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Marblehead, Massachusetts 01945
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“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
47 years as “The Voice of Massachusetts Taxpayers”
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their Institutional Memory — |
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CLT UPDATE
Sunday, June 27, 2021
Shameless Greed Rules
The Week
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to CLT's Commentary on the News
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Most Relevant News
Excerpts
(Full news reports follow Commentary)
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Through mid-June, the Department of Revenue collected
nearly 80 percent of the tax revenue it anticipates
bringing in during this final month of a remarkable
fiscal year that has already exceeded all expectations
and appears likely to produce a significant surplus.
In its mid-month report to the Legislature, DOR said it
had collected $2.003 billion from taxpayers between June
1 and June 15, up $768 million or 62.2 percent compared
to the same period in June 2020. DOR's latest monthly
benchmark for June projected a monthly total of $2.578
billion....
With the second half of June remaining to be counted,
DOR has collected $32.454 billion so far in fiscal year
2021, which ends June 30. That's $3.364 billion more
than the Baker administration's most recent estimate for
the full 12-month fiscal year and $1.3 billion more than
the pre-pandemic estimate of $31.15 billion in tax
revenue for fiscal year 2021.
It is also $2.334 billion more than the consensus
revenue agreement of $30.12 billion the governor, House
and Senate used to craft their fiscal year 2022 budget
proposals. The six lawmakers currently negotiating a
compromise fiscal year 2022 budget could wield
considerable power by increasing the revenue assumption
to give themselves additional money to spend, save or
turn back in the form of tax relief...
The fiscal year 2021 tax collections, which have
obliterated the Baker administration's expectations for
the last several months, look to be headed towards a
significant surplus. That would present another pot of
mostly untethered money for the governor and Legislature
to manage while also deciding how to spend more than $5
billion in federal aid received as part of the American
Rescue Plan Act.
State House News Service
Wednesday, June 23, 2021
Annual Tax Collections Beating
Estimate By $3.4 Bil, And Counting
Total Federal Awards to Massachusetts: $113 Billion
The federal government is expected to provide
approximately $113 billion in aid to Massachusetts in
response to the COVID-19 pandemic. Funding has been
given to three groups: businesses and individuals,
public entities, and Commonwealth agencies.
• Businesses and individuals received about $51 billion
through programs like the Paycheck Protection Program
for businesses and stimulus checks for individuals.
• Public entities other than Commonwealth agencies
received about $10 billion through programs like the
Coronavirus Local Fiscal Recovery Fund for municipal and
county governments, and Federal Transit Authority grants
to Regional Transportation Authorities.
• Commonwealth agencies received about $49 billion,
primarily to support COVID-related Unemployment
Insurance benefits, expansions of existing programs like
the Community Development Block Grant, and new programs
like the Coronavirus Relief Fund and the Coronavirus
State Fiscal Recovery Fund.
• Additionally, new federally-administered initiatives
like funding of COBRA coverage and the expansion of the
child tax credit are expected to provide nearly $4
billion to Commonwealth residents.
Massachusetts Department of Revenue
Division of Local Services/
Executive Office for Administration and Finance
Friday, June 25, 2021
"Total Federal Awards to Massachusetts:
$113 Billion"
With Massachusetts on track to end the year with a
multi-billion dollar surplus, Gov. Charlie Baker on
Wednesday proposed a two-month sales tax holiday that
would give consumers a break from the state's 6.25
percent sales tax in August and September in an effort
to drive shoppers to local businesses.
The major tax relief proposal would cost the state an
estimated $900 million in forgone revenue, but the
Republican governor said it would also be a way for the
state to show appreciation to business owners and
consumers who have contributed to the surplus by finding
ways to support each other during the COVID-19 pandemic.
Baker said he would file legislation Wednesday to expand
the annual sales tax holiday from a two-day weekend in
August to a two-month event, believing it would help
give the state's economy "some momentum as we come out
of this sort of pandemic doldrums that we've been in."
As it stands now, the tax-free holiday has been set for
the weekend of Aug. 14 and Aug. 15.
"It would be a really big deal, not just for taxpayers,
but also for all those Main Street businesses have
really had it probably toughest of all on the economic
side since the beginning of the pandemic," Baker said at
a State House press conference.
Through May, the state had collected more than $3.9
billion in excess of projections for the fiscal year and
that trend has continued in June with the Department of
Revenue reporting that through the middle of the month
the state had already collected 80 percent of what it
expected for the full month.
Baker hesitated to make a guess on how large the surplus
will be when the fiscal year ends on June 30 and the
books are balanced, but he said it was clear that there
would be "significant" excess revenue to be spent, saved
or returned to taxpayers....
Another chunk of the surplus is expected to find its way
into savings.
The Department of Revenue on Tuesday certified for the
comptroller $2.3 billion in capital gains taxes
collected so far in fiscal 2021, which exceeds a
threshold set by state law resulting in an automatic
transfer of $852 million to the state's stabilization
fund. That transfer, the administration said, pushed the
balance in the state's "rainy day" fund to $4.3 billion.
State House News Service
Wednesday, June 23, 2021
Baker Seeks Two-Month Sales Tax
Holiday
Consumers, Businesses Would Share in Bulging Surplus
Gov. Charlie Baker on Thursday continued to pitch his
new idea for a two-month sales tax holiday this summer
even after the $900 million tax relief proposal landed
with a bit of a thud on Beacon Hill where many Democrats
panned the short-term tax break and supporters voiced
skepticism about its chances....
But the idea of suspending sales tax collections in
August and September to help give the retail economy a
jolt encountered swift pushback from legislators who
would have to sign off on the plan.
"We did do a weekend of sales tax holiday and I think
that is sufficient for now. There's a lot of need in the
state," Senate President Karen Spilka said.
Senate Ways and Means Chairman Michael Rodrigues and
Economic Development Committee Chairman Eric Lesser both
called the sales tax holiday a "political gimmick," and
other lawmakers enumerated the various ways they hoped
to spend surplus dollars....
With Baker recommending the tax holiday run August
through September, legislative leaders must decide in
the coming weeks whether the proposal has any legs. If
they don't accept it, Democrats in the House and Senate
could choose to shorten the duration or, as House
Minority Leader Brad Jones put it, let it "die a death
of inaction." ...
The state ended May with $3.9 billion more than it had
projected to collect over the first 11 months of the
fiscal year, and midway through June the Department of
Revenue reported collecting 80 percent of what it
expected for the full month.
Baker said the unexpected strength of tax collections,
including capital gains taxes, has pushed the state's
reserved balance to more than $4.3 billion
"I think we owe some of this to the people of
Massachusetts and to some of the small businesses. They
had a terrible year," Baker said Thursday during an
interview on GBH's "Boston Public Radio." ...
Retail groups were among those cheering Baker's
proposal.
Jon Hurst, president of the Retailers Association of
Massachusetts, called the proposal "a smart, exciting,
and progressive economic incentive that will benefit our
small businesses and our consumers just when they need
it."
The Massachusetts Fiscal Alliance also countered the
idea that allowing people to keep more of the money they
earn should be seen as a gimmick.
"Massachusetts is collecting more tax money than they
ever dreamed of, and Massachusetts taxpayers are among
the most generous in the country. State House
politicians should share some of the riches with the
taxpayers and not keep it all for themselves to spend in
a self-centered and reckless way," MassFiscal spokesman
Paul Craney....
Baker, Jones and other supporters of the extended tax
holiday noted that the tax relief would come at a time
when government is not only running a surplus, but
lawmakers are debating how to spend more than $5 billion
in federal COVID-19 aid, and cities, towns and schools
received billions more through the American Rescue Plan
Act.
State House News Service
Thursday, June 24, 2021
Lights Quickly Dim on Baker’s Tax
Relief Plan
Spilka: Sales Tax Holiday Weekend "Sufficient For Now"
Gov. Charlie Baker’s plan to slash sales taxes statewide
for two months appears dead-on-arrival in the state’s
Democrat-led Legislature, where lawmakers dismissed the
measure as a “gimmick.”
But the Republican governor signaled he isn’t giving up
without a fight, taking the chance to swing back at
critical lawmakers not once, but twice on Thursday in
person and on GBH radio....
Baker on Wednesday announced legislation that would
expand the state’s sales tax holiday, which is
traditionally two days, into a two-month affair. Cutting
the state’s 6.25% sales tax for eight weeks would save
shoppers and businesses an estimated $900 million, he
said.
State Sen. Eric Lesser, D-Longmeadow, said the proposal
would “do almost nothing to help out local retailers,”
joining a growing list of Democratic lawmakers who
oppose the plan.
“Now that COVID is ending, demand is at record levels.
Our local businesses need more workers and better
infrastructure, not political gimmicks. Extra funds
should be used to reduce class sizes, repair crumbling
roads and bridges, improve broadband internet, or use to
pay down debt,” Lesser said.
The Boston Herald
Thursday, June 24, 2021
Charlie Baker’s 2-month sales tax holiday
appears dead on arrival
in Democrat-led Massachusetts Legislature despite
business support
The debate over Gov. Charlie Baker’s proposed two-month
sales tax holiday has turned into a partisan,
interest-driven dispute.
Baker, a Republican who has not yet announced whether he
will run for reelection, portrayed the tax holiday as a
way to keep more money in the hands of consumers, while
helping small businesses. “We are proud to offer this
proposal to keep money in the hands of taxpayers and
promote economic development amidst Massachusetts’
recovery from the COVID-19 public health emergency,”
Secretary of Administration and Finance Michael
Heffernan said in a statement.
Businesses that would benefit from increased sales are,
unsurprisingly, supportive. Retailers Association of
Massachusetts president Jon Hurst, in a statement
included in the governor’s press release, called it “a
smart, exciting, and progressive economic incentive that
will benefit our small businesses and our consumers just
when they need it.”
But liberal groups panned the move as a gimmick that
would divert an unexpected budget surplus away from
other government spending priorities. “The tax dollars
the Commonwealth would lose from this 2-month sales tax
holiday could support local schools by accelerating
funding for the Student Opportunity Act, provide
opportunities for affordable childcare that will help
businesses and families, and encourage travel by
enabling transit authorities to stop collecting
burdensome bus fares,” said Marie-Frances Rivera,
president of the liberal-leaning Massachusetts Budget
and Policy Center....
The presidents of the Massachusetts Teachers Association
and American Federation of Teachers-Massachusetts issued
a joint statement criticizing Baker for wanting to boost
big box stores and online retailers instead of investing
in colleges, public schools, and transportation. Merrie
Najimy of the MTA and Beth Kontos of AFT Massachusetts
called it “Baker's billion-dollar giveaway.”
On one hand, the debate is coming down to the typical
Republican versus Democrat dynamic, with Baker favoring
lower taxes and putting more money into the hands of
consumers, and Democrats wanting more government
spending to shore up public infrastructure.
CommonWealth Magazine
Friday, June 25, 2021
Two-month sales tax holiday may not
make economic sense
“Gov. Baker’s proposal to return some of taxpayers’
overpayment, considering the historic hardships imposed
on citizens over the past 15 months, is proper and
compassionate,” said Chip Ford, executive
director of Citizens for Limited Taxation (CLT).
“The usual resistance to even this small tax relief
proposal when the state finds itself awash in an
unexpected $4 billion-plus revenue surplus and $5
billion-plus in additional federal grants, every cent
provided by taxpayers, is shameful and demonstrates why
we’ve always asserted at CLT: ‘More is never enough and
never will be.’”
Beacon Hill Roll Call
June 21-25, 2021
Two-Month Sales Tax Holiday In July And
August
The House on Tuesday rejected Gov. Charlie Baker's
request to immediately spend $2.8 billion in federal
COVID-19 relief money, choosing to follow through with
the plan of Democratic leaders to sweep most of the $5.3
billion the state received into a separate fund as they
consider how to deploy the money.
The action by the House reflects not only a disagreement
between the governor and Legislature over process, but
also about how quickly the federal funds should be spent
to assist in the state's economic recovery.
Baker last Thursday offered a compromise that would have
allowed him to immediately spend more than half of the
funding the state received through the American Rescue
Plan Act, and give the Legislature more time to
deliberate over how to spend the remaining $2.3
billion....
While Baker did not say whether he would veto the bill
should it again reach his desk, it's likely Democrats in
the Legislature will have enough votes to override the
governor.
"We can all agree a number of those are well conceived
and worthy. We don't deny that. We just think it's
important all 160 members of this body and 40 in our
sister body have a chance to have their voice heard,"
said Rep. Dan Hunt, the chair of the House Committee on
Federal Stimulus and Census Oversight, about the
governor's priorities.
