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Post Office Box 1147
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Marblehead, Massachusetts 01945
▪ (781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
47 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Monday, October 25, 2021
Governments Are Flush
But Still Demand More Taxes
Jump directly
to CLT's Commentary on the News
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Most Relevant News
Excerpts
(Full news reports follow Commentary)
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H-3039 allows cities
and towns to implement a local excise tax of
3-cents-per-gallon on gas and diesel fuel sold
within its borders. One cent of the tax would go to
each of the following: the maintenance, repair,
upkeep, construction or improvement of roads,
bridges, sidewalks, bikeways, public parking areas
or roadside drainage; the Massachusetts Bay
Transportation Authority or regional transportation
authority serving the city or town; and projects
which promote and improve non-single occupancy motor
vehicle transportation including pedestrian
facilities, bicycle facilities, senior
transportation programs, telecommuting programs and
carpool programs.
“I filed this
legislation after three of the municipalities I
represent filed home rule petitions requesting that
a gasoline tax be authorized,” said co-sponsor Rep.
Smitty Pignatelli (D-Lenox). “I'm a firm believer
that if the state government cannot provide the
necessary funds for communities to maintain their
transportation infrastructure, we should not stand
in the way of solutions that allow communities to
make these decisions and get needed revenue for
themselves.”
“This legislation gives
municipalities the ability to raise additional
revenue and the flexibility to address their most
pressing transportation needs,” said co-sponsor Rep.
Tommy Vitolo (D-Brookline). “Across the
commonwealth, our transportation systems need
improvement and [this bill] helps communities
implement local solutions.”
“A local gas tax is
nothing more than another sneaky attempt to raise
municipal revenue outside and above the restrictions
of Proposition 2½,” said Chip Ford, executive
director of Citizens for Limited Taxation.
“The state can certainly provide the funds to
maintain transportation infrastructure if Beacon
Hill prioritizes it,” added Ford. “Reason
Foundation's 25th Annual Highway Report (2020) ranks
Massachusetts 49th (second highest) in total
spending per road mile. Its state-controlled highway
miles (3,659) is the fourth smallest highway system
in the nation yet just its administrative cost per
mile alone is second-highest.”
Beacon
Hill Roll Call
October 18-22, 2021
Allow Cities and Towns to Impose a
3-Cents-per-Gallon Gas Tax (H-3039)
By Bob Katzen
Rep. Kay Khan, a Newton
Democrat, has filed two bills to tax sugary
beverages (H-2972) and double the excise taxes on
beer, wine and liquor (H-2973).
Khan told the Committee
on Revenue Monday that she thought the time for both
ideas had come, with the state spending $2.6 billion
every year in response to alcoholism and addiction,
and other cities finding success with sugar taxes.
"I just think that we
need to be really looking at this very seriously,"
Khan said.
Neither idea is new,
but Sen. Adam Hinds, the co-chair of the Committee
on Revenue, said the fact that Massachusetts doesn't
tax alcohol sales "jumped out to a lot of us" who
served on the Tax Expenditure Review Commission, and
he described Massachusetts as an "outlier." ...
Khan's bill would not
change the application of the sales tax, but would
double the excise tax rates assessed on beer, wine
and liquor. Hinds said those rates have not been
adjusted in decades, and remain among the lowest in
the country even among states that also charge sales
taxes on alcohol....
The alcohol excise tax
proposal, however, encountered opposition from the
Massachusetts Package Stores Association, which said
it could threaten the existence of locally-owned
alcohol retailers.
Rob Mellion, executive
director of the MPSA, said . . . higher excise taxes
would also make it that much harder to compete with
New Hampshire, which doesn't tax alcohol and already
counts on Massachusetts for at least 28 percent of
its sales. He said New Hampshire routinely markets
to Massachusetts consumers because of the price
differential.
"When you raise the
excise tax, you've just given them a new campaign,"
Mellion said....
Khan's other bill would
impose a tiered tax structure on sugary drinks based
on volume and sugar content, putting Massachusetts
in the company of cities like San Francisco,
Washington, D.C., Philadelphia and Seattle that have
taxes on soda and other drinks to encourage
healthier choices.
State
House News Service
Monday, October 18, 2021
Drink Taxes Pitched To Boost
Health, Addiction Treatment
Voters Rejected Alcohol Tax Plan in 2010
Massachusetts Department of Revenue
Division of Local Services
FREE CASH —
DEFINITION
Free cash is a revenue
source that results from the calculation, as of July
1, of a community's remaining, unrestricted funds
from its operations of the previous fiscal year
based on the balance sheet as of June 30. It
typically includes actual receipts in excess of
revenue estimates and unspent amounts in
departmental budget line items for the year just
ending, plus unexpended free cash from the previous
year. Free cash is offset by property tax
receivables and certain deficits, and as a result,
can be a negative number.
In our January 7th,
2021 article entitled “Counting Free Cash – Another
Update,” we noted yet another new record in total
statewide certifications of $1.915 billion as of
7/1/2019. This was a 9.2% increase over the amount
certified as of July 1, 2018, and well above the
2.5% increase that July 1, 2018 totaled over July 1,
2017.
In that same article,
we questioned whether the legislation that extended
appropriation of July 1, 2019 free cash beyond June
30, 2020, plus the general economic slowdown due to
the pandemic would lead to a significant reduction
in total free cash certified as of July 1, 2020. The
crystal ball foreseeing local government’s fiscal
future was not completely clear at that time. With
all the data now in, we’ll determine if the trend of
a consistent annual increase in total certified free
cash continued....
The streak continues.
July 1, 2020 certified free cash totaled
$1,950,974,770. The $35.8 million increase, however,
was only 1.9% over free cash certified as of July 1,
2019. This total did continue a trend in total free
cash over $1 billion that began as of July 1, 2012
as shown in the graph below. Certifications have
increased from July 1, 2009 to July 1, 2020 by about
$1.3 billion.
In this certification
period, 349 communities were certified. Of these,
five were certified in the negative ranging from
$104,193 to $2,402,830. The greatest increase in
free cash was Boston at $13.9 million, while
Cambridge had the greatest decrease at $36.8
million. Across the board, we saw a median increase
of $432,477 and median decrease of $409,413....
As of this writing,
almost 100 cities and towns have free cash certified
as of July 1, 2021 and many results show a
significant increase over their amount certified as
of July 1, 2020. We remain cautiously optimistic
that this good financial news will continue and
prove initial thoughts of a significant free cash
reduction in this new certification period false.
Emergency federal and state financial assistance to
local governments in response to the pandemic
continues to provide a measure of financial support,
which has been a factor in the increases in free
cash realized to date.
City &
Town
A Publication of the Massachusetts Department of
Revenue's
Division of Local Services
October 21, 2021
An Update on Free Cash
. . . Of course, the
falling leaves, cooler nights and the impending
arrival of November means the clock is really
ticking on the Legislature to make some decisions.
Baker signed a $303
million closeout budget on Wednesday that allows for
about $1.5 billion in surplus tax revenue from
fiscal 2021 to be deposited in an escrow account for
legislators to decide at a later date how to spend.
The move to temporarily set aside last year's
surplus was unique and made, according to Democratic
leaders, in order to allow Comptroller William
McNamara to balance the books for last year without
rushing the Legislature to make decisions on how to
spend the extra cash.
Of course, what it
looks like to be in a rush in the real world versus
on Beacon Hill are two different things.
Gov. Charlie Baker
filed a budget to spend the surplus back in August,
and even before that he put forward a plan to spend
just over half of the state's American Rescue Plan
Act funds.
House and Senate
leaders are now looking this fall at how to allocate
both pots of money, worth around $6.3 billion
combined, all while monitoring Washington to try to
avoid overlapping with the trillions of dollars
Congressional Democrats are looking to throw at
infrastructure, child care and Medicaid, if they can
only just reach agreement amongst themselves.
Baker said he was
optimistic that the Legislature was preparing a
"pretty, pretty comprehensive and pretty
significant" ARPA spending bill, and he reupped his
recommendation that $1 billion from the surplus be
used replenish the unemployment insurance system.
That spending bill
could very well be the next major item to find
itself on the House calendar. But this week it was
the decennial redistricting map drawn by Assistant
House Majority Leader Michael Moran that was up for
a vote.
State
House News Service
Friday, October 22, 2021
Weekly Roundup - Get It, Got It,
Good
Beacon Hill leaders
continue to juggle pandemic management with
legislative wrangling, but with formal sessions due
to cease for the year on Nov. 17, they now have less
than a month to deliver on their fall agenda....
Democrats on Beacon
Hill have been known to extend conference committee
deliberations for months on major spending bills,
but they are leaving themselves only weeks to come
to terms on a bill allocating a portion of federal
COVID-19 relief funding, a critical piece of
legislation that budget writers have described as a
"once-in-a-generation opportunity."
If they want to put a
good chunk of the $4.8 billion in American Rescue
Plan Act funds to work soon, it's looking more
likely that Democrats will need to ram a bill
through in the next few weeks, potentially limiting
opportunities for major amendments and longer
negotiations.
House Democrats are
scheduled to huddle as a caucus Monday to talk about
ARPA spending legislation, signaling that a proposal
is likely imminent. The House has also scheduled a
formal session for Thursday, with a potential formal
penciled in for Friday.
Gov. Charlie Baker said
this week that he's expecting a "comprehensive" bill
to emerge soon in the Legislature. The ARPA bill is
perhaps overshadowing other near-term spending
choices.
Lawmakers and Baker
this week agreed on a $300 million bill to close out
the books on fiscal 2021, but legislative leaders
have described a fall timeline to consider $1.5
billion in unobligated fiscal 2021 surplus funds
that are now sitting in a new fund.
By socking the money
away, the Legislature avoided having it swept into
the state's reserves and it's possible that the
surplus dollars will be allocated in one exercise
that also involves ARPA funds, although conflating
the two bills could raise ARPA spending
accountability issues.
State
House News Service
Friday, October 22, 2021
Advances - Week of Oct. 24, 2021
Gas prices continue to
contribute to inflation concerns, rising nine cents
per gallon in the last week and cutting further into
household budgets across Massachusetts.
AAA Massachusetts
reported Monday that the average price of a gallon
of gas hit $3.27 in its latest weekly survey. That's
up from $3.10 a month ago and just $2.10 a year ago.
"Compared to the price
of gas a year ago, it now costs consumers about $17
more to fill up their vehicles," AAA's Mary Maguire
said. "And unfortunately, it doesn't look like
drivers will be finding relief at the pump any time
soon."
The last time prices in
Massachusetts were this high was October of 2014 at
$3.32 per gallon, according to AAA, which said
increasing crude oil prices are the "primary factor"
behind the higher prices at the pump....
While calls for
increased investments in transit and transportation
have continued, gas tax talks on Beacon Hill have
died down after the House in 2020 passed legislation
raising more than $600 million in new transportation
revenues, a package that died without a vote in the
Senate. The House bill had featured a 5-cent
increase in the gas tax and a 9-cent increase in the
tax on diesel fuel....
