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Marblehead, Massachusetts 01945
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“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
48 years as “The Voice of Massachusetts Taxpayers”
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their Institutional Memory — |
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CLT UPDATE
Sunday, January 9, 2022
Record-Shattering
Revenue Haul Still Not Enough
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to CLT's Commentary on the News
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Most Relevant News
Excerpts
(Full news reports follow Commentary)
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State tax revenues have
defied expectations throughout the pandemic and
federal aid has helped to keep Massachusetts
fiscally healthy over the last two years. But
uncertainty about the sustainability of recent
positive economic trends and unknowns surrounding
the latest mutated form of the coronavirus made
trying to predict tax collections for the next 18
months a daunting task Tuesday.
House Ways and Means
Chairman Aaron Michlewitz, Senate Ways and Means
Chairman Michael Rodrigues and Administration and
Finance Secretary Michael Heffernan called
economists and budget experts to testify on what
they expect to see in fiscal year 2023 from state
tax collections, the first step in building a
spending plan for the budget year that begins July
1, 2022....
Despite all pointing to
a number of factors that could undermine their
estimates -- like yet another COVID-19 surge,
ongoing labor shortages and supply chain glitches,
and persistently high inflation -- the experts
assembled Tuesday largely agreed that Massachusetts
can expect to collect at least about $36.48 billion
and possibly as much as nearly $40.8 billion in tax
revenue next budget cycle, which would be between 6
percent and 18.6 percent more than the Baker
administration's official expectation for the
current budget year....
Five months in, fiscal
year 2022 tax collections are more than $900 million
ahead of consensus revenue expectations to this
point in the year and are trending more than $2
billion ahead of actual fiscal 2021 collections
through the same period of time.
State
House News Service
Tuesday, December 21, 2021
Analysts See State Tax Revenue
Growth Rolling Along
The grand total of
state revenues collected by the end of fiscal year
2021 exceeded that year's budget estimates by more
than $13 billion, including a surplus of more than
$5.86 billion in tax revenue, according to a new
report from the state comptroller.
Fiscal year 2021
revenues from all sources totaled $56,867,366,700 as
of June 30, 2021, Comptroller William McNamara's
office said in an accounting report typically
required by the Legislature in each year's budget.
That was 30 percent more than the $43,641,100,000
revenue grand total estimated in the fiscal year
2021 budget....
Income tax revenue, the
single largest bucket of state tax revenue, came in
at more than $19.61 billion -- outpacing the
budget's underlying estimate of $15.93 billion by
nearly 25 percent.
State
House News Service
Monday, January 3, 2022
Comptroller: FY '21 Revenues
Smashed Estimates By $13 Billion
December tax
collections of $4.24 billion shattered last year's
mark for the final month of the year and exceed
estimates by more than 40 percent, but the windfall
is likely temporary with state revenue officials
attributing much of gains to a change in state law
that allows certain businesses to avoid federal
limits on state and local tax deductions.
The Department of
Revenue reported Wednesday that the state in
December 2021 collected $1.4 billion more than in
December 2020 and $1.23 billion more than estimates
for the month. But DOR also said much of that money
will be returned through refunds.
Still, even after
adjusting for the business tax changes, the
department said December tax collections exceeded
last year's haul by $520 million, or 18.3 percent,
and beat estimates by $635 million.
"December 2021 revenue
collections increased in all major tax types in
comparison to December 2020 collections and the
December 2021 monthly benchmark, including
withholding, non-withholding, sales and use tax,
corporate and business tax, and 'all other' tax,"
Revenue Commissioner Geoffrey Snyder said. "The
increase in withholding is likely related to
improvements in labor market conditions."
State
House News Service
Wednesday, January 5, 2022
Change in Law Leads to Massive
December Tax Haul
The last week of 2021
was the best one on record for Massachusetts Lottery
sales as weekly sales records for scratch tickets
and Keno combined with a rising Powerball jackpot to
contribute to more than $145.3 million in sales....
The Lottery produced a
record $1.112 billion in profit in fiscal 2021 for
the Legislature to use as local aid to cities and
towns and through five months of fiscal 2022 is
running roughly $38.5 million ahead of the fiscal
2021 profit pace.
[State Treasurer
Deborah] Goldberg told lawmakers and Baker
administration officials last month that she expects
the Lottery will generate about $995 million in
revenue for the state this fiscal year and roughly
$1 billion in fiscal year 2023.
State
House News Service
Wednesday, January 5, 2022
Bettors Dump Record Amounts Into
Lottery
Democratic lawmakers
are pitching plans to ratchet up taxes on
corporations to support the state’s recovery from
the economic impacts of the pandemic.
Several proposals heard
by the Legislature’s Revenue Committee Wednesday
would increase the state’s corporate tax and set
other new levies to squeeze more money out of
corporations they say have reaped profits during the
pandemic.
One proposal filed by
Rep. Mary Keefe, D-Worcester, would raise the
current corporate tax rate of 8% to the pre-2010
rate of 9.5%, which backers say would generate $375
million to $500 million annually....
Another proposal, filed
by Rep. Mike Connolly, D-Cambridge, would establish
a tiered alternative minimum tax charging
corporations from $456 to $150,000 a year depending
on sales. Businesses that report less than $1
million in sales a year would only pay $456, which
is the current flat rate for all businesses.
Connolly told the
committee that the changes would bring more
“fairness” into the state’s corporate tax
structure....
Last year, a coalition
of labor unions, community groups and faith groups
called on Beacon Hill to increase taxes on
corporations and wealthy shareholders to drum up
money to offset pandemic-related budget cuts that
were being predicted at the time.
Increasing the tax on
corporate profits from 8% to 9.5%, advocates say,
could generate another $450 million to $525 million
a year for the state’s coffers.
The group, Raise Up
Massachusetts, is also behind a “millionaires tax”
referendum cleared for the 2022 ballot that will ask
voters to amend the state constitution to set a 4%
surtax on the portion of an individual’s annual
income above $1 million....
Business leaders say
raising corporate taxes would be a mistake for the
state as it tries to recover from the economic
impacts of the coronavirus.
“The idea of piling on
new taxes at a time when businesses are trying
desperately to recover would be folly,” said Chris
Carlozzi, state director of the Massachusetts
chapter of the National Federation of Independent
Businesses. “For lawmakers to say that the state
needs more tax revenue from businesses at a time
when billions of dollars in pandemic relief has come
into the state is disingenuous.”
The Salem
News
Thursday, December 23, 2021
Lawmakers want to
increase corporate taxes
While the federal
government has pumped billions of one-time dollars
into state economies, some legislative Democrats
believe the state still should be looking to wealthy
corporations for additional revenue to fund
education, transportation and other priorities when
those funds inevitably dry up.
The Joint Committee on
Revenue held a hearing Wednesday on dozens of bills
related to corporate tax structures, including
proposals to return the state's corporate tax rate
to pre-2010 levels and to increase the minimum tax
companies without other liabilities must pay.
State
House News Service
Wednesday, December 21, 2021
Dems Push For Higher Taxes On
Businesses
When is a tax hike not
a tax hike?
When Massachusetts
Democrats maneuver definitions with the skill of a
three-card monte dealer....
According to the State
House News Service, some legislative Democrats
believe the state still should set its sights on
wealthy corporations for additional revenue to fund
education, transportation and other priorities.
Corporations are the
go-to villain for Democrats, aghast at their
job-creating, worker-employing, economic growth
boosting gall.
It’s time for them to
pay for all that success....
Rep. Mary Keefe, a
Worcester Democrat, proposed increasing the
corporate tax rate from 8% to 9.5%, the same level
it sat at more than a decade ago. She said there are
only eight other states where businesses pay a
smaller share of state and local taxes than they do
in Massachusetts....
“We need to generate
more progressive revenue,” Keefe said.
Corporate tax reform,
she said, would also improve equity in the tax code
because she said business taxes are paid
disproportionately by white, high-income households
who are more likely to own stock.
“I don’t like to use
the word raising taxes,” she said. “This is about
restoring the tax to where it was before 2010.”
So making a tax higher
isn’t raising it, it’s just reverting the tax to
where it was 21 years ago. When it was higher.
Sorry, but up is up....
The problem with
corporate tax hikes is that businesses go where the
tax environment is friendly. And there are many
states who openly court big businesses to boost
their local economy.
Businesses don’t have
to make it in Massachusetts. Nor do they have to
spend it here.
We do need to consider
a future when the federal gravy train pulls out of
the station, but eyeing Massachusetts’ corporations
as giant ATMs who must stand in for D.C.’s coffers
is the best way to send these companies packing.
A Boston
Herald editorial
Friday, December 24, 2021
Raise taxes, say
goodbye to businesses
A tax deduction for
charitable donations approved by voters more than
two decades ago will be delayed again after
lawmakers failed to authorize the changes before
recessing for a seven-week winter break.
Under the law, people
would be allowed to claim charitable contributions
against their Part B adjusted gross income on their
state taxes. The deduction could not be used for
donations of household goods or clothing.
Voters approved the
deduction in 2000 as part of a referendum rolling
back the state’s personal income tax rate to 5%. The
referendum was approved by more than 70% of voters.
Two years after its
approval, the Legislature froze the personal income
tax at 5.3% to plug budget shortfalls and created a
mechanism to reduce the tax rate as revenue growth
allowed.
As part of the changes,
lawmakers froze the charitable deduction until the
state’s income tax rate fell to 5%.
The state had planned
to allow the deductions starting this year since the
income tax rate finally dropped to 5%. But lawmakers
postponed it, citing the financial impact of the
pandemic....
Senate Minority Leader
Bruce Tarr, R-Gloucester, a chief proponent of
bringing back the tax deduction, said he is
“disappointed” that the Legislature didn’t take
action on it before breaking for a long winter
recess.
Tarr likens the delay
to a move by the Legislature years ago to postpone a
reduction in the personal income tax rate that was
approved by voters by a referendum.
“It’s another example
of something that the voters overwhelmingly mandated
that has continued to be short on Beacon Hill,” he
said. “I think it promotes distrust in government to
have that kind of a situation and it’s hard to
defend given the financial situation we find
ourselves in.”
Massachusetts has
benefited from an influx of billions of dollars in
federal pandemic relief, as well as
better-than-expected tax collections in recent years
that have given Beacon Hill policymakers a pile of
surplus money.
Tarr sought to
implement the voter-approved tax break as part of
the $4 billion plan to spend American Rescue Plan
Act funds and state surplus revenue.
But the
Democratic-controlled Legislature rejected his
amendment, ensuring that the charitable deduction
won’t be available for income tax filers next year.
The Salem
News
Monday, December 27, 2021
Beacon Hill punts on
charitable deductions law, again
With some of the
highest property values in the country, some older
Massachusetts homeowners possess sizable wealth. But
those high values carry high taxes, and many seniors
on fixed incomes find themselves in a state that one
local assessor called "house rich and cash poor."
That contrast was a
central theme before the Revenue Committee on
Tuesday, where supporters of legislation to update
senior tax relief programs pushed for measures that
would increase the value of local exemptions or make
more residents above the age of 65 eligible to defer
property taxes....
Older Bay Staters can
seek property tax relief in several ways, including
via the state-administered circuit breaker tax
credit, local exemptions, and deferral of the taxes
owed at the local level.
The deferral option
allows residents 65 or older with low annual incomes
to push back a portion or all of the property taxes
they owe. According to a Department of Revenue
taxpayer guide, the taxes plus interest cannot
exceed more than 50 percent of the homeowner's
"proportional ownership share of the fair cash value
of the property." ...
Their bill would also
amend the 8 percent default interest rate on the
deferred property tax value to a lower figure based
on recent state or local bond rates, which Vitolo
estimated is about 3 percent.
Another obstacle the
deferral program poses, Vitolo said, is a sharp and
sudden increase in the interest rate when a
recipient dies.
Current law doubles the
rate from 8 percent to 16 percent "on the day of
that senior citizen's passing," Vitolo, a Brookline
Democrat, said. His bill would delay that increase
by one year to give surviving family members or an
estate time to respond.
State
House News Service
Tuesday, December 28, 2021
Lawmakers Urged To Join
Senior Tax Relief Movement
Wednesday, Jan. 12,
2022:
REVENUE COMMITTEE:
Joint Committee on Revenue holds a virtual hearing
to consider 13 bills related to estates and another
37 bills concerning income taxes. As voters prepare
to consider a ballot question in November that would
impose a 4 percent surtax on household income above
$1 million, several of the bills seek changes to
other sections of tax law.
A bill from Cambridge
Democrat Rep. Connolly and Northampton Democrat Sen.
Comerford (H 2851) would increase the tax rate on
Part A taxable income consisting of interest and
dividends and the tax on Part C income from 5.3
percent to 9 percent.
Other bills include
proposals to cap the statewide income tax at 6.25
percent (S 2002) and to create tax credits for rent
paid on personal residences (H 3078). Also,
officials from Children's HealthWatch plan to
testify on a bill (S 1852) expanding the earned
income tax credit to certain immigrants who file
taxes. (Wednesday, 10 a.m.)
https://malegislature.gov/Events/Hearings/Detail/4137
State
House News Service
Friday, January 7, 2022
Advances - Week of Jan. 9, 2022
Legislators pushing for
estate tax reform aimed at raising an outdated
threshold that burdens middle class families are on
the right track.
