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Post Office Box 1147
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Marblehead, Massachusetts 01945
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“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
47 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Monday, November 22, 2021
More on Halting
TCI — and the Increasingly Dysfunctional Legislature
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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|
Gov. Charlie Baker
threw in the towel on his transportation climate
initiative on Thursday just days after Gov. Ned
Lamont of Connecticut did the same thing in his
state....
Lamont indicated he
might revisit joining the initiative after next
year’s election, but Baker’s statement indicated he
intends to move on and not look back. It’s a
stunning turnaround for a concept that once
attracted the interest of a dozen northeast and
mid-Atlantic states and became a linchpin of the
Baker administration’s plan for reaching net zero
greenhouse gas emissions by 2050....
Massachusetts was the
only state supporting the transportation climate
initiative until Thursday. The governors in Rhode
Island and Connecticut couldn’t get it through their
legislatures; Baker had the power to sign on because
of earlier legislation giving him the authority to
act on his own....
Paul Craney, a
spokesman for the Massachusetts Fiscal Alliance,
which opposed the transportation climate initiative,
said he was glad Massachusetts finally abandoned
what he called a “regressive gas tax scheme,” which
he said would have hurt the middle class and the
working poor the most. He thanked his allies in the
fight — Citizens for Limited Taxation, the
Beacon Hill Institute, the National Federation of
Independent Business, Massachusetts Republican Party
chairman Jim Lyons, and Boston Herald columnist
Howie Carr.
CommonWealth Magazine
Thursday, November 18, 2021
Baker pulls the plug on
transportation climate initiative
Abandons cap-and-invest plan after Lamont’s decision
to back away in CT
Providence, RI
— Just one day after
Governor Dan McKee's office confirmed that the
governor continues to support the Transportation and
Climate Initiative (TCI), his administration
reversed course and announced that it was dropping
its effort to adopt the initiative.
GoLocalProv
Friday, November 19, 2021
McKee Drops Support for
Transportation and Climate Initiative
After both
Massachusetts and Connecticut’s governors pulled out
of the Transportation and Climate Initiative, citing
waning support and higher gas prices, Rhode Island
has also has left, putting the nail in the coffin on
the multi-state partnership.
“The Transportation and
Climate Initiative depends upon the involvement of
at least three jurisdictions to go forward as a
program,” said Ocean State Department of
Environmental Management Acting Director Terrence
Gray in a statement. “Recent events in Connecticut
and Massachusetts, however, have made clear that at
least for the time being, Rhode Island must explore
other options in clean transportation.” ...
Paul Diego Craney of
the conservative watchdog organization Mass Fiscal
Alliance, one of the most vocal opponents of TCI,
praised the move.
“We are pleased to see
the TCI scheme completely surrendered,” he said in a
statement. “We would not have settled for anything
but an unconditional surrender of the scheme. Rhode
Island motorists don’t deserve to be on an island on
its own, so their state’s motorists can be thankful
this Thanksgiving holiday season.”
The
Boston Herald
Saturday, November 20, 2021
Rhode Island, the final
state, pulls out of TCI
Gov. Charlie Baker’s
surprise move to dump the unpopular climate
initiative compact could be the strongest signal yet
that he has his eyes on a third term.
The Transportation and
Climate Initiative, or TCI, would have raised
already skyrocketing gas prices and given fuel to
Baker’s potential Republican opponent, former Rep.
Geoff Diehl.
Now that the Republican
governor doesn’t have to contend with the impacts of
TCI, he can avoid getting blamed for gas tax hikes
and shortages, though he won’t rid his
administration of the stain of the failed
initiative.
“It’s a failed program
for him now,” said Paul Diego Craney of the
MassFiscal Alliance, the major opponent of TCI.
“Republican primary voters are not going to forget
that at all.”
TCI could still be a
potent issue for Diehl even though it’s on the scrap
heap....
“It doesn’t go away
just by dropping out,” Craney said. “I suspect
(Diehl) will use it all the way to the end of the
primary.”
Diehl also can gloat
his way through the campaign reminding voters that
he was always opposed to TCI and was protecting
motorists from massive gas tax hikes. And Democrats
may have an opening now to attack Baker for failing
to do enough to combat climate change.
The
Boston Herald
Friday, November 19, 2021
Charlie Baker jettisons failed
TCI, but will voters remember?
By Joe Battenfeld
Progressives say the
only way to achieve their climate goals is to raise
the price of fossil fuels. Their problem is that
consumers don’t want to pay more for energy, and as
the latest proof behold Connecticut Gov. Ned
Lamont’s retreat this week from a Northeast state
climate pact.
Last December the
Governors of Rhode Island, Connecticut and
Massachusetts and the mayor of Washington, D.C.,
joined a cap-and-trade scheme to reduce carbon
emissions from fuel....
Mr. Lamont finally gave
up trying to pass the scheme this week. “Look, I
couldn’t get it through when gas prices were at
historic lows. So I think the legislature has been
pretty clear it is a tough rock to push when gas
prices are so high,” he said. Massachusetts GOP Gov.
Charlie Baker then threw in the towel too, causing
the climate pact to effectively combust.
Mr. Lamont is running
for re-election next year, and perhaps the close
race this month in New Jersey gave him pause. Even
liberals don’t want to pay more for energy to make
an insignificant reduction in global emissions.
Washington State voters have twice shot down a
carbon tax. This summer the Swiss rejected higher
taxes on driving and flying in a referendum. Maybe
the death of fossil fuels that we’ve been told is
inevitable isn’t so inevitable.
The Wall
Street Journal
Friday, November 19, 2021
Opinion | Review & Outlook
The Northeast Climate Pact
Implodes
If state
representatives want to avoid allowing mail-in
voting and expanded early voting permission to lapse
next month, they will need to find a way to secure a
bipartisan agreement within the chamber, according
to the House's top elections expert.
And while House and
Senate leaders agree on some core election reform
proposals, there are "a lot of different moving
pieces" that they have not yet ironed out, Election
Laws Committee Co-chair Rep. Dan Ryan told the News
Service.
Ryan said Wednesday
that he did not expect action on temporary or
permanent voting reforms, and the Legislature indeed
adjourned its final formal lawmaking session of 2021
without tackling the issues and with the House
electing not to even open up debate on the
matter....
Failing to act by
Wednesday's end of formal sessions for the year
leaves the near-term fate of the reforms uncertain.
Supporters of the reforms could allow the policies
to lapse and attempt to revive them when formal
sessions resume in January, or try to enact either
an extension or a permanent authorization during
informal sessions, when a single member's objection
could stall progress.
"We could try to do
that, but of course, if one person decides they
don't want it to happen, then we have to go into
January and think of Plan B," Ryan said of tackling
election reforms in an informal session during the
holiday quiet period.
House Republicans voted
against the mail-in voting budget amendment in June,
at the time criticizing the process. Senate
Republicans have also objected to some voting
reforms.
House Minority Leader
Brad Jones signaled Wednesday that his caucus may be
open to another temporary extension of the COVID-19
voting policies.
State
House News Service
Wednesday, November 17, 2021
Beacon Hill Leaves Voting
Reforms Up In The Air
Gov. Charlie Baker is
among those disappointed that Beacon Hill Democrats
couldn't agree on a plan to put nearly $4 billion to
work throughout the economy before breaking for a
seven-week stretch of informal sessions, and is
blaming a legislative decision earlier this year for
causing delays.