The chief
transportation revenue proposal with some momentum
still behind it is the proposed surtax on household
incomes above $1 million a year. That proposal is
scheduled to appear as a constitutional amendment on
the November 2022 ballot, where it faces an
up-or-down vote.
Supporters of the idea
say it will force higher-income households to pay
their "fair share" of taxes and deliver as much as
$2 billion to be shared between education and
transportation investments. Opponents say the
measure, if passed, could drive wealth and revenue
out of Massachusetts and eventually lead to higher
taxes on other high earners through a graduated
income tax structure.
Baker, who hasn't said
if he'll seek a third term in 2022, opposes the
income surtax. Baker last month warned that
companies "can locate anywhere" and questioned
estimates of expected surtax revenues and promises
that they would only be spent on education and
transportation.
State
House News Service
Monday, October 18, 2021
AAA: Average Gas Fill-Up Cost Up $17
In Past Year
Feds: Boston-Area Consumer Price Index Rose 4
Percent
As the State House News
Service reported, soaring gas prices are adding to
inflation worries, rising 9 cents a gallon in the
last week. AAA Massachusetts reported Monday that
the average price of a gallon of gas hit $3.27 in
its latest weekly survey. That’s up from $3.10 a
month ago and just $2.10 a year ago.
“Compared to the price
of gas a year ago, it now costs consumers about $17
more to fill up their vehicles,” AAA’s Mary Maguire
said. “And unfortunately, it doesn’t look like
drivers will be finding relief at the pump any time
soon.”
Just what we need
before Thanksgiving and holiday trips to see family.
Driving to find the perfect Christmas tree, piling
in the car to tour the houses bedecked in festive
lights — it’ll cost a pretty penny this year.
The last time prices in
Massachusetts were this high was October of 2014 at
$3.32 per gallon, according to AAA, which said
increasing crude oil prices are the “primary factor”
behind the higher prices at the pump.
Oil — the fuel Biden
and his fellow Democrats love to demonize, but on
which the country depends....
The Biden
administration has requested OPEC increase its
exports.
Dependence on OPEC was
one of the reasons the Keystone XL Pipeline contract
was a good idea — it would have given America a
stronger measure of energy independence.
Is it any wonder that
amid a host of legal woes, Donald Trump still has
the support of 47% of registered voters in another
run for the White House, according to a new Hill-HarrisX
poll?
A Boston
Herald editorial
Tuesday, October 19, 2021
Biden tries talk therapy on
gas prices
Democrats scaled back a
proposal to require banks to send to the IRS more
information about customers’ accounts in hopes of
salvaging the idea, raising to $10,000 from $600 the
key reporting threshold and adding an exemption that
would spare many workers and retirees.
The core idea
remains—banks would be required to provide
information that could help the IRS more easily find
tax cheating. But amid opposition from the
financial-services industry and many Republicans,
Sens. Ron Wyden (D., Ore.) and Elizabeth Warren (D.,
Mass.) proposed changes on Tuesday that would reduce
the number of accounts affected. The plan seeks to
generate hundreds of billions of dollars in owed but
unpaid taxes that could help pay for new federal
programs under consideration in Congress.
Democrats want banks,
other financial institutions and peer-to-peer
services such as Venmo to report annual totals of
account inflows and outflows to the Internal Revenue
Service. That would give the tax agency a window
into income streams that are more opaque than wages
and interest. The IRS already gets information on
wages and interest from banks and employers and
cross-checks that data against tax returns.
The additional account
details wouldn’t provide direct evidence of tax
cheating, but they would create a data trove that
tax authorities could use to decide who gets
audited. It could also be a deterrent to
people—particularly business owners—who are
considering not reporting all of their income....
Banks, credit unions,
Republican lawmakers, business owners and
conservative groups such as Americans for Tax Reform
have been building opposition to the plan for
months. They warn that the requirement would put
taxpayer information at risk if IRS computer systems
were breached and they have described the proposal
as snooping and surveillance.
“Even with the
modifications announced today, this proposal still
goes too far by forcing financial institutions to
share with the IRS private financial data from
millions of customers not suspected of cheating on
their taxes,” Rob Nichols, president and CEO of the
American Bankers Association, said Tuesday....
The current proposal
doesn’t require banks to share transaction-level
data. But the IRS could use the account information
to request information about specific withdrawals
and deposits, said Richard Hunt, CEO of the Consumer
Bankers Association, a trade group for retail banks.
“[The IRS] can’t deduce
who is avoiding paying their taxes without peering
through every financial transaction,” Mr. Hunt said.
“Bankers cannot become agents of the IRS.” ...
Rep. Drew Ferguson (R.,
Ga.), a member of the House Ways and Means
Committee, said the revised proposal still raised
privacy concerns.
“It does not matter if
the amount is $1, $600 or $10,000, Americans don’t
want the IRS snooping into their bank accounts,” Mr.
Ferguson said on Fox News on Tuesday.
The Wall
Street Journal
Tuesday, October 19, 2021
Democrats Try to Salvage IRS
Bank-Account Reporting With Scaled-Back Plan
Key reporting threshold would go to $10,000 from
$600; banks, GOP say plan is unworkable
Democrats walked into a
political ditch with their plan to let the Internal
Revenue Service snoop on American banks accounts,
and so far they’re doing a lousy job of scrambling
to get out.
This week Senate
Democrats backed by the Biden Treasury released a
revised proposal that raises the threshold for
financial institutions to report to the IRS on
individual accounts to $10,000 from the previously
mooted $600. The proposal also tries to dodge the
charge of snooping on Everyman by exempting wage
income from “certain payroll companies” and Social
Security checks.
The details are murky,
but most Americans could still get ensnared in this
dragnet unless they pay bills and buy goods in cash.
Democrats say banks will only have to report total
annual inflows and outflows, not discrete
transactions. But nearly all Americans spend more
than $10,000 a year.
The real political goal
here is to create a mechanism for triggering
audits—probably through an algorithm—so the IRS can
rifle through all of a taxpayer’s business and other
financial records....
Senate Democrats say
their plan would be “virtually cost-free” for banks.
Big banks can handle the compliance burdens, but the
burden is greater for community banks that provide
most lending to small businesses.
Banks will also be in
the awkward position of helping the government
police their customers. Recall how liberals howled
about the National Security Agency antiterror
program that required telecom companies to share
phone metadata with the feds. Now Democrats want
financial institutions to help the tax collector
track your cash flow. Vows of privacy at the IRS
aren’t worth much after the recent leaks of taxpayer
data to ProPublica.
The IRS already has
enough data to go after the wealthy and genuine tax
cheats. It wants to look at everyone’s bank account
so its agents have another excuse to audit and
squeeze more money from non-wealthy Americans.
The Wall
Street Journal
Thursday, October 21, 2021
The $10,000 IRS Tax Dragnet
Treasury wants to snoop on bank accounts to trigger
more audits.
Some state school board
associations are challenging the National School
Boards Association’s (NSBA) recent letter to
President Joe Biden.
The NSBA
compared parents to domestic terrorists and
called for the president to direct the federal
government to “deal with the growing number of
threats of violence and acts of intimidation
occurring across the nation.”
Several days later, the
Department of Justice (DOJ)
announced it was tasking FBI agents and U.S.
attorneys to convene to discuss strategies for
addressing threats against school administrators,
board members, teachers, and staff....
The Massachusetts
Association of School Committees and the Arizona
School Boards Association also indicated approval of
the DOJ’s order....
The Kentucky School
Boards Association said the national letter doesn’t
reflect its opinion.
Kim Schelling, the
group’s executive director, said it believes
strongly in “the value of local control” and that
“engaging with local constituents is a hallmark of
democracy and disagreement expressed publicly is not
new for school board members.”
While certain behaviors
that have been reported are troubling, such as
disruptions of school board meetings, they “appear
to represent the isolated actions of a small number
of people,” she added.
“Illegal acts,
violence, and intimidation of any public officials
will not be tolerated, and districts will continue
to work closely with local law enforcement to
address issues of public safety,” Schelling wrote,
adding that the state group will likely need to see
“corrective action” from NSBA’s leadership to remain
a part of the national association.
The Epoch
Times
Monday, October 11, 2021
Some School Board Associations
Denounce National Group’s Letter Over Threats
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Local municipal, state,
and federal — governments at all levels
demand more from taxpayers. Always more. And More
Is Never Enough (MINE) and more never will be enough until
governments at all levels have taken every cent we have leaving us
impoverished then continue to squeeze us for even more. Even
when governments clearly don't need more from us they scheme
to take it anyway — because today that is what governments
do. The political elites are convinced they can spend
your money better and more wisely than you can.
One
the local level, state legislators have filed a bill to provide
cities and towns the power to impose their own gas tax on top
of the state and federal gas tax — on top of the surging price of
crude oil thanks to President Dementia and his America Last cabal.
Beacon Hill Roll Call reported on Saturday ("Allow
Cities and Towns to Impose a 3-Cents-per-Gallon Gas Tax"):
H-3039 allows cities and
towns to implement a local excise tax of
3-cents-per-gallon on gas and diesel fuel sold
within its borders. One cent of the tax would go
to each of the following: the maintenance,
repair, upkeep, construction or improvement of
roads, bridges, sidewalks, bikeways, public
parking areas or roadside drainage; the
Massachusetts Bay Transportation Authority or
regional transportation authority serving the
city or town; and projects which promote and
improve non-single occupancy motor vehicle
transportation including pedestrian facilities,
bicycle facilities, senior transportation
programs, telecommuting programs and carpool
programs.
“I filed this legislation
after three of the municipalities I represent
filed home rule petitions requesting that a
gasoline tax be authorized,” said co-sponsor
Rep. Smitty Pignatelli (D-Lenox). “I'm a firm
believer that if the state government cannot
provide the necessary funds for communities to
maintain their transportation infrastructure, we
should not stand in the way of solutions that
allow communities to make these decisions and
get needed revenue for themselves.”
“This legislation gives
municipalities the ability to raise additional
revenue and the flexibility to address their
most pressing transportation needs,” said
co-sponsor Rep. Tommy Vitolo (D-Brookline).
“Across the commonwealth, our transportation
systems need improvement and [this bill] helps
communities implement local solutions.”
My response to Beacon
Hill Roll Call request for a comment was:
“A local gas tax is
nothing more than another sneaky attempt to raise municipal
revenue outside and above the restrictions of Proposition 2½,”
said Chip Ford, executive director of Citizens for
Limited Taxation. “The state can certainly provide the funds
to maintain transportation infrastructure if Beacon Hill
prioritizes it,” added Ford. “Reason
Foundation's 25th Annual Highway Report (2020) ranks
Massachusetts 49th (second highest) in total spending per road
mile. Its state-controlled highway miles (3,659) is the fourth
smallest highway system in the nation yet just its
administrative cost per mile alone is second-highest.”
