenue increases despite the
economic slowdown from the coronavirus pandemic and is
now looking to return some of that through tax relief.
(See analysis of Arizona, Kansas, Louisiana, Montana,
and Oklahoma). The question for Ohio legislators is, how
best to do that?
This week, the Ohio Senate released
its budget proposal for the upcoming fiscal biennium
(2022-2023) and it includes a 5 percent tax cut to
personal income taxes. That differs from earlier
versions offered by Gov. Mike DeWine (R), which offers
no cuts to the income tax, and the Ohio House of
Representatives, which includes a 2 percent cut. The
Senate proposal also offers a solution to the issue of
cities taxing nonresident workers who haven’t been
coming to their offices in those cities throughout the
pandemic.
The Senate tax reduction plan would
be implemented over two years, trimming rates by 3.5
percent the first year and 1.5 percent the second year.
Do you
suppose something like that is possibly even conceivable
on Beacon Hill? Don't waste your time thinking about
it. That is not The Massachusetts Way
— where it took Citizens
for Limited Taxation thirty years, three decades, 360
months to roll the "18-month,
temporary" Dukakis income tax hike of 1989 back to five
percent. The Democrat majority and The Takers
are too busy scheming over how to grab more, more, always
more from the hard-working, productive Providers
of all state spending. More Is Never Enough (MINE) and
never will be. That is "The Massachusetts Way".
Instead we
are informed by the
State House News Service ("Income Surtax Vote Planned for
Next Week"):
The so-called millionaire's tax
proposal has been years in the making and is one vote of
the Legislature short of being put before voters on the
2022 statewide ballot. The proposal would amend the
state's Constitution to add a 4 percent surtax on all
household income above $1 million. The current flat
income tax rate in Massachusetts is 5 percent.
"As Massachusetts recovers from the
COVID-19 pandemic, and as we prepare for our future, we
have a unique opportunity to move towards a Commonwealth
that truly works for all residents," [Senate President]
Spilka and [House Speaker] Mariano said in a joint
statement Thursday.
The Democratic leaders said it is
their intent to call for a vote on the income tax
amendment next Wednesday when the Constitutional
Convention -- a joint meeting of the two branches of the
Legislature -- gavels back in....
The Raise Up Coalition, a group of
labor, faith and community organizations that have
championed the millionaire's tax, said they appreciated
the scheduling of the vote and described its campaign as
being in "full swing," with more than a dozen local
rallies planned this month.
"Long before the pandemic,
Massachusetts needed new investments in our
transportation and public education systems. These
investments are needed now more than ever to lift up our
economy for everyone and to ensure Massachusetts remains
a great place to live, work, and raise a family.
Massachusetts needs sustainable, long-term revenue for
these investments that doesn't require low- and
middle-income families to pay more," the coalition said
in a statement.
There they go again corrupting the language for spin and
effect. They don't call taking from some to give to
others (them) "taxing and spending" any more. It has
become "investing" don'cha know. Who are those behind
this latest money-grab, The Takers? This latest
incarnation identifies itself as Raise Up Massachusetts.
Who and what makes up the current cabal of Takers can be
found
here — and their intentions are
promoted
here.
An extensive list of their rallies to
grab more can be found below in the State House News
Service's Advances for the coming week. They are
massing all across the state, determined to conquer this
time.
If they succeed with this sixth
attempt to impose a graduated income tax on The
Productive, how dystopian will Massachusetts will become
when all the productive Producers and Providers
have packed up and fled? Who will The Takers
feed on then? Don't look over your shoulder — they'll
be coming for you, before turning on each other.
Pioneer Institute released another of
its great reports on this issue on Monday which exposed
another fabrication used by The Takers. Below
are a few excerpts from it (you can find and download a full
copy of the report
here).
CLICK THE GRAPHIC TO GO TO PIONEER
Proponents of a state
constitutional amendment to add a 4 percent surtax on
all households with annual income above $1 million
frequently cite 2015 data from the Institute on Taxation
and Economic Policy, which argues that the Massachusetts
tax code is regressive, but a new study published by
Pioneer Institute debunks many of the underlying
assumptions used in ITEP’s 2015 report....