But it won’t solve the
state’s “snowbird” problem....
It’s that $1M bar that
needs to go.
“If you’re a middle
class family who’s just sitting on property, the
valuation has just increased,” said state Sen.
Julian Cyr (D-Truro), who authored the Senate
version of the bill. “Those are the folks who’re
being adversely affected by the state tax, not the
ultra-rich, who frankly are savvy and well-resourced
enough to avoid it in the first place.”
According to Zillow,
the average Massachusetts home costs $541,834, a
16.6% increase from a year ago. “That means that a
lot of middle-income families really quickly hit
that $1 million threshold,” said State Rep. Daniel
Fernandes (D-Falmouth), who filed the House version
of the bill. “If they just have a home that is
slightly over half a million dollars, and they have
some money in a 401k and maybe a car and a life
insurance policy.”
The bill would double
the threshold from $1 million to $2 million.
“The estate tax in
Massachusetts was always intended to be a rather
progressive tax, meaning that you’re focusing on
folks who are wealthy and super-wealthy, but I think
that the million dollar threshold feels out of
date,” Cyr said.
Eileen McAnneny,
president of the Massachusetts Taxpayers Foundation,
noted that the risk of losing the state’s aging
population to other states like Florida and New
Hampshire already has a ripple effect on the state’s
other revenues, including capital gains taxes,
interest, dividends, sales tax and more. The Herald
reported earlier this year that the state lost $20.7
billion in adjusted gross income between 1993 and
2018....
Massachusetts has many
wonderful attributes — a balmy winter isn’t one of
them. Florida and other points south have appealed
to retirees since the first grandpa wore socks with
sandals and declared it a fashion statement.
Things are less
expensive the farther south you go. A visit to
NerdWallet’s cost of living calculator finds that
compared to Boston, the cost of living in Tampa is
40% lower. The cost of food is 4% lower, and the
price of entertainment is 11% lower. Healthcare
costs are 13% lower.
So while the lawmakers’
reform bill is a much-needed piece of legislation to
bring the estate tax code up to date, it doesn’t
reform the weather nor the prices in our beautiful,
cold, expensive state.
A Boston
Herald editorial
Thursday, December 30, 2021
High temps, low prices lure
snowbirds to FL
A friend of mine who
lived for many years on the North Shore relocated to
Kentucky in 2018 and has rejoiced ever since that it
was among the best decisions he ever made. Compared
with the Bay State, he reports, the housing where he
lives now is more affordable, the taxes are lower,
the winters are milder, the people are friendlier,
and the politics are more congenial. Not even the
tornadoes that tore up Western Kentucky last month
have dampened his satisfaction in no longer having
to put up with all the things that he found so
irksome about life in Massachusetts.
My friend’s experience
isn’t anomalous. Each year, more people leave
Massachusetts for other states than move to
Massachusetts from other states. According to the US
Census Bureau, between April 2020 and July 2021, the
population of Massachusetts shrank by more than
45,000. Only three other states — California, New
York, and Illinois — experienced a greater net
outflow of residents....
Massachusetts certainly
has its charms and advantages; countless Bay Staters
would never consider moving anywhere else. But
plenty of their neighbors feel differently. Year in,
year out, tens of thousands of Massachusetts
residents leave for good, and their numbers aren’t
replenished by newcomers from other states. My
friend in Kentucky is happy he left, and he’s
clearly not alone.
The
Boston Globe
Wednesday, January 5, 2022
Bye-bye, Bay State
By Jeff Jacoby
Lawmakers pocketed a
pricey pay bump last year, sending salaries for most
state senators and representatives north of six
figures as the pandemic surged.
State Sen. Cynthia
Friedman was the highest-earning lawmaker of 2021,
taking home $220,544, state payroll data shows. The
Arlington Democrat earned more than $41,000 more
than the next highest earner, Speaker of the House
Ronald Mariano.
Mariano, D-Quincy,
collected $179,276. His counterpart in the Senate
and the Legislature’s third-highest earner Senate
President Karen Spilka, D-Ashland, was paid
$178,276.
Base pay for all 200
state lawmakers climbed from $66,250 to $70,530 last
year thanks to a 4.89% raise that was made available
to them by a 2017 law that tied biennial increases
in their salaries to changes in wages over the
previous two years.
Office expense accounts
and lucrative stipends for those serving on
committees also saw increases, further padding the
pockets of lawmakers like Friedman....
The state comptroller’s
office lists Friedman’s base pay at $135,331.
Expense accounts range
from $16,245 and $21,660 depending on how far
lawmakers live from the State House.
The
Boston Herald
Tuesday, January 4, 2022
Many Massachusetts state
lawmakers earning six-figure pay, one tops $220,000
The United States Labor
Department recently confirmed what ordinary
Massachusetts residents already knew; inflation is
having a crushing impact on millions of low-income
and middle-class Massachusetts residents. What they
may not know is that while this is devastating news
for almost all of us, for our state’s 200 lawmakers,
it means they are eligible for a significant pay
raise....
While this is horrible
news for ordinary, working-class Massachusetts
taxpayers, it’s great news for our part-time, “full
time” legislature. In January, Massachusetts
lawmakers received a scheduled automatic pay raise
which is tied to the rate of inflation. As the rate
of inflation reaches a 40-year high, lawmakers’ next
eligible automatic pay bump will be their biggest
yet if it stays on pace.
As we head into 2022,
inflation and economic anxiety are at the forefront
of the minds of most Massachusetts residents —
except those at the State House. And why would it
be? For lawmakers, inflation means automatic pay
raises and higher wages. As for Massachusetts
Speaker Ron Mariano and Senate President Karen
Spilka, they still want more....
Despite their automatic
pay increases, and their proposed ballot question
plan to increase the income tax rate by 80%, Speaker
Mariano and Senate President Spilka are sitting on a
pile of dough. These legislative leaders currently
control billions of dollars in excess taxpayer money
and federal COVID relief money. Even with billions
of dollars of taxpayer money going unspent, these
enriched legislative leaders will try to fool enough
voters into thinking they don’t have enough money
next year.
The public often
wonders why their paychecks don’t get any bigger
while politicians get rich when they get elected.
It’s really simple. Politicians propose gimmicks to
raise taxes, which take more out of ordinary
people’s paychecks and politicians give themselves
automatic pay raises when everyone else is
suffering. That is a theme Massachusetts Fiscal
Alliance will remind the public throughout the New
Year until the legislature’s 80% income tax hike
gimmick fails next November.
The
Boston Herald
Wednesday, December 22, 2021
As
inflation crushes taxpayers, Legislature sees riches
ahead
Massachusetts is
preparing to enact some of the most stringent
regulations for truck emissions in the nation, as
the Baker administration seeks to curb tailpipe
pollution to meet its ambitious environmental goals.
The new regulations,
unveiled by the state Department of Environmental
Protection this week, would adopt California’s
accelerated truck standards requiring an increasing
percentage of all medium- and heavy-duty trucks sold
to be zero-emission starting in 2025.
The regulations, once
finalized, will require manufacturers increase
zero-emission truck sales in the state between 30
and 50% by 2030 and 40 and 75% by 2035....
The move will make
Massachusetts one of five states -- including
Washington, Oregon, New York, New Jersey -- to adopt
California's stringent rules....
"Major policies that
ban the sale of entire categories of vehicles is a
decision that should be debated by the Legislature
and not rushed through by unelected bureaucrats
before a major holiday," said Paul Craney, spokesman
for the Massachusetts Fiscal Alliance, a
conservative, pro-business group....
Massachusetts adopted
California's Low Emission Vehicle program
regulations in 1991 and has updated it to remain in
sync with the West Coast state's regulations. The
new regulations involves emission standards for
vehicles built in 2025 and also medium- and
heavy-duty vehicles and engines.
The move follows the
collapse of a multi-state pact aimed at reducing
regional vehicle emissions for both trucks and
passenger vehicles.
Last month, Gov.
Charlie Baker pulled the plug on the Transportation
Climate Initiative after the agreement failed to
gain traction among other states.
Baker had been one of
the most vocal proponents of TCI, touting it as key
to the state’s effort to reduce the largest source
of greenhouse gas emissions.
But most of the
original dozen states that were included in the
initiative had backed away, and when Connecticut
Gov. Ned Lamont announced that he won't be joining
the pact, Baker had no choice but to pull
Massachusetts out.
The
Eagle-Tribune
Thursday, January 6, 2022
State to adopt stringent truck
emissions rules
As it aims for
Massachusetts to phase out sales of traditional
gas-powered medium- and heavy-duty vehicles over the
next three decades, the Baker administration is
adopting greenhouse gas emissions standards and
regulations from California meant to accelerate the
switch to electric vehicles.
The Department of
Environmental Protection last week filed emergency
regulations and amendments to immediately adopt the
Golden State's Advanced Clean Trucks (ACT) policy,
which requires an increasing percentage of trucks
sold between model year 2025 and model year 2035 to
be zero-emissions vehicles....
The administration said
the adoption of California's regulations, which is
required in certain circumstances under
Massachusetts law, will help reduce pollution that
harms the environment, promote the adoption of
electric trucks and "lead to reduced fuel
consumption and fuel costs and maintenance due to
more fuel-efficient engines and vehicles and
next-generation zero-emission trucks."
"Massachusetts
continues to take aggressive action to reduce
emissions from the transportation sector, and
addressing pollution from medium- and heavy-duty
vehicles and advancing the market for clean trucks
is an essential part of this effort," Energy and
Environmental Affairs Secretary Kathleen Theoharides
said....
The Massachusetts Clean
Air Act requires that the Bay State "shall adopt
motor vehicle emissions standards based on the
California's [sic] duly promulgated motor vehicle
emissions standards" unless DEP determines, after a
public hearing and based on "substantial" evidence
that emissions standards and a compliance program
similar to California's "will not achieve, in the
aggregate, greater motor vehicle pollution
reductions than the federal standards and compliance
program."
DEP said that its
analysis of the California regulations concluded
that they "are clearly more stringent and provide,
in the aggregate, greater emission reductions than
the current federal program, and therefore must be
adopted by MassDEP." The regulations were filed Dec.
30 on an emergency basis, the agency said, because
they must be in place two years before the first
affected model year begins. Model year 2025 starts
Jan. 1, 2024....
In all, the changes are
projected to lead to costs of $1.054 billion by
2050, the agency said....
Zero-emission vehicles
are a major part of the Baker administration's
strategy to meet reduced greenhouse gas emissions
goals. The 2050 decarbonization plan the
administration released in late 2020 said that
reducing greenhouse gas emissions by 45 percent from
1990 levels by 2030 -- the administration's goal
before a climate law set the required 2030 reduction
at 50 percent -- would "require that about 1 million
of the 5.5 million [passenger vehicles] projected to
be registered in the Commonwealth in 2030 be"
zero-emission vehicles.
In coordination with
more than a dozen other states, Massachusetts has
already set a goal that at least 30 percent of all
trucks sold by 2030 and 100 percent of trucks sold
by 2050 be zero-emission vehicles.
State
House News Service
Monday, January 3, 2022
State Borrows from California to Speed Transition to
Electric Trucks
The second leg of the
Legislature's two-year session officially kicked off
on Wednesday marking the start of a seven-month
stretch that will test the ability of lawmakers to
juggle predictable duties like the passage of an
annual budget with the challenges of reaching
compromise on leadership priorities like voting
reform, mental health access and the acceleration of
offshore wind energy....
But while COVID-19 will
continue to occupy the attention of lawmakers, many
legislators, operating with newly drawn districts,
have already begun thinking about reelection or
running for another office and will be looking to
make progress on myriad issues that would provide
grist for their campaigns later in the year....
On the Legislature's
side of the State House, most committees face a Feb.
2 deadline to report out any bills currently before
them for consideration and lawmakers will most
likely want to pass legislation as soon as possible
setting a date for the primary elections later this
year.
"Just in general, I
would like to see committees start releasing more
bills for us to act upon," Sen. Michael Moore said
after Wednesday's session.
State
House News Service
Wednesday, January 5, 2022
Slow Start To Busy Seven-Month Session Stretch |
|
On December 21 the
State House News Service reported ("Analysts See State Tax Revenue
Growth Rolling Along"):
. . . House Ways and Means
Chairman Aaron Michlewitz, Senate Ways and Means
Chairman Michael Rodrigues and Administration and
Finance Secretary Michael Heffernan called
economists and budget experts to testify on what
they expect to see in fiscal year 2023 from state
tax collections, the first step in building a
spending plan for the budget year that begins July
1, 2022....
Despite all pointing to
a number of factors that could undermine their
estimates -- like yet another COVID-19 surge,
ongoing labor shortages and supply chain glitches,
and persistently high inflation -- the experts
assembled Tuesday largely agreed that Massachusetts
can expect to collect at least about $36.48 billion
and possibly as much as nearly $40.8 billion in tax
revenue next budget cycle, which would be between 6
percent and 18.6 percent more than the Baker
administration's official expectation for the
current budget year....
Five months in, fiscal
year 2022 tax collections are more than $900 million
ahead of consensus revenue expectations to this
point in the year and are trending more than $2
billion ahead of actual fiscal 2021 collections
through the same period of time.