As I
keep saying, it doesn't need to be "The Massachusetts Way."
Compare total disbursements for the Bay State (second-highest
spending at #49 of all 50 states (spending almost five times above
the national average for administrative costs alone) with
others — for instance, my "sanctuary state" of Kentucky (#10 from
the bottom), with the lowest administrative cost of all 50:
Then
there are the relentless taxes professed to being imposed "for the
children" or other such "noble" causes for your own good while
raking in more of your whatever discretionary income you might still
have as the true objective.
The State House News Service reported last Monday ("Drink
Taxes Pitched To Boost Health, Addiction Treatment
Voters Rejected Alcohol Tax Plan in 2010"):
Rep. Kay Khan, a Newton
Democrat, has filed two bills to tax sugary
beverages (H-2972) and double the excise taxes
on beer, wine and liquor (H-2973).
Khan told the Committee on
Revenue Monday that she thought the time for
both ideas had come, with the state spending
$2.6 billion every year in response to
alcoholism and addiction, and other cities
finding success with sugar taxes.
"I just think that we need
to be really looking at this very seriously,"
Khan said.
Neither idea is new, but
Sen. Adam Hinds, the co-chair of the Committee
on Revenue, said the fact that Massachusetts
doesn't tax alcohol sales "jumped out to a lot
of us" who served on the Tax Expenditure Review
Commission, and he described Massachusetts as an
"outlier." ...
Khan's bill would not
change the application of the sales tax, but
would double the excise tax rates assessed on
beer, wine and liquor....
Khan's other bill would
impose a tiered tax structure on sugary drinks
based on volume and sugar content, putting
Massachusetts in the company of cities like San
Francisco, Washington, D.C., Philadelphia and
Seattle that have taxes on soda and other drinks
to encourage healthier choices.
"The
Best Legislature Money Can Buy" with far too much spare time on
their "full-time" hands is never at a loss for ideas on how to
siphon in more revenue by whatever means is necessary. It's
pretty much all they think about with all that free time available.
All
this plundering amidst more revenue pouring into the state's
treasury than they can spend fast enough. It its Weekly
Roundup on Friday the State House News Service noted:
House and Senate
leaders are now looking this fall at how to
allocate both pots of money, worth around $6.3
billion combined, all while monitoring
Washington to try to avoid overlapping with the
trillions of dollars Congressional Democrats are
looking to throw at infrastructure, child care
and Medicaid, if they can only just reach
agreement amongst themselves.
On
Friday in its Advances for this week ahead the News Service
reported:
Beacon Hill leaders
continue to juggle pandemic management with
legislative wrangling, but with formal sessions
due to cease for the year on Nov. 17, they now
have less than a month to deliver on their fall
agenda....
Democrats on Beacon Hill
have been known to extend conference committee
deliberations for months on major spending
bills, but they are leaving themselves only
weeks to come to terms on a bill allocating a
portion of federal COVID-19 relief funding, a
critical piece of legislation that budget
writers have described as a
"once-in-a-generation opportunity."
If they want to put a good
chunk of the $4.8 billion in American Rescue
Plan Act funds to work soon, it's looking more
likely that Democrats will need to ram a bill
through in the next few weeks, potentially
limiting opportunities for major amendments and
longer negotiations.
That
compares to the bankroll accumulated by municipal, city and town
governments.
The Massachusetts Department of Revenue's Division
of Local Services issued an update on Thursday to the municipalities
regarding the record-setting amounts of "free cash" left over to
most of them from the last fiscal year. According to the
Division "Free
Cash" is:
. . . a revenue
source that results from the calculation, as of July 1, of a
community's remaining, unrestricted funds from its operations of
the previous fiscal year based on the balance sheet as of June
30. It typically includes actual receipts in excess of revenue
estimates and unspent amounts in departmental budget line items
for the year just ending, plus unexpended free cash from the
previous year. Free cash is offset by property tax receivables
and certain deficits, and as a result, can be a negative number.
In other
words, free cash is the same as surplus revenue
— more taxes extracted
from city and town taxpayers than cities and towns
found necessary to spend.
In Division of Local Services's
Thursday issue of "City & Town — A
Publication of the Massachusetts Department of Revenue's Division of
Local Services, An Update on Free Cash:
In our January 7th, 2021
article entitled “Counting Free Cash – Another
Update,” we noted yet another new record in
total statewide certifications of $1.915 billion
as of 7/1/2019. This was a 9.2% increase over
the amount certified as of July 1, 2018, and
well above the 2.5% increase that July 1, 2018
totaled over July 1, 2017.
In that same article, we
questioned whether the legislation that extended
appropriation of July 1, 2019 free cash beyond
June 30, 2020, plus the general economic
slowdown due to the pandemic would lead to a
significant reduction in total free cash
certified as of July 1, 2020. The crystal ball
foreseeing local government’s fiscal future was
not completely clear at that time. With all the
data now in, we’ll determine if the trend of a
consistent annual increase in total certified
free cash continued....
The streak continues. July
1, 2020 certified free cash totaled
$1,950,974,770. The $35.8 million increase,
however, was only 1.9% over free cash certified
as of July 1, 2019. This total did continue a
trend in total free cash over $1 billion that
began as of July 1, 2012 as shown in the graph
below. Certifications have increased from July
1, 2009 to July 1, 2020 by about $1.3 billion.
In this certification
period, 349 communities were certified. Of
these, five were certified in the negative
ranging from $104,193 to $2,402,830. The
greatest increase in free cash was Boston at
$13.9 million, while Cambridge had the greatest
decrease at $36.8 million. Across the board, we
saw a median increase of $432,477 and median
decrease of $409,413....
As of this writing, almost
100 cities and towns have free cash certified as
of July 1, 2021 and many results show a
significant increase over their amount certified
as of July 1, 2020. We remain cautiously
optimistic that this good financial news will
continue and prove initial thoughts of a
significant free cash reduction in this new
certification period false. Emergency federal
and state financial assistance to local
governments in response to the pandemic
continues to provide a measure of financial
support, which has been a factor in the
increases in free cash realized to date.
Nonetheless, Rep.
Smitty Pignatelli (D-Lenox) and Rep. Tommy Vitolo
(D-Brookline) have filed a bill H-3039 to empower cities and towns
to impose a local excise tax of 3-cents-per-gallon on gas and diesel
fuel sold within its city or town lines.
Your salary over the past
year has been cut by 5.4% Every dime you've saved over your
lifetime is today worth 5.4% less than it was a year ago. And
it's going to get worse long before it can possibly get any better.
Never mind
inflation, some economists are now daring to talk of stagflation
— when incomes are stagnant while
purchasing power steadily declines.
A Boston Herald editorial on Tuesday
("Biden tries talk therapy on gas prices")
observed:
As the State
House News Service reported, soaring gas prices are adding to
inflation worries, rising 9 cents a gallon in the last week. AAA
Massachusetts reported Monday that the average price of a gallon
of gas hit $3.27 in its latest weekly survey. That’s up from
$3.10 a month ago and just $2.10 a year ago.
“Compared to
the price of gas a year ago, it now costs consumers about $17
more to fill up their vehicles,” AAA’s Mary Maguire said. “And
unfortunately, it doesn’t look like drivers will be finding
relief at the pump any time soon.”
Just what we
need before Thanksgiving and holiday trips to see family.
Driving to find the perfect Christmas tree, piling in the car to
tour the houses bedecked in festive lights — it’ll cost a pretty
penny this year.
The last time
prices in Massachusetts were this high was October of 2014 at
$3.32 per gallon, according to AAA, which said increasing crude
oil prices are the “primary factor” behind the higher prices at
the pump.
Oil — the fuel
Biden and his fellow Democrats love to demonize, but on which
the country depends....
The Biden
administration has requested OPEC increase its exports.
Dependence on
OPEC was one of the reasons the Keystone XL Pipeline contract
was a good idea — it would have given America a stronger measure
of energy independence.
Is it any
wonder that amid a host of legal woes, Donald Trump still has
the support of 47% of registered voters in another run for the
White House, according to a new Hill-HarrisX poll.
It
would appear that we've gotten the attention of the
Democrat-Socialists in Congress — at least enough to get them
running for cover if not abandoning their assault on taxpayer
privacy.
The Wall Street Journal reported on Tuesday ("Democrats
Try to Salvage IRS Bank-Account Reporting With Scaled-Back Plan—Key
reporting threshold would go to $10,000 from $600; banks, GOP say
plan is unworkable"):
Democrats scaled back a
proposal to require banks to send to the IRS
more information about customers’ accounts in
hopes of salvaging the idea, raising to $10,000
from $600 the key reporting threshold and adding
an exemption that would spare many workers and
retirees.
The core idea remains—banks
would be required to provide information that
could help the IRS more easily find tax
cheating. But amid opposition from the
financial-services industry and many
Republicans, Sens. Ron Wyden (D., Ore.) and
Elizabeth Warren (D., Mass.) proposed changes on
Tuesday that would reduce the number of accounts
affected....
Democrats want banks, other
financial institutions and peer-to-peer services
such as Venmo to report annual totals of account
inflows and outflows to the Internal Revenue
Service. That would give the tax agency a window
into income streams that are more opaque than
wages and interest. The IRS already gets
information on wages and interest from banks and
employers and cross-checks that data against tax
returns.
The additional account
details wouldn’t provide direct evidence of tax
cheating, but they would create a data trove
that tax authorities could use to decide who
gets audited. It could also be a deterrent to
people—particularly business owners—who are
considering not reporting all of their
income....
Banks, credit unions,
Republican lawmakers, business owners and
conservative groups such as Americans for Tax
Reform have been building opposition to the plan
for months. They warn that the requirement would
put taxpayer information at risk if IRS computer
systems were breached and they have described
the proposal as snooping and surveillance.
“Even with the
modifications announced today, this proposal
still goes too far by forcing financial
institutions to share with the IRS private
financial data from millions of customers not
suspected of cheating on their taxes,” Rob
Nichols, president and CEO of the American
Bankers Association, said Tuesday....
The current proposal
doesn’t require banks to share transaction-level
data. But the IRS could use the account
information to request information about
specific withdrawals and deposits, said Richard
Hunt, CEO of the Consumer Bankers Association, a
trade group for retail banks.
“[The IRS] can’t deduce who
is avoiding paying their taxes without peering
through every financial transaction,” Mr. Hunt
said. “Bankers cannot become agents of the IRS.”
...
Rep. Drew Ferguson (R.,
Ga.), a member of the House Ways and Means
Committee, said the revised proposal still
raised privacy concerns.
“It does not matter if the
amount is $1, $600 or $10,000, Americans don’t
want the IRS snooping into their bank accounts,”
Mr. Ferguson said on Fox News on Tuesday.
In its editorial on
Thursday ("The $10,000 IRS
Tax Dragnet—Treasury
wants to snoop on bank accounts to trigger more
audits") the Journal added:
Democrats walked into a
political ditch with their plan to let the
Internal Revenue Service snoop on American banks
accounts, and so far they’re doing a lousy job
of scrambling to get out.