Hunt said that over the course of several months after
the "July holiday" the House planned to have multiple
hearings on different subject matters to gather input on
how the money should be spent. Mariano and Spilka said
the hearings would be led by the Joint Committee on Ways
and Means....
The governor has said he currently does not need
legislative approval to spend the federal aid, but when
asked last week why he didn't just start spending the
money now he said he wanted to work with the
Legislature.
"I think we're trying to pursue this in what I would
describe as a good faith manner," Baker said.
State House News Service
Tuesday, June 22, 2021
Admin Worried About Holdup As House
Dems Vote to Stash Fed Aid
Reflective Process Planned For Biden's Rescue Plan $$$
The power struggle over who will hold the purse strings
as Massachusetts doles out the latest round of federal
coronavirus relief dollars continues on Beacon Hill,
where state representatives reached a deal they say
would give the governor “some latitude” around how the
cash gets spent.
“Our actions this week will preserve the funds while
allowing all parties to participate in the discussion
and help make decisions about how to allocate these
resources,” House Speaker Ronald Mariano and Senate
President Karen Spilka said in a joint statement on
Tuesday.
Democratic leaders are looking to to sweep most of the
$5.3 billion the state received in unrestricted funds
through President Biden’s American Rescue Plan into a
separate fund as they consider how to spend the
money....
If the bill passes, it will tie Baker’s hands when it
comes to spending more.
The Boston Herald
Tuesday, June 22, 2021
Power struggle between Charlie
Baker, Dems
over spending federal coronavirus aid rages
House officials said they wanted to make spending
decisions using a very public process, and move away
from giving the governor license to use the sweeping
executive powers he exercised during the pandemic.
Baker said spending a good chunk of the money quickly
was important to spurring the state’s economic recovery,
but Rep. Dan Hunt, the chair of the House Committee on
Federal Stimulus and Census Oversight, said there was no
rush, that the money under federal guidelines could be
portioned out over four years....
What will be interesting to watch is if House and Senate
leaders can keep members in check during the budget
process, and avoid turning the one-time federal money
into a special interest gravy train.
The numbers are astounding. The state received $5.28
billion in unrestricted federal aid under the American
Rescue Plan.
CommonWealth Magazine
Tuesday, June 22, 2021
House votes to put fed funds
through budget-like process
Gives Baker control of just $200m, not $2.8b
Gov. Charlie Baker keeps setting them up, and the
Legislature keeps knocking 'em down.
Last week, it was a plan to spend $2.8 billion in
federal relief money on what Baker hoped would be
slam-dunk priorities -- housing, job training, parks.
The response from House and Senate Democrats? Nope, at
least not yet.
The Republican governor came right back this week with a
pitch to use $900 million from an expected surplus at
the end of fiscal 2021 (which concludes next Wednesday)
to cover a two- month sales tax holiday in August and
September.
Why provide sales tax relief for two days on Aug. 14 and
Aug. 15 when the state can afford sales tax relief for
two months, Baker said. Well, it turns out legislative
Democrats could think of a few reasons, all but popping
the governor's sales tax holiday balloon before it could
float away.
"We did do the weekend already, and I think that's
sufficient," Senate President Karen Spilka said....
Of course, there was a touch of irony that the
Legislature would criticize the governor for not
proposing to spend the projected surplus on investments
in education, housing and infrastructure at the same
time they were voting down his plan to spend billions on
education, housing and infrastructure.
State House News Service
Friday, June 25, 2021
Weekly Roundup - Bowling for
Compromise
Reports of the death of the Transportation and Climate
Initiative appear greatly exaggerated.
In one sign of life, the Rhode Island Senate on Tuesday
approved legislation that would make the Ocean State a
founding member of the regional program to cut
planet-warming emissions from cars and trucks.
The 38-to-7 vote comes a couple of weeks after
Connecticut legislators and Gov. Ned Lamont failed to
reach an agreement on including a TCI bill in the state
budget, prompting calls from opponents that the
cap-and-invest program was all but dead.
While there was hope that the Connecticut legislature
would take up the multi-state proposal when it
reconvened, that special session came and went last week
without any action on what environmental advocates say
is a crucial step in fighting climate change....
The vote came over the objections of senators from rural
districts who say the fees will amount to a gas tax that
will be passed down to consumers, and that their
constituents will bear the burden because they rely more
on their cars to get around.
“Morally, it would be cruel to impose this fuel tax on
Rhode Islanders,” said Sen. Jessica de la Cruz, a North
Smithfield Republican....
Whether the legislation goes any further is up to the
House. Rep. Terri Cortvriend’s bill has been submitted
to the Committee on Finance, but a hearing hasn’t been
scheduled yet and is unlikely to be put on the calendar
before the General Assembly adjourns for the summer.
Cortvriend, a Portsmouth Democrat, has said she expects
a hearing in the fall if the session reconvenes.
The Providence Journal
Tuesday, June 22, 2021
Regional initiative to cut road
emissions wins RI Senate approval
“The breadth of research covered in this paper really
highlights the variety of ways in which income tax hikes
can leave states vulnerable to wealth flight and fiscal
and economic harm,” said Andrew Mikula, author of
Tax Flight of the Wealthy: An Academic Literature Review.
“Besides physical relocation out of Massachusetts, such
policies are also deterring innovators from coming here
to begin with, and encouraging stock-based salaries that
are used to delay tax payments.” ...
Pioneer’s new policy brief also highlights nuances
in past studies that have downplayed the role of tax
hikes in the migration decisions of the wealthy. For
example, a 2016 paper by Cornell University Professor
Cristobal Young claims that “when Florida is excluded,
there is virtually no” correlation between income tax
rates and migration patterns in the United States.
However, underpinning this headline-worthy line is that
Young doesn’t rule out that there is an “especially
appealing combination” of tax avoidance and geography
driving the so-called Florida effect. In addition, the
database used in Young’s paper only includes households
that earned over $1 million in the year before they
move, a severe limitation that misses households that
migrate for the purpose of avoiding taxes on the
anticipated sale of a valuable asset....
“Research data allow us to put some hard numbers on the
devastating and perhaps permanent impact of a graduated
income tax – as much as $2 billion in lost taxable
income,” said Pioneer Institute Executive Director Jim
Stergios. “And calculating the impact on state tax
revenues ignores the enormous human toll: lost jobs and
less security for homeowners. The long-term effects may
include, as is abundantly clear in the case of
Connecticut, anemic growth in state tax receipts and
therefore fewer resources for social programs and public
investments.”
Pioneer Institute
Thursday, June 17, 2021
Study Says Massachusetts Surtax
Proposal
Could Reduce Taxable Income in the State by Over $2
Billion
“We need to hold the millionaires accountable. It’s
time. This is about fairness, equality, equity,”
Rosalinda Midence told the Herald moments after riling
up a group of ralliers in Nubian Square on Monday night.
Midence said the 4-cent surtax on all state income over
$1 million would “level the playing field” for working
Bay Staters who lose a disproportionate amount of their
wages to income taxes by raising an additional $2
billion from millionaires.
She’s one of the dozens of speakers who have stood to
support the Fair Share Amendment measure at a series of
14 rallies across the state this month organized by the
Raise Up Massachusetts Coalition.
The group is the same one behind the successful
campaigns of other progressive measures including
raising the state minimum wage and pressuring the
Legislature to take up — and pass — the Family Medical
Leave Act....
The measure appears popular among Bay State voters, with
a recent poll from Boston-based MassINC Polling Group
showing 72% back the wealth tax....
Ralliers like Midence said they “get angry” when they
see the pushback to something she describes as “justice
for the poor and middle class.”
The Boston Herald
Monday, June 21, 2021
Battle of Massachusetts millionaires’
tax pits
grassroots organizing against blitz of opposition
reports
It started with plastic bags and plastic straws, now
they’re coming for your takeout.
On Tuesday, leaders of the Joint Committee on Public
Health and representatives of the food container
industry duked it out during a hearing on bills to
restrict the use of polystyrene food containers and
utensils, according to the State House News Service.
To hear advocates from the Massachusetts Public Interest
Research Group (MASSPIRG) and Environment Massachusetts,
and Rep. Dave Rogers tell it, single-use plastic
products like foam cups and takeout containers should be
banned because of the health and environmental risks
associated with them.
“I think we all know very well that single-use plastic
products including polystyrene foam cups and takeout
containers are a major source of pollution in our
rivers, streams and oceans.... Ben Hellerstein, state
director for Environment Massachusetts, said. For all
these reasons and more, there’s more than 100
communities across Massachusetts that have already taken
action to restrict the use of plastic products.”
Of course they have, this is Massachusetts.
A Boston Herald editorial
Wednesday, June 23, 2021
Ban takeout containers? Not so fast
The cracks started appearing a few years after
Massachusetts voters in 2016 approved a ballot
initiative that effectively mandated that all eggs sold
in the state come from cage-free hens.
The law, backed by nearly 8 of 10 voters, was pushed by
top animal welfare groups in order to create what they
argued were more humane standards for animals.
Now, warning of an “Egg-mageddon” — a severe egg
shortage that would send prices spiking — lawmakers are
moving to change the measure before it goes into effect
in 2022.
The Boston Globe
Friday, June 25, 2021
Warning of a coming ‘Egg-mageddon’
|
Chip Ford's CLT
Commentary
The embarrassment of riches
continues to flood and overflow state coffers.
According to the State House News Service on Wednesday ("Annual
Tax Collections Beating Estimate By $3.4 Bil, And Counting"):
Through mid-June, the Department of
Revenue collected nearly 80 percent of the tax revenue
it anticipates bringing in during this final month of a
remarkable fiscal year that has already exceeded all
expectations and appears likely to produce a significant
surplus.
In its mid-month report to the
Legislature, DOR said it had collected $2.003 billion
from taxpayers between June 1 and June 15, up $768
million or 62.2 percent compared to the same period in
June 2020. DOR's latest monthly benchmark for June
projected a monthly total of $2.578 billion....
With the second half of June
remaining to be counted, DOR has collected $32.454
billion so far in fiscal year 2021, which ends June 30.
That's $3.364 billion more than the Baker
administration's most recent estimate for the full
12-month fiscal year and $1.3 billion more than the
pre-pandemic estimate of $31.15 billion in tax revenue
for fiscal year 2021.
It is also $2.334 billion more than
the consensus revenue agreement of $30.12 billion the
governor, House and Senate used to craft their fiscal
year 2022 budget proposals. The six lawmakers currently
negotiating a compromise fiscal year 2022 budget could
wield considerable power by increasing the revenue
assumption to give themselves additional money to spend,
save or turn back in the form of tax relief...
The fiscal year 2021 tax
collections, which have obliterated the Baker
administration's expectations for the last several
months, look to be headed towards a significant surplus.
That would present another pot of mostly untethered
money for the governor and Legislature to manage while
also deciding how to spend more than $5 billion in
federal aid received as part of the American Rescue Plan
Act.
Then on Friday I received a
notice from the DOR's Division of Local Service of a
report released by the Baker administration's Secretary of
Administration and Finance's office (emphasis added):
Total Federal Awards to
Massachusetts: $113 Billion
The federal government is expected
to provide approximately $113 billion in aid to
Massachusetts in response to the COVID-19 pandemic.
Funding has been given to three groups: businesses and
individuals, public entities, and Commonwealth agencies.
• Businesses and individuals
received about $51 billion through programs like the
Paycheck Protection Program for businesses and stimulus
checks for individuals.
• Public entities other than
Commonwealth agencies received about $10 billion through
programs like the Coronavirus Local Fiscal Recovery Fund
for municipal and county governments, and Federal
Transit Authority grants to Regional Transportation
Authorities.
• Commonwealth agencies received
about $49 billion, primarily to support COVID-related
Unemployment Insurance benefits, expansions of existing
programs like the Community Development Block Grant, and
new programs like the Coronavirus Relief Fund and the
Coronavirus State Fiscal Recovery Fund.
• Additionally, new
federally-administered initiatives like funding of COBRA
coverage and the expansion of the child tax credit are
expected to provide nearly $4 billion to Commonwealth
residents.