The new Pioneer study also
emphasizes how Massachusetts gets a vastly
disproportionate share of income tax revenue from the
wealthy. The top 10 percent of Massachusetts taxpayers
paid 38.2 percent more than the bottom 90 percent in
2017, and that figure would rise to 68.1 percent more if
the surtax passes. The richest 0.5 percent of taxpayers
currently pay 24 percent of state income taxes in the
Commonwealth, and this would rise to 32.5 percent if the
surtax is passed. This is significant because a heavy
reliance on the wealthy to fill state coffers has been
linked to high revenue volatility and other budget
problems. . . .
Conclusion
Advocates of the proposed surtax
paint a picture of the Massachusetts tax system as
highly regressive. They fail to mention that ITEP, the
organization that produced the data upon which they
rely, rated Massachusetts as having a more progressive
tax system than 29 other states. ITEP fails to
adequately explain their model’s treatment of the tax
incidence of sales, excise, and property taxes, and they
exclude a number of other aspects of the tax code that
make it seem artificially regressive.
Taxpayers with annual incomes of
more than $1 million, constituting 0.5 percent of all
taxpayers, paid more than twice as much in state income
taxes in 2017 as did the bottom 60 percent of income
earners combined. That same year, the top 10 percent of
Massachusetts taxpayers paid 38.2 percent more than all
other taxpayers combined, and that figure would rise to
68.1 percent more if the surtax passes. Taxpayers with
incomes of $1 million or more had average income of $3.7
million in 2017 and paid an average of $1.2 million in
combined state and federal taxes, for an effective rate
of 32.8 percent. Other taxpayers had an average income
of $70,042 and paid an average of $14,318 in combined
state and federal taxes, for an effective rate of 18.9
percent.
In an era of stark income
inequality, the federal government is better able to
address progressivity in taxation and the resulting
economic fallout. After all, to avoid taxation, it is
far more difficult to leave the country than move across
state lines. Increasing the top income tax rate in
Massachusetts from 5 percent to 9 percent, an 80 percent
increase, runs the risk of incentivizing high income
taxpayers and businesses to relocate to lower tax
states. If the Commonwealth is to have a serious debate
about the merits of a tax hike, we should start with a
candid look at how progressive our tax code already is,
and ITEP’s “Who Pays?” series is far from candid.
A graduated income tax has been
proposed and put on the ballot five times in the past (in
1962, 1968, 1972, 1976, and 1994) and soundly defeated every
time. Citizens for Limited Taxation was founded by
Edward F. King in 1975 to oppose and defeat it on the 1976
ballot. CLT, led by Barbara Anderson, opposed and
defeated it on the statewide ballot in 1994, the last time
it raised its ugly head. We must defeat it again, for
the sixth time.
If the historic flat rate income tax
(ever since a state income tax was first imposed in 1916)
where every taxpayer pays the same rate is
ever cracked, if The Takers ever manage to divide and
conquer taxpayers one income bracket at a time, then the
time to abandon all hope will have arrived.
CLT will send a memo to all
legislators on Tuesday before their Wednesday vote
encouraging them to restrain themselves, and a news release
to all our media contacts statewide. Watch for yours.
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
Full News Reports Follow
(excerpted above) |
|
Massachusetts Department of Revenue
Thursday, June 3, 2021
Press Release: May Revenue Collections Total $4.002 Billion
Monthly collections up $2.264 billion or 130.3% vs. May 2020
actual; $2.109 billion above benchmark
Massachusetts Department of Revenue (DOR) Commissioner
Geoffrey Snyder today announced that preliminary revenue
collections for May totaled $4.002 billion, which is $2.264
billion or 130.3% more than the actual collections in May
2020, and $2.109 billion or 111.4% more than benchmark.[1]
FY2021 year-to-date collections totaled approximately
$30.451 billion, which is $5.689 billion or 23.0% more than
collections in the same period of FY2020, however,
historical comparisons should consider the impact of COVID-related
tax filing timing changes. Year-to-date collections are also
$3.938 billion or 14.9% more than the year-to-date benchmark
and exceed the full year benchmark by $1.360 billion.