This week Senate Democrats
backed by the Biden Treasury released a revised
proposal that raises the threshold for financial
institutions to report to the IRS on individual
accounts to $10,000 from the previously mooted
$600. The proposal also tries to dodge the
charge of snooping on Everyman by exempting wage
income from “certain payroll companies” and
Social Security checks.
The details are murky, but
most Americans could still get ensnared in this
dragnet unless they pay bills and buy goods in
cash. Democrats say banks will only have to
report total annual inflows and outflows, not
discrete transactions. But nearly all Americans
spend more than $10,000 a year.
The real political goal
here is to create a mechanism for triggering
audits—probably through an algorithm—so the IRS
can rifle through all of a taxpayer’s business
and other financial records....
Senate Democrats say their
plan would be “virtually cost-free” for banks.
Big banks can handle the compliance burdens, but
the burden is greater for community banks that
provide most lending to small businesses.
Banks will also be in the
awkward position of helping the government
police their customers. Recall how liberals
howled about the National Security Agency
antiterror program that required telecom
companies to share phone metadata with the feds.
Now Democrats want financial institutions to
help the tax collector track your cash flow.
Vows of privacy at the IRS aren’t worth much
after the recent leaks of taxpayer data to
ProPublica.
The IRS already has enough
data to go after the wealthy and genuine tax
cheats. It wants to look at everyone’s bank
account so its agents have another excuse to
audit and squeeze more money from non-wealthy
Americans.
I
suspect this is far more devious than just chasing down tax
avoiders. I believe the authoritarians see this as a means to
root around in every expenditure made by any opponent of the regime.
They are a very patient lot that will settle for even a foot in the
door if they must. Incrementally they will push that door
wider open over time. Look how they've expanded The Patriot
Act and their illicit use of FISA courts.
On the topic of
authoritarians, in the
CLT Update of October 11, 2021 I wrote:
Back to the "fascist-like,
authoritarian Biden era of mandates" and tasking the FBI to
intimidate parents at local school committee meetings, on the
national front the United States of America continues to circle
the drain under the Dementia Joe Biden administration's cabal.
On Monday,
Biden's alleged "moderate" Attorney General Merrick Garland
responded to a September 28 letter from the National School
Boards Association calling on the Justice Department to shut
down parents' opposition to critical race theory, mask mandates
for children, and other objectionable curricula being imposed on
their children. The NSBA requested that the
Patriot Act be implemented to confront "these heinous
actions . . . the equivalent to a form of domestic terrorism."
This
too is experiencing push back by patriotic Americans.
The Epoch Times reported on October 11, 2021
("Some School Board Associations Denounce
National Group’s Letter Over Threats"):
Some state school board
associations are challenging the National School
Boards Association’s (NSBA) recent letter to
President Joe Biden.
The NSBA
compared parents to domestic terrorists and
called for the president to direct the federal
government to “deal with the growing number of
threats of violence and acts of intimidation
occurring across the nation.”
Several days later, the
Department of Justice (DOJ)
announced it was tasking FBI agents and U.S.
attorneys to convene to discuss strategies for
addressing threats against school
administrators, board members, teachers, and
staff....
The Massachusetts
Association of School Committees and the Arizona
School Boards Association also indicated
approval of the DOJ’s order....
The Kentucky School
Boards Association said the national letter
doesn’t reflect its opinion.
Kim Schelling, the group’s
executive director, said it believes strongly in
“the value of local control” and that “engaging
with local constituents is a hallmark of
democracy and disagreement expressed publicly is
not new for school board members.”
While certain behaviors
that have been reported are troubling, such as
disruptions of school board meetings, they
“appear to represent the isolated actions of a
small number of people,” she added.
“Illegal acts, violence,
and intimidation of any public officials will
not be tolerated, and districts will continue to
work closely with local law enforcement to
address issues of public safety,” Schelling
wrote, adding that the state group will likely
need to see “corrective action” from NSBA’s
leadership to remain a part of the national
association.
This
also provides another sterling example of how everything needs not
be The Massachusetts Way. It now turns out, as was
suspected, that a couple of officers at the top of the
National School Boards
Association colluded with officials in the Biden administration and
U.S. Justice Department prior to igniting this assault on parents of
school children
—
and that unauthorized action is fracturing the organization.
|
 |
 |
|
Chip Ford
Executive Director |
|
|
Beacon Hill Roll
Call
Volume 46 - Report No. 43
October 18-22, 2021
Allow Cities and Towns to Impose a 3-Cents-per-Gallon Gas
Tax (H-3039)
By Bob Katzen
REVENUE COMMITTEE HEARING – The Revenue Committee held a
virtual hearing on several tax-related measures including:
ALLOW CITIES AND TOWNS TO IMPOSE A 3-CENTS-PER-GALLON GAS
TAX (H-3039) – Allows cities and towns to implement a local
excise tax of 3-cents-per-gallon on gas and diesel fuel sold
within its borders. One cent of the tax would go to each of
the following: the maintenance, repair, upkeep, construction
or improvement of roads, bridges, sidewalks, bikeways,
public parking areas or roadside drainage; the Massachusetts
Bay Transportation Authority or regional transportation
authority serving the city or town; and projects which
promote and improve non-single occupancy motor vehicle
transportation including pedestrian facilities, bicycle
facilities, senior transportation programs, telecommuting
programs and carpool programs.
“I filed this legislation after three of the municipalities
I represent filed home rule petitions requesting that a
gasoline tax be authorized,” said co-sponsor Rep. Smitty
Pignatelli (D-Lenox). “I'm a firm believer that if the state
government cannot provide the necessary funds for
communities to maintain their transportation infrastructure,
we should not stand in the way of solutions that allow
communities to make these decisions and get needed revenue
for themselves.”
“This legislation gives municipalities the ability to raise
additional revenue and the flexibility to address their most
pressing transportation needs,” said co-sponsor Rep. Tommy
Vitolo (D-Brookline). “Across the commonwealth, our
transportation systems need improvement and [this bill]
helps communities implement local solutions.”
“A local gas tax is nothing more than another sneaky attempt
to raise municipal revenue outside and above the
restrictions of Proposition 2½,” said Chip Ford,
executive director of Citizens for Limited Taxation.
“The state can certainly provide the funds to maintain
transportation infrastructure if Beacon Hill prioritizes
it,” added Ford. “Reason Foundation's 25th Annual Highway
Report (2020) ranks Massachusetts 49th (second highest) in
total spending per road mile. Its state-controlled highway
miles (3,659) is the fourth smallest highway system in the
nation yet just its administrative cost per mile alone is
second-highest.”
“According to the Reason Foundation’s annual highway report,
Massachusetts ranked as the second most expensive state in
the country for how much taxpayers spend on roads,” said
Paul Craney, spokesman for the Massachusetts Fiscal
Alliance. “Massachusetts is the second most expensive state
for its administrative cost and cost for maintenance. In
those categories, Massachusetts is paying three or four
times the national average. Clearly the problem is how our
state spends money. Taxpayers are generous enough and they
should not pay a penny more in gas taxes.”
State House News
Service
Monday, October 18, 2021
Drink Taxes Pitched To Boost Health, Addiction Treatment
Voters Rejected Alcohol Tax Plan in 2010
By Matt Murphy
Former Gov. Deval Patrick tried repeatedly without success
to tax soda and voters in 2010 rejected higher taxes on
alcohol, but supporters of slapping new levies on sugary and
alcoholic beverages testified Monday that the two policies
combined could bring in up to $435 million in additional
revenue for public health, nutrition and substance use
treatment.
Rep. Kay Khan, a Newton Democrat, has filed two bills to tax
sugary beverages (H-2972) and double the excise taxes on
beer, wine and liquor (H-2973).
Khan told the Committee on Revenue Monday that she thought
the time for both ideas had come, with the state spending
$2.6 billion every year in response to alcoholism and
addiction, and other cities finding success with sugar
taxes.
"I just think that we need to be really looking at this very
seriously," Khan said.
Neither idea is new, but Sen. Adam Hinds, the co-chair of
the Committee on Revenue, said the fact that Massachusetts
doesn't tax alcohol sales "jumped out to a lot of us" who
served on the Tax Expenditure Review Commission, and he
described Massachusetts as an "outlier."
"Was the intention of the policy to tax alcohol lower than
anything else? If it was, then interesting. But I doubt it,"
Hinds said, telling Khan, "I really appreciate you raising
this."
Hinds said the Tax Expenditure Review Commission estimated,
with the help of the Department of Revenue, that taxing
alcohol at the same 6.25 percent rate as sales of other
products would net the state over $120 million. Voters in
2010, however, repealed a law that would have applied the
newly raised sales tax rate to alcohol, with 52 percent
opposing the tax change.
Khan's bill would not change the application of the sales
tax, but would double the excise tax rates assessed on beer,
wine and liquor. Hinds said those rates have not been
adjusted in decades, and remain among the lowest in the
country even among states that also charge sales taxes on
alcohol.
Doubling the excise taxes, Khan said, would generate $67
million in new taxes and allow the state to invest more in
substance use treatment and prevention.
"We really need to address this in a substantial way," she
said.
The alcohol excise tax proposal, however, encountered
opposition from the Massachusetts Package Stores
Association, which said it could threaten the existence of
locally-owned alcohol retailers.
Rob Mellion, executive director of the MPSA, said package
stores are confronting a climate of "chaos and disruption"
in the COVID-19 era as more consumers move online, putting
local retailers in competition with larger, and sometimes
out-of-state, chains. He said loopholes in the law allow
third-party delivery services to purchase alcohol from other
states, and then deliver within Massachusetts.
"It's unpoliceable," Mellion said of the alleged illegal
out-of-state alcohol sales online. "If you raise the excise
tax, you're just going to push more people to do it more."
Mellion said higher excise taxes would also make it that
much harder to compete with New Hampshire, which doesn't tax
alcohol and already counts on Massachusetts for at least 28
percent of its sales. He said New Hampshire routinely
markets to Massachusetts consumers because of the price
differential.
"When you raise the excise tax, you've just given them a new
campaign," Mellion said.
Khan's other bill would impose a tiered tax structure on
sugary drinks based on volume and sugar content, putting
Massachusetts in the company of cities like San Francisco,
Washington, D.C., Philadelphia and Seattle that have taxes
on soda and other drinks to encourage healthier choices.
Khan, a former nurse, said sugary drinks like Coca-Cola are
the largest source of added sugar in American diets, and
lead to higher rates of obesity, diabetes, cancer, stroke,
tooth decay and heart disease.
Allyson Perron, director of government relations for the
American Heart Association in Massachusetts, also testified
in support, arguing that sugar taxes have been shown to be
effective in reducing consumption in cities like
Philadelphia.
Twenty-seven House and Senate lawmakers have signed on to
Khan's sugary drink tax proposal, which she filed with Rep.