Reporting on the state
comptroller's annual report, On January 3 the News
Service noted: ("Comptroller: FY '21 Revenues
Smashed Estimates By $13 Billion'):
The grand total of
state revenues collected by the end of fiscal year
2021 exceeded that year's budget estimates by more
than $13 billion, including a surplus of more than
$5.86 billion in tax revenue, according to a new
report from the state comptroller.
Fiscal year 2021
revenues from all sources totaled $56,867,366,700 as
of June 30, 2021, Comptroller William McNamara's
office said in an accounting report typically
required by the Legislature in each year's budget.
That was 30 percent more than the $43,641,100,000
revenue grand total estimated in the fiscal year
2021 budget....
Income tax revenue, the
single largest bucket of state tax revenue, came in
at more than $19.61 billion -- outpacing the
budget's underlying estimate of $15.93 billion by
nearly 25 percent.
Two days later on
January 5 the State House News Service reported ("Change in Law Leads to Massive
December Tax Haul"):
December tax
collections of $4.24 billion shattered last year's
mark for the final month of the year and exceed
estimates by more than 40 percent, but the windfall
is likely temporary with state revenue officials
attributing much of gains to a change in state law
that allows certain businesses to avoid federal
limits on state and local tax deductions.
The Department of
Revenue reported Wednesday that the state in
December 2021 collected $1.4 billion more than in
December 2020 and $1.23 billion more than estimates
for the month. But DOR also said much of that money
will be returned through refunds.
Still, even after
adjusting for the business tax changes, the
department said December tax collections exceeded
last year's haul by $520 million, or 18.3 percent,
and beat estimates by $635 million.
"December 2021 revenue
collections increased in all major tax types in
comparison to December 2020 collections and the
December 2021 monthly benchmark, including
withholding, non-withholding, sales and use tax,
corporate and business tax, and 'all other' tax,"
Revenue Commissioner Geoffrey Snyder said. "The
increase in withholding is likely related to
improvements in labor market conditions."
And it is not just tax
revenue that has broken all-time records. Even
in Year Two of the worldwide Chinese Pandemic the
Massachusetts Lottery is doing the same, according
to the State Treasurer who oversees it. The
News Service added ("Bettors Dump Record Amounts Into
Lottery"):
The last week of 2021
was the best one on record for Massachusetts Lottery
sales as weekly sales records for scratch tickets
and Keno combined with a rising Powerball jackpot to
contribute to more than $145.3 million in sales....
The Lottery produced a
record $1.112 billion in profit in fiscal 2021 for
the Legislature to use as local aid to cities and
towns and through five months of fiscal 2022 is
running roughly $38.5 million ahead of the fiscal
2021 profit pace.
[State Treasurer
Deborah] Goldberg told lawmakers and Baker
administration officials last month that she expects
the Lottery will generate about $995 million in
revenue for the state this fiscal year and roughly
$1 billion in fiscal year 2023.
Let us stipulate the
obvious right here and now: Massachusetts does not have
a revenue problem of any sort by any stretch. Massachusetts
does not need to raise taxes —
any taxes in any shape or form —
another cent for any reason. Massachusetts needs to rein in
spending fast and Beacon Hill denizens need to seriously consider
returning at least some of those billions of excess
taxpayer-dollars to their rightful owners. This is now no
longer honestly arguable.
For a start, there are two
simple solutions immediately available that have been too long
denied — perennially blocked by an
intransigent Legislature with an insatiable lust for always more
taxpayer's cash to squander: Restoring the charitable
deduction approved overwhelmingly by the voters in 2000 (alongside
CLT's income tax rollback ballot question), and; Updating the
state's onerous estate tax on the deceased.
Regarding the charitable
donations tax deduction, The Salem
News on December 27 reported ("Beacon Hill punts on
charitable deductions law, again"):
A tax deduction for
charitable donations approved by voters more than
two decades ago will be delayed again after
lawmakers failed to authorize the changes before
recessing for a seven-week winter break....
Voters approved the
deduction in 2000 as part of a referendum rolling
back the state’s personal income tax rate to 5%. The
referendum was approved by more than 70% of voters.
Two years after its
approval, the Legislature froze the personal income
tax at 5.3% to plug budget shortfalls and created a
mechanism to reduce the tax rate as revenue growth
allowed.
As part of the changes,
lawmakers froze the charitable deduction until the
state’s income tax rate fell to 5%.
Massachusetts has
benefited from an influx of billions of dollars in
federal pandemic relief, as well as
better-than-expected tax collections in recent years
that have given Beacon Hill policymakers a pile of
surplus money.
[Sen. Bruce Tarr,
R-Gloucester] sought to
implement the voter-approved tax break as part of
the $4 billion plan to spend American Rescue Plan
Act funds and state surplus revenue.
But the
Democratic-controlled Legislature rejected his
amendment, ensuring that the charitable deduction
won’t be available for income tax filers next year.
State Rep.
Shawn Dooley (R-Norfolk) has again introduce a bill
to update and reform the Massachusetts estate tax,
H-2881.
In part it states:
SECTION 6. Chapter
65C of the General Laws is hereby amended by striking out
Section 1(k), as appearing in the 2012 Official Edition, and
inserting in place thereof the following section:-
(k) “Basic
exclusion amount”, $2,750,000 which shall be annually adjusted
for inflation based on the US Department of Labor’s Consumer
Price Index (CPI) for All Urban Consumers. If the amount as
adjusted under the preceding sentence is not a multiple of
$10,000, such amount shall be rounded to the nearest multiple of
$10,000.
I was
contacted by Rep. Dooley's chief of staff last week
inviting CLT to provide testimony before the Joint
Committee on Revenue this coming Wednesday, which we
will be doing. Rep. Dooley attempted to update
and revise the estate tax in 2019 but was
unsuccessful so he's trying again. We were
invited to provide testimony again as CLT did in
September of 2019 ("CLT
Supports Estate Tax Revision"). That CLT
testimony in part noted the key considerations as we
see it:
. . . Bill Harris,
then-president of the Financial Planning Association of
Massachusetts, noted in his December 2017 Wicked Local Plymouth
column:
"Massachusetts implemented the current estate tax rules back
in 2001. Unlike other states, it’s never been indexed
for inflation. In the past three years, nine states
have eliminated or lowered their estate taxes. Many
more states are raising their lifetime exemptions (the
amount that is excluded from estate tax calculation).
New Jersey is scheduled to eliminate its estate tax
altogether, joining about a half-dozen others that have
ended their estate taxes over the past decade."
New Jersey repealed
its estate tax last year, leaving only eleven states that tax
the estates of its deceased citizens. Currently
Massachusetts is tied with Oregon as the most onerous, with the
lowest exemption of $1,000,000.
Mr. Harris further
noted:
"If you think the estate tax is only for the wealthy, think
again. The Massachusetts estate tax is regularly
entrapping unsuspecting middle-class families. If you
own a modest house on the South Shore and you’ve funded your
IRA for an adequate retirement, your estate may get hit with
the death tax. In estate planning circles,
Massachusetts is the least desirable state in which to
reside if you want to pass assets to your heirs. . . .
"The Massachusetts exemption threshold is only $1 million,
much less than the current federal estate taxes. But
unlike the federal estate tax, which only taxes the excess
over the threshold, in Massachusetts the threshold is a
trigger, and the majority of estate becomes taxable . . .
snaring lots of taxpayers at death.
"The tax on a $1 million estate is approximately $36,000,
however the tax on an estate that is $999,999 is zero.
If you are a Massachusetts resident and all of your assets
combined are just a bit above $1 million, get below that
threshold or change your residency before you die.
Otherwise, death taxes will be due."
Citizens for
Limited Taxation supports H-2446, "An Act relative to the
Massachusetts estate tax code" sponsored by Rep. Shawn Dooley
and others. It is a well-considered proposal that will
help ameliorate the currently excessive state estate tax
situation.
When the
Legislature takes good care of itself with generous
salaries, "stipends," expense accounts, etc., all
are indexed for inflation through the Consumer Price
Index. If it's good for them it ought to be
provided for estate taxpayers as well. Let's
call it "equity" and "social justice" and just get
it done.
See:
As
inflation crushes taxpayers, Legislature sees riches
ahead and
Many Massachusetts state
lawmakers earning six-figure pay, one tops $220,000
If not now, when?
Instead of seeking ways in
which to return some of taxpayers' involuntary largess the
Legislature — as always
— is looking for ways to suck even more
cash from the productive.
The State
House News Service on December 21 noted ("Dems Push For Higher Taxes On
Businesses"):
While the federal
government has pumped billions of one-time dollars
into state economies, some legislative Democrats
believe the state still should be looking to wealthy
corporations for additional revenue to fund
education, transportation and other priorities when
those funds inevitably dry up.
The Joint Committee on
Revenue held a hearing Wednesday on dozens of bills
related to corporate tax structures, including
proposals to return the state's corporate tax rate
to pre-2010 levels and to increase the minimum tax
companies without other liabilities must pay.
The Salem
News on December 23 reported ("Lawmakers want to
increase corporate taxes"):
Democratic lawmakers
are pitching plans to ratchet up taxes on
corporations to support the state’s recovery from
the economic impacts of the pandemic.
Several proposals heard
by the Legislature’s Revenue Committee Wednesday
would increase the state’s corporate tax and set
other new levies to squeeze more money out of
corporations they say have reaped profits during the
pandemic.
One proposal filed by
Rep. Mary Keefe, D-Worcester, would raise the
current corporate tax rate of 8% to the pre-2010
rate of 9.5%, which backers say would generate $375
million to $500 million annually....
Another proposal, filed
by Rep. Mike Connolly, D-Cambridge, would establish
a tiered alternative minimum tax charging
corporations from $456 to $150,000 a year depending
on sales. Businesses that report less than $1
million in sales a year would only pay $456, which
is the current flat rate for all businesses.
Connolly told the
committee that the changes would bring more
“fairness” into the state’s corporate tax
structure....
Increasing the tax on
corporate profits from 8% to 9.5%, advocates say,
could generate another $450 million to $525 million
a year for the state’s coffers.
The group, Raise Up
Massachusetts, is also behind a “millionaires tax”
referendum cleared for the 2022 ballot that will ask
voters to amend the state constitution to set a 4%
surtax on the portion of an individual’s annual
income above $1 million....
Business leaders say
raising corporate taxes would be a mistake for the
state as it tries to recover from the economic
impacts of the coronavirus.
“The idea of piling on
new taxes at a time when businesses are trying
desperately to recover would be folly,” said Chris
Carlozzi, state director of the Massachusetts
chapter of the National Federation of Independent
Businesses. “For lawmakers to say that the state
needs more tax revenue from businesses at a time
when billions of dollars in pandemic relief has come
into the state is disingenuous.”
The Boston
Herald opined in its December 24 editorial ("Raise taxes, say
goodbye to businesses"):
When is a tax hike not
a tax hike?
When Massachusetts
Democrats maneuver definitions with the skill of a
three-card monte dealer....
According to the State
House News Service, some legislative Democrats
believe the state still should set its sights on
wealthy corporations for additional revenue to fund
education, transportation and other priorities.
Corporations are the
go-to villain for Democrats, aghast at their
job-creating, worker-employing, economic growth
boosting gall.
It’s time for them to
pay for all that success....
Rep. Mary Keefe, a
Worcester Democrat, proposed increasing the
corporate tax rate from 8% to 9.5%, the same level
it sat at more than a decade ago. She said there are
only eight other states where businesses pay a
smaller share of state and local taxes than they do
in Massachusetts....
“We need to generate
more progressive revenue,” Keefe said.
Corporate tax reform,
she said, would also improve equity in the tax code
because she said business taxes are paid
disproportionately by white, high-income households
who are more likely to own stock.
“I don’t like to use
the word raising taxes,” she said. “This is about
restoring the tax to where it was before 2010.”
So making a tax higher
isn’t raising it, it’s just reverting the tax to
where it was 21 years ago. When it was higher.
Sorry, but up is up....
The problem with
corporate tax hikes is that businesses go where the
tax environment is friendly. And there are many
states who openly court big businesses to boost
their local economy.
Businesses don’t have
to make it in Massachusetts. Nor do they have to
spend it here.
We do need to consider
a future when the federal gravy train pulls out of
the station, but eyeing Massachusetts’ corporations
as giant ATMs who must stand in for D.C.’s coffers
is the best way to send these companies packing.
In another Boston
Herald editorial, this one on December 30 regarding
the estate tax revision and the exodus of productive taxpayers out
of Massachusetts ("High temps, low prices lure
snowbirds to FL") noted:
Legislators pushing for
estate tax reform aimed at raising an outdated
threshold that burdens middle class families are on
the right track.
But it won’t solve the
state’s “snowbird” problem....
It’s that $1M bar that
needs to go.
“If you’re a middle
class family who’s just sitting on property, the
valuation has just increased,” said state Sen.
Julian Cyr (D-Truro), who authored the Senate
version of the bill. “Those are the folks who’re
being adversely affected by the state tax, not the
ultra-rich, who frankly are savvy and well-resourced
enough to avoid it in the first place.”
According to Zillow,
the average Massachusetts home costs $541,834, a
16.6% increase from a year ago. “That means that a
lot of middle-income families really quickly hit
that $1 million threshold,” said State Rep. Daniel
Fernandes (D-Falmouth), who filed the House version
of the bill. “If they just have a home that is
slightly over half a million dollars, and they have
some money in a 401k and maybe a car and a life
insurance policy.”