“May revenue included increases in most major categories,
particularly personal income tax return payments,” said
Commissioner Snyder. “However, historical comparisons to
last year and previous years should be viewed with caution
due to COVID-related timing changes to the 2020 and 2021 tax
filing season as well as responsive measures undertaken to
mitigate the impacts 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 May Revenue Collections
• Income tax collections for May were $3.020 billion, $1.986
billion or 192.1% above benchmark, and $1.897 billion or
169.0% more than May 2020. Due to extensions of filing and
payment deadlines in both this year and last year, income
tax collections in May 2021 and May 2020 are not comparable.
• Withholding tax collections for May totaled $1.167
billion, $206 million or 21.4% above benchmark, and $46
million or 4.1% more than May 2020.
• Income tax estimated payments totaled $58 million for May,
$36 million or 161.4% more than benchmark, and $32 million
or 127.3% more than May 2020.
• Income tax returns and bills totaled $2.141 billion for
May, $1.993 billion more than benchmark, and $2.067 billion
more than May 2020. Due to extensions of filing and payment
deadlines in both this year and last year, income tax
returns and bills in May 2021 and those in May 2020 are not
comparable.
• Income tax cash refunds in May totaled $345 million in
outflows, $248 million or 255.8% more than benchmark, and
$248 million or 255.1% more than May 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
May 2021 and those in May 2020 are not comparable.
• Sales and use tax collections for May totaled $689
million, $52 million or 8.2% above benchmark, and $251
million or 57.2% more than May 2020.
• Corporate and business tax collections for the month
totaled $71 million, $10 million or 12.6% below benchmark,
and $34 million or 92.7% more than May 2020.
Other tax collections for May totaled $222 million, $81
million or 57.6% above benchmark, and $82 million or 58.7%
more than May 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
Thursday, June 3, 2021
May Haul Puts State Taxes $5.689 Bil Ahead of Last Year
State Awash in Extra Cash Ahead of Surtax Debate
By Colin A. Young
The Department of Revenue collected more than twice as much
money from taxpayers last month than it had anticipated and
Massachusetts is now on pace to emerge from the
pandemic-plagued fiscal year 2021 having collected more tax
revenue than state officials projected before anyone here
had heard of COVID-19.
DOR announced Thursday that it collected $4.002 billion in
taxes from people and businesses in May -- $2.264 billion or
130.3 percent more than was collected in May 2020 and $2.109
billion or 111.4 percent more than the Baker administration
had estimated it would collect for the month. This year, the
tax filing deadline was May 17 but last year it was in July.
The May benchmark, which was not adjusted after the filing
deadline was postponed this year, was $1.893 billion.
"May revenue included increases in most major categories,
particularly personal income tax return payments," Revenue
Commissioner Geoffrey Snyder said. "However, historical
comparisons to last year and previous years should be viewed
with caution due to COVID-related timing changes to the 2020
and 2021 tax filing season as well as responsive measures
undertaken to mitigate the impacts of COVID-19."
With one month of fiscal 2021 remaining, state government
has collected $30.451 billion in tax revenue -- $1.360
billion more than DOR's most recent estimate for the full
12-month fiscal year. Year-to-date collections are up $5.689
billion or 23 percent over the same 11-month period in
fiscal 2020 and $3.938 billion or 14.9 percent over DOR's
expectations.
If June revenues now come in at exactly the DOR benchmark of
$2.578 billion, Massachusetts will have collected $33.029
billion in tax revenue for fiscal year 2021.
That would be $3.939 billion or 13.54 percent more than what
the Baker administration projected it would collect this
fiscal year when it last updated its expectations in
January, $3.42 billion or 11.55 percent more than what was
collected during fiscal year 2020, and about $1.879 billion
or 6 percent more than the pre-pandemic estimate of $31.15
billion in tax revenue for fiscal year 2021.
It would also be about $2.909 billion more than the
consensus revenue agreement of $30.12 billion the governor,
House and Senate used craft their fiscal year 2022 budget
proposals. As the budget bills passed by the House and
Senate head into conference committee negotiations in the
coming week, the six-member panel could decide to wield
considerable power by upping the revenue assumption to give
themselves additional money to dole out. Democratic leaders
in both branches have said they could consider increasing
the projection, in part to reduce their planned raid of the
state's rainy day fund.