Baker proposed spending
American Rescue Plan Act funds in June, but
legislative Democrats put the federal aid in a
lockbox that they control and opted for a long
public hearing process to gather feedback about the
state's needs. They then couldn't agree on a
consensus bill by Wednesday when formal sessions
ended for 2021.
"The Baker-Polito
Administration believes the Legislature's original
decision six months ago to freeze these funds and
subject them to the legislative process created a
massive delay in putting these taxpayer dollars to
work," Baker press secretary Terry MacCormack said.
"Massachusetts was already behind most of the
country in utilizing these funds before the latest
setback, and further delay will only continue to
leave residents, small businesses and hundreds of
organizations frozen out from the support the rest
of the country is now tapping into to recover from
this brutal pandemic."
Negotiations among six
members of a conference committee are continuing,
but any agreement they might reach in the next seven
weeks will require bipartisan and unanimous support
since any single lawmaker can stop a bill from
advancing in informal sessions. Formal sessions are
scheduled to resume on Jan. 5, but there's
uncertainty also about whether, under legislative
rules, the appropriations bills will die at the
start of the new annual session or carry over
intact....
While conference talks
are conducted in secret, there were some signs of
discord Wednesday night. When Michlewitz signaled a
deal was not within reach, Rodrigues appeared taken
aback and said he lacked a "dance partner" and that
"it takes two to tango." As the House abruptly
adjourned at 6:25 p.m., Sen. William Brownsberger
was telling senators to settle in for a lot more
work that evening. Once news of the House
adjournment reached the Senate, that chamber ended
its session at 6:38 p.m.
State
House News Service
Thursday, November 18, 2021
Baker Blames Legislature For ARPA
Spending Delays
Spox: Mass. Trails Other States In Using Relief
Funds
If there’s one thing
our state lawmakers have historically been good at,
it’s spending large pots of money.
And getting their rest.
So it’s astonishing
that they have been unable to reach an agreement to
spend more than $5 billion in funds, a federal
gift-in-hand intended to ease the effects of the
pandemic.
But it’s not
astonishing at all that lawmakers adjourned for the
year Thursday, leaving the issue hanging in
limbo....
As legislators headed
off into the sunset, Governor Charlie Baker made no
secret of his frustration with them. He’s absolutely
right to believe they’ve shirked their duty.
“The Legislature made a
commitment to get it done before they went home for
the holiday season and I can’t tell you how
frustrated I am,” Baker said. “Not just for me but
for all the mayors and small businesses and folks
who are looking for an opportunity to do something
other than what they were doing before, and getting
the skills that would be required to do that.”
The money in question
comes through the American Recovery Relief Act with
few, if any, strings attached. And that might be
part of the problem: so much flexibility allows
plenty of room for disagreement and delay — and
delay is an art form on Beacon Hill.
Other states have
managed to figure out how to spend the money.
Baker’s claim that Massachusetts lags behind other
states in spending the cash seems to check out.
What does Baker want to
do with the money? His wish list included spending
on housing, job training, environmental and
climate-related programs, and education. Those
priorities were placed on the table months ago.
The Legislature moved
quickly, back then, to ensure that the money could
only be spent with its approval. Legislative leaders
bemoaned a lack of process, and insisted that they,
not Baker, should decide how to spend the money.
That’s fine, but if
they were going to seize control, they own the
failure of that process. ... Impressive it is
not....
Lawmakers might argue
that this is just a delay, that a compromise will
eventually be reached.
In theory, that’s true.
But in practice, the Legislature is now stuck in
informal session, where nothing can pass without a
unanimous vote.
Nothing major happens
in informal session, and anyone who has spent any
time in the State House knows this package isn’t
likely to be an exception....
But as it stands now,
the Legislature is effectively on break. They’ll
pick this matter up in January, I guess. Or maybe
they’ll just hold a few more hearings, and squabble
for a little longer over who’s really in charge on
Beacon Hill — them or the governor.
The
Boston Globe
Friday, November 19, 2021
As billions hang in limbo,
lawmakers take a breather
By Adrian Walker
The Massachusetts High
Technology Council is likely to launch a court
challenge to the ballot language for the so-called
millionaires’ tax unless the ballot question says
the tax would not necessarily increase spending on
schools and transportation, it said in a letter this
week....
The missive from MHTC
raises the prospect of another clash before the
Massachusetts Supreme Judicial Court, which struck
down a previous version of the tax proposal in 2018.
The proposal is now poised to go before voters as a
ballot question in November 2022.
A court battle, should
it come to pass, would be limited to the proposal’s
language, not whether it should be on the ballot at
all. Still, the MHTC’s letter drew strong rebukes
from proponents of the tax on Wednesday.
In the letter, sent to
Attorney General Maura Healey and Secretary of the
Commonwealth William Galvin on Tuesday, the MHTC
took issue with the ballot language that was to be
used to describe the proposed tax in 2018. No such
materials have been made public so far this year.
Back then, a summary of
the proposal informed voters that revenue from the
tax, subject to appropriation by lawmakers, would be
used only for education- and transportation-related
purposes. A description of the meaning of a “yes”
vote used similar language.
The MHTC contended in
the letter that the proposal does not require
lawmakers to use millionaires-tax revenue to
increase spending in those two areas, since they can
reduce spending on education and transportation from
other revenue sources, and replace it with revenue
raised by the millionaires’ tax. Opponents to the
tax have made the argument for years, as a reason
not to pass the proposal....
The letter asks Healey
and Galvin to release the proposal language as soon
as possible, or at the latest by Jan. 12, so that
the MHTC has enough time to challenge the language,
if necessary, under guidelines previously issued by
the SJC....
In the letter, the MHTC
cited polling it conducted finding that when told
lawmakers need not increase spending on education
and transportation because of the millionaires’ tax,
72% of respondents replied that the 2018 ballot
language was misleading.
Boston
Business Journal
Wednesday, November 17, 2021
Business group threatens SJC
challenge to millionaires tax language
One irony of inflation
is that while it’s bad for working Americans, it’s
great for the government. Tax revenues soar as
nominal profits and incomes rise, and for evidence
simply look at the boom in state and local
government coffers. They’ve rarely had it so good,
but don’t expect them to be frugal spenders....
Progressive states with
higher tax rates are especially flush. State and
local tax revenue in New York—which raised taxes on
high earners this spring—is running $13.3 billion
(21.3%) higher for the current fiscal year that
began in April over the same period in 2019. Mind
you, 2019 was a very good year for state coffers.
(See nearby table.)
California continues to
report record monthly tax collections even after
Gov. Gavin Newsom boasted this spring of a $75
billion budget surplus. State tax revenue for the
fiscal year starting in July through October is
running nearly 25% over budget estimates and 33%
more than in 2019.
These rich states have
also received plenty of welfare from Washington.
Congress has given states and local governments $885
billion in direct aid through the various Covid
bills for schools, public transit, Medicaid and
more. Now they’re set to get another large helping
from the infrastructure deal for public transit,
broadband, water systems and electric grids....