The report further noted the
sources of the federal government's largesse:
The federal
government has enacted at least six pieces of
legislation in response to the public health emergency
caused by COVID-19. Three pieces of legislation were
enacted in March 2020, the largest and most notable of
which was the Coronavirus Aid, Relief, and Economic
Security Act (the “CARES Act”). This $2.2 trillion
package included numerous initiatives, including but not
limited to the Paycheck Protection Program (PPP),
economic impact payments ($1,200 payments to qualified
individuals), Economic Injury Disaster Loans (EIDL),
Provider Relief Funds for health care providers, the
Coronavirus Relief Fund (CvRF) for state and local
governments, and an array of other new initiatives and
expansions to existing programs. Additionally, the
Consolidated Appropriations Act, 2021 was enacted on
December 27, 2020. This law authorized $900 billion in
additional COVID-related assistance.
Most
recently, the American Rescue Plan Act of 2021 (“ARPA”)
was signed into law on March 11, 2021. This law provides
$1.9 trillion for continued COVID-19 response and
recovery, including $350 billion for the Coronavirus
State and Local Fiscal Recovery Funds.
On Wednesday the State House
News Service reported ("Baker Seeks
Two-Month Sales Tax Holiday Consumers, Businesses Would
Share in Bulging Surplus"):
With Massachusetts on track to end
the year with a multi-billion dollar surplus, Gov.
Charlie Baker on Wednesday proposed a two-month sales
tax holiday that would give consumers a break from the
state's 6.25 percent sales tax in August and September
in an effort to drive shoppers to local businesses.
The major tax relief proposal would
cost the state an estimated $900 million in forgone
revenue, but the Republican governor said it would also
be a way for the state to show appreciation to business
owners and consumers who have contributed to the surplus
by finding ways to support each other during the
COVID-19 pandemic.
Baker said he would file
legislation Wednesday to expand the annual sales tax
holiday from a two-day weekend in August to a two-month
event, believing it would help give the state's economy
"some momentum as we come out of this sort of pandemic
doldrums that we've been in."
As it stands now, the tax-free
holiday has been set for the weekend of Aug. 14 and Aug.
15.
"It would be a really big deal, not
just for taxpayers, but also for all those Main Street
businesses have really had it probably toughest of all
on the economic side since the beginning of the
pandemic," Baker said at a State House press conference.
Through May, the state had
collected more than $3.9 billion in excess of
projections for the fiscal year and that trend has
continued in June with the Department of Revenue
reporting that through the middle of the month the state
had already collected 80 percent of what it expected for
the full month.
Baker hesitated to make a guess on
how large the surplus will be when the fiscal year ends
on June 30 and the books are balanced, but he said it
was clear that there would be "significant" excess
revenue to be spent, saved or returned to taxpayers....
Another chunk of the surplus is
expected to find its way into savings.
The Department of Revenue on
Tuesday certified for the comptroller $2.3 billion in
capital gains taxes collected so far in fiscal 2021,
which exceeds a threshold set by state law resulting in
an automatic transfer of $852 million to the state's
stabilization fund. That transfer, the administration
said, pushed the balance in the state's "rainy day" fund
to $4.3 billion.
The very next day the News
Service followed up ("Lights Quickly
Dim on Baker’s Tax Relief Plan Spilka: Sales Tax Holiday
Weekend 'Sufficient For Now'"):
Gov. Charlie Baker on Thursday
continued to pitch his new idea for a two-month sales
tax holiday this summer even after the $900 million tax
relief proposal landed with a bit of a thud on Beacon
Hill where many Democrats panned the short-term tax
break and supporters voiced skepticism about its
chances....
But the idea of suspending sales
tax collections in August and September to help give the
retail economy a jolt encountered swift pushback from
legislators who would have to sign off on the plan.
"We did do a weekend of sales tax
holiday and I think that is sufficient for now. There's
a lot of need in the state," Senate President Karen
Spilka said.
The Boston Herald also on
Thursday reported ("Charlie Baker’s 2-month
sales tax holiday appears dead on arrival
in Democrat-led Massachusetts Legislature despite business
support"):
Gov. Charlie Baker’s plan to slash
sales taxes statewide for two months appears
dead-on-arrival in the state’s Democrat-led Legislature,
where lawmakers dismissed the measure as a “gimmick.”
...
State Sen. Eric Lesser,
D-Longmeadow, said the proposal would “do almost nothing
to help out local retailers,” joining a growing list of
Democratic lawmakers who oppose the plan.
“Now that COVID is ending, demand
is at record levels. Our local businesses need more
workers and better infrastructure, not political
gimmicks. Extra funds should be used to reduce class
sizes, repair crumbling roads and bridges, improve
broadband internet, or use to pay down debt,” Lesser
said.
By Friday all the usual
suspects were lined up, the conclusion was coming into
sight.
CommonWealth Magazine reported ("Two-month
sales tax holiday may not make economic sense"):
The debate over Gov. Charlie
Baker’s proposed two-month sales tax holiday has turned
into a partisan, interest-driven dispute....
But liberal groups panned the move
as a gimmick that would divert an unexpected budget
surplus away from other government spending priorities.
“The tax dollars the Commonwealth would lose from this
2-month sales tax holiday could support local schools by
accelerating funding for the Student Opportunity Act,
provide opportunities for affordable childcare that will
help businesses and families, and encourage travel by
enabling transit authorities to stop collecting
burdensome bus fares,” said Marie-Frances Rivera,
president of the liberal-leaning Massachusetts Budget
and Policy Center....
The presidents of the Massachusetts
Teachers Association and American Federation of
Teachers-Massachusetts issued a joint statement
criticizing Baker for wanting to boost big box stores
and online retailers instead of investing in colleges,
public schools, and transportation. Merrie Najimy of the
MTA and Beth Kontos of AFT Massachusetts called it
“Baker's billion-dollar giveaway.”
On one hand, the debate is coming
down to the typical Republican versus Democrat dynamic,
with Baker favoring lower taxes and putting more money
into the hands of consumers, and Democrats wanting more
government spending to shore up public infrastructure.
The usual More Is Never Enough
suspects lined up and assumed the position. "No tax
cuts, not now not ever."
When asked for my response by
Beacon Hill Roll Call ("Two-Month Sales Tax
Holiday In July And August") I replied:
“Gov.
Baker’s proposal to return some of taxpayers’
overpayment, considering the historic hardships imposed
on citizens over the past 15 months, is proper and
compassionate,” said Chip Ford, executive
director of Citizens for Limited Taxation (CLT).
“The usual resistance to even this small tax relief
proposal when the state finds itself awash in an
unexpected $4 billion-plus revenue surplus and $5
billion-plus in additional federal grants, every cent
provided by taxpayers, is shameful and demonstrates why
we’ve always asserted at CLT: ‘More is never enough and
never will be.’”
I closed the last
CLT Update
with my observation:
With some
$10 Billion of "free money" floating around the State
House to get in the way is to get trampled. Gov. Baker
is trying to play fair, spending half himself and
leaving the other half to legislative leaders.
Unfortunately Charlie doesn't realize that More Is Never
Enough (MINE) and never will be. Now we shall see just
how much all his "bipartisanship" has been worth when
there's a fortune on the table.
Within just a couple of days we
had our answer.
On Tuesday the State House News
Service reported ("Admin Worried About
Holdup As House Dems Vote to Stash Fed Aid"):
The House on Tuesday rejected Gov.
Charlie Baker's request to immediately spend $2.8
billion in federal COVID-19 relief money, choosing to
follow through with the plan of Democratic leaders to
sweep most of the $5.3 billion the state received into a
separate fund as they consider how to deploy the money.
The action by the House reflects
not only a disagreement between the governor and
Legislature over process, but also about how quickly the
federal funds should be spent to assist in the state's
economic recovery....
While Baker did not say whether he
would veto the bill should it again reach his desk, it's
likely Democrats in the Legislature will have enough
votes to override the governor....
The governor has said he currently
does not need legislative approval to spend the federal
aid, but when asked last week why he didn't just start
spending the money now he said he wanted to work with
the Legislature.
"I think we're trying to pursue
this in what I would describe as a good faith manner,"
Baker said.
The Boston Herald reported on
Tuesday ("Power struggle between
Charlie Baker, Dems over spending federal coronavirus aid
rages"):
The power struggle over who will
hold the purse strings as Massachusetts doles out the
latest round of federal coronavirus relief dollars
continues on Beacon Hill, where state representatives
reached a deal they say would give the governor “some
latitude” around how the cash gets spent.
“Our actions this week will
preserve the funds while allowing all parties to
participate in the discussion and help make decisions
about how to allocate these resources,” House Speaker
Ronald Mariano and Senate President Karen Spilka said in
a joint statement on Tuesday.
Democratic leaders are looking to
to sweep most of the $5.3 billion the state received in
unrestricted funds through President Biden’s American
Rescue Plan into a separate fund as they consider how to
spend the money....
If the bill passes, it will tie
Baker’s hands when it comes to spending more.
Within the above News Service
report it was noted:
The
House and Senate had initially proposed to sweep the
more $5.28 billion in ARPA aid received by Massachusetts
into a fund that Baker could not touch without their
approval, but over the past several weeks $394 million
of the relief money has been committed.
Baker
has already spent $109 million on local aid for four
cities -- Chelsea, Everett, Methuen and Randolph --
shortchanged aid by federal funding formulas and $75
million is needed to subsidize the state's new COVID-19
emergency sick leave law.
The
House vote on Tuesday also left Baker with $10 million
to cover the cost of a new "VaxMillions" vaccine
Lottery, which is offering fully vaccinated residents a
chance to win one of five $1 million prizes, or one of
five $300,000 scholarships for entrants under 18.
One
wrinkle added to the debate Tuesday was an amendment
offered by Hunt and Ways and Means Chairman Aaron
Michlewitz and unanimously approved in the House that
directs Baker to spend $200 million "to protect against
emerging public health threats or to support new,
heightened, or emergency public health response efforts
against the 2019 novel coronavirus and variants
thereof."
CommonWealth Magazine observed on Tuesday ("House
votes to put fed funds through budget-like process;
Gives Baker control of just $200m, not $2.8b"):
. . . What will be interesting to
watch is if House and Senate leaders can keep members in
check during the budget process, and avoid turning the
one-time federal money into a special interest gravy
train.
The numbers are astounding. The
state received $5.28 billion in unrestricted federal aid
under the American Rescue Plan.
We can see where this is
going, as usual. Gov. Baker got $200 million of the
$5.28 Billion, the Legislature gets to squander the rest.
That's what Democrats consider "bipartisan."
The Providence Journal on
Tuesday reported a spark of hope remains for the
Transportation and Climate Initiative (TCI) in Rhode Island
("Regional initiative to cut road
emissions wins RI Senate approval"):
Reports of the death of the Transportation and Climate
Initiative appear greatly exaggerated.
In one sign of life, the Rhode Island Senate on Tuesday
approved legislation that would make the Ocean State a
founding member of the regional program to cut
planet-warming emissions from cars and trucks....
The vote came over the objections of senators from rural
districts who say the fees will amount to a gas tax that
will be passed down to consumers, and that their
constituents will bear the burden because they rely more
on their cars to get around....
Whether the legislation goes any further is up to the
House. Rep. Terri Cortvriend’s bill has been submitted
to the Committee on Finance, but a hearing hasn’t been
scheduled yet and is unlikely to be put on the calendar
before the General Assembly adjourns for the summer.
Cortvriend, a Portsmouth Democrat, has said she expects
a hearing in the fall if the session reconvenes.
So far it remains only the City of Washington in the
District of Columbia and the Commonwealth of Massachusetts
that are committed to this "multi-state" TCI stealth gas tax,
aka, "Baker's Boondoggle."
Pioneer Institute released another report last week, this one
debunking previous studies by others, asserting it own potential
(likely?)
consequences of the graduated income tax ballot question,
aka, "The Fair Share Amendment" or "Millionaires Tax."
In "Study
Says Massachusetts Surtax Proposal —
Could Reduce Taxable Income in the State by Over $2
Billion" Pioneer asserts:
Many of the individual research
papers described in the report focus on particular
sub-groups of the wealthy, such as chief executive
officers at major corporations and particularly
innovative “star scientists.”
“The breadth of research covered in
this paper really highlights the variety of ways in
which income tax hikes can leave states vulnerable to
wealth flight and fiscal and economic harm,” said Andrew
Mikula, author of Tax Flight of the Wealthy: An Academic
Literature Review. “Besides physical relocation out of
Massachusetts, such policies are also deterring
innovators from coming here to begin with, and
encouraging stock-based salaries that are used to delay
tax payments.”
The Pioneer Institute study ties
the results of these academic pieces into Massachusetts’
current graduated income tax proposal. . . .