The over-benchmark fiscal 2021 collections, if they hold up
for another month, would lead to a significant surplus this
summer, which could come into sharper focus just as the
governor and Legislature are making decisions about how to
spend $5.3 billion in federal aid received as part of the
American Rescue Plan Act.
Thursday's announcement of May tax collections also came
just hours after House Speaker Ronald Mariano and Senate
President Karen Spilka announced their plan to take up a
constitutional amendment to impose a surtax on household
income over $1 million during a Constitutional Convention
next week. If the proposal passed the joint session, it
would go to the voters on the 2022 statewide ballot.
"We stand with the residents of Massachusetts in exploring
new ways to increase revenue for the state as we envision
and invest in an equitable and hopeful future for the
Commonwealth," Mariano and Spilka said in a statement
Thursday.
Even before May's benchmark-shattering collections were
announced Thursday, Massachusetts had been in the midst of a
trend of monthly tax collections obliterating DOR's
expectations. January collections beat the benchmark by 14.7
percent, February collections surpassed the benchmark by
24.8 percent, March revenues came in 26.8 percent over
expectations and April collections beat DOR's monthly
benchmark by just more than 11 percent.
By May 15, DOR already had an indication that May tax
collections were coming in strong. By mid-month, DOR had
already collected $1.190 billion -- an increase of $519
million or 77.5 percent over what had been collected during
the same half-month period last year and about 63 percent of
the $1.893 billion that DOR expected May to bring.
Putting the $2.1 billion over-benchmark number for May in
context, Doug Howgate of the Massachusetts Taxpayers
Foundation said tax collections in Massachusetts have never
exceeded benchmarks by $2 billion or more for any full
fiscal year going back to at least fiscal 2006.
State House News Service
Friday, June 4, 2021
Advances - Week of June 6, 2021
Massachusetts residents and businesses are smashing tax
collection records and the federal government is pouring
billions of dollars into the state's already hot economy,
but the Massachusetts Legislature sees an opportunity to
grab even more revenue and they are poised to take it.
Lawmakers believe a 4 percent surtax on household incomes
above $1 million per year would put a dent in the problem of
income inequality and generate about $2 billion a year in
new tax revenue that will help make needed education and
transportation investments. Opponents are making the
slippery slope argument, alleging that amending the
Constitution to allow different income tax rates represents
a likely irreversible step that threatens the tax base by
making the state less economically competitive and could
eventually lead to more tax brackets and a graduated income
tax structure.
The Legislature on Wednesday plans to gavel into a
Constitutional Convention to advance the amendment to the
2022 ballot where it will be settled by voters.
State Budget Status
The House passed its fiscal 2022 budget (H 4001) on April 29
and the Senate approved its spending plan (S 2465) on May
27. On Monday, the branches are expected to send those two
bills to a six-member conference committee for resolution.
Negotiators will have 24 days to reach an agreement in time
for the July 1 start of the fiscal year, although Gov. Baker
will also get his usual 10 days to review the bill and take
actions on it.
If House and Senate leaders stick to usual practice, the
conference committee will be composed of the leaders of each
branch's budget committee: Reps. Aaron Michlewitz,
Ann-Margaret Ferrante, and Todd Smola, and Sens. Michael
Rodrigues, Cindy Friedman, and Patrick O'Connor.
Key aspects of the House and Senate budgets line up and
won't require negotiations, but the budgets are loaded up
with scores of policy proposals that were not vetted by
committees this session and the spending plans are based on
tax revenue assumptions that appear to be way too low and
will likely be adjusted upwards to reflect actual trends and
perhaps to offset large proposed draws from a state rainy
day fund that Beacon Hill has tapped deeply to preserve
programs and services during the pandemic.
State of Emergency, ARPA Decisions
The week ahead marks the last full week under the state of
emergency that Gov. Charlie Baker declared in March 2020.
The Public Health Council plans to meet virtually to vote on
related public health regulations. In the wake of Baker's
decision to pull the emergency declaration down effective
June 15, there's a shrinking window for him and the
Legislature to decide which pandemic-era policies to extend.