Remember when the
states pleaded poverty last year? We told you they
didn’t need the money, and the current data proves
it. States could now be using this windfall to cut
taxes, and some are, but most are spending it on new
commitments that won’t vanish when the revenue boom
does. Democratic states in particular are building
in new structural spending in the form of higher pay
and pensions for public unions. Also popular are
climate-change boondoggles like New York’s “green
energy transmission superhighway.”
The $4 trillion
Democratic entitlement bill will put states on the
hook for new liabilities once the federal largesse
dries up.
The Wall
Street Journal
Friday, November 12, 2021
Review & Outlook
The Inflation Revenue
Dividend
State and local governments have never had so much
dough.
|
|
We were all shocked when
Gov. Charlie Baker abruptly withdrew from his TCI "boondoggle" the
day after we turned in the petitions to stop TCI to all the town
clerks for certification, dropped out two days after Connecticut
Gov. Lamont’s withdrawal the day before we submitted them. All
that remained of the TCI “multi-state compact” (among a dozen
Northeast and mid-Atlantic states) was the city of Washington D.C.
and tiny Rhode Island.
Then the final state
domino fell the following day, on Friday, when Rhode Island Governor
McKee announced his state's withdrawal as well. D.C. Mayor
Muriel Bowser will now have to save the planet and cripple her
city's motorists singlehanded.
In CLT's announcement on
Friday in my commentary I noted:
Whether or not the petition had any influence on their
decisions, we're still looking to go ahead with the ballot
question if we've qualified with enough signatures to move
forward. Just because a politician says something today doesn't
mean he'll say the same thing tomorrow. And there's no telling
what a new governor and administration will do.
In Rhode Island's
announcement of its withdrawal on Friday the state Department of
Environmental Management Acting Director Terrence Gray stated on
behalf of Gov. Mckee:
The Transportation
and Climate Initiative depends upon the involvement of at least
three jurisdictions to go forward as a program. Recent events in
Connecticut and Massachusetts, however, have made clear that at
least for the time being, Rhode Island must explore other
options in clean transportation. . . . I look forward to
remaining in contact with my counterparts in neighboring states
to continue our shared goal of tackling climate change.
When Connecticut Governor
Ned Lamont was asked on Tuesday whether there is a future for TCI,
the Hartford Courant
reported:
Asked whether the
proposal could be revived in 2023, Lamont said, “Yeah, let’s
see where we are.’'
On Thursday "The Best
Legislature Money Can Buy" for all intent ended this year's
legislative activities for the coming seven weeks. In
Massachusetts the Legislature never calls it quits, adjourns,
prorogues sine die like almost all other states
— it remains officially in session from
January through the next January. By remaining in "informal
session" legislators continue to collect their $20,000-plus annual
"travel stipend" even though nobody's moving from home and hasn't
for almost two years, working remotely from there. After
over 600 days closed down and counting, the Massachusetts State House is
the only state capitol besides Hawaii that prevents the public
from entering, and Hawaii allows its citizens access by appointment.
So what's the excuse for
these obscenely highly-paid legislators leaving so much of the
people's critical business uncompleted before racing off to their
latest extended paid vacation? (They just returned to work two
months ago from their taxpayer-paid month-plus summer vacation.)
On Wednesday the State House News Service reported
("Beacon Hill Leaves Voting Reforms Up In
The Air"):
If state representatives
want to avoid allowing mail-in voting and
expanded early voting permission to lapse next
month, they will need to find a way to secure a
bipartisan agreement within the chamber,
according to the House's top elections expert.
And while House and Senate
leaders agree on some core election reform
proposals, there are "a lot of different moving
pieces" that they have not yet ironed out,
Election Laws Committee Co-chair Rep. Dan Ryan
told the News Service.
Ryan said Wednesday that he
did not expect action on temporary or permanent
voting reforms, and the Legislature indeed
adjourned its final formal lawmaking session of
2021 without tackling the issues and with the
House electing not to even open up debate on the
matter....
Failing to act by
Wednesday's end of formal sessions for the year
leaves the near-term fate of the reforms
uncertain.
On Thursday the News Service reported ("Baker
Blames Legislature For ARPA Spending Delays —
Spox: Mass. Trails Other
States In Using Relief Funds"):
Baker proposed spending
American Rescue Plan Act funds in June, but
legislative Democrats put the federal aid in a
lockbox that they control and opted for a long
public hearing process to gather feedback about
the state's needs. They then couldn't agree on a
consensus bill by Wednesday when formal sessions
ended for 2021.
"The Baker-Polito
Administration believes the Legislature's
original decision six months ago to freeze these
funds and subject them to the legislative
process created a massive delay in putting these
taxpayer dollars to work," Baker press secretary
Terry MacCormack said. "Massachusetts was
already behind most of the country in utilizing
these funds before the latest setback, and
further delay will only continue to leave
residents, small businesses and hundreds of
organizations frozen out from the support the
rest of the country is now tapping into to
recover from this brutal pandemic."
Negotiations among six
members of a conference committee are
continuing, but any agreement they might reach
in the next seven weeks will require bipartisan
and unanimous support since any single lawmaker
can stop a bill from advancing in informal
sessions. Formal sessions are scheduled to
resume on Jan. 5, but there's uncertainty also
about whether, under legislative rules, the
appropriations bills will die at the start of
the new annual session or carry over intact....
While conference talks are
conducted in secret, there were some signs of
discord Wednesday night. When Michlewitz
signaled a deal was not within reach, Rodrigues
appeared taken aback and said he lacked a "dance
partner" and that "it takes two to tango." As
the House abruptly adjourned at 6:25 p.m., Sen.
William Brownsberger was telling senators to
settle in for a lot more work that evening. Once
news of the House adjournment reached the
Senate, that chamber ended its session at 6:38
p.m.
Even Liberal Boston Globe
columnist
Adrian Walker was having none of it. In his
Friday column he wrote ("As billions hang in
limbo, lawmakers take a breather"):
If there’s one thing our
state lawmakers have historically been good at,
it’s spending large pots of money.
And getting their rest.
So it’s astonishing that
they have been unable to reach an agreement to
spend more than $5 billion in funds, a federal
gift-in-hand intended to ease the effects of the
pandemic.
But it’s not astonishing at
all that lawmakers adjourned for the year
Thursday, leaving the issue hanging in limbo....
The money in question comes
through the American Recovery Relief Act with
few, if any, strings attached. And that might be
part of the problem: so much flexibility allows
plenty of room for disagreement and delay — and
delay is an art form on Beacon Hill.
Other states have managed
to figure out how to spend the money. Baker’s
claim that Massachusetts lags behind other
states in spending the cash seems to check out.
What does Baker want to do
with the money? His wish list included spending
on housing, job training, environmental and
climate-related programs, and education. Those
priorities were placed on the table months ago.
The Legislature moved
quickly, back then, to ensure that the money
could only be spent with its approval.
Legislative leaders bemoaned a lack of process,
and insisted that they, not Baker, should decide
how to spend the money.
That’s fine, but if they
were going to seize control, they own the
failure of that process. ... Impressive it is
not....
Lawmakers might argue that
this is just a delay, that a compromise will
eventually be reached.
In theory, that’s true. But
in practice, the Legislature is now stuck in
informal session, where nothing can pass without
a unanimous vote.
Nothing major happens in
informal session, and anyone who has spent any
time in the State House knows this package isn’t
likely to be an exception....