Jon Santiago and Sen. Jason Lewis. It would add a tax of 1
cent to 3 cents per ounce to drinks, depending on the sugar
content. Drinks with less than 7.5 grams of sugar per 12
ounces would not be taxed.
Khan estimated the tax could be worth as much as $368
million that could be invested in public health, nutrition
programs, and clean drinking water in schools.
"Three-hundred sixty eight million is a lot of money that
could be poured into better health services," Khan said.
Patrick, when he was governor from 2007 until 2014,
repeatedly filed sugar tax proposals as part of his annual
budget submissions to the Legislature, but the idea never
gained traction.
City &
Town
A Publication of the Massachusetts Department of Revenue's
Division of Local Services
October 21, 2021
An Update on Free Cash
By Deborah Wagner — Bureau of
Accounts Director
In our January 7th, 2021 article entitled “Counting Free
Cash – Another Update,” we noted yet another new record in
total statewide certifications of $1.915 billion as of
7/1/2019. This was a 9.2% increase over the amount certified
as of July 1, 2018, and well above the 2.5% increase that
July 1, 2018 totaled over July 1, 2017.
In that same article, we questioned whether the legislation
that extended appropriation of July 1, 2019 free cash beyond
June 30, 2020, plus the general economic slowdown due to the
pandemic would lead to a significant reduction in total free
cash certified as of July 1, 2020. The crystal ball
foreseeing local government’s fiscal future was not
completely clear at that time. With all the data now in,
we’ll determine if the trend of a consistent annual increase
in total certified free cash continued.
July 1, 2020 Certifications
The streak continues. July 1, 2020 certified free cash
totaled $1,950,974,770. The $35.8 million increase, however,
was only 1.9% over free cash certified as of July 1, 2019.
This total did continue a trend in total free cash over $1
billion that began as of July 1, 2012 as shown in the graph
below. Certifications have increased from July 1, 2009 to
July 1, 2020 by about $1.3 billion.
In this certification period, 349 communities were
certified. Of these, five were certified in the negative
ranging from $104,193 to $2,402,830. The greatest increase
in free cash was Boston at $13.9 million, while Cambridge
had the greatest decrease at $36.8 million. Across the
board, we saw a median increase of $432,477 and median
decrease of $409,413.
Did outliers have any effect on the statewide total? July 1,
2020 certifications for Boston and Cambridge were $428
million and $210 million, respectively, or about one-third
of the total. The same can be said for their certifications
as of July 1, 2019. If their certifications are removed from
the last two fiscal periods, the statewide total for the
remaining communities reveals a 4.7% increase compared with
the 1.9% noted in the above Free Cash Certification chart.
Despite the rise seen in the statewide total, not every
community experiences an increase from the previous period,
as shown in the graph below. Note that in only one fiscal
period shown (7/1/17 vs 7/1/16) did the number of
communities with a decrease in certified free cash exceed
those with an increase in certified free cash.
The Effect of the Pandemic on July 1, 2019 Certifications
Normally, free cash cannot be appropriated until it has been
certified by the Director of Accounts; any unappropriated
balance expires after the next June 30 and is unavailable
for appropriation after June 30 and must then be recertified
after a new balance sheet has been submitted and reviewed as
of July 1.
However, Section 6 of Chapter 53 of the Acts of 2020, "An
Act to Address Challenges Faced by Municipalities and State
Authorities Resulting From COVID-19,” extended the free cash
certification time period beyond June 30 as a funding source
for the FY2021 expenditures of a city, town or district if
its annual budget was delayed beyond June 30, 2020 due to
the COVID-19 emergency.
This extension authorized an appropriation of the July 1,
2019 free cash certification until the earlier of the
setting of the FY2021 tax rate or a new certification is
approved as of July 1, 2020. This extension had to be first
granted by the Director of Accounts. Extensions were granted
for 123 towns; no special purpose districts applied. A
review of the Tax Rate Recaps approved for these 123 towns
revealed that 61 took advantage of their extension.
Therefore, although 62 others were prepared, their extension
proved unnecessary. For the 61 towns, an additional $61.1
million was appropriated from July 1, 2019 certified free
cash after July 1, 2020.
Very Early Indications
As of this writing, almost 100 cities and towns have free
cash certified as of July 1, 2021 and many results show a
significant increase over their amount certified as of July
1, 2020. We remain cautiously optimistic that this good
financial news will continue and prove initial thoughts of a
significant free cash reduction in this new certification
period false. Emergency federal and state financial
assistance to local governments in response to the pandemic
continues to provide a measure of financial support, which
has been a factor in the increases in free cash realized to
date.
In January, we will have an article on free cash
certifications for the as of 7/1/21 period, as we will have
more data available then. For all cities, towns and special
purpose districts, please re-read our City & Town article on
Fiscal Stress – A Diminishing Level of Reserves, December 6,
2018 on how to improve free cash position and for policies
on generating and using free cash.
State House News
Service
Friday, October 22, 2021
Weekly Roundup - Get It, Got It, Good
Recap and analysis of the week in state government
By Matt Murphy
Millions have gotten it, and more want it, mostly for their
children. There are boosters with evolving eligibility
standards and the possibility for mixing and matching.
Others flat out still refuse to get it.
The COVID-19 vaccine landscape is becoming more complex by
the day, but tens of thousands of state employees started
their work week on Monday under a simple directive: Prove it
(vaccination) or lose it (job).
Deadline day arrived for more than 42,000 state employees
who call Gov. Charlie Baker their boss, and the
administration reported that 40,462 active employees, or
95.2 percent, complied with Baker's executive order
requiring them to show proof of vaccination, request a
health or religious exemption or risk losing their job.
That left just over 1,500 public employees who failed comply
with the executive order, and it had Baker feeling pretty
good about his decision to enforce a vaccine mandate.
"The fact that 95 percent of our employees have attested to
either being vaccinated or having to file for an exemption
-- and the vast, vast, vast majority have been vaccinated --
I think is an indication from the state workforce that they
agree with us," Baker said on Monday, after meeting with
legislative leaders.
Although the question of enforcement remains an open one.
Technically, anyone who missed the Sunday deadline to show
proof of vaccination should be serving a five-day
suspension, but Baker said agencies are reaching out to
those employees trying to understand their situations.
The State Police Association of Massachusetts has been among
the most vocal opponents of Baker's vaccine mandate, and on
Monday union leadership said it had 299 members in limbo,
including 200 waiting on decisions about their waiver
applications and 99 in plain defiance of the order who had
not yet been disciplined.
Baker said remaining exemption requests would be processed
in the next two weeks, and in the meantime he was "not
concerned" about meeting staffing needs at the State Police,
or any other agency.
Senate President Karen Spilka said she wasn't concerned
about discipline or staffing either because 100 percent of
Senate members and staff responded by her Oct. 15 deadline
to get vaccinated, allowing her to think about moving ahead
with a hybrid work model for the branch. Not too far behind,
the House COVID-19 Working Group finalized its Nov. 1
vaccine deadline and masking rules for the State House.
While boosting vaccination rates among adults remains a
goal, the attention of lawmakers and the administration is
also drifting toward making sure children have access. With
federal approval expected within weeks for 5- to
11-year-olds to get a COVID-19 shot, the House and Senate
had an oversight hearing to make sure Massachusetts is
ready.
Health and Human Services Secretary Marylou Sudders said she
expects 515,000 children to become eligible by next month,
and anticipates 360,000 doses being received and made
available at over 700 locations by the first week in
November.
Of course, the falling leaves, cooler nights and the
impending arrival of November means the clock is really
ticking on the Legislature to make some decisions.
Baker signed a $303 million closeout budget on Wednesday
that allows for about $1.5 billion in surplus tax revenue
from fiscal 2021 to be deposited in an escrow account for
legislators to decide at a later date how to spend. The move
to temporarily set aside last year's surplus was unique and
made, according to Democratic leaders, in order to allow
Comptroller William McNamara to balance the books for last
year without rushing the Legislature to make decisions on
how to spend the extra cash.
Of course, what it looks like to be in a rush in the real
world versus on Beacon Hill are two different things.
Gov. Charlie Baker filed a budget to spend the surplus back
in August, and even before that he put forward a plan to
spend just over half of the state's American Rescue Plan Act
funds.
House and Senate leaders are now looking this fall at how to
allocate both pots of money, worth around $6.3 billion
combined, all while monitoring Washington to try to avoid
overlapping with the trillions of dollars Congressional
Democrats are looking to throw at infrastructure, child care
and Medicaid, if they can only just reach agreement amongst
themselves.
Baker said he was optimistic that the Legislature was
preparing a "pretty, pretty comprehensive and pretty
significant" ARPA spending bill, and he reupped his
recommendation that $1 billion from the surplus be used
replenish the unemployment insurance system.
That spending bill could very well be the next major item to
find itself on the House calendar. But this week it was the
decennial redistricting map drawn by Assistant House
Majority Leader Michael Moran that was up for a vote.
On the House side, Moran and the Special Committee on
Redistricting made some changes before it went to the floor
to strengthen two of the 33 majority-minority districts on
the map in New Bedford and Framingham.
The final product passed 158-1 with strong bipartisan
support.
Things have not been so smooth in the Senate, where Senate
President Pro Tempore William Brownsberger's map for the 40
members of that branch has been picked apart and subjected
to threats of lawsuits.
Brownsberger heard that feedback and drew a brand new
majority-minority district that includes Brockton, Avon and
half of Randolph, upending the district currently
represented by Sen. Michael Brady and meeting advocates part
way.
He also reconsidered initial plans to split Ward 16 in
Boston, but did not fundamentally alter plans to
controversially split Haverhill between two districts to
create a new majority-minority district anchored in
Lawrence.
Rather than push for a vote this week, the Senate will
consider the revised plan next Thursday as members of
Congress and the Governor's Council also continue to wait to
see how legislative leaders might alter their
constituencies.
Without redistricting to consider, senators passed two other
bills, neither of which knocked anything off Democrats'
stated agenda for the fall.
One bill, similar to legislation that passed last session,
would require middle and high schools to teach students
about genocide. The other focused on making it easier and
faster for military spouses to transfer professional
licenses into Massachusetts when their families are
relocated here.
The week also brought news of more delays in the Green Line
Extension, though the MBTA project remains on budget, which
is saying something.
After pushing back the planned opening of the new Union
Square station in Somerville from October to December this
summer, T General Manager Steve Poftak said the agency was
tacking another three months onto that timeline.
"Excuse me while I go break every object I can find. I
understand these things happen, but I don't have to like
it," Somerville Mayor Joe Curtatone tweeted, reflecting on
the fact that the delay means he will no longer be mayor
when the first trolleys roll through Union Square.
The Green Line's Lechmere and Union Square stations will now
open in March, and Poftak said, "I do have a real high level
of confidence that this will be the last delay ... "
Meanwhile, the second branch of the extension into Medford
was on a May 2022 opening trajectory, and Poftak is clinging
to hope that will remain possible.