The bill would double
the threshold from $1 million to $2 million.
“The estate tax in
Massachusetts was always intended to be a rather
progressive tax, meaning that you’re focusing on
folks who are wealthy and super-wealthy, but I think
that the million dollar threshold feels out of
date,” Cyr said.
Eileen McAnneny,
president of the Massachusetts Taxpayers Foundation,
noted that the risk of losing the state’s aging
population to other states like Florida and New
Hampshire already has a ripple effect on the state’s
other revenues, including capital gains taxes,
interest, dividends, sales tax and more. The Herald
reported earlier this year that the state lost $20.7
billion in adjusted gross income between 1993 and
2018....
Massachusetts has many
wonderful attributes — a balmy winter isn’t one of
them. Florida and other points south have appealed
to retirees since the first grandpa wore socks with
sandals and declared it a fashion statement.
Things are less
expensive the farther south you go. A visit to
NerdWallet’s cost of living calculator finds that
compared to Boston, the cost of living in Tampa is
40% lower. The cost of food is 4% lower, and the
price of entertainment is 11% lower. Healthcare
costs are 13% lower.
So while the lawmakers’
reform bill is a much-needed piece of legislation to
bring the estate tax code up to date, it doesn’t
reform the weather nor the prices in our beautiful,
cold, expensive state.
The
Committee to Unleash Prosperity on December 27 noted
("The
Great Escape"):
Americans continue to vote
with their feet, in an acceleration of pre-COVID trends away from
California and the Northeast and to the South.
The Census Bureau reported
Net Domestic Migration by Region July 1 2020 to July 1 2021:
Northeast -389,638
West -144,941
Midwest -123,103
South +657,682
And here is 2021 by state:
In his
Boston Globe column last Wednesday ("Bye-bye, Bay State") Jeff Jacoby
wrote (excerpts):
A friend of mine who
lived for many years on the North Shore relocated to
Kentucky in 2018 and has rejoiced ever since that it
was among the best decisions he ever made. Compared
with the Bay State, he reports, the housing where he
lives now is more affordable, the taxes are lower,
the winters are milder, the people are friendlier,
and the politics are more congenial. Not even the
tornadoes that tore up Western Kentucky last month
have dampened his satisfaction in no longer having
to put up with all the things that he found so
irksome about life in Massachusetts.
My friend’s experience
isn’t anomalous. Each year, more people leave
Massachusetts for other states than move to
Massachusetts from other states. According to the US
Census Bureau, between April 2020 and July 2021, the
population of Massachusetts shrank by more than
45,000. Only three other states — California, New
York, and Illinois — experienced a greater net
outflow of residents....
Massachusetts certainly
has its charms and advantages; countless Bay Staters
would never consider moving anywhere else. But
plenty of their neighbors feel differently. Year in,
year out, tens of thousands of Massachusetts
residents leave for good, and their numbers aren’t
replenished by newcomers from other states. My
friend in Kentucky is happy he left, and he’s
clearly not alone.
I'll leave it to you to
figure out who that friend of Jeff's is!
Not only can Bay
State residents and taxpayers vote with their feet and wallets
— they are and they have been,
in large numbers. U-Haul produces an annual report on the out-
and in-migration numbers based on its moving rentals. Its
latest report ("2020
Migration Trends: U-Haul Ranks 50 States by Migration Growth")
ranks Massachusetts #47 in migration outflow, better than only New
Jersey, Illinois, and California which have lost the most
population.
Massachusetts politicians
seem not to care in the least that they're chasing out the golden
goose that provides every cent the state has to spend. Will
they never wake up, ever step outside their Beacon
Hill Bubble?
Spoiler Alert!
Just when we thought we had dodged Gov. Baker's TCI bullet here
comes the end-run work-around that likely will be even worse for
motorists and residents.
On Monday the State
House News Service reported ("State Borrows from California to Speed Transition to
Electric Trucks"):
As it aims for
Massachusetts to phase out sales of traditional
gas-powered medium- and heavy-duty vehicles over the
next three decades, the Baker administration is
adopting greenhouse gas emissions standards and
regulations from California meant to accelerate the
switch to electric vehicles.
The Department of
Environmental Protection last week filed emergency
regulations and amendments to immediately adopt the
Golden State's Advanced Clean Trucks (ACT) policy,
which requires an increasing percentage of trucks
sold between model year 2025 and model year 2035 to
be zero-emissions vehicles....
The Massachusetts Clean
Air Act requires that the Bay State "shall adopt
motor vehicle emissions standards based on the
California's [sic] duly promulgated motor vehicle
emissions standards" unless DEP determines, after a
public hearing and based on "substantial" evidence
that emissions standards and a compliance program
similar to California's "will not achieve, in the
aggregate, greater motor vehicle pollution
reductions than the federal standards and compliance
program."
The
Eagle-Tribune reported on Thursday ("State to adopt stringent truck
emissions rules"):
The move will make
Massachusetts one of five states -- including
Washington, Oregon, New York, New Jersey -- to adopt
California's stringent rules....
"Major policies that
ban the sale of entire categories of vehicles is a
decision that should be debated by the Legislature
and not rushed through by unelected bureaucrats
before a major holiday," said Paul Craney, spokesman
for the Massachusetts Fiscal Alliance, a
conservative, pro-business group....
Massachusetts adopted
California's Low Emission Vehicle program
regulations in 1991 and has updated it to remain in
sync with the West Coast state's regulations. The
new regulations involves emission standards for
vehicles built in 2025 and also medium- and
heavy-duty vehicles and engines.
The move follows the
collapse of a multi-state pact aimed at reducing
regional vehicle emissions for both trucks and
passenger vehicles.
Last month, Gov.
Charlie Baker pulled the plug on the Transportation
Climate Initiative after the agreement failed to
gain traction among other states.
Baker had been one of
the most vocal proponents of TCI, touting it as key
to the state’s effort to reduce the largest source
of greenhouse gas emissions.
But most of the
original dozen states that were included in the
initiative had backed away, and when Connecticut
Gov. Ned Lamont announced that he won't be joining
the pact, Baker had no choice but to pull
Massachusetts out.
On a final closing note,
my politically astute friends in the Bluegrass State often think I'm
exaggerating when I relate how bad government is in Massachusetts
"where everything that is not banned is mandated by law." In
my news search this week I stumbled across a headline even I
couldn't comprehend, I word I'd never come across: "stealthing."
With the hours required for my daily research I strictly narrow my
focus to only headlines which indicate an article that might be of
interest to taxpayers — but this one
I had to read, then send around to my friends here. They now
believe me without hesitation and are stunned that this is what
Massachusetts politicians waste time on — and
are probably still laughing. I don't know whether to
laugh or cry.
The Boston Globe
January 5, 2022
Massachusetts lawmakers look to outlaw ‘stealthing’
Though “stealthing” is common, state law is silent
|
 |
 |
|
Chip Ford
Executive Director |
|
|
State House News
Service
Tuesday, December 21, 2021
Analysts See State Tax Revenue Growth Rolling Along
Experts Return After Missing Mark Last Cycle
By Colin A. Young and Katie Lannan
State tax revenues have defied expectations throughout the
pandemic and federal aid has helped to keep Massachusetts
fiscally healthy over the last two years. But uncertainty
about the sustainability of recent positive economic trends
and unknowns surrounding the latest mutated form of the
coronavirus made trying to predict tax collections for the
next 18 months a daunting task Tuesday.
House Ways and Means Chairman Aaron Michlewitz, Senate Ways
and Means Chairman Michael Rodrigues and Administration and
Finance Secretary Michael Heffernan called economists and
budget experts to testify on what they expect to see in
fiscal year 2023 from state tax collections, the first step
in building a spending plan for the budget year that begins
July 1, 2022.
Trying to predict something as fickle as tax revenue seven
months to a year-and-a-half out is inherently challenging,
and Beacon Hill has so far struggled to wrap its arms around
the changes brought upon by the pandemic. At one point early
in the pandemic, some state budget watchers predicted that
tax revenues could end up as much as $8 billion short of
expectations. Instead, Massachusetts generated a surplus of
about $5 billion in fiscal year 2021 and is on track to
significantly exceed revenue expectations this budget year
as well.
"For nearly two years, the commonwealth has gone through
some of the most turbulent budgets that this building has
ever seen. Throughout these unprecedented times, the
commonwealth has seen historic highs in terms of our revenue
numbers. One of the main drivers of this has been the
unprecedented amount of assistance the federal government
has given," Michlewitz said. "Unfortunately, this level of
support is not permanent and, going forward, we must keep
that in mind as we plan for the future of the commonwealth."
Despite all pointing to a number of factors that could
undermine their estimates -- like yet another COVID-19
surge, ongoing labor shortages and supply chain glitches,
and persistently high inflation -- the experts assembled
Tuesday largely agreed that Massachusetts can expect to
collect at least about $36.48 billion and possibly as much
as nearly $40.8 billion in tax revenue next budget cycle,
which would be between 6 percent and 18.6 percent more than
the Baker administration's official expectation for the
current budget year.
Department of Revenue
Revenue Commissioner Geoffrey Snyder said Tuesday that the
current year's tax collections have been solid enough so far
that he now projects fiscal year 2022 will end with DOR
having collected between $35.726 billion and $36.623 billion
-- between $1.325 billion and $2.222 billion more than the
consensus revenue agreement reached a year ago. The fiscal
2022 benchmark could be updated when the fiscal 2023
agreement is announced.
For fiscal year 2023, the primary focus of Tuesday's
hearing, Snyder said that DOR forecasts that state tax
revenue will land in the range of $36.484 billion to $37.684
billion, which would be between 2.1 percent and 2.9 percent
higher than the agency's revised fiscal 2022 forecast.
Snyder also flagged for the budget managers DOR's
expectation that capital gains taxes, a source of revenue
that has helped Massachusetts bulk up its reserves during
the recent years of strong stock market performance, will
tail off in fiscal 2023.
"Capital gains taxes are a volatile revenue source. With
years of rising capital markets, we recognize the potential
for growing reserves of unrealized gains. However, capital
gains revenue collections have been very strong over the
past several years, hitting an all-time high in FY21, which
leads to uncertainty about how much more unrealized gains
remain," he said, referring to the $2.584 billion in capital
gains tax revenue last fiscal year.
DOR is forecasting that fiscal year 2022 capital gains will
be between $2.409 billion and $2.713 billion, roughly in
line with the capital gains-specific benchmark of $2.615
billion. For fiscal year 2023, however, Snyder said that DOR
is projecting that capital gains revenue will sink to
between $2.198 billion and $2.356 billion.
As did most of the experts who testified Tuesday, Snyder
said DOR's forecast is clouded with "a significant degree of
uncertainty" related to the future course of COVID-19, labor
and supply chain constraints, and inflation's impacts on the
global economy.
Mass. Taxpayers Foundation
The Massachusetts Taxpayers Foundation offered a mixed
outlook, with President Eileen McAnneny forecasting that
revenue growth will "remain robust" this fiscal year before
flipping to a "completely different story" next year when
the situation will revert "back to a period of stalled
growth."
McAnneny projected the state will end fiscal 2022 with $37.2
billion in tax collections -- $3.1 billion or 9 percent
above last year, growth that she said would be fueled by
"employment bouncing back, wage increases, asset value
spikes, increased spending on durable goods and motor
vehicles with higher prices due to inflation, and healthy
profits for corporations."
After that, though, McAnneny said revenues would grow only
1.1 percent or $411 million in fiscal 2023, giving
budget-writers $37.6 billion to work with. She said more
workers, earning higher wages as employers compete for
labor, will drive up withholding income tax revenues by
nearly $600 million next year, but those gains will be
offset by a "steep decline" in capital gains and other
non-withholding income tax revenues.
Sales tax growth will moderate to 1 percent in fiscal 2023
as spending shifts back from durable goods to services and
inflation rates slowly decline over the next 18 months,
McAnneny said.
Alan Clayton-Matthews
Northeastern University economist Alan Clayton-Matthews had
the rosiest forecast for fiscal year 2023, projecting that
Massachusetts could collect as much as $40.795 billion based
on "a very sanguine economic outlook." That would represent
6.5 percent growth over his fiscal year 2022 forecast of
$38.301 billion, he said.
Clayton-Matthews reviewed how withholdings from unemployment
insurance programs helped prop up state tax revenues during
the pandemic. He said that impact is tailing off and should
get back down to normal pre-pandemic levels during fiscal
2023.
Withholding from unemployment insurance added $258 million
to fiscal year 2020 revenues and $557 million to revenues in
fiscal year 2021, he said, and is expected to contribute
$137 million to state revenues in fiscal year 2022. For
fiscal year 2023, he projected that unemployment insurance
withholdings would provide about $58 million to state
coffers.
"That's a normal level, $58 million. So we are seeing the
waning effects of unemployment assistance support to
revenues," Clayton-Matthews said. "On the other hand, of
course, if unemployment is falling, employment and therefore
wage and salary income and income revenues are rising."
Center for State Policy Analysis
Higher-than-expected inflation creates a "dark cloud" over
the state's revenue picture, cautioned Evan Horowitz,
executive director of the Center for State Policy Analysis
at Tufts University.