But as it stands now, the
Legislature is effectively on break. They’ll
pick this matter up in January, I guess. Or
maybe they’ll just hold a few more hearings, and
squabble for a little longer over who’s really
in charge on Beacon Hill — them or the governor.
With all the focus on TCI
and whether it and other petition drives will have enough signatures
to move forward to the 2022 ballot there's one ballot question
we know will be there: The latest incarnation of a
graduated income tax proposed constitutional amendment, the
so-called "Fair Share Amendment" or "Millionaires Tax." The
Mass. High Tech Council took the first attempt before the state
Supreme Judicial Court and the court threw it out as
unconstitutional (see our CLT Update for June 18, 2018: "SJC
kills Grad Tax — for the sixth time!").
The High Tech Council is threatening to take this reincarnation of
the same proposal to the SJC again and good for them.
The Boston Business Journal reported on Wednesday ("Business
group threatens SJC challenge to millionaires tax language"):
The Massachusetts High
Technology Council is likely to launch a court
challenge to the ballot language for the
so-called millionaires’ tax unless the ballot
question says the tax would not necessarily
increase spending on schools and transportation,
it said in a letter this week....
The missive from MHTC
raises the prospect of another clash before the
Massachusetts Supreme Judicial Court, which
struck down a previous version of the tax
proposal in 2018. The proposal is now poised to
go before voters as a ballot question in
November 2022.
A court battle, should it
come to pass, would be limited to the proposal’s
language, not whether it should be on the ballot
at all....
In the letter, sent to
Attorney General Maura Healey and Secretary of
the Commonwealth William Galvin on Tuesday, the
MHTC took issue with the ballot language that
was to be used to describe the proposed tax in
2018. No such materials have been made public so
far this year.
Back then, a summary of the
proposal informed voters that revenue from the
tax, subject to appropriation by lawmakers,
would be used only for education- and
transportation-related purposes. A description
of the meaning of a “yes” vote used similar
language.
The MHTC contended in the
letter that the proposal does not require
lawmakers to use millionaires-tax revenue to
increase spending in those two areas, since they
can reduce spending on education and
transportation from other revenue sources, and
replace it with revenue raised by the
millionaires’ tax. Opponents to the tax have
made the argument for years, as a reason not to
pass the proposal....
The letter asks Healey and
Galvin to release the proposal language as soon
as possible, or at the latest by Jan. 12, so
that the MHTC has enough time to challenge the
language, if necessary, under guidelines
previously issued by the SJC.
I've been perplexed
throughout the pandemic how the state has managed to steadily rake
in record-breaking tax revenue while businesses and employees have
been locked down and locked out — a surplus of over $5
Billion last year alone and heading for more of the same.
Baffled is probably a better word. Finally someone has
explained it.
In its Review & Outlook editorial on Friday the Wall
Street Journal noted ("The Inflation
Revenue Dividend — State and local
governments have never had so much dough"):
One irony of inflation is
that while it’s bad for working Americans, it’s
great for the government. Tax revenues soar as
nominal profits and incomes rise, and for
evidence simply look at the boom in state and
local government coffers. They’ve rarely had it
so good, but don’t expect them to be frugal
spenders....
Progressive states with
higher tax rates are especially flush. State and
local tax revenue in New York—which raised taxes
on high earners this spring—is running $13.3
billion (21.3%) higher for the current fiscal
year that began in April over the same period in
2019. Mind you, 2019 was a very good year for
state coffers. (See nearby table.)
California continues to
report record monthly tax collections even after
Gov. Gavin Newsom boasted this spring of a $75
billion budget surplus. State tax revenue for
the fiscal year starting in July through October
is running nearly 25% over budget estimates and
33% more than in 2019.
These rich states have also
received plenty of welfare from Washington.
Congress has given states and local governments
$885 billion in direct aid through the various
Covid bills for schools, public transit,
Medicaid and more. Now they’re set to get
another large helping from the infrastructure
deal for public transit, broadband, water
systems and electric grids....
Remember when the states
pleaded poverty last year? We told you they
didn’t need the money, and the current data
proves it. States could now be using this
windfall to cut taxes, and some are, but most
are spending it on new commitments that won’t
vanish when the revenue boom does. Democratic
states in particular are building in new
structural spending in the form of higher pay
and pensions for public unions. Also popular are
climate-change boondoggles like New York’s
“green energy transmission superhighway.”
The $4 trillion Democratic
entitlement bill will put states on the hook for
new liabilities once the federal largesse dries
up.
"States could now
be using this windfall to cut taxes, and some are,
but most are spending it on new commitments that
won’t vanish when the revenue boom does. Democratic
states in particular are building in new structural
spending in the form of higher pay and pensions for
public unions. Also popular are climate-change
boondoggles like New York’s “green energy
transmission superhighway.
"The $4 trillion Democratic
entitlement bill will put states on the hook for new liabilities
once the federal largesse dries up."
This perfectly describes The People's
Republic of Taxachusetts, explains the state revenue bonanza
— and warns of bad things to come.
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Chip Ford
Executive Director |
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CommonWealth Magazine
Thursday, November 18, 2021
Baker pulls the plug on transportation climate initiative
Abandons cap-and-invest plan after Lamont’s decision to back
away in CT
By Bruce Mohl
Gov. Charlie Baker threw in the towel on his transportation
climate initiative on Thursday just days after Gov. Ned
Lamont of Connecticut did the same thing in his state.
“The Baker-Polito Administration always maintained the
Commonwealth would only move forward with TCI if multiple
states committed, and, as that does not exist, the
transportation climate initiative is no longer the best
solution for the Commonwealth’s transportation and
environmental needs,” said Terry MacCormack, the governor’s
press secretary, in a statement.
Lamont indicated he might revisit joining the initiative
after next year’s election, but Baker’s statement indicated
he intends to move on and not look back. It’s a stunning
turnaround for a concept that once attracted the interest of
a dozen northeast and mid-Atlantic states and became a
linchpin of the Baker administration’s plan for reaching net
zero greenhouse gas emissions by 2050.
Katie Theoharides, the governor’s secretary of energy and
environmental affairs, said in December 2020, when
Massachusetts, Connecticut, Rhode Island, and the District
of Columbia announced they were moving forward with the
transportation climate initiative, that Massachusetts needed
the program if it was going to have a chance of reaching its
goal of net zero emissions. “We can’t get there without a
program like this,” she said.
She declined comment when asked about the initiative on
Thursday after a ceremonial groundbreaking on Cape Cod for
the Vineyard Wind offshore wind farm. She said the
administration would be issuing a statement on the
initiative later in the day.
Massachusetts was the only state supporting the
transportation climate initiative until Thursday. The
governors in Rhode Island and Connecticut couldn’t get it
through their legislatures; Baker had the power to sign on
because of earlier legislation giving him the authority to
act on his own.
The Transportation Climate Initiative was intended to be a
cap-and-invest program for automobile fuels. Fuel
wholesalers would purchase at auction allowances permitting
them to sell gasoline in Massachusetts and other
participating states. The number of allowances would be
reduced each year, ratcheting up the price of gasoline and
incentivizing drivers to switch to electric vehicles.
Opponents as well as some supporters called the
transportation climate initiative a disguised gas tax, but
backers said the approach was a nuanced, two-step approach
to dealing with climate change by making gasoline more
expensive while generating the revenues needed to build the
infrastructure needed to transition away from vehicles
running on gasoline.