STORY OF THE WEEK: For over 1,500 state workers, their job
was not worth a shot in the arm.
State House News
Service
Friday, October 22, 2021
Advances - Week of Oct. 24, 2021
Beacon Hill leaders continue to juggle pandemic management
with legislative wrangling, but with formal sessions due to
cease for the year on Nov. 17, they now have less than a
month to deliver on their fall agenda.
-- REDISTRICTING: The House approved its plan to redraw 160
district boundaries this week and the Senate on Wednesday
plans to tackle its map reconfiguring the 40 Senate
districts. The wait continues for proposed maps adjusting
the state's nine Congressional districts and its eight
Governor's Council districts. Look for the Senate next week
to quickly sign off on the proposed House districts since
those need to be in place soon to give candidates time to
establish residency one year ahead of the 2022 elections.
-- ARPA SPENDING BILL | SURPLUS SPENDING BILL: Democrats on
Beacon Hill have been known to extend conference committee
deliberations for months on major spending bills, but they
are leaving themselves only weeks to come to terms on a bill
allocating a portion of federal COVID-19 relief funding, a
critical piece of legislation that budget writers have
described as a "once-in-a-generation opportunity."
If they want to put a good chunk of the $4.8 billion in
American Rescue Plan Act funds to work soon, it's looking
more likely that Democrats will need to ram a bill through
in the next few weeks, potentially limiting opportunities
for major amendments and longer negotiations.
House Democrats are scheduled to huddle as a caucus Monday
to talk about ARPA spending legislation, signaling that a
proposal is likely imminent. The House has also scheduled a
formal session for Thursday, with a potential formal
penciled in for Friday.
Gov. Charlie Baker said this week that he's expecting a
"comprehensive" bill to emerge soon in the Legislature. The
ARPA bill is perhaps overshadowing other near-term spending
choices.
Lawmakers and Baker this week agreed on a $300 million bill
to close out the books on fiscal 2021, but legislative
leaders have described a fall timeline to consider $1.5
billion in unobligated fiscal 2021 surplus funds that are
now sitting in a new fund.
By socking the money away, the Legislature avoided having it
swept into the state's reserves and it's possible that the
surplus dollars will be allocated in one exercise that also
involves ARPA funds, although conflating the two bills could
raise ARPA spending accountability issues.
-- VOTING REFORMS: The House has yet to take up a
Senate-approved bill making mail-in and early voting
permanent and expanding opportunities for unregistered
voters to register and cast a ballot in one go, both on an
election day itself and during the preceding early voting
periods.
Prospective voters seeking to take advantage of same-day
registration under the Senate's bill would need to appear in
person when their local polling place or an early voting
site in their city or town is open, complete an application,
submit proof or residence such as a driver's license and
attest in writing that they are a U.S. citizen at least 18
years old who is eligible to vote. Anyone who cannot present
the identification required would be allowed to cast a
provisional ballot.
While creating new registration options, the Senate bill
leaves in place the registration deadline in current law --
20 days before an election and 10 days before a special town
meeting.
The House last year rejected a same-day registration
proposal, citing a desire to prevent long lines at polling
places at a time when public officials were looking to limit
close contacts to discourage the spread of COVID-19.
A vote on registration reforms in the House in the coming
weeks would likely lead to a different result, although the
change could make House elections more unpredictable for
incumbents by making it more risky for them to target only
registered voters in low-turnout primaries.
The temporary mail-in voting and expanded early voting
authorization is set to expire Dec. 15 -- before the Jan. 11
special election to fill the Senate seat vacated by former
Sen. Joe Boncore -- unless lawmakers act again to expand the
pandemic-era provisions.
-- SPORTS BETTING: Through their silence, senators by now
have made their voices heard on legalizing sports betting:
they do not appear keen on tackling it.
The House has twice signed off on legalization bills and
neighboring states have already waded into the new gaming
frontier.
In July, Sen. Eric Lesser said the Senate was ready to
tackle the issue and told New England Sports Network viewers
that Massachusetts "should really hope and aim to get this
going by the end of the calendar year."
The House bill in the three months since its passage has
remained in the Senate Ways and Means Committee. Senate
President Karen Spilka recently did not include a sports
betting bill on her own list of fall priorities, which does
include a mental and behavioral health care bill that has
yet to emerge in the Senate.
Several senators, including Spilka, opposed the original
push to legalize casinos in Massachusetts, and that branch
more strongly resisted the casino push than the House before
agreeing to go along with legalization.
The News Service hosts an event Tuesday morning on sports
betting that will feature Lesser and his House counterpart
on the Economic Development and Emerging Technologies
Committee, Rep. Jerald Parisella.
-- INITIAL SHOTS FOR KIDS, BOOSTERS FOR OTHERS: Initial
shipments totalling 360,000 doses of Pfizer's pediatric
COVID-19 vaccine are expected to begin flowing into
Massachusetts next week as state government, health care
providers and pharmacies prepare to begin vaccinating some
515,000 kids aged 5 through 11 who are expected to become
eligible in early November.
The shots will become available at roughly 700 locations,
including pediatricians' offices, pharmacies, school-based
clinics and mobile vaccination programs. Health and Human
Services Secretary Sudders said that families should "stay
tuned until, like, next week" for more information about how
to sign up to get kids vaccinated. "There will be a mix of,
as there has been, appointment basis and walk-ins, and which
primary care practices have signed up, and how local boards
of health who've signed up how they want to manage it," she
said. "Now that we know who, it's how."
Parts of three school years have been disrupted by the
pandemic, leading to months of remote learning and ongoing
masking requirements for kids. Like it did for much of the
rest of society, vaccine eligibility for (and take-up among)
most school-aged kids could mean the end of most COVID-19
mitigation measures, and Education Commissioner Jeff Riley
said this week that the decision to either let the masking
requirement expire or extend it further will come "by early
next week."
Meanwhile, providers and pharmacies across Massachusetts are
now administering a greater variety of COVID-19 booster
shots now that the federal government has approved the
supplemental shots for all three brands, Moderna, Pfizer and
Johnson & Johnson. -- Colin A. Young
Storylines In Progress
... Bills calling for new state policies to address the
opioid crisis are up for a public hearing Monday afternoon
... Education Commissioner Jeff Riley plans "early next
week" to make a decision on whether to extend the school
mask mandate and if so, for how long
... The newly constituted MBTA Board of Directors holds its
first meeting on Wednesday
... The U.S. Attorney's Office in Boston is suddenly in an
unusual state of suspense, awaiting word along with everyone
else on whether and when the U.S. Senate will tackle the
controversial nomination of Suffolk DA Rachael Rollins to
succeed former U.S. Attorney Andrew Lelling, a Trump
appointee
... Two state reps - Claire Cronin of Easton and Maria
Robinson of Framingham - remain poised to depart soon
pending confirmation of their nominations to federal posts,
with Cronin slotted for U.S. ambassador to Ireland and
Robinson for a Department of Energy job. Their resignations
will trigger a pair of unusual special elections in which
candidates would run in districts that would be blown up
under the redistricting bill moving toward Gov. Baker's desk
... Another unanswered question: will Cronin, prior to her
departure, deliver on the joint rules reforms she was
entrusted to negotiate with the Senate back in March? That
conference committee has gone completely dark, and also lost
one of its Senate conferees, former Sen. Joe Boncore. Spilka
hasn't decided yet on a new conferee, or on whether to name
a new co-chair of the Transportation Committee, another post
that Boncore held
... The week ahead is the last full one for campaigning
prior to the Nov. 2 municipal elections. The race for mayor
of Boston is the headliner but mayoralties are up for grabs
in several other cities and there are contested primaries on
both sides of the aisle in the special election to fill the
House seat recently vacated by Brad Hill, an Ipswich
Republican who joined the Massachusetts Gaming Commission
... Legislators for years have resisted calls to subject
their branch of government to the public records law, but
lawmakers will have to revisit the topic at least briefly on
Tuesday when a bill removing their exemption comes up for a
public hearing
... The passing of vaccine mandate deadlines for Senate and
executive branch employees means legislative officials may
have more to say soon about bringing workers back to the
State House, and executive employees out of compliance with
the mandate may soon face ramifications ...
Tuesday, Oct. 26, 2021
STATE ADMINISTRATION COMMITTEE: Joint Committee on State
Administration and Regulatory Oversight holds a hearing on
about two dozen bills, most of them related to public
records or the open meeting law. In a 2016 reform law aimed
at making government more transparent, the Legislature
preserved its own exemption from the public records law. A
bill (H 3239 / S 2048) from Rep. Uyterhoeven and Sen.
Eldridge would apply the law to the Legislature, something
activists have urged, and the Legislature has resisted, for
years. A commission of six lawmakers charged with examining
legislative transparency and whether to apply public records
law standards to the Legislature came to a dead end in 2018
when the House and Senate members could not find common
ground. (Tuesday, 10:30 a.m.)
HOUSING COMMITTEE: Housing Committee hosts a virtual hearing
to consider late-filed legislation and bills related to
affordable housing. A bill from Rep. Connolly (H 1379) would
authorize an additional $1 billion in bonding to fund
preservation and production of low-income housing. Another
Connolly bill, filed in the Senate by Sen. Comerford (H 1377
/ S 868), would allow cities and towns to impose a real
estate transfer fee between 0.5 percent and 2 percent of the
purchase price and use the revenue for affordable housing.
(Tuesday, 11 a.m.)
FINANCIAL SERVICES COMMITTEE: Forty-nine bills dealing with
banking are on the agenda at a Joint Committee on Financial
Services virtual hearing. A pair of proposals (H 1144 / S
630) would create a foreclosure mediation program that would
require mortgage owners to inform residents about mediation
opportunities in foreclosure cases. Other topics the
committee could take up include debt collection,
establishment of a public bank of Massachusetts, and
inactive bank account fees. (Tuesday, 11 a.m.)
State House News
Service
Monday, October 18, 2021
AAA: Average Gas Fill-Up Cost Up $17 In Past Year
Feds: Boston-Area Consumer Price Index Rose 4 Percent
By Michael P. Norton
Gas prices continue to contribute to inflation concerns,
rising nine cents per gallon in the last week and cutting
further into household budgets across Massachusetts.
AAA Massachusetts reported Monday that the average price of
a gallon of gas hit $3.27 in its latest weekly survey.
That's up from $3.10 a month ago and just $2.10 a year ago.
"Compared to the price of gas a year ago, it now costs
consumers about $17 more to fill up their vehicles," AAA's
Mary Maguire said. "And unfortunately, it doesn't look like
drivers will be finding relief at the pump any time soon."
The last time prices in Massachusetts were this high was
October of 2014 at $3.32 per gallon, according to AAA, which
said increasing crude oil prices are the "primary factor"
behind the higher prices at the pump.
The Consumer Price Index rose 4 percent in the Boston area
over the past year, the Bureau of Labor Statistics reported
last week, lower than the national rate, which was up 5.4
percent. Energy prices surged upwards by more than 26
percent since last September, largely due to gas prices that
rose 42.9 percent and are contributing to rising U.S import
prices.