Baker has put forward proposed extensions, but lawmakers
have yet to hatch a plan. Baker and legislative leaders also
continue to haggle over who has the authority to decide how
to allocate $5.3 billion in one-time federal stimulus and
economic recovery funds, and haven't even reached the phase
where they are putting plans on the table to put that money
to work.
Legislative leaders on Tuesday morning sprung a plan to
deposit $5.3 billion in federal aid into a segregated fund
and the House immediately passed the proposal, which the
Senate is poised to advance next week. Baker's team says the
$5.3 billion in discretionary funding does not require
legislative appropriation and that the administration "is
ready to work with municipal, non-profit, private sector and
legislative partners to invest these funds quickly."
On Friday, Baker said he expects "to talk to the Legislature
some more about the best way to make sure that we put the
money to work in the most appropriate place and as quickly
as possible so that it does have the kind of impact we want
it to have to jumpstart a lot of activity around
Massachusetts."
House Speaker Ronald Mariano previously said he hoped to
advance a bill allocating some American Rescue Act funding
in June, and Democratic legislative leaders face some
pressure to show how the federal rescue plan funds fit into
President Joe Biden's agenda to "build back better." The
House and Senate both plan to hold formal sessions Thursday,
which could be the day when they will try to make progress
on a pandemic policy extensions bill and legislation
governing ARPA funds. . . .
Monday, June 7, 2021
INCOME SURTAX RALLY - FALL RIVER: Raise Up Massachusetts
holds campaign event in Fall River to promote the proposed 4
percent surtax on incomes above $1 million. Supporters say
it would raise $2 billion a year for spending on
transportation and public education. Opponents say it would
make the state less economically competitive and could lead
to a graduated income tax.
Tuesday, June 8, 2021
INCOME SURTAX RALLY - NEW BEDFORD: Raise Up Massachusetts
holds campaign event in New Bedford to promote the proposed
4 percent surtax on incomes above $1 million. Supporters say
it would raise $2 billion a year for spending on
transportation and public education. Opponents say it would
make the state less economically competitive and could lead
to a graduated income tax.
INCOME SURTAX RALLY - SPRINGFIELD: Raise Up Massachusetts
holds campaign event in Springfield to promote the proposed
4 percent surtax on incomes above $1 million. Supporters say
it would raise $2 billion a year for spending on
transportation and public education. Opponents say it would
make the state less economically competitive and could lead
to a graduated income tax.
Wednesday, June 9, 2021
JOINT SESSION - INCOME SURTAX VOTE: The House and Senate
meet in a joint session to vote on a proposed constitutional
amendment (S 5) that would raise the income tax on wealthy
Massachusetts residents, the final step toward putting the
question before voters on the 2022 ballot.
Democratic legislative leaders teed up the vote to take
place during the Constitutional Convention.
If approved, the constitutional amendment would add a 4
percent surtax on all household income above $1 million in
addition to the state's existing flat income tax rate of 5
percent. Backers have been pushing for the change, sometimes
referred to as the Fair Share Amendment or millionaire's
tax, for years. Supporters argue the tax change will
generate more than $1 billion annually for education and
transportation investments, while opponents contend that
hiking the rate could drive portions of the tax base out of
state.
The latest vote comes as state tax revenues surge above
expectations and as Beacon Hill grapples with how to spend
billions of dollars of federal COVID-19 stimulus funding.
The measure must pass in two consecutive two-year lawmaking
sessions to qualify for the ballot. In 2019, the House and
Senate -- where Democrats wield supermajority power -- gave
their first round of approval by a 147-48 vote. If
legislators vote in favor again on Wednesday - 101 votes are
needed to advance it - the proposal will then be subject to
an up-or-down vote as a statewide ballot question in 2022.
(Wednesday, 1 p.m., House Chamber)
Thursday, June 10, 2021
INCOME SURTAX RALLY - PITTSFIELD: Raise Up Massachusetts
holds campaign event in Pittsfield to promote the proposed 4
percent surtax on incomes above $1 million. Supporters say
it would raise $2 billion a year for spending on
transportation and public education. Opponents say it would
make the state less economically competitive and could lead
to a graduated income tax.