In its statement Thursday, the Baker administration said the
federal infrastructure package, the American Rescue Plan Act
funding, and state tax revenue surpluses will now become the
financing mechanisms for building the infrastructure
necessary to reduce transportation emissions and meet the
state’s climate goals.
Paul Craney, a spokesman for the Massachusetts Fiscal
Alliance, which opposed the transportation climate
initiative, said he was glad Massachusetts finally abandoned
what he called a “regressive gas tax scheme,” which he said
would have hurt the middle class and the working poor the
most. He thanked his allies in the fight — Citizens for
Limited Taxation, the Beacon Hill Institute, the
National Federation of Independent Business, Massachusetts
Republican Party chairman Jim Lyons, and Boston Herald
columnist Howie Carr.
GoLocalProv
Friday, November 19, 2021
McKee Drops Support for Transportation and Climate
Initiative
By GoLocalProv News Team
Providence, RI -- Just one day after Governor Dan McKee's
office confirmed that the governor continues to support the
Transportation and Climate Initiative (TCI), his
administration reversed course and announced that it was
dropping its effort to adopt the initiative.
Department of Environmental Management Acting Director
Terrence Gray issued the following statement on behalf of
Mckee regarding the State of Rhode Island’s participation in
the TCI late on Friday.
“The Transportation and Climate Initiative depends upon the
involvement of at least three jurisdictions to go forward as
a program. Recent events in Connecticut and Massachusetts,
however, have made clear that at least for the time being,
Rhode Island must explore other options in clean
transportation. We must be clear: Rhode Island is on the
clock to combat climate change, and we must move forward
with a bold initiative to meet net-zero. The Act on Climate
law sets mandates, not goals, for the state to reduce
greenhouse gases economy-wide. And we will have serious
difficulty meeting the new law’s reduction mandates without
a strong commitment and plan to reduce emissions from the
transportation sector, which contributes nearly 40 percent
of carbon emissions in our area. The Executive Climate
Change Coordinating Council, which I chair, will be
analyzing the federal infrastructure bill and other possible
funding streams to ensure that Rhode Island makes progress
at replacing dirty, fuel-burning engines with clean, green,
zero-emissions transportation options. I look forward to
remaining in contact with my counterparts in neighboring
states to continue our shared goal of tackling climate
change. It demands action now.”
Legislators Call for Continued Support
In an opinion piece submitted to GoLocal earlier on Friday,
Sen. Alana DiMario and Rep. Terri Cortvriend wrote, "In the
decade-plus since the Transportation Climate Initiative
(TCI) was first developed under the [Donald] Carcieri
administration, there has been growing, bipartisan consensus
that we must end our dependence on fossil fuels for the
health of the people in our communities and our planet. No
one disputes that reality."
"And in that decade of work and planning and a worsening
climate crisis, no one has come up with a better solution to
reduce our greenhouse gas emissions from the transportation
sector. TCI would cut greenhouse gas pollution from motor
vehicles in the region by an estimated 26% and generate a
total of more than $3 billion dollars over 10 years for the
participating jurisdictions to invest in equitable,
less-polluting transportation options and to help energize
economic recovery," the legislators wrote.
They concluded, "As elected officials it is our duty to keep
the health and safety of our communities front and center in
the decisions that we make. Leading the region in
implementing the concepts of TCI does exactly that. For too
many decades we have deferred acting on climate change, and
there is no more time to waste. If we aren't here to fight
for the bold and necessary changes to address the most
pressing issues facing us and to reduce the burden on future
generations, then why are we here?"
The Boston
Herald
Saturday, November 20, 2021
Rhode Island, the final state, pulls out of TCI
By Amy Sokolow
After both Massachusetts and Connecticut’s governors pulled
out of the Transportation and Climate Initiative, citing
waning support and higher gas prices, Rhode Island has also
has left, putting the nail in the coffin on the multi-state
partnership.
“The Transportation and Climate Initiative depends upon the
involvement of at least three jurisdictions to go forward as
a program,” said Ocean State Department of Environmental
Management Acting Director Terrence Gray in a statement.
“Recent events in Connecticut and Massachusetts, however,
have made clear that at least for the time being, Rhode
Island must explore other options in clean transportation.”
Although the partnership was originally supposed to include
a dozen states and D.C., by the time a memorandum of
understanding was signed in 2020, only Massachusetts, Rhode
Island, Connecticut and D.C. were on board. As the Herald
previously reported, Connecticut Governor Ned Lamont pulled
out of the partnership designed to cut fuel emissions last
week, citing rising gas prices as his reason for the move.
“Look, I couldn’t get that through when gas prices were at a
historic low, so I think the legislature has been pretty
clear that it’s going to be a pretty tough rock to push when
gas prices are so high, so no,’’ Lamont told reporters
Tuesday. Under TCI, gas prices were projected to rise up to
9 cents per gallon more.
Shortly thereafter, Massachusetts Gov. Charlie Baker, once a
major proponent of TCI as a way to cut emissions by a
quarter over 10 years, also announced that the Bay State
would not be part of it.
“The Baker-Polito Administration always maintained the
Commonwealth would only move forward with TCI if multiple
states committed, and, as that does not exist, the
transportation climate initiative is no longer the best
solution for the Commonwealth’s transportation and
environmental needs,” Baker press secretary Terry MacCormack
said in a statement Thursday.
As Baker’s office said it would do in the Bay State, Rhode
Island plans to combat climate change using other financing
means. In Rhode Island’s case, the Executive Climate Change
Coordinating Council will analyze the federal infrastructure
bill that recently passed as well as “other possible funding
streams” to “(replace) dirty, fuel-burning engines with
clean, green, zero-emissions transportation options,” Gray
said.
Gray also called on the state’s transportation sector to
reduce emissions on their own, because the industry
contributes nearly 40% of carbon emissions in the state.
The Baker administration also hopes to use federal
infrastructure funds, as well as a statewide tax revenue
surplus, to attack the climate-change issue.
Paul Diego Craney of the conservative watchdog organization
Mass Fiscal Alliance, one of the most vocal opponents of
TCI, praised the move.
“We are pleased to see the TCI scheme completely
surrendered,” he said in a statement. “We would not have
settled for anything but an unconditional surrender of the
scheme. Rhode Island motorists don’t deserve to be on an
island on its own, so their state’s motorists can be
thankful this Thanksgiving holiday season.”
The Boston
Herald
Friday, November 19, 2021
Charlie Baker jettisons failed TCI, but will voters
remember?
By Joe Battenfeld
Gov. Charlie Baker’s surprise move to dump the unpopular
climate initiative compact could be the strongest signal yet
that he has his eyes on a third term.
The Transportation and Climate Initiative, or TCI, would
have raised already skyrocketing gas prices and given fuel
to Baker’s potential Republican opponent, former Rep. Geoff
Diehl.
Now that the Republican governor doesn’t have to contend
with the impacts of TCI, he can avoid getting blamed for gas
tax hikes and shortages, though he won’t rid his
administration of the stain of the failed initiative.
“It’s a failed program for him now,” said Paul Diego Craney
of the MassFiscal Alliance, the major opponent of TCI.
“Republican primary voters are not going to forget that at
all.”