Food prices in the Boston area increased over the year by
3.8 percent, mainly due to a 10.2 percent increase in
restaurant prices.
Transportation Revenues Outlook
While calls for increased investments in transit and
transportation have continued, gas tax talks on Beacon Hill
have died down after the House in 2020 passed legislation
raising more than $600 million in new transportation
revenues, a package that died without a vote in the Senate.
The House bill had featured a 5-cent increase in the gas tax
and a 9-cent increase in the tax on diesel fuel.
Democrats who control the Legislature found common ground on
one transportation revenue idea -- raising fees on Uber and
Lyft rides -- but also haven't revisited that measure since
last session, when they didn't leave themselves enough time
to override a Gov. Charlie Baker veto.
In his fiscal 2021 budget, Baker himself called for
increasing the per-trip fee from 20 cents to $1, but he then
balked at the Legislature's effort to impose steeper hikes
and argued policymakers should wait until the pandemic's
impact on ridership and congestion become clearer.
The chief transportation revenue proposal with some momentum
still behind it is the proposed surtax on household incomes
above $1 million a year. That proposal is scheduled to
appear as a constitutional amendment on the November 2022
ballot, where it faces an up-or-down vote.
Supporters of the idea say it will force higher-income
households to pay their "fair share" of taxes and deliver as
much as $2 billion to be shared between education and
transportation investments. Opponents say the measure, if
passed, could drive wealth and revenue out of Massachusetts
and eventually lead to higher taxes on other high earners
through a graduated income tax structure.
Baker, who hasn't said if he'll seek a third term in 2022,
opposes the income surtax. Baker last month warned that
companies "can locate anywhere" and questioned estimates of
expected surtax revenues and promises that they would only
be spent on education and transportation.
------
AAA Gas Prices website
https://gasprices.aaa.com/
The Boston
Herald
Tuesday, October 19, 2021
A Boston Herald editorial
Biden tries talk therapy on gas prices
The good news: President Joe Biden’s chief medical adviser
Dr. Anthony Fauci has given a thumb’s up to holiday
gatherings for the vaxxed.
“I believe strongly that, particularly in the vaccinated
people, if you’re vaccinated and your family members are
vaccinated, those who are eligible — that is obviously very
young children are not yet eligible — that you can enjoy the
holidays. You can enjoy Halloween, trick-or-treating and
certainly Thanksgiving with your family and Christmas with
your family,” Fauci said on Sunday during ABC’s “This Week.”
The bad news: You’re probably going to have to pack the pie
in Tupperware and take the bus to grandma’s.
As the State House News Service reported, soaring gas prices
are adding to inflation worries, rising 9 cents a gallon in
the last week. AAA Massachusetts reported Monday that the
average price of a gallon of gas hit $3.27 in its latest
weekly survey. That’s up from $3.10 a month ago and just
$2.10 a year ago.
“Compared to the price of gas a year ago, it now costs
consumers about $17 more to fill up their vehicles,” AAA’s
Mary Maguire said. “And unfortunately, it doesn’t look like
drivers will be finding relief at the pump any time soon.”
Just what we need before Thanksgiving and holiday trips to
see family. Driving to find the perfect Christmas tree,
piling in the car to tour the houses bedecked in festive
lights — it’ll cost a pretty penny this year.
The last time prices in Massachusetts were this high was
October of 2014 at $3.32 per gallon, according to AAA, which
said increasing crude oil prices are the “primary factor”
behind the higher prices at the pump.
Oil — the fuel Biden and his fellow Democrats love to
demonize, but on which the country depends.
As #emptyshelvesjoe trends on Twitter amid the supply chain
crisis, inflation and real fears of Christmas shortages, the
last thing the president needs is #gaspainbiden to follow.
And so the president, who can’t move the country away from
fossil fuels fast enough, has been having chats with the oil
industry.
As Politico reported, “Senior staff is preoccupied with
trying to identify options to bring down oil prices, which
they believe are driving (the) inflation uptick,” said
Stephen Brown, a longtime energy lobbyist and current
strategist with RBJ Strategies. “Some producers will talk to
them, but it is also not like they have a lot of friends in
this sector.”
We can’t guess why.
To hear the proponents of the Green New Deal tell it, oil
and gas should be phased out yesterday, there should be
electric vehicles in every garage, and Americans who haven’t
yet bought a Tesla are all part of the problem.
Those White House talk sessions must have been awkward as
heck.
Then of course, there’s OPEC, which is concerned first and
foremost with OPEC. The oil cartel is careful not to turn on
the tap too fast after prices fell so far during the
pandemic.
The Biden administration has requested OPEC increase its
exports.
Dependence on OPEC was one of the reasons the Keystone XL
Pipeline contract was a good idea — it would have given
America a stronger measure of energy independence.
Is it any wonder that amid a host of legal woes, Donald
Trump still has the support of 47% of registered voters in
another run for the White House, according to a new Hill-HarrisX
poll?
The Wall Street
Journal
Tuesday, October 19, 2021
Democrats Try to Salvage IRS Bank-Account Reporting With
Scaled-Back Plan
Key reporting threshold would go to $10,000 from $600;
banks, GOP say plan is unworkable
By Richard Rubin and Orla McCaffrey
Democrats scaled back a proposal to require banks to send to
the IRS more information about customers’ accounts in hopes
of salvaging the idea, raising to $10,000 from $600 the key
reporting threshold and adding an exemption that would spare
many workers and retirees.
The core idea remains—banks would be required to provide
information that could help the IRS more easily find tax
cheating. But amid opposition from the financial-services
industry and many Republicans, Sens. Ron Wyden (D., Ore.)
and Elizabeth Warren (D., Mass.) proposed changes on Tuesday
that would reduce the number of accounts affected. The plan
seeks to generate hundreds of billions of dollars in owed
but unpaid taxes that could help pay for new federal
programs under consideration in Congress.
Democrats want banks, other financial institutions and
peer-to-peer services such as Venmo to report annual totals
of account inflows and outflows to the Internal Revenue
Service. That would give the tax agency a window into income
streams that are more opaque than wages and interest. The
IRS already gets information on wages and interest from
banks and employers and cross-checks that data against tax
returns.
The additional account details wouldn’t provide direct
evidence of tax cheating, but they would create a data trove
that tax authorities could use to decide who gets audited.
It could also be a deterrent to people—particularly business
owners—who are considering not reporting all of their
income.
An annual report would be generated when a bank account’s
inflows include more than $10,000 not tied to wages or other
exempted benefits.
“We’re adding language to ensure enforcement efforts are
focused on the very wealthy,” Mr. Wyden said Tuesday. He
added that the $10,000 figure was chosen because it is used
in other instances. It is the threshold for when cash
transactions must be reported to the government.
Raising the reporting level is insufficient, banking
industry executives said. Moreover, exempting certain
payments would make it more complicated for financial
institutions to determine which accounts should be subject
to reporting, industry representatives added.
“Banks aren’t the answer here,” said Greg Carmichael, chief
executive of Fifth Third Bancorp. “We would hate to see [the
requirement] materialize and be asked to police that space.”
Banks, credit unions, Republican lawmakers, business owners
and conservative groups such as Americans for Tax Reform
have been building opposition to the plan for months. They
warn that the requirement would put taxpayer information at
risk if IRS computer systems were breached and they have
described the proposal as snooping and surveillance.
“Even with the modifications announced today, this proposal
still goes too far by forcing financial institutions to
share with the IRS private financial data from millions of
customers not suspected of cheating on their taxes,” Rob
Nichols, president and CEO of the American Bankers
Association, said Tuesday.
House Democrats left the proposal out of their legislative
version of President Biden’s agenda. Ways and Means
Committee Chairman Rep. Richard Neal (D., Mass.), said
Tuesday that he hadn’t seen details and looks forward to
reviewing the Senate’s legislative language, which isn’t
complete yet.
The administration is still aggressively pursuing the idea
to help pay for a variety of policies such as the extension
of the expanded child tax credit. Democrats don’t need
Republican votes to include the changes in their broader
social-policy and climate legislation, but they will need to
keep their own party together because of the 50-50 split in
the Senate and slim House margins. So far, key centrist
Democrats haven’t broken with the administration on this
idea, as they did on other tax proposals.
“Let’s be clear what this is about: It’s about big banks
deciding to protect wealthiest Americans that get away with
not paying the taxes they owe by fighting this common-sense
solution,” White House press secretary Jen Psaki said on
Monday.
The Biden administration included the idea in its proposed
budget for the 2022 fiscal year with the intention to
implement it for 2023 tax year with the first reports due in
early 2024. Often, tax-compliance measures are easier to
sell politically than direct tax increases, but this one has
proven to be the opposite.
Critics argue the proposal would burden financial
institutions with new costs, including those related to
determining which accounts are covered by the proposal. The
measure would also place banks in the undesirable position
of divulging more client data to the government, on top of
existing reports on interest and dividend income.
The current proposal doesn’t require banks to share
transaction-level data. But the IRS could use the account
information to request information about specific
withdrawals and deposits, said Richard Hunt, CEO of the
Consumer Bankers Association, a trade group for retail
banks.
“[The IRS] can’t deduce who is avoiding paying their taxes
without peering through every financial transaction,” Mr.
Hunt said. “Bankers cannot become agents of the IRS.”
Some bank customers are wary as well, in part because of a
robust lobbying effort from industry trade groups to inform
customers of the risks they believe the reporting proposal
introduces. The requirement would erode consumers’ trust in
their banks to safeguard information, critics say.
“The biggest and most powerful banks in the world want
Americans to believe they’re still relying on legal pads and
some kind of abacus to perform basic functions,” Mr. Wyden
said. “The idea that adding two boxes to a form they already
send to the IRS is just going to be bedlam just does not
hold up.”
Some criticisms from Republican lawmakers about the proposal
are untrue, namely the claim that the IRS would get data
about individual transactions. Final details aren’t set, but
the emerging plan would require reporting of two numbers for
each account—gross inflows and gross outflows. The IRS
could, as it does now, get more detailed transaction data
during an audit.
Rep. Drew Ferguson (R., Ga.), a member of the House Ways and
Means Committee, said the revised proposal still raised
privacy concerns.
“It does not matter if the amount is $1, $600 or $10,000,
Americans don’t want the IRS snooping into their bank
accounts,” Mr. Ferguson said on Fox News on Tuesday.
The proposal is part of the administration’s broader efforts
to close the tax gap, the difference between taxes owed and
taxes collected. The gap neared $600 billion in 2020,
according to estimates by former IRS Commissioner Charles
Rossotti, who has advocated for a version of the plan.
Administration officials say the proposal builds on what
works already. When the IRS has independent information
about income, people are more likely to pay what they owe.
Few people underreport their wages, because they know the
IRS has their employer’s report on Form W-2.