Pioneer’s new policy brief also
highlights nuances in past studies that have downplayed
the role of tax hikes in the migration decisions of the
wealthy. For example, a 2016 paper by Cornell University
Professor Cristobal Young claims that “when Florida is
excluded, there is virtually no” correlation between
income tax rates and migration patterns in the United
States.
However, underpinning this
headline-worthy line is that Young doesn’t rule out that
there is an “especially appealing combination” of tax
avoidance and geography driving the so-called Florida
effect. . . .
“Research data allow us to put some
hard numbers on the devastating and perhaps permanent
impact of a graduated income tax – as much as $2 billion
in lost taxable income,” said Pioneer Institute
Executive Director Jim Stergios. “And calculating the
impact on state tax revenues ignores the enormous human
toll: lost jobs and less security for homeowners. The
long-term effects may include, as is abundantly clear in
the case of Connecticut, anemic growth in state tax
receipts and therefore fewer resources for social
programs and public investments.”
What will the "More Is Never
Enough" Takers cabal do when their millionaires tax
windfall not only doesn't materialize, but instead causes
overall revenue to decrease?
It doesn't take much
imagination to answer that, does it? Bend over
taxpayers.
"It Doesn't Need
To Be 'The Massachusetts Way'"!
The Boston Globe reported on
Friday ("Warning of a coming ‘Egg-mageddon’"):
The
cracks started appearing a few years after Massachusetts
voters in 2016 approved a ballot initiative that
effectively mandated that all eggs sold in the state
come from cage-free hens.
The
law, backed by nearly 8 of 10 voters, was pushed by top
animal welfare groups in order to create what they
argued were more humane standards for animals.
Now,
warning of an “Egg-mageddon” — a severe egg shortage
that would send prices spiking — lawmakers are moving to
change the measure before it goes into effect in
2022....
“The
entirety of this is so out-of-state egg producers can
get into the Massachusetts market without meeting the
standards that the voters put in in 2016,” Mitchell
said.
Senator Anne Gobi, a Spencer Democrat, concurred.
“I
think it was the wrong move of the Senate to overturn
the will of the people by overturning a vote,” said the
senator.
Lewis,
the senator who introduced the legislation, said he
thinks it is “likely” the House of Representatives will
take up the bill, which he believes is “fully consistent
with the intent of voters.” The lower chamber passed
similar changes as part of its annual budget in 2019.
Governor Charlie Baker has not taken a position on the
measure.
But if
the change to the ballot measure becomes law, it won’t
be the first time legislators have tinkered with
voter-passed laws arguing that leaving the status quo
would be bad for everyone. For example, lawmakers first
delayed and then reworked the 2016 measure legalizing
recreational marijuana sales.
Set aside that the Legislature
was thrilled to stomp all over the voters' mandate in 2002
when it "froze" CLT's rollback of the "temporary" income tax
hike that passed overwhelmingly on the 2000 ballot until just last year. Boston
Globe reporter Jasper Goodman, a 2018 high school grad, is
too young to remember if even know.
That was one of the reasons I
chose Kentucky when I could have bailed out and relocated
anywhere. A much lower cost of living here, for
example I paid $1.09 for a gallon of milk a week ago,
compared to well-over $3.00 in Massachusetts (thanks in part to the
Massachusetts law that
sets an artificially fixed minimum price on the price of
milk):
(a) "No milk dealer shall distribute or sell in any
market within the commonwealth milk obtained from a
producer or from another milk dealer if such milk was
acquired from the producer within the commonwealth at a
cost less than the price fixed by the commissioner to be
paid for milk so acquired and distributed...."
Check out this
cost-of living comparison between Boston, MA and Bowling
Green, KY.
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Massachusetts
Today |
Kentucky
Today |
Reminiscent of German Lutheran
pastor Martin Niemöller's famous
"First the came . . ." poem, The Boston Herald editorial
on Wednesday ("Ban takeout containers?
Not so fast") noted:
It
started with plastic bags and plastic straws, now
they’re coming for your takeout.
On
Tuesday, leaders of the Joint Committee on Public Health
and representatives of the food container industry duked
it out during a hearing on bills to restrict the use of
polystyrene food containers and utensils, according to
the State House News Service.
To
hear advocates from the Massachusetts Public Interest
Research Group (MASSPIRG) and Environment Massachusetts,
and Rep. Dave Rogers tell it, single-use plastic
products like foam cups and takeout containers should be
banned because of the health and environmental risks
associated with them.
“I
think we all know very well that single-use plastic
products including polystyrene foam cups and takeout
containers are a major source of pollution in our
rivers, streams and oceans.... Ben Hellerstein, state
director for Environment Massachusetts, said. For all
these reasons and more, there’s more than 100
communities across Massachusetts that have already taken
action to restrict the use of plastic products.”
Of
course they have, this is Massachusetts.
No silly bans on plastic bags
or straws here in the Bluegrass State. Kentucky
doesn't even require annual motor vehicle inspections. I'm the only one with an
inspection sticker on the windshield of my vehicle, if a bit
faded, still there since my 2018 exodus from Massachusetts
— as a reminder of what I fled. Just being so left alone is truly a
blessing, one I think most Kentuckians don't fully
appreciate because it's what they are accustomed to.
Occasionally I mention these
contrasts because I think most of us accept the familiar,
feel that how things are done where we live is how they're
done elsewhere, even everywhere; that they are the norm.
Admittedly even I am surprised at how remarkably wrong that
is, was for me until I escaped and now observe from the
outside with a new perspective. It makes me more
aggravated, frustrated, even angrier over what Massachusetts
government gets away with — and
that the politicians doing it to you keep being
re-elected.
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Chip Ford
Executive Director |
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Full News Reports
(excerpted above) |
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State House News Service
Wednesday, June 23, 2021
Annual Tax Collections Beating Estimate By $3.4 Bil, And
Counting
By Colin A. Young
Through mid-June, the Department of Revenue collected nearly
80 percent of the tax revenue it anticipates bringing in
during this final month of a remarkable fiscal year that has
already exceeded all expectations and appears likely to
produce a significant surplus.
In its mid-month report to the Legislature, DOR said it had
collected $2.003 billion from taxpayers between June 1 and
June 15, up $768 million or 62.2 percent compared to the
same period in June 2020. DOR's latest monthly benchmark for
June projected a monthly total of $2.578 billion.
"The month-to-date increase is mostly due to increases in
withholding, income estimated payments, corporate and
business taxes, sales and use tax, and estate tax," Revenue
Commissioner Geoffrey Snyder wrote. Snyder said collections
are generally weighted towards the end of the month and
urged caution when interpreting mid-month results.
With the second half of June remaining to be counted, DOR
has collected $32.454 billion so far in fiscal year 2021,
which ends June 30. That's $3.364 billion more than the
Baker administration's most recent estimate for the full
12-month fiscal year and $1.3 billion more than the
pre-pandemic estimate of $31.15 billion in tax revenue for
fiscal year 2021.
It is also $2.334 billion more than the consensus revenue
agreement of $30.12 billion the governor, House and Senate
used to craft their fiscal year 2022 budget proposals. The
six lawmakers currently negotiating a compromise fiscal year
2022 budget could wield considerable power by increasing the
revenue assumption to give themselves additional money to
spend, save or turn back in the form of tax relief.
The fiscal year 2021 tax collections, which have obliterated
the Baker administration's expectations for the last several
months, look to be headed towards a significant surplus.
That would present another pot of mostly untethered money
for the governor and Legislature to manage while also
deciding how to spend more than $5 billion in federal aid
received as part of the American Rescue Plan Act.
Gov. Charlie Baker is scheduled to make an announcement
related to the fiscal year 2021 budget Wednesday at 1 p.m.
from the State House.
Massachusetts Department of Revenue
Division of Local Services
June 25, 2021
— Excerpts follow (Full
Report
here) —
Executive Office for Administration and Finance
About COVID-19 Federal Funds
This page provides information about federal funds provided
to the Commonwealth in response to the COVID-19 public
health emergency.
The Commonwealth of Massachusetts’ Executive Office for
Administration and Finance (A&F) Federal Funds Office (FFO)
has been charged by the Governor with overseeing COVID-related
federal funding in a manner that optimizes federal funding,
targets the administration’s priorities, and minimizes
compliance risk.
This page provides information about:
• Federal funds provided to the Commonwealth in response to
the COVID-19 public health emergency, including the
Coronavirus Relief Fund and the Coronavirus State Fiscal
Recovery Fund;
• Federal funds distributed to municipalities and school
districts; and
• FFO's role in compliance for federal funds, including
compliance resources for municipalities and state agencies.
About COVID-19 Federal Funding
The federal government has enacted at least six pieces of
legislation in response to the public health emergency
caused by COVID-19. Three pieces of legislation were enacted
in March 2020, the largest and most notable of which was the
Coronavirus Aid, Relief, and Economic Security Act (the
“CARES Act”). This $2.2 trillion package included numerous
initiatives, including but not limited to the Paycheck
Protection Program (PPP), economic impact payments ($1,200
payments to qualified individuals), Economic Injury Disaster
Loans (EIDL), Provider Relief Funds for health care
providers, the Coronavirus Relief Fund (CvRF) for state and
local governments, and an array of other new initiatives and
expansions to existing programs. Additionally, the
Consolidated Appropriations Act, 2021 was enacted on
December 27, 2020. This law authorized $900 billion in
additional COVID-related assistance.
Most recently, the American Rescue Plan Act of 2021 (“ARPA”)
was signed into law on March 11, 2021. This law provides
$1.9 trillion for continued COVID-19 response and recovery,
including $350 billion for the Coronavirus State and Local
Fiscal Recovery Funds.
Total Federal Awards to Massachusetts: $113 Billion
The federal government is expected to provide approximately
$113 billion in aid to Massachusetts in response to the
COVID-19 pandemic. Funding has been given to three groups:
businesses and individuals, public entities, and
Commonwealth agencies.
• Businesses and individuals received about $51 billion
through programs like the Paycheck Protection Program for
businesses and stimulus checks for individuals.
• Public entities other than Commonwealth agencies received
about $10 billion through programs like the Coronavirus
Local Fiscal Recovery Fund for municipal and county
governments, and Federal Transit Authority grants to
Regional Transportation Authorities.
• Commonwealth agencies received about $49 billion,
primarily to support COVID-related Unemployment Insurance
benefits, expansions of existing programs like the Community
Development Block Grant, and new programs like the
Coronavirus Relief Fund and the Coronavirus State Fiscal
Recovery Fund.
• Additionally, new federally-administered initiatives like
funding of COBRA coverage and the expansion of the child tax
credit are expected to provide nearly $4 billion to
Commonwealth residents.
Funds are specifically prohibited from being used for:
• Offsetting tax cuts; or
• Public pension funds.
—
Full Report —
State House News Service
Wednesday, June 23, 2021
Baker Seeks Two-Month Sales Tax Holiday
Consumers, Businesses Would Share in Bulging Surplus
By Matt Murphy
With Massachusetts on track to end the year with a
multi-billion dollar surplus, Gov. Charlie Baker on
Wednesday proposed a two-month sales tax holiday that would
give consumers a break from the state's 6.25 percent sales
tax in August and September in an effort to drive shoppers
to local businesses.
The major tax relief proposal would cost the state an
estimated $900 million in forgone revenue, but the
Republican governor said it would also be a way for the
state to show appreciation to business owners and consumers
who have contributed to the surplus by finding ways to
support each other during the COVID-19 pandemic.
Baker said he would file legislation Wednesday to expand the
annual sales tax holiday from a two-day weekend in August to
a two-month event, believing it would help give the state's
economy "some momentum as we come out of this sort of
pandemic doldrums that we've been in."
As it stands now, the tax-free holiday has been set for the
weekend of Aug. 14 and Aug. 15.
"It would be a really big deal, not just for taxpayers, but
also for all those Main Street businesses have really had it
probably toughest of all on the economic side since the
beginning of the pandemic," Baker said at a State House
press conference.
Through May, the state had collected more than $3.9 billion
in excess of projections for the fiscal year and that trend
has continued in June with the Department of Revenue
reporting that through the middle of the month the state had
already collected 80 percent of what it expected for the
full month.
Baker hesitated to make a guess on how large the surplus
will be when the fiscal year ends on June 30 and the books
are balanced, but he said it was clear that there would be
"significant" excess revenue to be spent, saved or returned
to taxpayers.
"It's also a way for us to say, as I think we should, thank
you to all the people who create that tax revenue through
their creativity and imagination over the course of the last
year," Baker said.