TCI could still be a potent issue for Diehl even though it’s
on the scrap heap. Diehl will undoubtedly remind voters that
Baker was the “champion” of TCI — which sought to cut motor
vehicle emissions by 26% over the next 10 years — even as
other states like Connecticut were dropping out of the
compact, Craney said.
“It doesn’t go away just by dropping out,” Craney said. “I
suspect (Diehl) will use it all the way to the end of the
primary.”
Diehl also can gloat his way through the campaign reminding
voters that he was always opposed to TCI and was protecting
motorists from massive gas tax hikes. And Democrats may have
an opening now to attack Baker for failing to do enough to
combat climate change.
Baker has still not said whether he’ll seek a third term,
getting testy about repeated questions on the subject.
But his window for making a decision is closing fast.
Dumping TCI could be the final chess move he’ll make before
announcing he’s all in for another term.
This isn’t the only signal Baker is interested in running
again next year. The Republican governor has re-energized
his fundraising in the last few months, though he still lags
far behind his lieutenant governor, Karyn Polito.
And a new poll shows that Baker would be tough to beat in a
general election campaign. In the UMass Amherst poll of
nearly 700 voters, Baker holds wide leads over his declared
Democratic opponents, Ben Downing, state Sen. Sonia
Chang-Diaz and Danielle Allen, and a small lead over the one
big unannounced candidate, Attorney General Maura Healey.
But there’s some troubling news in the poll. Nearly half of
all voters are still unsure about who they will support —
indicating Baker hasn’t yet convinced them he should win
another term.
And the poll did not measure Baker’s strength against Diehl
among just Republican primary voters.
If early polls prove right, Baker in fact may face a much
tougher fight in his own party’s primary than in the general
election.
The Wall Street
Journal
Friday, November 19, 2021
Opinion | Review & Outlook
The Northeast Climate Pact Implodes
Connecticut Governor Lamont withdraws amid soaring fuel
prices.
Progressives say the only way to achieve their climate goals
is to raise the price of fossil fuels. Their problem is that
consumers don’t want to pay more for energy, and as the
latest proof behold Connecticut Gov. Ned Lamont’s retreat
this week from a Northeast state climate pact.
Last December the Governors of Rhode Island, Connecticut and
Massachusetts and the mayor of Washington, D.C., joined a
cap-and-trade scheme to reduce carbon emissions from fuel.
Wholesalers and distributors would have to buy emissions
credits at auction. The proceeds would be sent to the states
to spend on electric vehicles, public transportation and
“climate justice.”
Over time the cap on emissions would decline, and fuel
distributors would have to spend more to buy credits. This
would increase fuel prices. The Lamont administration
estimated the scheme would add about five to nine cents a
gallon to gasoline prices in the first year. Prices would
rise in the other states too.
Which is why all three Governors failed to pass the scheme
in their overwhelmingly Democratic legislatures this year.
“There are some people who are living on such a tight margin
that anything that adds to their regular expenses is going
to put a squeeze on them and put them in a tight hardship,”
Connecticut Senate President Pro Tem Martin Looney said.
Mr. Lamont finally gave up trying to pass the scheme this
week. “Look, I couldn’t get it through when gas prices were
at historic lows. So I think the legislature has been pretty
clear it is a tough rock to push when gas prices are so
high,” he said. Massachusetts GOP Gov. Charlie Baker then
threw in the towel too, causing the climate pact to
effectively combust.
Mr. Lamont is running for re-election next year, and perhaps
the close race this month in New Jersey gave him pause. Even
liberals don’t want to pay more for energy to make an
insignificant reduction in global emissions. Washington
State voters have twice shot down a carbon tax. This summer
the Swiss rejected higher taxes on driving and flying in a
referendum. Maybe the death of fossil fuels that we’ve been
told is inevitable isn’t so inevitable.
State House News
Service
Wednesday, November 17, 2021
Beacon Hill Leaves Voting Reforms Up In The Air
No Clear Timetable To Address Mail-In, Early Voting
By Chris Lisinski and Sam Doran
If state representatives want to avoid allowing mail-in
voting and expanded early voting permission to lapse next
month, they will need to find a way to secure a bipartisan
agreement within the chamber, according to the House's top
elections expert.
And while House and Senate leaders agree on some core
election reform proposals, there are "a lot of different
moving pieces" that they have not yet ironed out, Election
Laws Committee Co-chair Rep. Dan Ryan told the News Service.
Ryan said Wednesday that he did not expect action on
temporary or permanent voting reforms, and the Legislature
indeed adjourned its final formal lawmaking session of 2021
without tackling the issues and with the House electing not
to even open up debate on the matter.
The existing policies that have been in place for most of
the pandemic are set to expire Dec. 15. Although the COVID-era
voting reforms have proved popular and earned the support of
Republican Gov. Charlie Baker and Democrat Secretary of
State William Galvin, the Legislature has been unable to
find agreement and pass a bill making them permanent.
The Senate in October approved legislation known as the
VOTES Act along party lines (S 2545) that would enshrine
mail-in voting and expanded early voting as well as
implement same-day voter registration.
In June, the House added an amendment to a supplemental
budget that would have permanently authorized mail-in voting
and early voting before biennial elections, but that measure
was dropped in the ultimate version of the spending bill.
"There's some details on how much, how long should we do
early voting for and things like that, but we're in
agreement, we want to make it permanent. But I think with
the bigger VOTES Act going on, there's a lot of different
moving pieces that we're still not in agreement on, the two
chambers," Ryan said. "We can always just extend the voting
protections that we have now into next year if we don't get
something done. On those two big pieces, we're in agreement.
It's just getting kind of caught up in the bigger bill."
Failing to act by Wednesday's end of formal sessions for the
year leaves the near-term fate of the reforms uncertain.
Supporters of the reforms could allow the policies to lapse
and attempt to revive them when formal sessions resume in
January, or try to enact either an extension or a permanent
authorization during informal sessions, when a single
member's objection could stall progress.
"We could try to do that, but of course, if one person
decides they don't want it to happen, then we have to go
into January and think of Plan B," Ryan said of tackling
election reforms in an informal session during the holiday
quiet period.
House Republicans voted against the mail-in voting budget
amendment in June, at the time criticizing the process.
Senate Republicans have also objected to some voting
reforms.
House Minority Leader Brad Jones signaled Wednesday that his
caucus may be open to another temporary extension of the
COVID-19 voting policies.
"I think some people would be amenable to the idea of an
extension under the same terms we've done it the last few,"
Jones said in an interview. "I'll talk to the members and
see what the terms are and how long it's for, what exactly
the provisions are. I think there's some concerns about what
it entails and how long it's for."
Jabbing at Democrats who wield supermajority margins in both
chambers, Jones added, "But again, they've got the numbers.
It's something that would have been fairly easy to get out
here now."
Representatives also rejected a same-day voter registration
proposal last year, and it's unclear if House leaders have
come around to the idea -- which Baker opposes -- since the
Senate's action.
Voters in the First Suffolk and Middlesex District are set
to select a new senator this winter following the mid-term
resignation of former Sen. Joseph Boncore. The primary is
scheduled for Dec. 14, one day before the end of temporary
mail-in and early voting policies, and the general election
is scheduled for Jan. 11.
Jones also said lawmakers still do not know the final date
for the September 2022 state primary election, which could
complicate the process of pulling nomination papers for some
legislators.