INCOME SURTAX RALLY - WORCESTER: Raise Up Massachusetts
holds campaign event in Worcester to promote the proposed 4
percent surtax on incomes above $1 million. Supporters say
it would raise $2 billion a year for spending on
transportation and public education. Opponents say it would
make the state less economically competitive and could lead
to a graduated income tax.
Saturday, June 12, 2021
INCOME SURTAX RALLY - GREENFIELD: Raise Up Massachusetts
holds campaign event in Greenfield to promote the proposed 4
percent surtax on incomes above $1 million. Supporters say
it would raise $2 billion a year for spending on
transportation and public education. Opponents say it would
make the state less economically competitive and could lead
to a graduated income tax.
State House News Service
Friday, June 4, 2021
Weekly Roundup - Taxing and Spending
Recap and analysis of the week in state government
By Matt Murphy
Welcome to post-pandemic Beacon Hill, where the political
fights over how vaccine doses should be distributed have
been replaced by quarrels over who gets to decide how to
spend surfeits of money, and where to potentially get more.
If you extended your holiday weekend and are just tuning in,
Gov. Charlie Baker and the Legislature got into a bit of a
tiff this week over who should have the final say over how
$5.28 billion in federal relief money gets spent, with four
cities - Chelsea, Everett, Methuen and Randolph - caught in
the middle.
This happened as Senate President Karen Spilka and House
Speaker Ron Mariano scheduled a vote for next Wednesday on
the $2 billion "millionaires' tax" and Department of Revenue
Commissioner Geoffrey Snyder released live images of himself
swimming in money, DuckTales-style.
(Ok, the latter didn't really happen, but it almost could
have.)
It all started Tuesday morning as legislators and staff were
sifting through Memorial Day weekend email and Spilka and
Mariano announced that they planned to move the state's full
American Rescue Plan Act allowance into a separate fund from
which the Legislature, and only the Legislature, could
appropriate it.
Baker quickly threw a flag on the power play, stating that
not only was it not necessary, but it could slow down the
state's ability to quickly put that money to use stimulating
the economy.
Furthermore, he had promised, at the urging of members of
the Congressional delegation, to give the aforementioned
four cities $100 million that they had been short changed
due to federal funding formulas. If the money was moved into
a segregated fund, he could no longer transfer the money and
the cities would have to wait, he said.
"If he says that he has that authority, then he could have
cut a check a week ago," Rep. Dan Hunt, chairman of the
House Committee on Federal Stimulus and Census Oversight,
responded. The Dorchester Democrat was referencing the fact
that the money had apparently arrived from the feds on May
19.
And as it turned out, a senior administration official said
Baker had been planning to announce the release of the funds
the next morning in Chelsea, but cut it from the script
rather than risk antagonizing legislative leaders.
Baker responded to questions about the money at his Chelsea
event by indicating that he would raise the issue with
Mariano and Spilka, adding, "I hope they see it the way we
do."
They didn't.
The two Democrats suggested they were the ones with the
sense of "urgency" to rush to rescue of Chelsea, Everett,
Methuen and Randolph, but they offered no timeline to
appropriate the money and referenced a "robust legislative
process," which is almost never confused with urgency.
So, Baker on Friday went ahead and released the money
anyway, and the total was $109 million. Sens. Elizabeth
Warren and Ed Markey and Rep. Ayanna Pressley applauded the
move, and Mariano and Spilka said they were "glad" the four
cities would be receiving the additional funds.
"The Senate and House look forward to working with the
Administration and the public in an open and transparent
process to equitably distribute federal funds," Mariano and
Spilka concluded.
But while the saga of the $109 million may be over,
Democratic leaders are still moving ahead with plans to
seize control of the funds, and this may not be the last
clash over how to handle billions of uncommitted cash.
With an election year around the corner, DOR announced that
the state took in $4 billion in taxes in May, beating
estimates by more than $2.1 billion and putting the state on
track to collect nearly $4 billion more than it expected on
the year. Hence, Snyder's metaphorical coin dive.
While some of that has to do with the fact that the tax
filing deadline was moved this year from April to May, it
still marked the continuation of a trend that has state
leaders contemplating a sizable surplus at the end of the
fiscal year.
That, too, will need to get spent, or saved, or perhaps
returned in the form of tax relief.