Horowitz is projecting $36.5 billion in revenue collections
for fiscal 2023, and said he thinks it makes sense to raise
this year's benchmark by $1 billion, to $35.4 billion.
Accounting for inflation, Horowitz said next year's growth
could actually work out to "a slight decline in revenue,
meaning the state could have fewer real dollars to work with
for FY23."
Because the cost "of running state government has risen more
rapidly than we've seen in a generation," he said that even
a "maintenance budget" for next year "will have to reckon
with the fast-growing cost of hiring people, procuring
materials, providing housing support, and a great deal
besides."
Horowitz said the uncertainties arising from the pandemic
have created a mix of risks and "hopeful possibilities" on
the economic front. Right now, he said, consumer spending
levels above long-term trends, the job market near its
pre-pandemic highs, "extremely" high valuations for asset
prices and the Federal Reserve's plans to raise rates
combine to mean "there are a lot more ways for our economy
to stumble and a lot fewer chances to accelerate from here."
"In terms of state tax revenue, Massachusetts may already be
overdue for a correction, with the volatile parts of our tax
system, like capital gains and estimated taxes, having
outrun the more stable parts, like income withholding and
the sales tax," he said.
Monitoring Fiscal Year 2022 and Next Steps
When the same trio assembled last year to forecast fiscal
year 2022 revenues, they settled on an estimate of $30.12
billion. At the time, they said it represented 3.5 percent
growth in state tax revenue compared to their then-current
estimate of $29.09 billion in fiscal 2021 revenue.
About six months later, fiscal year 2021 ended with DOR
having collected $34.137 billion -- well in excess of the
initial pre-pandemic estimate of $31.15 billion.
Five months in, fiscal year 2022 tax collections are more
than $900 million ahead of consensus revenue expectations to
this point in the year and are trending more than $2 billion
ahead of actual fiscal 2021 collections through the same
period of time.
"I certainly appreciate the difficulty of projecting tax
revenues over the past two years, and for the upcoming one
as well," MTF's McAnneny said Tuesday. "We were talking
prior to the start of this, some of the presenters, and we
were all saying just how difficult it has been. I liken it
to a roller coaster ride, complete with dips and turns, and
unfortunately I think we have one more loop before this ride
is over."
After the hearing, the Joint Ways and Means Committee and
Heffernan will work up an agreed-upon tax revenue forecast
for fiscal year 2023. They have until Jan. 15 to arrive at
that number. The figure will become the state revenue-side
anchor in Gov. Charlie Baker's final budget filing, which is
due to the Legislature by Jan. 26.
The House will roll out and debate its own version of a
fiscal year 2023 budget in April and the Senate will follow
suit in May. Because it is their "consensus" number, both
branches generally rely upon the same revenue estimate when
they assemble their budgets even though the estimate is
months old by that point.
June is typically when a six-member conference committee
hammers out an agreement between the branches on a single
budget bill before the governor gets his chance to sign,
amend or veto its provisions. Fiscal year 2023 starts July
1, 2022.
Still Having Technical Difficulties
Tuesday's hearing got off to a dubious start when the
chairmen of the House and Senate Ways and Means committees
and Baker administration finance officials huddled to go
over their tax revenue forecasts without providing access to
the public, press or even to lawmakers assigned to sit on
the Ways and Means committees.
Rodrigues' office said a technical glitch kept the start of
the hearing from being broadcast on the Legislature's
website. Only Rodrigues, Michlewitz and Heffernan were
allowed to participate in the hearing in person from the
State House, which remains wholly closed to the public.
By the time the public broadcast became available at about
10:20 a.m., Revenue Commissioner Geoffrey Snyder was already
partway through his testimony, which generally follows
opening remarks from the chairmen and secretary, comments
that sometimes set the tone for the upcoming budget cycle.
A Rodrigues aide said that the committee staff was not
alerted to the fact that the hearing was not available to
the public or press until about five minutes in.
"As an unintended consequence, Chair Rodrigues commenced the
hearing without this knowledge and opening remarks were well
underway before he was informed by staff that we were
experiencing technical difficulties," the aide said.
"Fortunately though, the technical difficulties with the
live feed were resolved and public access has been preserved
thanks to the fact the hearing is being recorded."
Michlewitz's office did not respond to questions from the
News Service.
Early in the pandemic, when virtual hearings were still
relatively new to lawmakers, Rodrigues and Michlewitz had to
postpone a virtual summit with many of the same economic
experts they heard from Tuesday because they were not able
to livestream the proceedings.
"We could have held this but for it to not be broadcast
live, for it to not be transparent, it's not worth it. We'd
rather do it the right way," Michlewitz said at the time.
State House News
Service
Monday, January 3, 2022
Comptroller: FY '21 Revenues Smashed Estimates By $13
Billion
By Colin A. Young
The grand total of state revenues collected by the end of
fiscal year 2021 exceeded that year's budget estimates by
more than $13 billion, including a surplus of more than
$5.86 billion in tax revenue, according to a new report from
the state comptroller.
Fiscal year 2021 revenues from all sources totaled
$56,867,366,700 as of June 30, 2021, Comptroller William
McNamara's office said in an accounting report typically
required by the Legislature in each year's budget. That was
30 percent more than the $43,641,100,000 revenue grand total
estimated in the fiscal year 2021 budget.
After required transfers to specific accounts, the fiscal
2021 budget document assumed $22.793 billion in tax revenue
but the fiscal year ended with more than $28.656 billion in
tax revenue after the transfers, the report said. Income tax
revenue, the single largest bucket of state tax revenue,
came in at more than $19.61 billion -- outpacing the
budget's underlying estimate of $15.93 billion by nearly 25
percent.
Non-tax revenue -- things like federal reimbursements and
departmental revenue -- came in even further above
expectations. At more than $28.21 billion, actual fiscal
2021 non-tax revenue was more than 35 percent more than the
$20.85 billion expectation built into the fiscal 2021
budget.
The report also sheds light on the specific revenue sources
that outperformed (or underperformed) their budget bill
expectations. For example, the report shows that the fiscal
2021 budget was built with an expectation of $54.5 million
in marijuana excise tax revenue but the year actually
generated more than twice that amount -- $112.37 million. As
the pandemic lingered, revenue from room occupancy taxes
came in at about $88.72 million -- about 25 percent short of
the $117.9 million estimate.
The comptroller's office said the "comparison of Actual
Revenue Collections to Budget" is traditionally submitted
pursuant to sections of the annual appropriations act. But
when lawmakers in December 2020 passed the conference
committee budget for fiscal year 2021, the language "was
inadvertently omitted" and the office instead prepared the
fiscal 2021 report based on language provided by legislative
staff.
State House News
Service
Wednesday, January 5, 2022
Change in Law Leads to Massive December Tax Haul
By Matt Murphy
December tax collections of $4.24 billion shattered last
year's mark for the final month of the year and exceed
estimates by more than 40 percent, but the windfall is
likely temporary with state revenue officials attributing
much of gains to a change in state law that allows certain
businesses to avoid federal limits on state and local tax
deductions.
The Department of Revenue reported Wednesday that the state
in December 2021 collected $1.4 billion more than in
December 2020 and $1.23 billion more than estimates for the
month. But DOR also said much of that money will be returned
through refunds.
Still, even after adjusting for the business tax changes,
the department said December tax collections exceeded last
year's haul by $520 million, or 18.3 percent, and beat
estimates by $635 million.
"December 2021 revenue collections increased in all major
tax types in comparison to December 2020 collections and the
December 2021 monthly benchmark, including withholding,
non-withholding, sales and use tax, corporate and business
tax, and 'all other' tax," Revenue Commissioner Geoffrey
Snyder said. "The increase in withholding is likely related
to improvements in labor market conditions."
Snyder said many pass-through entities, or businesses that
pass all income on to owners and investors, elected to pay
excise taxes at the business entity level, and will then be
able to claim credits equal to 90 percent of the tax paid.
Pass-through entity members who also paid taxes on their
estimated business income will also be eligible for refunds.
After accounting for the expected refunds, Snyder said
fiscal 2022 year-to-date collections are $2.67 billion
higher than after the first six months of fiscal 2021 and
trending $1.55 billion, or 10 percent, above budgeted
projections.
Sales taxes totaling $771 million in December were up 33.5
percent from last year, and the $108 million in meals taxes
were $27 million higher than projected and $44 million more
than last December.
State House News
Service
Wednesday, January 5, 2022
Bettors Dump Record Amounts Into Lottery
By Colin A. Young
The last week of 2021 was the best one on record for
Massachusetts Lottery sales as weekly sales records for
scratch tickets and Keno combined with a rising Powerball
jackpot to contribute to more than $145.3 million in sales.
From Sunday, Dec. 26 through Saturday, Jan. 1, the Lottery
sold $145,329,765 worth of its products, eclipsing the
previous weekly sales record of $139.47 million set the week
that ended Jan. 16, 2021, by more than 4 percent, the
Lottery announced Wednesday.
"Thanks to the Lottery team, our retail partners, and most
importantly, our customers we have been able to achieve
another record setting performance," Treasurer Deborah
Goldberg, who chairs the Lottery Commission, said. "Despite
a challenging business environment over the last two years,
the Lottery has been able to surpass previous records set
and we hope to build upon ... that success this year."
The Lottery sold just more than $97.88 million worth of
scratch tickets during the last week of 2021, topping the
previous weekly high of $93.16 million established during
the final week of 2020. Keno sales for the last week of 2021
totaled nearly $25.8 million, breaking the $25 million mark
for the first time and breaking the weekly record of $24.48
million in Keno sales the week that ended March 20, 2021.
Lottery Executive Director Michael Sweeney said the
record-setting sales were "driven by a thoughtful,
analytical approach to all areas of our business such as new
ticket development, managing inventory and distribution, new
promotions and enhancing digital and social media while
making operational adjustments prompted by the pandemic."
The Lottery produced a record $1.112 billion in profit in
fiscal 2021 for the Legislature to use as local aid to
cities and towns and through five months of fiscal 2022 is
running roughly $38.5 million ahead of the fiscal 2021
profit pace.
Goldberg told lawmakers and Baker administration officials
last month that she expects the Lottery will generate about
$995 million in revenue for the state this fiscal year and
roughly $1 billion in fiscal year 2023.
The Salem
News
Thursday, December 23, 2021
Lawmakers want to increase corporate taxes
By Christian M. Wade, Statehouse reporter
Democratic lawmakers are pitching plans to ratchet up taxes
on corporations to support the state’s recovery from the
economic impacts of the pandemic.
Several proposals heard by the Legislature’s Revenue
Committee Wednesday would increase the state’s corporate tax
and set other new levies to squeeze more money out of
corporations they say have reaped profits during the
pandemic.
One proposal filed by Rep. Mary Keefe, D-Worcester, would
raise the current corporate tax rate of 8% to the pre-2010
rate of 9.5%, which backers say would generate $375 million
to $500 million annually.
Keefe said big corporations have made record profits during
the pandemic, and wealthy shareholders have used loopholes,
tax breaks and weak corporate disclosure laws to avoid
paying their “fair share” of taxes.
“During the pandemic, 17 out of America’s top 25
corporations have made extraordinary profits and distributed
99% of their net profits to their wealthy shareholders, who
are overwhelmingly white, male and among the wealthiest 10%
of Americans,” she told the panel.
Keefe said studies have shown more than 80% of the benefits
from former President Donald Trump’s 2017 Jobs and Tax Cut
Act — which reduced the corporate tax from 35% to 21% — went
to the nation’s top earners.
She said the state needs “new progressive revenues” to
provide assistance to people facing eviction and food
insecurity, boost education spending, strengthen public
transit and support workforce development, among other
priorities.
Another proposal, filed by Rep. Mike Connolly, D-Cambridge,
would establish a tiered alternative minimum tax charging
corporations from $456 to $150,000 a year depending on
sales. Businesses that report less than $1 million in sales
a year would only pay $456, which is the current flat rate
for all businesses.
Connolly told the committee that the changes would bring
more “fairness” into the state’s corporate tax structure.
“As we know, corporations avoid paying taxes by employing a
variety of accounting techniques and taking advantage of
certain provisions in the law,” he said.
He points to several other states, including New York and
New Jersey, which have tailored their corporate taxes to
collect more from companies to make larger profits.
Meanwhile, another proposal heard by the committee would
authorize the state to tax a portion of profits that
corporations often store away in offshore “tax havens.”
Last year, a coalition of labor unions, community groups and
faith groups called on Beacon Hill to increase taxes on
corporations and wealthy shareholders to drum up money to
offset pandemic-related budget cuts that were being
predicted at the time.
Increasing the tax on corporate profits from 8% to 9.5%,
advocates say, could generate another $450 million to $525
million a year for the state’s coffers.
The group, Raise Up Massachusetts, is also behind a
“millionaires tax” referendum cleared for the 2022 ballot
that will ask voters to amend the state constitution to set
a 4% surtax on the portion of an individual’s annual income
above $1 million.
Supporters say the tax will drum up to $2 billion in
much-needed revenue for education and transportation
spending.
Opponents argued the measure will hurt businesses, drive
away investment and put a drag on the state’s economy as it
recovers from the pandemic.
Massachusetts has received billions of dollars in federal
pandemic relief, but supporters of raising corporate taxes
say those funds will eventually dry up.