Asked about the overall timeline for action on mail-in
voting and expanded early voting reforms, Ryan replied, "To
be honest, I really don't know."
"We're trying to get through tonight," he said. "I've been
meeting with the speaker and his staff on this. We're going
to follow up first thing tomorrow. It's not just those two
pieces. We have a bunch of other home rule petitions. A
bunch of cities and towns want to do election laws stuff.
But a lot of what they want to do for municipal elections is
also reflected in the VOTES Act, so we're trying to take it
all in."
State House News
Service
Thursday, November 18, 2021
Baker Blames Legislature For ARPA Spending Delays
Spox: Mass. Trails Other States In Using Relief Funds
By Michael P. Norton
Gov. Charlie Baker is among those disappointed that Beacon
Hill Democrats couldn't agree on a plan to put nearly $4
billion to work throughout the economy before breaking for a
seven-week stretch of informal sessions, and is blaming a
legislative decision earlier this year for causing delays.
Baker proposed spending American Rescue Plan Act funds in
June, but legislative Democrats put the federal aid in a
lockbox that they control and opted for a long public
hearing process to gather feedback about the state's needs.
They then couldn't agree on a consensus bill by Wednesday
when formal sessions ended for 2021.
"The Baker-Polito Administration believes the Legislature's
original decision six months ago to freeze these funds and
subject them to the legislative process created a massive
delay in putting these taxpayer dollars to work," Baker
press secretary Terry MacCormack said. "Massachusetts was
already behind most of the country in utilizing these funds
before the latest setback, and further delay will only
continue to leave residents, small businesses and hundreds
of organizations frozen out from the support the rest of the
country is now tapping into to recover from this brutal
pandemic."
Negotiations among six members of a conference committee are
continuing, but any agreement they might reach in the next
seven weeks will require bipartisan and unanimous support
since any single lawmaker can stop a bill from advancing in
informal sessions. Formal sessions are scheduled to resume
on Jan. 5, but there's uncertainty also about whether, under
legislative rules, the appropriations bills will die at the
start of the new annual session or carry over intact.
Baker's reaction came more than 12 hours after lawmakers cut
their last formal sessions of 2021 short once it became
clear that Rep. Aaron Michlewitz and Sen. Michael Rodrigues,
who are leading talks on behalf of branches that passed
their bills unanimously, would not be able to reach an
agreement.
While conference talks are conducted in secret, there were
some signs of discord Wednesday night. When Michlewitz
signaled a deal was not within reach, Rodrigues appeared
taken aback and said he lacked a "dance partner" and that
"it takes two to tango." As the House abruptly adjourned at
6:25 p.m., Sen. William Brownsberger was telling senators to
settle in for a lot more work that evening. Once news of the
House adjournment reached the Senate, that chamber ended its
session at 6:38 p.m.
Baker's concerns about a holdup in the use of federal
recovery funds are not new, and date back to June when the
House rejected his plan to immediately spend $2.8 billion in
federal COVID-19 relief money. The Legislature instead voted
to sweep $4.89 billion into a COVID-19 relief fund. At that
time, the governor's office worried about the potential for
"a process that would take years while the communities that
were hit hardest by the pandemic, including communities of
color, wait."
While there's widespread agreement on the need to put ARPA
funds to work as soon as possible, generally speaking, the
funds must be committed by the end of 2024 and spent by the
end of 2026.
The amounts differ and both bills feature scores of project
earmarks, but both the House (in October) and Senate (last
week) have passed plans to spend about $3.82 billion from a
combination of ARPA funds and surplus state tax dollars from
fiscal 2021 to stimulate the economy, support workers and
businesses, and invest in infrastructure projects, public
health and other priorities.
The Senate bill proposes to spend $250.9 million on public
health infrastructure, which is $100 million more than the
House. It would also increase investments in water and sewer
infrastructure by $75 million over the $100 million in the
House bill and boost mental health spending by $150 million,
to $400 million.
Meanwhile, the House proposed $40 million for youth summer
and school-year jobs, $75 million for capital projects on
public college and university campuses, and $20 million for
special education. The Senate proposal funds none of those
priorities.
The other members of the conference committee are Reps. Dan
Hunt (D-Dorchester) and Todd Smola (R-Warren), and Sens.
Cindy Friedman (D-Arlington) and Patrick O'Connor
(R-Weymouth).
The Boston
Globe
Friday, November 19, 2021
As billions hang in limbo, lawmakers take a breather
By Adrian Walker, Globe Columnist
If there’s one thing our state lawmakers have historically
been good at, it’s spending large pots of money.
And getting their rest.
So it’s astonishing that they have been unable to reach an
agreement to spend more than $5 billion in funds, a federal
gift-in-hand intended to ease the effects of the pandemic.
But it’s not astonishing at all that lawmakers adjourned for
the year Thursday, leaving the issue hanging in limbo. Both
the House and the Senate had passed spending plans for the
money, but those bills have to be reconciled into a single
document and signed into law.
As legislators headed off into the sunset, Governor Charlie
Baker made no secret of his frustration with them. He’s
absolutely right to believe they’ve shirked their duty.
“The Legislature made a commitment to get it done before
they went home for the holiday season and I can’t tell you
how frustrated I am,” Baker said. “Not just for me but for
all the mayors and small businesses and folks who are
looking for an opportunity to do something other than what
they were doing before, and getting the skills that would be
required to do that.”
The money in question comes through the American Recovery
Relief Act with few, if any, strings attached. And that
might be part of the problem: so much flexibility allows
plenty of room for disagreement and delay — and delay is an
art form on Beacon Hill.
Other states have managed to figure out how to spend the
money. Baker’s claim that Massachusetts lags behind other
states in spending the cash seems to check out.
What does Baker want to do with the money? His wish list
included spending on housing, job training, environmental
and climate-related programs, and education. Those
priorities were placed on the table months ago.
The Legislature moved quickly, back then, to ensure that the
money could only be spent with its approval. Legislative
leaders bemoaned a lack of process, and insisted that they,
not Baker, should decide how to spend the money.
That’s fine, but if they were going to seize control, they
own the failure of that process. Here’s what they have to
show for their muscle flexing: a half-dozen public hearings,
two substantially different bills, and no clear path to
moving forward.
Impressive it is not.
Let’s bear in mind that much is at stake here. The whole
promise of the American Rescue Plan Act is that the pandemic
has done major economic damage to families and workers, harm
that government should try to set right.
That is so obviously true that even red states and blue
states mostly agree on the basic premise.
Obviously, there are plenty of ways to spend a few billion
dollars. But it shouldn’t be hard to find plenty of common
ground.
Instead we’re doing nothing, while people who need help
aren’t getting it. That’s indefensible.
Lawmakers might argue that this is just a delay, that a
compromise will eventually be reached.
In theory, that’s true. But in practice, the Legislature is
now stuck in informal session, where nothing can pass
without a unanimous vote.
Nothing major happens in informal session, and anyone who
has spent any time in the State House knows this package
isn’t likely to be an exception.
When Baker says this legislation is “stuck in neutral”, he’s
telling the truth.
I wonder whether this would have been dealt with more
urgently if the State House were open to the public (as
other state houses are). If the constituencies for the many
urgent needs going unaddressed could have gone into the
building and talked to their so-called representatives,
might that have forced some action?