For many business owners who get paid by cash, check or
peer-to-peer payment services, however, there is no such
independent information. The mere existence of annual
reports could spur them to report more of their income.
Still, it is an open question just how effectively the IRS
could use any new information from the proposal. The IRS has
been shrinking for years, but Democrats are also trying to
double its size over the next decade so it can do more
enforcement.
Unlike existing reports on wages, dividends and interest,
bank inflows and outflows aren’t necessarily income, so the
new data also wouldn’t be as easy to use. Nontaxable
deposits could include gifts, inheritances and transfers
between accounts.
Instead, the tax agency would have to design algorithms
based on the new data to help it decide who should get
audited.
The administration argues that is less invasive because
people would face fewer unnecessary audits. And
administration officials say that overall, audit rates won’t
increase on taxpayers making less than $400,000 a year.
For the plan to work, potential tax cheats must be convinced
that the IRS can use the information to find them, said
Janet Holtzblatt, a former Treasury Department and
Congressional Budget Office official.
“Will the IRS be able to use that information? Will
taxpayers recognize that that information is being used? And
how long will it take?” said Ms. Holtzblatt, now a senior
fellow at the Tax Policy Center in Washington.
Unlike interest, wage or dividend income, account flows
information wouldn’t correspond to a line on the tax return.
“This is an attempt to go out and find more information
about those people for whom we know over half of their
income is not reported accurately to the IRS,” she said. “So
the motives are good [but] I don’t think the administration
has done a good job of explaining exactly how this would
work.”
— Amara Omeokwe contributed to this article.
The Wall Street
Journal
Thursday, October 21, 2021
OPINION | REVIEW & OUTLOOK
The $10,000 IRS Tax Dragnet
Treasury wants to snoop on bank accounts to trigger more
audits.
Democrats walked into a political ditch with their plan to
let the Internal Revenue Service snoop on American banks
accounts, and so far they’re doing a lousy job of scrambling
to get out.
This week Senate Democrats backed by the Biden Treasury
released a revised proposal that raises the threshold for
financial institutions to report to the IRS on individual
accounts to $10,000 from the previously mooted $600. The
proposal also tries to dodge the charge of snooping on
Everyman by exempting wage income from “certain payroll
companies” and Social Security checks.
The details are murky, but most Americans could still get
ensnared in this dragnet unless they pay bills and buy goods
in cash. Democrats say banks will only have to report total
annual inflows and outflows, not discrete transactions. But
nearly all Americans spend more than $10,000 a year.
The real political goal here is to create a mechanism for
triggering audits—probably through an algorithm—so the IRS
can rifle through all of a taxpayer’s business and other
financial records.
Treasury cites the case of a taxpayer with income of $10,000
and bank cash flow of $10 million: “Having this summary
information will help flag for the IRS when high-income
people under-report their income (and under-pay their tax
obligations).” But such a case would be exceedingly rare and
possibly signal criminal behavior. Banks are already
required to report suspicious currency transactions over
$10,000 that might signal money laundering, tax evasion or
other crimes.
Treasury also says audit rates won’t increase for Americans
with less than $400,000 in income. That’s disingenuous.
Democrats know the IRS audit trigger would by necessity have
to sweep in tens of millions of Americans who report less
than $400,000 in income to catch the many tax cheats they
claim are under-reporting income.
“The Administration has been clear that audit rates will not
rise relative to recent years for those with under $400,000
in actual income” (our emphasis), wrote Treasury deputy
assistant secretary Natasha Sarin last month. But there’s no
way for the IRS to know a taxpayer’s actual income unless it
completes an audit. The whole purpose of this exercise is to
pursue people who say they earn less than $400,000 but might
be earning more.
Treasury’s main targets are small businesses whose income is
less visible than wages, dividends, capital gains and
interest, which already must be reported by third parties.
There’s little third-party reporting of business income.
“The wealthy business owners are on the honor system,”
Oregon Sen. Ron Wyden says.
Ms. Sarin says proprietorships, partnerships and
S-corporations make up about half of the individual income
“tax gap.” But most of the so-called under-reported income
isn’t at the very top. The top 1% of taxpayers—those making
roughly $540,000 or more in 2018—account for an estimated
28% of unpaid taxes, according to a study cited by Ms. Sarin.
Those ranking below 95% of the income distribution (about
$218,000) accounted for about half.
While tax fraud no doubt occurs, most of what liberals refer
to as “under-reported income” is the aggressive use of legal
tax deductions and write-offs. Businesses that challenge an
IRS audit assessment often prevail, though many can’t afford
tax attorneys and end up writing a check to end the matter.
The Democrats’ proposal might cause Americans who want to
avoid triggering an IRS audit to use virtual currencies,
digital wallets and decentralized intermediaries for
financial transactions, which will make their income streams
even less visible. One reason banks are complaining about
this new IRS snooping is they don’t want to lose customers.
Senate Democrats say their plan would be “virtually
cost-free” for banks. Big banks can handle the compliance
burdens, but the burden is greater for community banks that
provide most lending to small businesses.
Banks will also be in the awkward position of helping the
government police their customers. Recall how liberals
howled about the National Security Agency antiterror program
that required telecom companies to share phone metadata with
the feds. Now Democrats want financial institutions to help
the tax collector track your cash flow. Vows of privacy at
the IRS aren’t worth much after the recent leaks of taxpayer
data to ProPublica.
The IRS already has enough data to go after the wealthy and
genuine tax cheats. It wants to look at everyone’s bank
account so its agents have another excuse to audit and
squeeze more money from non-wealthy Americans.
The Epoch
Times
Monday, October 11, 2021
Some School Board Associations Denounce National Group’s
Letter Over Threats
By Zachary Stieber
Some state school board associations are challenging the
National School Boards Association’s (NSBA) recent letter to
President Joe Biden.
The NSBA
compared parents to domestic terrorists and called for
the president to direct the federal government to “deal with
the growing number of threats of violence and acts of
intimidation occurring across the nation.”
Several days later, the Department of Justice (DOJ)
announced it was tasking FBI agents and U.S. attorneys
to convene to discuss strategies for addressing threats
against school administrators, board members, teachers, and
staff.
Janet Turney-Giles and Gina Patterson, president and
executive director of the Virginia School Boards
Association, said in a joint statement that they had not
been consulted about the letter and were not informed it was
sent. The group said it supports elected officials and their
appointed leadership but also recognizes “the vital role
parents play in the education of their children and within
the school communities.”
“Those citizens who serve on Virginia’s local school boards
deserve our thanks. There is no justification for physical
or verbal threats directed against them, their staff, and
certainly not the students. Nor is there any excuse for
disrupting a public meeting. When such unfortunate events
occur, the local officials, working with local law
enforcement, must deal with the situation appropriately.
While we look for support to our state and federal
governments, we do not seek the involvement of federal law
enforcement or other officials in local decisions,” they
added.
The Louisiana School Boards Association said it didn’t agree
with NSBA’s letter.
“Our concern is that NSBA’s request and description of
events is not a universal occurrence at all school boards,
it fails to align with the standards of good governance, and
it discourages active participation in the governance
process. The NSBA’s request represents a huge step backwards
in the collective advocacy efforts carried out by LSBA and
other state associations in protecting and preserving
openness, transparency, and local autonomy,” the group said
in a letter.
The Louisiana association is now evaluating whether it will
continue to be a member of the national group.
The Kentucky School Boards Association said the national
letter doesn’t reflect its opinion.
Kim Schelling, the group’s executive director, said it
believes strongly in “the value of local control” and that
“engaging with local constituents is a hallmark of democracy
and disagreement expressed publicly is not new for school
board members.”
While certain behaviors that have been reported are
troubling, such as disruptions of school board meetings,
they “appear to represent the isolated actions of a small
number of people,” she added.
“Illegal acts, violence, and intimidation of any public
officials will not be tolerated, and districts will continue
to work closely with local law enforcement to address issues
of public safety,” Schelling wrote, adding that the state
group will likely need to see “corrective action” from
NSBA’s leadership to remain a part of the national
association.
The NBSA did not respond to a request for comment.
Other state boards indicated that they agreed with the
NSBA’s call for action, which proved successful.
Susan Meek, a spokesperson for the Colorado Association of
School Boards, in a lengthy blog post backed the letter,
alleging the level of vitriol at school board meetings “has
increased over the last few weeks, especially regarding mask
mandates.”
“Additionally, violent acts, threats, and acts of
intimidation are occurring throughout the nation at school
board meetings, inhibiting the right of all viewpoints to be
heard in a safe environment. These disruptions particularly
impact parents who are attempting to speak or hear about all
sides of an issue in a civil and peaceful environment,” she
wrote.
The NBSA linked to a number of citations in its letter to
Biden that is said highlighted “acts of malice, violence,
and threats against public school officials,” adding that
“the classification of these heinous actions could be the
equivalent to a form of domestic terrorism and hate crimes.”
Most of the links go to stories about parents, upset about
the teaching of controversial topics such as critical race
theory, confronting school board members. Apart from one
regarding an arrest in Illinois, no others parents appeared
to show violence and a top Department of Justice official,
testifying to Congress last week, declined to cite specific
examples of violence at such meetings.
The official, Deputy Attorney General Lisa Monaco, said that
it’s not “domestic extremism” to advocate at meetings, and
that “spirited debate” is welcome but “violence is not
appropriate.”
The New York State School Boards Association thanked
Attorney General Merrick Garland for responding to the NSBA
letter.
“We agree that any illegal activity should be prosecuted to
the fullest extent of the law. We also recognize that a
fundamental, bedrock principal of our democracy is the
ability of citizens to communicate their views directly to
elected leader,” the group said in a statement.
“Although we are thankful that the level of threats,
intimidation, and harassment has not risen to such a level
here in New York State as to require federal intervention,
just knowing that the resources of the federal government
are standing at the ready is greatly comforting. In the
meantime, our organization is devoting its efforts to
providing school boards and administrators with the
necessary tools to diffuse public expressions of anger and
upset, with the goal of returning to a time when civil
discourse was a hallmark of school board meetings and we can
all continue to serve as exemplars for our students,” it
added.
The Massachusetts Association of School Committees and
the Arizona School Boards Association also indicated
approval of the DOJ’s order.
Activists have accused the DOJ of overstepping with the
recent order. They’ve said school boards don’t like facing
the increased scrutiny from parents.
“Nationwide, parents are paying attention. They’re asking
the school board serious questions about how money is spent,
the ideology that’s being promoted in the classroom. And
these school board members don’t like getting these hard
questions,” Asra Nomani, vice president of strategy and
investigation for Parents Defending Education, said on NTD’s
“The Nation Speaks.”
The parent-founded group has shed light on content they find
concerning being taught to their children from books,
including pedophilia and the idea that whiteness is a bad.
“My advice is be unapologetic in your defense of children,
because we are their strongest advocates,” Nomani said.
“These poor kids are minors in society and don’t have the
kind of voice that we have and they should not be held
hostage by activists who are trying to intimidate their
biggest defenders.” |
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