Gov. Charlie Baker is among those who oppose plans to
ratchet up taxes, saying repeatedly that he would not
consider raising tax burdens amid the pandemic.
Business leaders say raising corporate taxes would be a
mistake for the state as it tries to recover from the
economic impacts of the coronavirus.
“The idea of piling on new taxes at a time when businesses
are trying desperately to recover would be folly,” said
Chris Carlozzi, state director of the Massachusetts chapter
of the National Federation of Independent Businesses. “For
lawmakers to say that the state needs more tax revenue from
businesses at a time when billions of dollars in pandemic
relief has come into the state is disingenuous.”
Carlozzi said NFIB supports several Republican sponsored
proposals, which are also being considered by the Revenue
Committee, to eliminate the state’s corporate minimum tax
and reduce other business taxes.
“This would give the state a competitive edge by doing away
with what many businesses feel is an unfair tax,” he said.
— Christian M. Wade covers
the Massachusetts Statehouse for North of Boston Media
Group’s newspapers and websites.
State House News
Service
Wednesday, December 21, 2021
Dems Push For Higher Taxes On Businesses
Bills Target Minimum Tax, Overall Corporate Tax Rate
By Matt Murphy
While the federal government has pumped billions of one-time
dollars into state economies, some legislative Democrats
believe the state still should be looking to wealthy
corporations for additional revenue to fund education,
transportation and other priorities when those funds
inevitably dry up.
The Joint Committee on Revenue held a hearing Wednesday on
dozens of bills related to corporate tax structures,
including proposals to return the state's corporate tax rate
to pre-2010 levels and to increase the minimum tax companies
without other liabilities must pay.
Committee co-chair Sen. Adam Hinds said the committee
experimented with written-only testimony on the more than
500 bills assigned to the panel this session, but is moving
back to virtual oral testimony and has an "aggressive"
schedule with about a hearing a week planned through
January.
Rep. Mary Keefe, a Worcester Democrat, proposed increasing
the corporate tax rate from 8 percent to 9.5 percent, the
same level it sat at more than a decade ago. She said there
are only eight other states where business pay a smaller
share of state and local taxes than they do in
Massachusetts.
Testifying that the adjustment could bring in $375 million
to $500 million annually, Keefe said the money will be
needed to not only fund the state's ongoing COVID-19
pandemic response, but meet the state's financial
commitments made to public schools under the Student
Opportunity Act and address problems like food insecurity
and the high cost of child care, which she said are not
going away.
"We need to generate more progressive revenue," Keefe said.
Corporate tax reform, she said, would also improve equity in
the tax code because she said business taxes are paid
disproportionately by white, high-income households who are
more likely to own stock.
"I don't like to use the word raising taxes," she said.
"This is about restoring the tax to where it was before
2010."
Rep. Mike Connolly, a Cambridge Democrat, said he supported
Keefe's bill, which has also been filed in the Senate by
Sen. Sal DiDomenico, but he also proposed increasing the
$456 corporate minimum tax that had not been adjusted since
1989.
Connolly's bill (H 2853) would establish a nine-tier
structure for companies that otherwise don't pay taxes on
income, topping out at $150,000 for companies that do more
than a $1 billion in sales a year. Corporations with less
than $1 million in annual sales would see no change to their
minimum tax of $456.
"When we say those words, progressive revenue, we're really
saying tax fairness," Connolly said, noting that New York,
New Jersey and Oregon have similar tiered systems.
The House previously voted to support an increase in the
corporate minimum tax as part of a transportation financing
package that stalled in the Senate in 2020 as COVID-19
disrupted the course of the legislative session, and life in
general.
Connolly cited the Massachusetts Budget and Policy Center
when he told the committee that in some years more than 200
companies in Massachusetts with more than $50 million in
gross annual receipts have paid just $456 in corporate
taxes.
The additional taxes, supporters said, were appropriate
given the cuts many wealthy corporations received on their
federal tax bills in recent years as part of the 2017
Republican tax cuts signed by former President Donald Trump.
Groups including the Alzheimer's Association and AARP also
testified Wednesday in support of creating a family
caregivers' tax credit of between $1,500 to $3,000 for
individuals who care for a sick loved one at home and often
have to leave the workforce as a result.
The Boston
Herald
Friday, December 24, 2021
A Boston Herald editorial
Raise taxes, say goodbye to businesses
When is a tax hike not a tax hike?
When Massachusetts Democrats maneuver definitions with the
skill of a three-card monte dealer.
The federal government has scattered largesse in the form of
billions of one-time dollars into state economies, including
ours, but those funds will eventually dry up. Then what?
According to the State House News Service, some legislative
Democrats believe the state still should set its sights on
wealthy corporations for additional revenue to fund
education, transportation and other priorities.
Corporations are the go-to villain for Democrats, aghast at
their job-creating, worker-employing, economic growth
boosting gall.
It’s time for them to pay for all that success.
The Joint Committee on Revenue held a hearing Wednesday on
dozens of bills related to corporate tax structures,
including proposals to return the state’s corporate tax rate
to pre-2010 levels.
Committee co-chair Sen. Adam Hinds said the committee
experimented with written-only testimony on the more than
500 bills assigned to the panel this session, but is moving
back to virtual oral testimony and has an “aggressive”
schedule with about a hearing a week planned through
January.
Rep. Mary Keefe, a Worcester Democrat, proposed increasing
the corporate tax rate from 8% to 9.5%, the same level it
sat at more than a decade ago. She said there are only eight
other states where businesses pay a smaller share of state
and local taxes than they do in Massachusetts.
Testifying that the adjustment could bring in $375 million
to $500 million annually, Keefe said the money will be
needed to not only fund the state’s ongoing COVID-19
pandemic response, but meet the state’s financial
commitments made to public schools under the Student
Opportunity Act and address problems like food insecurity
and the high cost of child care, which she said are not
going away.
“We need to generate more progressive revenue,” Keefe said.
Corporate tax reform, she said, would also improve equity in
the tax code because she said business taxes are paid
disproportionately by white, high-income households who are
more likely to own stock.
“I don’t like to use the word raising taxes,” she said.
“This is about restoring the tax to where it was before
2010.”
So making a tax higher isn’t raising it, it’s just reverting
the tax to where it was 21 years ago. When it was higher.
Sorry, but up is up.
Targeting white, high-income, stock-owning households for
higher business taxes in the name of tax code equity glosses
over the higher personal tax brackets these upper-income
households are already in. Or is the progressive goal to
keep paring down the assets of taxpayers starting at the top
until everyone’s hovering near the bottom? And what would be
the protocol if large corporations were owned by persons of
color?
The problem with corporate tax hikes is that businesses go
where the tax environment is friendly. And there are many
states who openly court big businesses to boost their local
economy.
Businesses don’t have to make it in Massachusetts. Nor do
they have to spend it here.
We do need to consider a future when the federal gravy train
pulls out of the station, but eyeing Massachusetts’
corporations as giant ATMs who must stand in for D.C.’s
coffers is the best way to send these companies packing.
Forging public-private partnerships is a better goal worth
pursuing. And they don’t take semantic contortions to
achieve.
The Salem
News
Monday, December 27, 2021
Beacon Hill punts on charitable deductions law, again
By Christian M. Wade, Statehouse reporter
A tax deduction for charitable donations approved by voters
more than two decades ago will be delayed again after
lawmakers failed to authorize the changes before recessing
for a seven-week winter break.
Under the law, people would be allowed to claim charitable
contributions against their Part B adjusted gross income on
their state taxes. The deduction could not be used for
donations of household goods or clothing.
Voters approved the deduction in 2000 as part of a
referendum rolling back the state’s personal income tax rate
to 5%. The referendum was approved by more than 70% of
voters.
Two years after its approval, the Legislature froze the
personal income tax at 5.3% to plug budget shortfalls and
created a mechanism to reduce the tax rate as revenue growth
allowed.
As part of the changes, lawmakers froze the charitable
deduction until the state’s income tax rate fell to 5%.
The state had planned to allow the deductions starting this
year since the income tax rate finally dropped to 5%. But
lawmakers postponed it, citing the financial impact of the
pandemic.
Gov. Charlie Baker added a provision to the current fiscal
year’s budget that would have authorized the deductions, but
lawmakers stripped the changes from the final spending
package. Baker vetoed the provision delaying the tax
deduction, but lawmakers overrode his objection.
Budget writers estimated that postponing the law until 2023
would free up about $64 million for the current fiscal year
budget.
Baker argues the state’s financial situation has improved
and he does not want to postpone it any longer.
“This deduction was approved by voters 20 years ago and
slated to go into effect when state finances allow, and the
combination of strong state revenues and serious needs
facing nonprofits and charitable organizations necessitates
this tax deduction’s going into place,” Baker wrote to
lawmakers recently.
Senate Minority Leader Bruce Tarr, R-Gloucester, a chief
proponent of bringing back the tax deduction, said he is
“disappointed” that the Legislature didn’t take action on it
before breaking for a long winter recess.
Tarr likens the delay to a move by the Legislature years ago
to postpone a reduction in the personal income tax rate that
was approved by voters by a referendum.
“It’s another example of something that the voters
overwhelmingly mandated that has continued to be short on
Beacon Hill,” he said. “I think it promotes distrust in
government to have that kind of a situation and it’s hard to
defend given the financial situation we find ourselves in.”
Massachusetts has benefited from an influx of billions of
dollars in federal pandemic relief, as well as
better-than-expected tax collections in recent years that
have given Beacon Hill policymakers a pile of surplus money.
Tarr sought to implement the voter-approved tax break as
part of the $4 billion plan to spend American Rescue Plan
Act funds and state surplus revenue.
But the Democratic-controlled Legislature rejected his
amendment, ensuring that the charitable deduction won’t be
available for income tax filers next year.
Groups that work with nonprofit groups argue that the tax
deduction law has been delayed long enough.
“Most nonprofits saw significant revenue losses last year
and had to layoff workers and cut hours,” said Jim Klocke,
CEO of the Massachusetts Nonprofit Network. “This law will
promote charitable giving and help nonprofits recover from
the pandemic.”
Most people who would be using the deduction live in low-
and middle-income households that often donate smaller
amounts to charity but have not been able to get a state
income tax deduction, he said.
“This is a universal deduction available to everybody,”
Klocke said. “It’s been delayed by more than 20 years, and
we believe it’s time to restore it.”
— Christian M. Wade covers
the Massachusetts Statehouse for North of Boston Media
Group’s newspapers and websites.
State House News
Service
Tuesday, December 28, 2021
Lawmakers Urged To Join Senior Tax Relief Movement
Locals Frustrated By Procedural Hurdles
By Chris Lisinski
With some of the highest property values in the country,
some older Massachusetts homeowners possess sizable wealth.
But those high values carry high taxes, and many seniors on
fixed incomes find themselves in a state that one local
assessor called "house rich and cash poor."
That contrast was a central theme before the Revenue
Committee on Tuesday, where supporters of legislation to
update senior tax relief programs pushed for measures that
would increase the value of local exemptions or make more
residents above the age of 65 eligible to defer property
taxes.
"This is one of the common concerns people raise, setting
aside the pandemic issues that are attendant to all of us,"
Mike Festa, state director for AARP Massachusetts, told the
committee. "When the dust settles and we try to get back to
some sense of normal, this is the kind of problem that is
systemic, long-standing and exacerbated over time."
Older Bay Staters can seek property tax relief in several
ways, including via the state-administered circuit breaker
tax credit, local exemptions, and deferral of the taxes owed
at the local level.
The deferral option allows residents 65 or older with low
annual incomes to push back a portion or all of the property
taxes they owe. According to a Department of Revenue
taxpayer guide, the taxes plus interest cannot exceed more
than 50 percent of the homeowner's "proportional ownership
share of the fair cash value of the property."
Of the state's 351 cities and towns, 119 granted at least
one property tax deferral for residents 65 and older in
fiscal 2021, according to DOR data.
Newton issued more deferrals than any other community with
69, representing $589,014 in property taxes whose collection
will be delayed. In terms of total value, Needham topped the
list with 12 deferrals constituting $998,283 in taxes.
Program backers say postponing payments allows seniors on
fixed and limited incomes to focus on their more pressing
needs, such as food and medicine, and pay off a tax bill
further down the road.
However, some lawmakers and advocates contend that the
deferral local option still imposes several unnecessary
barriers, including a requirement that a senior live in
Massachusetts for 10 years and own their property for five
years to qualify.
"If you're my neighbor, you're my neighbor the day you move
in, not after five years or 10 years," Rep. Tommy Vitolo,
who filed legislation with Rep. David Rogers (H 3090)
striking that time-based eligibility standard, told his
colleagues.
Their bill would also amend the 8 percent default interest
rate on the deferred property tax value to a lower figure
based on recent state or local bond rates, which Vitolo
estimated is about 3 percent.
Another obstacle the deferral program poses, Vitolo said, is
a sharp and sudden increase in the interest rate when a
recipient dies.
Current law doubles the rate from 8 percent to 16 percent
"on the day of that senior citizen's passing," Vitolo, a
Brookline Democrat, said. His bill would delay that increase
by one year to give surviving family members or an estate
time to respond.
In an interview after the hearing, Festa said the existing
interest rate increase creates a "very onerous result from
the accident of timing."