To take effect, the proposal would need to get through the
Democrat-controlled Legislature where lawmakers in both the
House and Senate were already questioning the governor's
decision to prioritize tax relief over investments in things
like student debt relief or public transit.
Several said the developing surplus should instead be put
toward public investments.
"There is no evidence that we need to incentivize
purchasing. Consumer demand is high. Instead of an extended
sales tax holiday, let's put funds towards our future:
relieve student debt, support public higher education,
address rent relief post-pandemic. I could make a long
list," Rep. Mindy Domb, of Amherst, said on Twitter.
"Or we could fix the T, repair our crumbling bridges, reduce
class sizes, and pay down our debt," Sen. Eric Lesser
tweeted.
And Brookline Rep. Tommy Vitolo said the money would be
better spent on transit, education, housing, state and local
government, building energy efficiency or paying down
pension debt.
"C'mon, man," Vitolo said tweeted.
While some legislators may be skeptical of the plan,
Retailers Association of Massachusetts President Jon Hurst
called it a "great idea."
"It's a great progressive pro-consumer and pro-small
business concept," Hurst said, adding, "This would be good
for consumers, good for businesses and the icing on the cake
would be that New Hampshire would hate it."
Hurst said that despite the strength of consumer activity
during the pandemic a large portion of dollars spent by
Massachusetts consumers went out of state for online
purchases that could be delivered to a shopper's door, and
not to local businesses.
"This could be a really important reminder to our consumers
that they need to shop like jobs depend on it, because quite
frankly they do," Hurst said.
Lt. Gov. Karyn Polito, who joined Baker at the press
conference, said the sales tax relief would be felt the most
in low-income communities where residents pay larger
portions of their household income on sales taxes.
Under Baker's plan, the governor said the MBTA and the
School Building Authority would not see their budgets
impacted by the tax holiday. Both agencies receive a
dedicated portion of every dollar in sales taxes collected
by Massachusetts.
The traditional August sales tax holiday applies to
purchases under $2,500, and does not extend to meals, motor
vehicles, boats, telecommunications services, utilities,
tobacco, marijuana or alcohol.
Another chunk of the surplus is expected to find its way
into savings.
The Department of Revenue on Tuesday certified for the
comptroller $2.3 billion in capital gains taxes collected so
far in fiscal 2021, which exceeds a threshold set by state
law resulting in an automatic transfer of $852 million to
the state's stabilization fund. That transfer, the
administration said, pushed the balance in the state's
"rainy day" fund to $4.3 billion.
In 2019 when the state last ended a fiscal year with a
surplus, Baker proposed a mix of tax relief and new
spending, including $175 million to expand for two years a
dependent tax credit for families with children and those
who care for elderly or disabled relatives.
The House and Senate, however, did not go along with his
plan.
While it remains to be seen how legislative leadership will
react to this latest tax proposal, the governor has been at
odds with the Legislature over how and how quickly to spend
more than $5 billion in federal relief aid.
Baker last week proposed to immediately spend more than half
of the funding the state received through the American
Rescue Plan Act, or about $2.8 billion, on a combination of
housing, job training water and sewer infrastructure and
other priorities.
The remainder of the money, he suggested, could become part
of a more deliberative process guided by the Legislature as
they sort through ideas for how best to spend the one-time
aid.
That plan, however, was rejected by the House on Tuesday,
and Democratic leaders said they instead want to hold a
series of hearings over the next few months to gather input
from lawmakers and others about how roughly $4.89 billion
should be used.
"We know that our colleagues in the Legislature are working
their process on our proposal, but we remain committed to
taking quick action to put these federal dollars to work and
will continue to pursue this plan to invest in these crucial
priorities in the communities that were hit hardest by the
pandemic," Baker said.
The governor would not say whether he would veto the bill
working its way back to his desk to give the Legislature
more control over the funding, or if he would seek to commit
some of the money before it gets swept into an account
beyond his reach to spend without legislative approval.
"I think we made a pretty clear statement in the proposal
that we made that we want to be collaborative on this one,"
Baker said.
State House News Service
Thursday, June 24, 2021
Lights Quickly Dim on Baker’s Tax Relief Plan
Spilka: Sales Tax Holiday Weekend "Sufficient For Now"
By Matt Murphy
Gov. Charlie Baker on Thursday continued to pitch his new
idea for a two-month sales tax holiday this summer even
after the $900 million tax relief proposal landed with a bit
of a thud on Beacon Hill where many Democrats panned the
short-term tax break and supporters voiced skepticism about
its chances.
Baker filed legislation proposing to use some of the
"significant" surplus expected when the fiscal year ends
next week on an expanded sales tax holiday. The governor's
bill would turn what is traditionally a two-day, tax-free
weekend in August -- Aug. 14 and Aug. 15 this year -- into a
two-month reprieve from the state's 6.25 percent sales tax.
But the idea of suspending sales tax collections in August
and September to help give the retail economy a jolt
encountered swift pushback from legislators who would have
to sign off on the plan.
"We did do a weekend of sales tax holiday and I think that
is sufficient for now. There's a lot of need in the state,"
Senate President Karen Spilka said.
Senate Ways and Means Chairman Michael Rodrigues and
Economic Development Committee Chairman Eric Lesser both
called the sales tax holiday a "political gimmick," and
other lawmakers enumerated the various ways they hoped to
spend surplus dollars.
"Whether it's investing in childcare, emerging workforce
needs, K-12 education, public health, or families in need,
there are no shortage of ways to responsibly invest to
support an equitable economic recovery, however a short-term
political gimmick is not one of them," Rodrigues said.
With Baker recommending the tax holiday run August through
September, legislative leaders must decide in the coming
weeks whether the proposal has any legs. If they don't
accept it, Democrats in the House and Senate could choose to
shorten the duration or, as House Minority Leader Brad Jones
put it, let it "die a death of inaction."
Evan Horowitz, executive director of the Center for State
Policy Analysis at Tufts, also questioned the wisdom of
injecting an economy already showing signs of overheating
with more capital.
"Outside the political questions, there's also the economic
question: is now the right time for this stimulus? I think
the consensus is probably not. We're running an economy
right now that's very hot," Horowitz said.
Horowitz noted the inflated prices of goods like lumber,
supply chain constraints for microchips and the trouble many
businesses are having recruiting labor.
"Injecting stimulus this summer compounds all of these
problems. It's giving people money to spend when high
spending is actually an economic concern, not a virtue," he
said.
Baker has described his proposal as not only a way to help
small, local businesses rebound from months of restrictions
imposed during the COVID-19 pandemic, but also a way to say
thank you to consumers who continued to spend and helped
contribute to the surplus.
The state ended May with $3.9 billion more than it had
projected to collect over the first 11 months of the fiscal
year, and midway through June the Department of Revenue
reported collecting 80 percent of what it expected for the
full month.
Baker said the unexpected strength of tax collections,
including capital gains taxes, has pushed the state's
reserved balance to more than $4.3 billion
"I think we owe some of this to the people of Massachusetts
and to some of the small businesses. They had a terrible
year," Baker said Thursday during an interview on GBH's
"Boston Public Radio."
Asked whether he'd consider limiting the tax break to
purchases made at small, local sellers, Baker said, "Well
that's an interesting idea. Certainly happy to talk to the
Legislature about that."
Retail groups were among those cheering Baker's proposal.
Jon Hurst, president of the Retailers Association of
Massachusetts, called the proposal "a smart, exciting, and
progressive economic incentive that will benefit our small
businesses and our consumers just when they need it."
The Massachusetts Fiscal Alliance also countered the idea
that allowing people to keep more of the money they earn
should be seen as a gimmick.
"Massachusetts is collecting more tax money than they ever
dreamed of, and Massachusetts taxpayers are among the most
generous in the country. State House politicians should
share some of the riches with the taxpayers and not keep it
all for themselves to spend in a self-centered and reckless
way," MassFiscal spokesman Paul Craney.
But few supporters, if any, seemed optimistic about the
bill's chances.
Jones said members of the House GOP caucus he had spoken
with about the governor's proposal were "very receptive,"
but he was skeptical the Democratic leaders would allow the
bill to come up for a vote.
"I'd certainly vote for it. I just honestly don't expect it
will get to the floor for a vote and I don't know if there
will be another chance for us to offer it," Jones said.
The Reading Republican called the proposal a "reasonable
way" to recognize taxpayers, and said it should help small
local businesses, even if some consumers choose to shop in
"Big Box" stores.
"Maybe someone who was stuck in quarantine and burned out
their TV on Netflix will go get a TV," Jones said.
Marie-Frances Rivera, president of the Massachusetts Budget
and Policy Center, said it "makes good sense" to shift the
tax system away from a 6.25 percent sales tax "that fall
most heavily on low-income households." However, she added:
"Unfortunately, spending the surplus this way forecloses the
ability to make investments that will transform
opportunities for everyone in our Commonwealth –
particularly for our low-income and BIPOC communities."
Rivera said the money could instead be used to accelerate
the state's seven-year funding plan for the Student
Opportunity Act, lower the cost of child care or allow
regional transit authorities to eliminate bus fares.
The heads of the state's two largest teachers unions also
said the surplus could be better invested in schools and
transportation. Massachusetts Teachers Association President
Merrie Najimy and American Federation of Teachers
Massachusetts President Beth Kontos said Baker's plan would
"boost the profits of large, out-of-state big-box stores and
online retailers."
Baker, Jones and other supporters of the extended tax
holiday noted that the tax relief would come at a time when
government is not only running a surplus, but lawmakers are
debating how to spend more than $5 billion in federal
COVID-19 aid, and cities, towns and schools received
billions more through the American Rescue Plan Act.
The governor last week proposed spending $2.8 billion in
Rescue Plan funds to boost the local economy, but the House
and Senate rejected that plan and returned him a bill to
deposit the ARPA aid into a fund for now.
Horowitz said a better plan for the surplus instead of
piling stimulus money on top of stimulus money might be to
either narrowly target the funds at populations that
struggled the most during the pandemic or give it to loan
programs and agencies like MassDevelopment that will deploy
the resources over many years.
— Sam Doran and Michael
Norton contributed reporting
CommonWealth Magazine
Friday, June 25, 2021
Two-month sales tax holiday may not make economic sense
By Shira Schoenberg
The debate over Gov. Charlie Baker’s proposed two-month
sales tax holiday has turned into a partisan,
interest-driven dispute.
Baker, a Republican who has not yet announced whether he
will run for reelection, portrayed the tax holiday as a way
to keep more money in the hands of consumers, while helping
small businesses. “We are proud to offer this proposal to
keep money in the hands of taxpayers and promote economic
development amidst Massachusetts’ recovery from the COVID-19
public health emergency,” Secretary of Administration and
Finance Michael Heffernan said in a statement.
Businesses that would benefit from increased sales are,
unsurprisingly, supportive. Retailers Association of
Massachusetts president Jon Hurst, in a statement included
in the governor’s press release, called it “a smart,
exciting, and progressive economic incentive that will
benefit our small businesses and our consumers just when
they need it.”
But liberal groups panned the move as a gimmick that would
divert an unexpected budget surplus away from other
government spending priorities. “The tax dollars the
Commonwealth would lose from this 2-month sales tax holiday
could support local schools by accelerating funding for the
Student Opportunity Act, provide opportunities for
affordable childcare that will help businesses and families,
and encourage travel by enabling transit authorities to stop
collecting burdensome bus fares,” said Marie-Frances Rivera,
president of the liberal-leaning Massachusetts Budget and
Policy Center.
Sen. Eric Lesser, a Longmeadow Democrat widely viewed as
eyeing higher office, who chairs the Legislature’s economic
development committee, said businesses “need more workers
and better infrastructure, not political gimmicks.” “Extra
funds should be used to reduce class sizes, repair crumbling
roads and bridges, improve broadband internet, or use to pay
down debt,” Lesser said.
The State House News Service reported that Senate Ways and
Means chair Michael Rodrigues, a Westport Democrat, also
called the extended sales tax holiday a “short-term
political gimmick,” while Senate President Karen Spilka was
equally cool to the idea.
The presidents of the Massachusetts Teachers Association and
American Federation of Teachers-Massachusetts issued a joint
statement criticizing Baker for wanting to boost big box
stores and online retailers instead of investing in
colleges, public schools, and transportation. Merrie Najimy
of the MTA and Beth Kontos of AFT Massachusetts called it
“Baker's billion-dollar giveaway.”