Maybe.
But as it stands now, the Legislature is effectively on
break. They’ll pick this matter up in January, I guess. Or
maybe they’ll just hold a few more hearings, and squabble
for a little longer over who’s really in charge on Beacon
Hill — them or the governor.
The thing is, that money could address a lot of issues for a
lot of people.
And none of those problems take a holiday break.
— Adrian Walker is a Globe
columnist.
Boston Business
Journal
Wednesday, November 17, 2021
Business group threatens SJC challenge to millionaires tax
language
By Greg Ryan
The Massachusetts High Technology Council is likely to
launch a court challenge to the ballot language for the
so-called millionaires’ tax unless the ballot question says
the tax would not necessarily increase spending on schools
and transportation, it said in
a letter this week.
The missive from MHTC raises the prospect of another clash
before the Massachusetts Supreme Judicial Court, which
struck down a previous version of the tax proposal in 2018.
The proposal is now poised to go before voters as a ballot
question in November 2022.
A court battle, should it come to pass, would be limited to
the proposal’s language, not whether it should be on the
ballot at all. Still, the MHTC’s letter drew strong rebukes
from proponents of the tax on Wednesday.
In the letter, sent to Attorney General Maura Healey and
Secretary of the Commonwealth William Galvin on Tuesday, the
MHTC took issue with the ballot language that was to be used
to describe the proposed tax in 2018. No such materials have
been made public so far this year.
Back then, a summary of the proposal informed voters that
revenue from the tax, subject to appropriation by lawmakers,
would be used only for education- and transportation-related
purposes. A description of the meaning of a “yes” vote used
similar language.
The MHTC contended in the letter that the proposal does not
require lawmakers to use millionaires-tax revenue to
increase spending in those two areas, since they can reduce
spending on education and transportation from other revenue
sources, and replace it with revenue raised by the
millionaires’ tax. Opponents to the tax have made the
argument for years, as a reason not to pass the proposal.
The business group is asking Healey and Galvin to make sure
that in 2022, the ballot language makes that point clear to
voters. If not, “our clients are likely to challenge the
summary and ‘yes’ statement before the Supreme Judicial
Court,” wrote Goodwin partner Kevin Martin on behalf of the
MHTC.
The letter asks Healey and Galvin to release the proposal
language as soon as possible, or at the latest by Jan. 12,
so that the MHTC has enough time to challenge the language,
if necessary, under guidelines previously issued by the SJC.
Debra O’Malley, a spokesperson for Galvin, told the Business
Journal that the attorney’s general office writes the
summaries of ballot questions. The “yes” and “no” statements
are required to be written jointly by the offices of the
attorney general and the secretary of the commonwealth by
May, she said. Those statements can be challenged in court
within 20 days of their publication, according to O’Malley.
A representative from Healey’s office declined comment,
other than to confirm the office received the letter.
In statements, both state Sen. Jason Lewis, one of the
sponsors of the proposal, and the Raise Up Massachusetts
coalition, one of its biggest supporters, took issue with
the MHTC’s characterization of the proposal.
“Unfortunately the Mass High Tech Council and other
big-business groups continue to pursue every tactic that
their lawyers can dream up in order to protect
multi-millionaires in the commonwealth from paying their
fair share of state income taxes,” Lewis said. “The
‘millionaires tax’ proposal is clear that all the new
revenue raised must be used for investments in public
education and transportation, both areas that lawmakers and
the public overwhelmingly agree need additional resources.”
Proponents and opponents of the tax are ramping up public
campaigns over the proposal. The Pioneer Institute released
a report Wednesday saying that pass-through businesses,
which are potentially subject to the tax, make up about 70%
of the state’s for-profit business entities. The
Massachusetts Budget and Policy Center, meanwhile, issued
its own report holding that less than 3% of those receiving
pass-through income from those entities would be subject to
the tax.
In the letter, the MHTC cited
polling it conducted finding that when told lawmakers
need not increase spending on education and transportation
because of the millionaires’ tax, 72% of respondents replied
that the 2018 ballot language was misleading.
The Wall Street
Journal
Friday, November 12, 2021
Review & Outlook
The Inflation Revenue Dividend
State and local governments have never had so much dough.
One irony of inflation is that while it’s bad for working
Americans, it’s great for the government. Tax revenues soar
as nominal profits and incomes rise, and for evidence simply
look at the boom in state and local government coffers.
They’ve rarely had it so good, but don’t expect them to be
frugal spenders.
Overall state and local government receipts including
federal aid were 23% above pre-pandemic levels in the third
quarter through September thanks to Congress’s gusher of
spending and the strong economic recovery, according to the
Committee for a Responsible Federal Budget.
Property, corporate, sales and individual tax revenue from
the third quarter of 2020 through the second quarter of this
year is running 18.3% above the same period two years ago,
according to Census Bureau data. How many Americans have
seen their incomes rise that much over the last two years?
Individual tax revenue has swelled thanks to frothy equity
markets as the affluent realize capital gains and inflation
pushes them into higher tax brackets. Sales tax revenue has
also surged thanks to federal transfer payments that have
boosted spending as well as corporate profits—which in turn
have inflated corporate tax revenue. Buoyant housing prices
are increasing property tax revenue that finances schools.
Progressive states with higher tax rates are especially
flush. State and local tax revenue in New York—which raised
taxes on high earners this spring—is running $13.3 billion
(21.3%) higher for the current fiscal year that began in
April over the same period in 2019. Mind you, 2019 was a
very good year for state coffers. (See nearby table.)
California continues to report record monthly tax
collections even after Gov. Gavin Newsom boasted this spring
of a $75 billion budget surplus. State tax revenue for the
fiscal year starting in July through October is running
nearly 25% over budget estimates and 33% more than in 2019.
These rich states have also received plenty of welfare from
Washington. Congress has given states and local governments
$885 billion in direct aid through the various Covid bills
for schools, public transit, Medicaid and more. Now they’re
set to get another large helping from the infrastructure
deal for public transit, broadband, water systems and
electric grids.
If the Democrats’ $4 trillion spending bill passes, they’ll
get even more. By our count, about $700 billion in the
Democrats’ new spending bill would go to the states for
programs such as child care, universal pre-K, home
healthcare and housing. Senate Majority Leader Chuck Schumer
demanded $65 billion for public housing—63% more than
President Biden proposed this spring—so there would be
enough money to bail out the wildly mismanaged New York City
Housing Authority.
Remember when the states pleaded poverty last year? We told
you they didn’t need the money, and the current data proves
it. States could now be using this windfall to cut taxes,
and some are, but most are spending it on new commitments
that won’t vanish when the revenue boom does. Democratic
states in particular are building in new structural spending
in the form of higher pay and pensions for public unions.
Also popular are climate-change boondoggles like New York’s
“green energy transmission superhighway.”
The $4 trillion Democratic entitlement bill will put states
on the hook for new liabilities once the federal largesse
dries up. In 2025 the feds will pay 95.4% of pre-K costs,
but only 63.6% in 2027. Republican governors would be wise
to opt out of the programs as many did with ObamaCare’s
Medicaid expansion.
But taxpayers in conservative states like West Virginia and
Arizona will still end up subsidizing expanded welfare
states in the likes of California and New York. Better to
call the whole thing off.
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Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ (781) 639-9709
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