Spilka and Mariano did not foreclose the idea that federal
relief funds "may potentially be spread out over a number of
years to ensure our continued economic vitality," which
could form a bridge between today and the day millionaires
start paying higher income taxes.
The two Democrats announced that they planned to call a vote
next Wednesday on a constitutional amendment to impose a new
4 percent surtax on income over $1 million, with the
intention of spending it on transportation and education.
It's the second and final vote required before the question
would be put to voters on the 2022 ballot, and it is
expected to pass despite the current strength of the state's
financial footing. Advocates still believe the new funding
sources will be needed long-term to address learning gaps,
public transit and traffic congestion.
As for that visit to Chelsea, Baker still made the short
drive north to the city's always-crowded Market Basket and
announced a new partnership with the grocery chain.
For three days this week and three days next week, pop-up
vaccine clinics will be run in Market Basket parking lots in
Chelsea, Fall River, Lawrence, Lynn and Revere and anyone
getting a shot will receive a $25 gift card for groceries.
The promotion is part of the administration's newest
strategy to reach the remaining pockets of unvaccinated
residents by making the COVID-19 vaccines more accessible,
including in hard-hit communities of color and to other
groups showing signs of vaccine hesitancy.
Baker has also reached out to Treasurer Deborah Goldberg to
inquire about the logistics of setting up a vaccine Lottery,
as states like Ohio and California have done, and vaccine
promotions are being run at venues like Polar Park in
Worcester.
The targeted approach means a winding down of the mass
vaccination sites that were so central to the early phases
of the administration's vaccine program.
Gillette Stadium was the first mass vaccination site to open
in January and it will be the first to close on June 14. The
site at the old Circuit City in Dartmouth will be the last
to close July 13.
STORY OF THE WEEK: One hundred million dollars between
friends.
State House News Service
Thursday, June 3, 2021
Income Surtax Vote Planned for Next Week
By Matt Murphy
Senate President Karen Spilka and House Speaker Ron Mariano
on Thursday teed up for a vote next week a constitutional
amendment that would raise the income tax on wealthy
Massachusetts residents at a time when the state is flush
with tax revenue and federal stimulus money.
The so-called millionaire's tax proposal has been years in
the making and is one vote of the Legislature short of being
put before voters on the 2022 statewide ballot. The proposal
would amend the state's Constitution to add a 4 percent
surtax on all household income above $1 million. The current
flat income tax rate in Massachusetts is 5 percent.
"As Massachusetts recovers from the COVID-19 pandemic, and
as we prepare for our future, we have a unique opportunity
to move towards a Commonwealth that truly works for all
residents," Spilka and Mariano said in a joint statement
Thursday.
The Democratic leaders said it is their intent to call for a
vote on the income tax amendment next Wednesday when the
Constitutional Convention -- a joint meeting of the two
branches of the Legislature -- gavels back in.
The measure must pass in two consecutive legislative
sessions to qualify for the ballot. It previously passed in
2019 by a vote of 147-48.
The Department of Revenue once estimated that the tax could
generate as much as $1.9 billion in new taxes that the
amendment would dedicate to transportation and revenue
needs, though that estimate has not been updated in years.
Tax revenues this fiscal year are trending more than $1.8
billion ahead of projections through April, and lawmakers
are also beginning the process of deciding how to spend $5.3
billion in federal COVID-19 relief aid.
Spilka and Mariano both said they support advancing the
income surtax increase to the ballot.
"We stand with the residents of Massachusetts in exploring
new ways to increase revenue for the state as we envision
and invest in an equitable and hopeful future for the
Commonwealth," the leaders said.
The Raise Up Coalition, a group of labor, faith and
community organizations that have championed the
millionaire's tax, said they appreciated the scheduling of
the vote and described its campaign as being in "full
swing," with more than a dozen local rallies planned this
month.
"Long before the pandemic, Massachusetts needed new
investments in our transportation and public education
systems. These investments are needed now more than ever to
lift up our economy for everyone and to ensure Massachusetts
remains a great place to live, work, and raise a family.
Massachusetts needs sustainable, long-term revenue for these
investments that doesn't require low- and middle-income
families to pay more," the coalition said in a statement.
|
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
|