On one hand, the debate is coming down to the typical
Republican versus Democrat dynamic, with Baker favoring
lower taxes and putting more money into the hands of
consumers, and Democrats wanting more government spending to
shore up public infrastructure.
But largely lost in the political shuffle, points out Evan
Horowitz, executive director at the nonpartisan Center for
State Policy Analysis at Tufts University, is whether the
move makes any sense economically. Horowitz said from an
economic perspective, this is not the right time for
additional stimulus. There is already a lot of stimulus
money out there, distributed by the federal government. Many
people have actually been saving money during the pandemic,
since they had fewer activities to spend it on
And with the economy reopening, there is already a
tremendous amount of pent-up demand. Spending on clothing is
way up. Spending on travel is increasing.
The increased spending is already leading to inflation. A
surge in construction and home renovation projects are
resulting in lumber shortages. A microchip shortage, caused
by COVID-related supply chain disruptions, is making it
harder to buy cars and other electronics.
Meanwhile, businesses like restaurants and hotels are
struggling to hire enough workers to keep up with demand.
Horowitz said in an interview that in the long term, these
problems will probably solve themselves. But in the short
term, “The economy can’t take much more spending.” Trying to
stimulate spending – generally the goal of a sales tax
holiday – will only exacerbate the short-term problems,
Horowitz said.
Horowitz said there may be ways to effectively target aid to
individuals and small businesses that still need help. But
the problem for many businesses is no longer a lack of
people buying. “Lots of businesses are having the opposite
problem,” Horowitz said. “You can’t keep up with demand.”
The Boston Herald
Thursday, June 24, 2021
Charlie Baker’s 2-month sales tax holiday appears dead on
arrival
in Democrat-led Massachusetts Legislature despite business
support
By Erin Tiernan
Gov. Charlie Baker’s plan to slash sales taxes statewide for
two months appears dead-on-arrival in the state’s
Democrat-led Legislature, where lawmakers dismissed the
measure as a “gimmick.”
But the Republican governor signaled he isn’t giving up
without a fight, taking the chance to swing back at critical
lawmakers not once, but twice on Thursday in person and on
GBH radio.
Baker said he’s “having a little trouble understanding” why
lawmakers this week rejected his proposal to immediately
spend $2.8 billion on behavioral and addiction services,
housing, transportation and environmental infrastructure
just to turn around and say investments are needed there in
response to his plan to cut sales taxes.
“We’re ready to see that proposal that we filed moved, but
the answer we got from them was that they want to spend some
time thinking about it. I have trouble figuring out how both
of those things are consistent,” Baker said.
Baker on Wednesday announced legislation that would expand
the state’s sales tax holiday, which is traditionally two
days, into a two-month affair. Cutting the state’s 6.25%
sales tax for eight weeks would save shoppers and businesses
an estimated $900 million, he said.
State Sen. Eric Lesser, D-Longmeadow, said the proposal
would “do almost nothing to help out local retailers,”
joining a growing list of Democratic lawmakers who oppose
the plan.
“Now that COVID is ending, demand is at record levels. Our
local businesses need more workers and better
infrastructure, not political gimmicks. Extra funds should
be used to reduce class sizes, repair crumbling roads and
bridges, improve broadband internet, or use to pay down
debt,” Lesser said.
Senate Ways and Means Chairman Michael Rodrigues called the
extended sales tax holiday proposal a “short-term political
gimmick” and “another missed opportunity to address the
pressing and long-term needs of our commonwealth.”
But right-leaning lobbyists and business interest groups are
backing the governor.
“Tax cuts are not gimmicks to those who want to keep more of
their own money,” said Paul Diego Craney, spokesman for the
Massachusetts Fiscal Alliance.
“Massachusetts is collecting more tax money than they ever
dreamed of, and Massachusetts taxpayers are among the most
generous in the country. State House politicians should
share some of the riches with the taxpayers and not keep it
all for themselves to spend in a self-centered and reckless
way,” Craney added.
Craney said it’s the least the state can do for businesses
that are staring at a “long-term tax” in the form of
unemployment insurance.
Retailers Association of Massachusetts President Jon Hurst
called sales tax “our most regressive tax on the books” and
would “incentivize consumers to spend their all-important
dollars with local businesses.”
Beacon Hill Roll Call
Volume 46 - Report No. 26
June 21-25, 2021
Two-Month Sales Tax Holiday In July And August
By Bob Katzen
Two-Month Sales Tax Holiday In July And August – Gov.
Charlie Baker proposed a full two-month sales tax holiday
during July and August this summer during which consumers
can buy most products that cost under $2,500 without paying
the state’s 6.25 percent sales tax.
“A two-month sales tax holiday will provide a boost to
Massachusetts’ taxpayers and Main Street economies as we
continue to recover from COVID-19,” said Baker.
“Massachusetts’ economic recovery is off to a good start,
but it’s crucial that the commonwealth takes action now to
spur more economic activity in communities and support
taxpayers. Thanks to stronger than expected tax revenues,
the commonwealth has managed to grow the Rainy Day Fund to a
balance higher than it was at the beginning of the pandemic,
and we can also afford to return these tax dollars to our
residents and small businesses.”
Senate President Karen Spilka’s response virtually ensures
that the proposal will be dead on arrival in the
Legislature. “We did do a weekend of sales tax holiday and I
think that is sufficient for now,” said Spilka. “There’s a
lot of need in the state.”
“Gov. Baker’s proposal to return some of taxpayers’
overpayment, considering the historic hardships imposed on
citizens over the past 15 months, is proper and
compassionate,” said Chip Ford, executive director of
Citizens for Limited Taxation (CLT). “The usual
resistance to even this small tax relief proposal when the
state finds itself awash in an unexpected $4 billion-plus
revenue surplus and $5 billion-plus in additional federal
grants, every cent provided by taxpayers, is shameful and
demonstrates why we’ve always asserted at CLT: ‘More is
never enough and never will be.’”
“Whether it’s investing in childcare, emerging workforce
needs, K-12 education, public health or families in need,
there are no shortage of ways to responsibly invest to
support an equitable economic recovery, however a short-term
political gimmick is not one of them,” said Senate Ways and
Means Chair Sen. Mike Rodrigues (D-Westport).
“A two-month sales tax holiday is a smart, exciting and
progressive economic incentive that will benefit our small
businesses and our consumers just when they need it,” said
Jon Hurst, President of the Retailers Association of
Massachusetts. “Consumers represent 70 percent of our
economy, and it is important that we incent them to invest
in our Main Streets, small businesses and communities. And
for our lower income families, this tax cut is all about
temporarily suspending the most regressive tax on the books,
just as their children are heading back to school.”
“We’ve learned from living through this pandemic that there
are deep inequities in our state,” said Cindy Rowe,
executive director of the Jewish Alliance for Law and Social
Action. “People are hungry, kids need public education,
workers need reliable transportation. The people of
Massachusetts are far wiser and more compassionate than our
governor gives them credit for being. They know that using
these federal tax dollars to invest in our greatest needs is
far better and more compassionate than a two-month tax
holiday. Let's live up to our better selves and make this
federal investment count.”
State House News Service
Tuesday, June 22, 2021
Admin Worried About Holdup As House Dems Vote to Stash Fed
Aid
Reflective Process Planned For Biden's Rescue Plan $$$
By Matt Murphy
The House on Tuesday rejected Gov. Charlie Baker's request
to immediately spend $2.8 billion in federal COVID-19 relief
money, choosing to follow through with the plan of
Democratic leaders to sweep most of the $5.3 billion the
state received into a separate fund as they consider how to
deploy the money.
The action by the House reflects not only a disagreement
between the governor and Legislature over process, but also
about how quickly the federal funds should be spent to
assist in the state's economic recovery.
Baker last Thursday offered a compromise that would have
allowed him to immediately spend more than half of the
funding the state received through the American Rescue Plan
Act, and give the Legislature more time to deliberate over
how to spend the remaining $2.3 billion.
The Republican governor proposed to put $1 billion into
housing and home ownership programs, and hundreds of
millions of dollars into job training, water and sewer
infrastructure and other priorities. The spending was
targeted toward helping people and communities hard hit by
the coronavirus, including communities of color.
House Speaker Ron Mariano and Senate President Karen Spilka,
however, quickly dismissed the governor's plan, and the
House on Tuesday formally voted 130-30 along party lines to
sweep $4.89 billion into a COVID-19 relief fund, subject to
appropriation by the Legislature.
"While the Administration has proposed working with the
Legislature to appropriate all of the funds, the
Administration also remains concerned about holding up these
funds with a process that would take years while the
communities that were hit hardest by the pandemic, including
communities of color, wait," Baker spokesman Terry
MacCormack said Tuesday in response to the vote.
While Baker did not say whether he would veto the bill
should it again reach his desk, it's likely Democrats in the
Legislature will have enough votes to override the governor.
"We can all agree a number of those are well conceived and
worthy. We don't deny that. We just think it's important all
160 members of this body and 40 in our sister body have a
chance to have their voice heard," said Rep. Dan Hunt, the
chair of the House Committee on Federal Stimulus and Census
Oversight, about the governor's priorities.
Hunt said that over the course of several months after the
"July holiday" the House planned to have multiple hearings
on different subject matters to gather input on how the
money should be spent. Mariano and Spilka said the hearings
would be led by the Joint Committee on Ways and Means.
"The Legislature stands firm in its commitment to employing
an open, transparent and thorough public process to best
understand how we as a state can make smart investments with
these one-time federal dollars to address pressing and
long-term needs while promoting a just recovery for all
areas of the state," Mariano and Spilka said in a statement
after the House vote.
The Democratic leaders said they invited the administration
to testify at their hearings.
"We will continue to seek input from the Governor and expect
that he will file additional legislation so that his
priorities can be part of that process," Mariano and Spilka
said.
Unlike Baker who said it was important to put the money to
work now to fuel the economic recovery, Hunt said Congress
intended "a process to take place over four years."
The Dorchester Democrat noted that other rounds of federal
stimulus were pumped directly into the economy and cities
and towns will still receive $3.4 billion in separate ARPA
relief. Additional buckets of money from ARPA for
unemployment, child care, higher education, public transit
and other sectors flow to directly from the federal
government to recipients without the involvement of the
Legislature or governor.
"As we move forward in a recovery phase, it's important to
spend time to reflect on this once in a generation funding,"
Hunt said.
The House and Senate had initially proposed to sweep the
more $5.28 billion in ARPA aid received by Massachusetts
into a fund that Baker could not touch without their
approval, but over the past several weeks $394 million of
the relief money has been committed.
Baker has already spent $109 million on local aid for four
cities -- Chelsea, Everett, Methuen and Randolph --
shortchanged aid by federal funding formulas and $75 million
is needed to subsidize the state's new COVID-19 emergency
sick leave law.
The House vote on Tuesday also left Baker with $10 million
to cover the cost of a new "VaxMillions" vaccine Lottery,
which is offering fully vaccinated residents a chance to win
one of five $1 million prizes, or one of five $300,000
scholarships for entrants under 18.
One wrinkle added to the debate Tuesday was an amendment
offered by Hunt and Ways and Means Chairman Aaron Michlewitz
and unanimously approved in the House that directs Baker to
spend $200 million "to protect against emerging public
health threats or to support new, heightened, or emergency
public health response efforts against the 2019 novel
coronavirus and variants thereof."
Public health departments strained by the pandemic have
requested up to $250 million in recovery funds to help hire
staff, invest in training and upgrade data systems.
"I think that's great example of an item that we'd love to
work with them and with the Legislature on to come up with
an appropriate investment there going forward," Baker said
last week.
Through her joint statement with the speaker, Spilka
indicated that she supported and would ask the Senate to
approve the $200 million for "urgent public health needs
that may require an immediate use of funds."
Since Baker presented his plan to spend more than half of
the ARPA on what he thought were priorities the Legislature
could support, the response has been mixed.
For instance, some environmental groups cheered the focus on
water and sewer infrastructure, parks and climate resiliency
projects. Meanwhile, business groups like the National
Federation of Independent Businesses lamented that Baker did
not recommend using some of the funding to replenish the
unemployment trust fund.
The governor has said he currently does not need legislative
approval to spend the federal aid, but when asked last week
why he didn't just start spending the money now he said he
wanted to work with the Legislature.
"I think we're trying to pursue this in what I would
describe as a good faith manner," Baker said.