"The person who inherits the property, let's say the
children, may not even know there's a tax deferral," Festa
said. "They would be in a situation where they're taking up
a huge increase in the bill because the interest rate
attaches, so giving breathing room for the family and the
estate to settle and sell and then pay -- you're just
acknowledging that you don't want this kind of onerous
result, which is not fair."
AARP Massachusetts endorsed the legislation Vitolo and
Rogers filed. Festa said he believes the Revenue Committee
could "probably cobble together a good omnibus bill"
incorporating some other proposals dealing with tax relief
for seniors, adding that "on balance, the Vitolo-Rogers bill
is the one that addresses the most critical need out there."
Another bill on the committee's plate (H 3732 / S 1916)
would give municipalities greater leeway to increase
eligibility for property tax exemption programs without
first getting approval from the state.
Victor Santaniello, town assessor for Wakefield and Reading,
told the Revenue Committee that income and asset limits for
the tax exemptions "have not kept pace with our economy."
In communities that have not pursued cost-of-living
adjustments, the maximum eligible income to qualify for a
senior property tax exemption is $20,000 for a single person
and $30,000 for a married couple, Santaniello said. Even in
Wakefield, which has implemented cost-of-living adjustments
to the income limits for 17 years, the caps are $28,000 and
$40,000 respectively, according to Santaniello.
The bill would set new eligibility limits for property tax
exemptions based on the statewide senior citizen circuit
breaker tax credit, which Santaniello said has a "much
higher income threshold," and allow local assessors to set
the exemption amount without first securing a home rule
petition.
"This solves the problem of someone being house rich and
cash poor," Santaniello told the News Service.
State law sets the property tax exemption for seniors at
$500, and about 100 communities have taken local action to
increase it to $1,000, Santaniello said. Both he and the
bill's House author, Rep. Kate Lipper-Garabedian, warned
that the process for doing so is arduous and requires state
legislative action to clear the way for municipal leaders.
When Wakefield moved to increase its exemption amount last
session, it took 17 months to move from the filing of a home
rule petition to securing Gov. Charlie Baker's signature,
Lipper-Garabedian said.
"It's of high importance that local governments are granted
expanded authority by the state. The alternative is a
lengthy and multi-stage process that delays implementation
of property relief programs and thus disadvantages senior
citizens," se said.
Lipper-Garabedian, who filed the bill alongside Sen. Jason
Lewis, said the Revenue Committee favorably reported an
earlier version of the legislation last session.
The Boston
Herald
Thursday, December 30, 2021
A Boston Herald editorial
High temps, low prices lure snowbirds to FL
Legislators pushing for estate tax reform aimed at raising
an outdated threshold that burdens middle class families are
on the right track.
But it won’t solve the state’s “snowbird” problem.
That — the phenomenon of Bay Staters flocking to warm
weather states like Florida for the winter for half the year
— is what prompted Massachusetts lawmakers to file their
bills.
As the Herald reported, residents of places like Nantucket
alerted their legislators that, thanks to a prohibitive
estate tax that kicks in at $1 million in assets, neighbors
are filling out temporary change of address cards to states
in the sunny south that don’t have estate taxes, escaping
the Mass. tax.
It’s that $1M bar that needs to go.
“If you’re a middle class family who’s just sitting on
property, the valuation has just increased,” said state Sen.
Julian Cyr (D-Truro), who authored the Senate version of the
bill. “Those are the folks who’re being adversely affected
by the state tax, not the ultra-rich, who frankly are savvy
and well-resourced enough to avoid it in the first place.”
According to Zillow, the average Massachusetts home costs
$541,834, a 16.6% increase from a year ago. “That means that
a lot of middle-income families really quickly hit that $1
million threshold,” said State Rep. Daniel Fernandes
(D-Falmouth), who filed the House version of the bill. “If
they just have a home that is slightly over half a million
dollars, and they have some money in a 401k and maybe a car
and a life insurance policy.”
The bill would double the threshold from $1 million to $2
million.
“The estate tax in Massachusetts was always intended to be a
rather progressive tax, meaning that you’re focusing on
folks who are wealthy and super-wealthy, but I think that
the million dollar threshold feels out of date,” Cyr said.
Eileen McAnneny, president of the Massachusetts Taxpayers
Foundation, noted that the risk of losing the state’s aging
population to other states like Florida and New Hampshire
already has a ripple effect on the state’s other revenues,
including capital gains taxes, interest, dividends, sales
tax and more. The Herald reported earlier this year that the
state lost $20.7 billion in adjusted gross income between
1993 and 2018.
It’s a great move — but avoiding the estate tax is but one
reason Florida and other southern states appeal to
Massachusetts seniors.
On Wednesday, the temperature in Boston at 5 p.m. was 41
degrees. In Tampa, it was 79.
A Massachusetts snowbird nesting from November until April
in Tampa, Orlando, Vero Beach or any other of Florida’s
literal hot spots doesn’t have to worry about shoveling
snow, saving the space they’ve just cleared, scraping off
their windshield, skidding on ice, paying an arm and a leg
for heat, traversing the snowmounds piled at street corners
by plows, etc.
Massachusetts has many wonderful attributes — a balmy winter
isn’t one of them. Florida and other points south have
appealed to retirees since the first grandpa wore socks with
sandals and declared it a fashion statement.
Things are less expensive the farther south you go. A visit
to NerdWallet’s cost of living calculator finds that
compared to Boston, the cost of living in Tampa is 40%
lower. The cost of food is 4% lower, and the price of
entertainment is 11% lower. Healthcare costs are 13% lower.
So while the lawmakers’ reform bill is a much-needed piece
of legislation to bring the estate tax code up to date, it
doesn’t reform the weather nor the prices in our beautiful,
cold, expensive state.
The
Committee to Unleash Prosperity
Monday, December 27, 2021
The
Great Escape
Americans continue to vote
with their feet, in an acceleration of pre-COVID trends away from
California and the Northeast and to the South.
The Census Bureau reported
Net Domestic Migration by Region July 1 2020 to July 1 2021:
Northeast -389,638
West -144,941
Midwest -123,103
South +657,682
And here is 2021 by state:
The Boston
Globe
Wednesday, January 5, 2022
Bye-bye, Bay State
Year in, year out, tens of thousands of Massachusetts
residents leave for good,
and their numbers aren’t replenished by newcomers from other
states.
By Jeff Jacoby, Globe Columnist
A friend of mine who lived for many years on the North Shore
relocated to Kentucky in 2018 and has rejoiced ever since
that it was among the best decisions he ever made. Compared
with the Bay State, he reports, the housing where he lives
now is more affordable, the taxes are lower, the winters are
milder, the people are friendlier, and the politics are more
congenial. Not even the tornadoes that tore up Western
Kentucky last month have dampened his satisfaction in no
longer having to put up with all the things that he found so
irksome about life in Massachusetts.
My friend’s experience isn’t anomalous. Each year, more
people leave Massachusetts for other states than move to
Massachusetts from other states. According to the US Census
Bureau, between April 2020 and July 2021, the population of
Massachusetts shrank by more than 45,000. Only three other
states — California, New York, and Illinois — experienced a
greater net outflow of residents.
When it comes to domestic migration — the movement of people
within the United States — Massachusetts has been on the
losing team for quite a while. Back in 2003, the Donahue
Institute at the University of Massachusetts noted with
concern that over the previous 12 years, Massachusetts had
experienced a net loss of more than 213,000 people (not
including foreign immigrants). The out-migration hasn’t
stopped. While the influx of people moving into
Massachusetts from elsewhere in the United States has been
steady, the Boston Business Journal observed in 2020, the
tide of those moving out has swelled by 24 percent. And
where are they going? The numbers fluctuate from year to
year, but the Journal identified Florida and New Hampshire
as the two “top states draining Massachusetts of the most
residents.”
Real-world evidence confirms that far more people relocate
from Massachusetts to Florida or New Hampshire than the
other way around.
Consider U-Haul’s rental rates. To rent a 26-foot truck for
a one-way move from Boston to Orlando this month will cost
you $5,325, but the rate is just $887 for a move from
Orlando to Boston. Why the steep disparity? Because the
demand for one-way trucks from Boston to Florida is very
high, while demand for trucks going in the other direction
is very low.
The imbalance shows up even for destinations as close as
Massachusetts and New Hampshire. U-Haul’s rate to rent a
truck from Boston to Manchester is $473. But it’s just $208
if you’re driving from Manchester to Boston.
To be sure, the choices Americans make about where to live
and work are affected by all kinds of individual
considerations — school, work, weather, family, cost of
living. But the persistent attraction of Florida and New
Hampshire also reflects the fact that they offer something
Massachusetts doesn’t: Could it be that neither imposes an
income tax? When the states are ranked by overall tax
burden, Florida and New Hampshire are among the least
onerous. That can’t be said about Massachusetts. Taxes are
not the only reason that people pull up stakes and move, of
course. But the steady (and costly) flow of Massachusetts
residents to the Granite and Sunshine states speaks for
itself.
Economist Mark Perry, who analyzes national domestic
migration patterns, shows that on a range of economic and
political measures, the Top 10 “inbound” states (currently
Florida, Texas, Arizona, North and South Carolina,
Tennessee, Georgia, Idaho, Utah, and Nevada) differ
significantly from the Top 10 “outbound” states (California,
New York, Illinois, Massachusetts, New Jersey, Louisiana,
Maryland, Hawaii, Minnesota, and Michigan). By and large,
inbound states have lower taxes, Republican governments,
cheaper energy, greater fiscal stability, and a more
pro-business environment. Outbound states are more likely to
lean the other way.
Admittedly, these are only broad patterns, and no state in
either category fits the description precisely. And, as
noted, every family’s decision to move from one state to
another is shaped by personal circumstances. But the data
keep reinforcing the patterns. “There is empirical evidence
that Americans and businesses ‘vote with their feet’ when
they relocate from one state to another,” writes Perry. “The
evidence suggests that Americans are moving from blue states
that are more economically stagnant . . . to fiscally sound
red states that are more economically vibrant.”
Massachusetts certainly has its charms and advantages;
countless Bay Staters would never consider moving anywhere
else. But plenty of their neighbors feel differently. Year
in, year out, tens of thousands of Massachusetts residents
leave for good, and their numbers aren’t replenished by
newcomers from other states. My friend in Kentucky is happy
he left, and he’s clearly not alone.
The Boston
Herald
Tuesday, January 4, 2022
Many Massachusetts state lawmakers earning six-figure pay,
one tops $220,000
By Erin Tiernan
Lawmakers pocketed a pricey pay bump last year, sending
salaries for most state senators and representatives north
of six figures as the pandemic surged.
State Sen. Cynthia Friedman was the highest-earning lawmaker
of 2021, taking home $220,544, state payroll data shows. The
Arlington Democrat earned more than $41,000 more than the
next highest earner, Speaker of the House Ronald Mariano.
Mariano, D-Quincy, collected $179,276. His counterpart in
the Senate and the Legislature’s third-highest earner Senate
President Karen Spilka, D-Ashland, was paid $178,276.
Base pay for all 200 state lawmakers climbed from $66,250 to
$70,530 last year thanks to a 4.89% raise that was made
available to them by a 2017 law that tied biennial increases
in their salaries to changes in wages over the previous two
years.
Office expense accounts and lucrative stipends for those
serving on committees also saw increases, further padding
the pockets of lawmakers like Friedman.
Friedman served on eight committees in 2021, serving as
chairwoman for the Joint Committee on Health Care Financing
and vice chairwoman for the Senate Committee on Ways and
Means, the Joint Committee on Ways and Means and the Joint
Committee on Covid-19 and Emergency Preparedness and
Management. She also served as a member on the Senate
Committee on Ethics, the Senate Committee on Personnel and
Administration, the Senate Committee on Rules and the Joint
Committee on Rules.
The state comptroller’s office lists Friedman’s base pay at
$135,331.
Expense accounts range from $16,245 and $21,660 depending on
how far lawmakers live from the State House.
Friedman’s office disputed the comptroller’s salary tally on
Tuesday night in a statement to the Herald.
State lawmakers shared the wealth in 2021, approving
long-awaited raises for House and Senate employees. Staffers
in both branches got 6% cost-of-living adjustments in their
paychecks in May, plus a $500 stipend to defray the cost of
working amid the coronavirus pandemic.
The state’s six constitutional officers and the
commonwealth’s 200 senators and representatives were
eligible for the nearly 5% salary boost last year too. All
but one — outgoing state Auditor Suzanne Bump — declined the
raise.
The roughly $8,740 salary bump for Bump brought her annual
pay to $187,468.
Gov. Charlie Baker, Lt. Gov. Karyn Polito, Attorney General
Maura Healey, Secretary of State William Galvin and
Treasurer Deborah Goldberg all rejected the raise.
Baker took home $185,000 in last year. Polito earned
$165,000. Healey took home $185,377, Galvin grabbed $178,695
and Goldberg earned $189,560.
The Boston
Herald
Wednesday, December 22, 2021
As inflation crushes taxpayers, Legislature sees riches
ahead
By Paul Diego Craney
The United States Labor Department recently confirmed what
ordinary Massachusetts residents already knew; inflation is
having a crushing impact on millions of low-income and
middle-class Massachusetts residents. What they may not know
is that while this is devastating news for almost all of us,
for our state’s 200 lawmakers, it means they are eligible
for a significant pay raise.