The Boston Herald
Tuesday, June 22, 2021
Power struggle between Charlie Baker, Dems over spending
federal coronavirus aid rages
By Erin Tiernan
The power struggle over who will hold the purse strings as
Massachusetts doles out the latest round of federal
coronavirus relief dollars continues on Beacon Hill, where
state representatives reached a deal they say would give the
governor “some latitude” around how the cash gets spent.
“Our actions this week will preserve the funds while
allowing all parties to participate in the discussion and
help make decisions about how to allocate these resources,”
House Speaker Ronald Mariano and Senate President Karen
Spilka said in a joint statement on Tuesday.
Democratic leaders are looking to to sweep most of the $5.3
billion the state received in unrestricted funds through
President Biden’s American Rescue Plan into a separate fund
as they consider how to spend the money.
Gov. Charlie Baker last week proposed a compromise that
would have shifted much of the control to lawmakers, but
compelled them to immediately spend $2.8 billion of the
roughly $5.1 billion in remaining American Rescue Plan
funds.
“While the Administration has proposed working with the
Legislature to appropriate all of the funds, the
Administration also remains concerned about holding up these
funds with a process that would take years while the
communities that were hit hardest by the pandemic, including
communities of color, wait,” Baker spokesman Terry
MacCormack said in response to the vote.
Democratic leaders, however, said the Legislature “stands
firm” in its quest to impose a public process for disbursing
the latest round of COVID-19 federal aid.
Already the Republican governor has shelled out about $394
million of the ARP funds. Four cities — Chelsea, Everett,
Methuen and Randolph — shortchanged aid by federal funding
formulas got a $109 million bump, $75 million went to the
state’s new COVID-19 emergency sick leave law. Another $10
million will cover the costs of Baker’s new “VaxMillions”
vaccine lottery, which Baker announced last week.
If the bill passes, it will tie Baker’s hands when it comes
to spending more.
Baker would be authorized to spend up to $200 million on
urgent pubilc health needs, which Rep. Dan Hunt, D-Boston,
said “gives the governor some latitude around some of the
remaining funds.”
CommonWealth Magazine
Tuesday, June 22, 2021
House votes to put fed funds through budget-like process
Gives Baker control of just $200m, not $2.8b
By Bruce Mohl
The House voted overwhelmingly on Tuesday to put nearly all
of the roughly $5 billion in unrestricted federal stimulus
money through a budget-like process, giving Gov. Charlie
Baker immediate control over just $200 million – far less
than the $2.8 billion he had sought last week.
House officials said they wanted to make spending decisions
using a very public process, and move away from giving the
governor license to use the sweeping executive powers he
exercised during the pandemic.
Baker said spending a good chunk of the money quickly was
important to spurring the state’s economic recovery, but
Rep. Dan Hunt, the chair of the House Committee on Federal
Stimulus and Census Oversight, said there was no rush, that
the money under federal guidelines could be portioned out
over four years.
“It’s important to spend time to reflect on this
once-in-a-generation funding,” he said.
What will be interesting to watch is if House and Senate
leaders can keep members in check during the budget process,
and avoid turning the one-time federal money into a special
interest gravy train.
The numbers are astounding. The state received $5.28 billion
in unrestricted federal aid under the American Rescue Plan.
The governor has already steered $109 million to Randolph,
Methuen, Everett, and Chelsea to compensate for a flawed
formula used to distribute earlier federal funds; another
$75 million has been designated to stabilize a COVID-19 sick
leave law; and $10 million has been allotted for a lottery
game designed to incentivize people to get vaccinated.
The House on Tuesday voted 130-30 to reject the governor’s
amendment seeking authority to spend $2.8 billion quickly
and 160-0 to approve an amendment setting aside $200 million
for Baker “to protect against emerging public health
threats.”
The bill now goes to the Senate, where leaders have
indicated they are likely to follow the House’s lead. Hunt
said the House would have multiple hearings on what to do
with the federal funds over the course of the next several
months.
House Speaker Ron Mariano issued a statement suggesting a
governmental balance is being restored. “Massachusetts has
an existing legislative process that includes the public,
both legislative branches, and the executive branch, which
has effectively allowed us to pass nation-leading bills
regarding climate change, reproductive justice, and police
reform. We look forward to embarking on a similar process as
we appropriate American Rescue Plan funds,” he said.
State House News Service
Friday, June 25, 2021
Weekly Roundup - Bowling for Compromise
Recap and analysis of the week in state government
By Matt Murphy
Gov. Charlie Baker keeps setting them up, and the
Legislature keeps knocking 'em down.
Last week, it was a plan to spend $2.8 billion in federal
relief money on what Baker hoped would be slam-dunk
priorities -- housing, job training, parks. The response
from House and Senate Democrats? Nope, at least not yet.
The Republican governor came right back this week with a
pitch to use $900 million from an expected surplus at the
end of fiscal 2021 (which concludes next Wednesday) to cover
a two- month sales tax holiday in August and September.
Why provide sales tax relief for two days on Aug. 14 and
Aug. 15 when the state can afford sales tax relief for two
months, Baker said. Well, it turns out legislative Democrats
could think of a few reasons, all but popping the governor's
sales tax holiday balloon before it could float away.
"We did do the weekend already, and I think that's
sufficient," Senate President Karen Spilka said.
Baker pitched the tax relief as a thank you to consumers who
found a way to keep working and spending during the pandemic
and a way to build on the momentum behind the economic
recovery. Top Democrats like Sens. Michael Rodrigues and
Eric Lesser, however, called it a "political gimmick" that
would divert money that the state could otherwise spend on
schools, roads and debt relief.
Of course, there was a touch of irony that the Legislature
would criticize the governor for not proposing to spend the
projected surplus on investments in education, housing and
infrastructure at the same time they were voting down his
plan to spend billions on education, housing and
infrastructure.
But good things come to those who wait, lawmakers said.
The House and Senate both voted along strict party lines to
reject Baker's $2.8 billion spending plan for the more than
$5 billion in remaining American Rescue Plan Act funding for
state government. The Legislature, instead, went ahead with
its strategy to sweep $4.89 billion into a COVID-19 relief
fund, which is subject to legislative appropriation.
The newest version of the bill, which is back on Baker's
desk, accounts for the $109 million Baker already sent to
Chelsea, Everett, Randolph and Methuen as aid, and leaves
the governor enough money to fund a COVID-19 emergency sick
leave program and the new "VaxMillions" sweepstakes.
The House and Senate also voted to direct Baker to spend
$200 million "to protect against emerging public health
threats or to support new, heightened, or emergency public
health response efforts against the 2019 novel coronavirus."
Baker would not say when asked if he planned to veto the
bill, though House and Senate leadership have the votes to
override. The governor also avoided directly answering a
question about whether he had considered just spending the
money now before it's swept out of his reach, stating only
that he preferred to work "collaboratively."
For the Legislature, that means participating in what Rep.
Dan Hunt described as a series of hearings to be held in the
coming months to gather feedback on how to spend the
stimulus.
While Baker believes at least some of the relief money
should be spent now to aid the recovery, Hunt said Congress
intended it to be spread over four years, and lawmakers
appear to be in no rush to put those dollars to work.
Is that smart budgeting? Or evidence of the lacking urgency
Sen. Sonia Chang-Diaz referred to this week when she
launched her campaign for governor? Chang-Diaz is attempting
to make history as the first Latina to control the
governor's office after more than 12 years in the Senate
where she has fought for education and criminal justice
reforms.
The Boston Democrat joins her former Senate colleague Ben
Downing and Harvard professor Danielle Allen in the race for
the Democratic nomination. And if the early days of the
primary have been any indication, Beacon Hill and the
Legislature will play the role of punching bag in next
year's contests.
The governor is still mum on his 2022 plans, but he and Lt.
Gov. Karyn Polito were raising money at the UMass Club on
Wednesday and his campaign says the governor resumed
in-person fundraising this month after a long hiatus.
Speaking of taking time off, the MBTA Fiscal and Management
Control Board is due for permanent retirement next week when
its authority expires on June 30. While the ARPA bill
reached the governor's desk, a mid-year spending bill
expected to be the vehicle to address the time-sensitive
futures of mail-in voting and oversight of the MBTA did not
quite get there.
The United States also might not get there when it comes to
President Joe Biden's target to have 70 percent of adult
Americans with at least one dose of COVID-19 vaccine by July
4. But Massachusetts reached its goal of having 4.1 million
people fully vaccinated this week.
The uptick in vaccinations has meant a greater and greater
return to normal activities, including traveling during
summer. Passenger traffic through Logan International
Airport remains below pre-pandemic levels, but it is on the
rise.
The only change, according to the Massachusetts Port
Authority, is that a greater percentage of those traveling
right now are doing so for leisure rather than business....
STORY OF THE WEEK: Baker floats a two-month sales tax
holiday only to see it quickly deflated by Democratic
leadership.
The Providence Journal
Tuesday, June 22, 2021
Regional initiative to cut road emissions wins RI Senate
approval
By Alex Kuffner
PROVIDENCE — Reports of the death of the Transportation and
Climate Initiative appear greatly exaggerated.
In one sign of life, the Rhode Island Senate on Tuesday
approved legislation that would make the Ocean State a
founding member of the regional program to cut
planet-warming emissions from cars and trucks.
The 38-to-7 vote comes a couple of weeks after Connecticut
legislators and Gov. Ned Lamont failed to reach an agreement
on including a TCI bill in the state budget, prompting calls
from opponents that the cap-and-invest program was all but
dead.
While there was hope that the Connecticut legislature would
take up the multi-state proposal when it reconvened, that
special session came and went last week without any action
on what environmental advocates say is a crucial step in
fighting climate change.
Still, Lamont says he remains committed to the initiative
and so do Massachusetts Gov. Charlie Baker and Rhode Island
Gov. Daniel McKee, whose predecessor in office, Gina
Raimondo, signed a memorandum of understanding in December
with her counterparts in the neighboring states along with
the District of Columbia.
“The governor supports efforts under TCI to address climate
change and improve public health, and will continue working
with Governors Lamont and Baker on this initiative,” said
Alana O’Hare, spokeswoman for McKee.
The Senate vote is another signal of support for a plan that
would place limits on carbon emissions from gasoline and
diesel and require suppliers of the fuels to buy credits to
sell them.
Revenues from the sales — an estimated $276 million in the
first year, including $20 million for Rhode Island — would
be used to fund mass transit, electric-vehicle charging and
other clean transportation options. At least 35% of the
money must go to lower-income communities disproportionately
affected by pollution.
The vote came over the objections of senators from rural
districts who say the fees will amount to a gas tax that
will be passed down to consumers, and that their
constituents will bear the burden because they rely more on
their cars to get around.
“Morally, it would be cruel to impose this fuel tax on Rhode
Islanders,” said Sen. Jessica de la Cruz, a North Smithfield
Republican.
She cited an outdated study that put the cost of the program
at up to 38 cents per gallon. The author of that study has
since told the Connecticut Examiner that his team modeled
something different from the current plan, which comes with
an estimated cost of up to 9 cents per gallon.
Whether the legislation goes any further is up to the House.
Rep. Terri Cortvriend’s bill has been submitted to the
Committee on Finance, but a hearing hasn’t been scheduled
yet and is unlikely to be put on the calendar before the
General Assembly adjourns for the summer. Cortvriend, a
Portsmouth Democrat, has said she expects a hearing in the
fall if the session reconvenes.
Sen. Alana DiMario, the lead sponsor in the Senate, said
that TCI will start addressing transportation emissions, but
is not the radical program it has been made out to be by its
critics.
“It is important to understand that this is a well-studied
plan that is well thought-out to slowly turn down the volume
on fossil fuels,” DiMario said. “It is not an off switch.”
Pioneer Institute
Thursday, June 17, 2021
Study Says Massachusetts Surtax Proposal
Could Reduce Taxable Income in the State by Over $2 Billion
As Massachusetts voters now begin to weigh the potential
impact of a ballot proposal to increase taxes on business
owners, retirees and wealthier households,
a new literature review by Pioneer Institute shows that
many existing academic studies find that wealthy individuals
are particularly sensitive to changes in tax policy. Other
studies explicitly warn policymakers that behavioral
responses to taxing the rich could erode the tax base and
ultimately strain state budgets.
Many of the individual research papers described in the
report focus on particular sub-groups of the wealthy, such
as chief executive officers at major corporations and
particularly innovative “star scientists.”
“The breadth of research covered in this paper really
highlights the variety of ways in which income tax hikes can
leave states vulnerable to wealth flight and fiscal and
economic harm,” said Andrew Mikula, author of
Tax Flight of the Wealthy: An Academic Literature Review.
“Besides physical relocation out of Massachusetts, such
policies are also deterring innovators from coming here to
begin with, and encouraging stock-based salaries that are
used to delay tax payments.”
The Pioneer Institute study ties the results of these
academic pieces into Massachusetts’ current graduated income
tax proposal. For example, a 2012 study from the University
of Pennsylvania found that, for every 1 percent increase in
the share of income retained after taxes, the total value of
taxable income in a jurisdiction increases by between 0.12
percent and 0.40 percent in the long run. This would imply
that Massachusetts’ proposed surtax would decrease the
amount of taxable income in the state by between $606
million and $2.02 billion.
A 2008 study in the Journal of Urban Economics spoke to the
interaction between the proposed surtax and a pending court
case between New Hampshire and Massachusetts over whether
remote workers in the Granite State are obligated to pay
taxes in Massachusetts when their companies are based here.
The study found that, in states without “reciprocity
agreements” that would prevent such disputes, the impact of
tax hikes on migration patterns is far stronger.
Pioneer’s new policy brief also highlights nuances in past
studies that have downplayed the role of tax hikes in the
migration decisions of the wealthy. For example, a 2016
paper by Cornell University Professor Cristobal Young claims
that “when Florida is excluded, there is virtually no”
correlation between income tax rates and migration patterns
in the United States.
However, underpinning this headline-worthy line is that
Young doesn’t rule out that there is an “especially
appealing combination” of tax avoidance and geography
driving the so-called Florida effect. In addition, the
database used in Young’s paper only includes households that
earned over $1 million in the year before they move, a
severe limitation that misses households that migrate for
the purpose of avoiding taxes on the anticipated sale of a
valuable asset.
Other papers described in the report discuss the tax policy
implications of the Tiebout hypothesis that people tend to
“vote with their feet.” In the aftermath of the COVID-19
pandemic, taxpayers may be especially mobile as they are
able to work from home in greater numbers than ever before.
All but one of the papers described in the report predate
the pandemic, and most of them predate the Tax Cuts and Jobs
Act as well, whose limitation on the state and local tax
deduction could also encourage increased migration among the
wealthy.
“Research data allow us to put some hard numbers on the
devastating and perhaps permanent impact of a graduated
income tax – as much as $2 billion in lost taxable income,”
said Pioneer Institute Executive Director Jim Stergios. “And
calculating the impact on state tax revenues ignores the
enormous human toll: lost jobs and less security for
homeowners. The long-term effects may include, as is
abundantly clear in the case of Connecticut, anemic growth
in state tax receipts and therefore fewer resources for
social programs and public investments.”
The Boston Herald
Monday, June 21, 2021
Battle of Massachusetts millionaires’ tax pits
grassroots organizing against blitz of opposition reports
By Erin Tiernan
For the supporters of a so-called millionaires’ tax, the
road to success is all about pitting grassroots passion
against a blitz of “fear-mongering” reports from
right-leaning think tanks and lobbyists who oppose the
measure.
“We need to hold the millionaires accountable. It’s time.
This is about fairness, equality, equity,” Rosalinda Midence
told the Herald moments after riling up a group of ralliers
in Nubian Square on Monday night.
Midence said the 4-cent surtax on all state income over $1
million would “level the playing field” for working Bay
Staters who lose a disproportionate amount of their wages to
income taxes by raising an additional $2 billion from
millionaires.
She’s one of the dozens of speakers who have stood to
support the Fair Share Amendment measure at a series of 14
rallies across the state this month organized by the Raise
Up Massachusetts Coalition.
The group is the same one behind the successful campaigns of
other progressive measures including raising the state
minimum wage and pressuring the Legislature to take up — and
pass — the Family Medical Leave Act.
The measure is finally headed to the 2022 ballot after state
lawmakers in a joint session earlier this month took a final
procedural step, voting 159-41 to clear the way for the
proposal to be placed on the ballot after years of prior
attempts have been stymied by political and court battles.
“The time has come and I think the pandemic has really
exposed major inequities in our society and we need to
create something that creates long-term sustainable change
for the future of the commonwealth,” said organizer Enid
Eckstein of Jamaica Plain Progressives, who said the
grassroots approach is the best way to reach voters.
The measure appears popular among Bay State voters, with a
recent poll from Boston-based MassINC Polling Group showing
72% back the wealth tax.
Lawmakers have promised the added cash will be earmarked for
transportation infrastructure and public schools, but
opponents argue the gains won’t outweigh the losses.
Monday’s rally came just days after Libertarian think-tank
Pioneer Institute, which opposes the measure, released yet
another study — this time a literature review — that warned
a wealth tax would likely scare off the state’s highest
earners.
“Research data allow us to put some hard numbers on the
devastating and perhaps permanent impact of a graduated
income tax — as much as $2 billion in lost taxable income,”
said Pioneer Institute Executive Director Jim Stergios. “And
calculating the impact on state tax revenues ignores the
enormous human toll: lost jobs and less security for
homeowners. The long-term effects may include, as is
abundantly clear in the case of Connecticut, anemic growth
in state tax receipts and therefore fewer resources for
social programs and public investments.”
Supporters of the surtax boil the literature down to
“fear-mongering” but the Pioneer report is just one of the
several reports opposition groups have released in recent
weeks.
Ralliers like Midence said they “get angry” when they see
the pushback to something she describes as “justice for the
poor and middle class.”
The Boston Herald
Wednesday, June 23, 2021
A Boston Herald editorial
Ban takeout containers? Not so fast
It started with plastic bags and plastic straws, now they’re
coming for your takeout.
On Tuesday, leaders of the Joint Committee on Public Health
and representatives of the food container industry duked it
out during a hearing on bills to restrict the use of
polystyrene food containers and utensils, according to the
State House News Service.
To hear advocates from the Massachusetts Public Interest
Research Group (MASSPIRG) and Environment Massachusetts, and
Rep. Dave Rogers tell it, single-use plastic products like
foam cups and takeout containers should be banned because of
the health and environmental risks associated with them.
“I think we all know very well that single-use plastic
products including polystyrene foam cups and takeout
containers are a major source of pollution in our rivers,
streams and oceans. Fragments of plastic have been found in
hundreds of species, which can block their digestive tracts
and lead to starvation and, additionally, plastic waste
washing up on our beaches in riverbanks is an eyesore,” Ben
Hellerstein, state director for Environment Massachusetts,
said. “For all these reasons and more, there’s more than 100
communities across Massachusetts that have already taken
action to restrict the use of plastic products.”
Of course they have, this is Massachusetts.
Officials from Dart Container, one of the world’s largest
manufacturers of polystyrene food service containers, and
the American Chemistry Council said these arguments were
overstated.
“The reason why I’m opposed to this, obviously, is there’s a
lot of misinformation out there,” Christine Cassidy,
recycling manager for Dart Container, said. She said
landfill waste audits have found that polystyrene food
service containers make up about 1% of landfill waste versus
about 30% made up by food waste.
Committee co-chair Sen. Jo Comerford disputed that figure,
and said the committee’s own research on the topic found
polystyrene was responsible for about 25% to 30% of landfill
waste.
We don’t doubt that the committee’s research was thorough,
and we don’t know where Dart Container got their number, but
the disparity calls for independent scrutiny.
Remember how the plastic straw ban got underway? Milo Cress,
then 9 years old, started his “Be Straw Free” campaign in
2011. He found that Americans use more than 500 million
drinking straws daily. That figure became the go-to
statistic for major media outlets writing about the issue.
He got to that number by calling straw manufacturers and
asking their estimates of the daily straw market in the U.S.
Needless to say, that number has been disputed.
But even if there is a concession as to the amount of
polystyrene landfill waste, questions remain: what are the
alternatives for takeout containers, and what effect would
this have on the restaurant industry?
We’re quick to jump on the ban-wagon — if something is
delicious but unhealthy, or can blow into the ocean and hurt
a fish, it’s history. The notion of letting people choose
for themselves, and take steps to be responsible of their
own volition, is never on the table.
Why offer paper or plastic when you can make the decision
for us?
And so it is with polystyrene food containers.
Presented with the facts, people are capable of making their
own choices. If environmental activists want to affect
change, they should think incentive, not cudgel.
The Boston Globe
Friday, June 25, 2021
Warning of a coming ‘Egg-mageddon,’
Mass. lawmakers move to alter animal welfare ballot measure
passed in 2016
By Jasper Goodman
The cracks started appearing a few years after Massachusetts
voters in 2016 approved a ballot initiative that effectively
mandated that all eggs sold in the state come from cage-free
hens.
The law, backed by nearly 8 of 10 voters, was pushed by top
animal welfare groups in order to create what they argued
were more humane standards for animals.
Now, warning of an “Egg-mageddon” — a severe egg shortage
that would send prices spiking — lawmakers are moving to
change the measure before it goes into effect in 2022. The
proposal would reduce the floor space requirements for hens
housed in facilities where they are able to move vertically,
a change supporters argue would bring Massachusetts in line
with a standard developed over the last five years. The
effort has the support of both the egg industry, which
largely opposed the 2016 reforms, and animal welfare groups
that spent millions to pass them, including the Humane
Society of the United States.
But the push to adjust the law has spawned opposition from a
local agriculture group and a national animal rights
organization. In a twist, the head of the California-based
Humane Farming Association told the Globe that if the
Legislature tinkers with the law, his organization will move
to use the state’s referendum process to overturn the
Legislature’s amendments to the 2016 measure.
Bradley Miller, who founded the HFA in 1985, said a bill
passed by the state Senate Thursday that would reduce the
floor space requirements for hens from 1.5 square feet per
bird to 1 square foot per bird in certain facilities was a
“cruel betrayal of animals and Massachusetts voters.”
“The Legislature has tried to ignore what was a clear demand
of voters,” Miller said. “We’re determined to give voters
the final say here. The voters have spoken loud and clear
about the 1.5 foot standard, and that must be upheld.”
The reduced floor space requirements in the Senate bill
would apply to hens housed in vertical aviaries, which are
multitiered facilities, as opposed to single-level hen
houses.
“This is actually considered more humane for chickens
because, just like other birds, they like to perch and
roost,” said Senator Jason M. Lewis, a Winchester Democrat
who introduced the bill in the Senate. “We’re basically
updating the Massachusetts standard for egg-laying hens so
that [it] will now accommodate vertical aviaries as well.”
The bill would also mandate that cage-free hen houses
include “enrichments that allow [hens] to exhibit natural
behaviors,” including scratch areas, perches, nest boxes,
and dust-bathing areas.
Josh Balk, the vice president of farm animal protection for
the Humane Society of the United States, said the bill is a
“tremendous advancement for animals.”
“Chickens are birds — they want to get off the ground,” he
said of the provision reducing the floor space requirements
for vertical facilities. “So when they have vertical space,
they need less space on the floor because they’re off the
ground.”
Balk said the type of vertical aviary system targeted by the
proposed changes was not widely used when the referendum was
passed in 2016. Because such systems have since become a
norm in production, he said, the law should be updated.
But opponents of the bill, including a top state
agricultural group, are crying foul. They say advocates of
the change are succumbing to pressure from out-of-state egg
producers and overturning the will of voters.
Brad Mitchell, deputy executive director of the
Massachusetts Farm Bureau Federation, disputed the notion
that 1 square foot is actually a standard for hens in
vertical aviaries. Instead, he said, “this is what a few
special interests have temporarily agreed on at this spot in
time.”
The passage of the bill would mark the first time a state
will ever have moved backward in humane protections for
animals, Mitchell said.
The state Farm Bureau opposed Question 3 in 2016. But today,
he said, all egg producers in the state are in compliance
with the regulations laid out in the ballot measure.
“The entirety of this is so out-of-state egg producers can
get into the Massachusetts market without meeting the
standards that the voters put in in 2016,” Mitchell said.
Senator Anne Gobi, a Spencer Democrat, concurred.
“I think it was the wrong move of the Senate to overturn the
will of the people by overturning a vote,” said the senator.
Lewis, the senator who introduced the legislation, said he
thinks it is “likely” the House of Representatives will take
up the bill, which he believes is “fully consistent with the
intent of voters.” The lower chamber passed similar changes
as part of its annual budget in 2019.
Governor Charlie Baker has not taken a position on the
measure.
But if the change to the ballot measure becomes law, it
won’t be the first time legislators have tinkered with
voter-passed laws arguing that leaving the status quo would
be bad for everyone. For example, lawmakers first delayed
and then reworked the 2016 measure legalizing recreational
marijuana sales. |
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