According to the Labor Department, their recent data shows
that inflation reached a four-decade high in the month of
November. The Labor Department said the consumer price
index, which measures what consumers pay for goods and
services, rose 6.8% in November from the same month a year
ago. That was the fastest pace since 1982. It was also the
sixth straight month in which inflation topped 5%. This type
of steady increase on countless necessities, including home
heating fuels, the price of gas, the price of groceries, the
price of clothing and many other essentials are all eating
away at the paychecks of low income and middle class people.
Inflation and other factors are to blame for the significant
rise in gas and diesel fuel prices. Massachusetts motorists
are now paying the highest gas price since 2012 — a near
decade high. Gas is about $3.42 a gallon, and this time last
year it was around $2.06. That means we’re looking at a 67%
increase, or an extra $20 at every fill-up.
While this is horrible news for ordinary, working-class
Massachusetts taxpayers, it’s great news for our part-time,
“full time” legislature. In January, Massachusetts lawmakers
received a scheduled automatic pay raise which is tied to
the rate of inflation. As the rate of inflation reaches a
40-year high, lawmakers’ next eligible automatic pay bump
will be their biggest yet if it stays on pace.
As we head into 2022, inflation and economic anxiety are at
the forefront of the minds of most Massachusetts residents —
except those at the State House. And why would it be? For
lawmakers, inflation means automatic pay raises and higher
wages. As for Massachusetts Speaker Ron Mariano and Senate
President Karen Spilka, they still want more.
Mariano and Spilka are pushing forward a 2022 ballot
question in hopes that the voters will be naive enough to
allow them to alter the state constitution to empower
lawmakers to raise the state income tax rate on whoever they
want. This will mean more of your money for them to spend.
This latest tax hike gimmick is authored, owned and
sponsored by Speaker Mariano and President Spilka along with
several other legislators. This proposed ballot question is
not brought forward by concerned taxpayers and citizens. If
these greedy politicians are successful, the state would do
away with its equal taxation clause that protects every
state taxpayer from unjust income tax hikes.
This legislative income tax hike would initially target
high-income earners. If the legislative ballot question
gimmick passes, these Massachusetts residents would see an
80% increase in their income tax rate. Once passed, the
speaker and Senate president will be given the authority to
raise the income taxes on whoever they want and as high as
they want. Can you afford an 80% increase in your income
taxes?
Despite their automatic pay increases, and their proposed
ballot question plan to increase the income tax rate by 80%,
Speaker Mariano and Senate President Spilka are sitting on a
pile of dough. These legislative leaders currently control
billions of dollars in excess taxpayer money and federal
COVID relief money. Even with billions of dollars of
taxpayer money going unspent, these enriched legislative
leaders will try to fool enough voters into thinking they
don’t have enough money next year.
The public often wonders why their paychecks don’t get any
bigger while politicians get rich when they get elected.
It’s really simple. Politicians propose gimmicks to raise
taxes, which take more out of ordinary people’s paychecks
and politicians give themselves automatic pay raises when
everyone else is suffering. That is a theme Massachusetts
Fiscal Alliance will remind the public throughout the New
Year until the legislature’s 80% income tax hike gimmick
fails next November.
— Paul Diego Craney is the
spokesman of Massachusetts Fiscal Alliance.
The Eagle-Tribune
Thursday, January 6, 2022
State to adopt stringent truck emissions rules
By Christian M. Wade
Massachusetts is preparing to enact some of the most
stringent regulations for truck emissions in the nation, as
the Baker administration seeks to curb tailpipe pollution to
meet its ambitious environmental goals.
The new regulations, unveiled by the state Department of
Environmental Protection this week, would adopt California’s
accelerated truck standards requiring an increasing
percentage of all medium- and heavy-duty trucks sold to be
zero-emission starting in 2025.
The regulations, once finalized, will require manufacturers
increase zero-emission truck sales in the state between 30
and 50% by 2030 and 40 and 75% by 2035.
MassDEP Commissioner Martin Suuberg said making the
stringent truck emission regulations permanent "will help to
reduce air pollution across the commonwealth and protect our
environment and the public health."
"The transportation sector accounts for about 40 percent of
the total greenhouse gas emissions statewide," Suuberg said.
"Adoption of these rules will also address environmental
justice concerns in communities that are disproportionately
impacted by medium- and heavy-duty vehicle traffic."
State environmental officials say the rules will lead to
more zero emission trucks on the road in Massachusetts,
which will in turn reduce gasoline and diesel fuel
consumption and maintenance costs due to more fuel-efficient
vehicles.
The move will make Massachusetts one of five states --
including Washington, Oregon, New York, New Jersey -- to
adopt California's stringent rules.
Environmental groups they say the move will help the state
meet is ambitious climate change goals, which call for "net
zero" carbon emissions by 2050.
Critics say the move will have a cost for consumers,
businesses and local governments that use types of vehicles
for delivering freight and goods and providing other
services from municipal trash collection to construction.
Some groups have criticized the Baker administration's
decision to post the emergency regulations, with no debate,
on the final day of the year.
"Major policies that ban the sale of entire categories of
vehicles is a decision that should be debated by the
Legislature and not rushed through by unelected bureaucrats
before a major holiday," said Paul Craney, spokesman for the
Massachusetts Fiscal Alliance, a conservative, pro-business
group.
Baker administration officials defended their decision to
issue the emergency rules at the end of the year, pointing
out they are required under federal law to issue vehicle
emissions regulations at least two years before they take
effect.
They also point out that the rules won't implemented until
April and the public will be able to comment on the proposed
regulations before they are finalized.
To be sure, Massachusetts adopted California's Low Emission
Vehicle program regulations in 1991 and has updated it to
remain in sync with the West Coast state's regulations. The
new regulations involves emission standards for vehicles
built in 2025 and also medium- and heavy-duty vehicles and
engines.
The move follows the collapse of a multi-state pact aimed at
reducing regional vehicle emissions for both trucks and
passenger vehicles.
Last month, Gov. Charlie Baker pulled the plug on the
Transportation Climate Initiative after the agreement failed
to gain traction among other states.
Baker had been one of the most vocal proponents of TCI,
touting it as key to the state’s effort to reduce the
largest source of greenhouse gas emissions.
But most of the original dozen states that were included in
the initiative had backed away, and when Connecticut Gov.
Ned Lamont announced that he won't be joining the pact,
Baker had no choice but to pull Massachusetts out.
The pact called for creating a cap-and-invest program
targeting gas and diesel fuel consumption. Under the plan,
suppliers who delivered fuel across state lines would have
be taxed on emissions above limits that still must be set.
Those costs were expected to be passed on to consumers.
Supporters of the plan argued that higher gas prices would
encourage people to drive less often and turn to public
transit, reducing emissions. Critics said the plan would
have driven up costs at the pump while doing little to
reduce regional greenhouse gas emissions.
TCI was projected to reduce regional emissions by as much as
26% in the next 11 years and generate hundreds of millions
of dollars for green projects over the next decade.
The Baker administration says it is also focused on using
$10 billion in federal funds headed to the state from the
new jobs and infrastructure law, a portion of which will be
devoted to helping the state meets its climate change goals.
Before the new vehicle regulations become permanent MassDEP
will be holding a public hearings and soliciting comment
online from interested parties.
— Christian M. Wade covers
the Massachusetts Statehouse for North of Boston Media
Group’s newspapers and websites.
State House News
Service
Monday, January 3, 2022
State Borrows from California to Speed Transition to
Electric Trucks
Fifty-Three Percent Truck Emissions Cut Projected by 2050
By Colin A. Young
As it aims for Massachusetts to phase out sales of
traditional gas-powered medium- and heavy-duty vehicles over
the next three decades, the Baker administration is adopting
greenhouse gas emissions standards and regulations from
California meant to accelerate the switch to electric
vehicles.
The Department of Environmental Protection last week filed
emergency regulations and amendments to immediately adopt
the Golden State's Advanced Clean Trucks (ACT) policy, which
requires an increasing percentage of trucks sold between
model year 2025 and model year 2035 to be zero-emissions
vehicles. DEP's amended regulations also incorporate
California's revisions to greenhouse gas standards for model
year 2025 and a "Heavy-Duty Omnibus Regulation," to
establish lower greenhouse gas and nitrogen oxides emissions
standards for conventional trucks and heavy-duty vehicles.
The administration said the adoption of California's
regulations, which is required in certain circumstances
under Massachusetts law, will help reduce pollution that
harms the environment, promote the adoption of electric
trucks and "lead to reduced fuel consumption and fuel costs
and maintenance due to more fuel-efficient engines and
vehicles and next-generation zero-emission trucks."
"Massachusetts continues to take aggressive action to reduce
emissions from the transportation sector, and addressing
pollution from medium- and heavy-duty vehicles and advancing
the market for clean trucks is an essential part of this
effort," Energy and Environmental Affairs Secretary Kathleen
Theoharides said. "Reducing emissions from trucks will help
support public health by improving air quality, reducing the
risk from exposure to toxic diesel pollution, and reducing
emissions that contribute to climate change."
Emissions from transportation totaled an estimated 30.8
million metric tons of carbon dioxide equivalents in 2018,
more than any other single sector and equal to roughly 42
percent of all emissions that year, DEP said. Baker
administration energy officials have said that medium- and
heavy-duty vehicles account for about 14 percent of the
greenhouse gas emissions in Massachusetts. The
transportation sector is one of a handful for which the
Baker administration must establish legally binding 2025 and
2030 emissions sublimits by July 1.
DEP said in a summary of the changes that the adoption of
the California regulations is projected by 2050 to lead to a
51 percent reduction in regional medium- and heavy-duty
vehicle nitrogen oxides emissions, a 23 percent drop in
particulate matter emissions and a 53 percent reduction in
greenhouse gas emissions compared with today's levels.
The Massachusetts Clean Air Act requires that the Bay State
"shall adopt motor vehicle emissions standards based on the
California's [sic] duly promulgated motor vehicle emissions
standards" unless DEP determines, after a public hearing and
based on "substantial" evidence that emissions standards and
a compliance program similar to California's "will not
achieve, in the aggregate, greater motor vehicle pollution
reductions than the federal standards and compliance
program."
DEP said that its analysis of the California regulations
concluded that they "are clearly more stringent and provide,
in the aggregate, greater emission reductions than the
current federal program, and therefore must be adopted by
MassDEP." The regulations were filed Dec. 30 on an emergency
basis, the agency said, because they must be in place two
years before the first affected model year begins. Model
year 2025 starts Jan. 1, 2024.
Members of the public will have a chance to weigh in on the
changes during a Feb. 1 virtual public hearing and can
submit written comments via email to ngoc.hoang@mass.gov
until 5 p.m. on Feb. 11, DEP said.
DEP acknowledged that the amendments "will increase the
upfront cost of new [medium- and heavy-duty] vehicles" but
said the owners of those vehicles will realize savings over
time from having switched to a zero-emissions vehicle. In
all, the changes are projected to lead to costs of $1.054
billion by 2050, the agency said.
The amended regulations are also expected to lead to health
care cost savings "in the range of $363 million to $818
million from 2025 through 2050, with the majority of
benefits due to avoided premature deaths, avoided
hospitalizations for cardiovascular illness and avoided
emergency room (ER) visits," the administration said.
"In addition to reducing criteria pollutant emissions and
GHG, the regulations will lead to reduced fuel consumption
and fuel costs due to more fuel-efficient engines and
vehicles, and next generation zero emission trucks, which
will positively affect consumers, most businesses and fleet
owners," DEP said.
Zero-emission vehicles are a major part of the Baker
administration's strategy to meet reduced greenhouse gas
emissions goals. The 2050 decarbonization plan the
administration released in late 2020 said that reducing
greenhouse gas emissions by 45 percent from 1990 levels by
2030 -- the administration's goal before a climate law set
the required 2030 reduction at 50 percent -- would "require
that about 1 million of the 5.5 million [passenger vehicles]
projected to be registered in the Commonwealth in 2030 be"
zero-emission vehicles.
In coordination with more than a dozen other states,
Massachusetts has already set a goal that at least 30
percent of all trucks sold by 2030 and 100 percent of trucks
sold by 2050 be zero-emission vehicles.
State House News
Service
Wednesday, January 5, 2022
Slow Start To Busy Seven-Month Session Stretch
2022 Begins With Virus Surge, State House Still Closed
By Matt Murphy and Sam Doran
The second leg of the Legislature's two-year session
officially kicked off on Wednesday marking the start of a
seven-month stretch that will test the ability of lawmakers
to juggle predictable duties like the passage of an annual
budget with the challenges of reaching compromise on
leadership priorities like voting reform, mental health
access and the acceleration of offshore wind energy.
The year also begins against a backdrop of skyrocketing
COVID-19 cases and concerns about the safety of in-person
schooling, testing capacity, and booster vaccination rates.
House Speaker Ron Mariano this week questioned what the
administration was doing to respond to the latest surge, and
whether additional funding might be necessary for testing or
the distribution of masks, and Senate President Karen Spilka
has joined others in calling for Baker to reinstitute a
statewide indoor mask mandate.
But while COVID-19 will continue to occupy the attention of
lawmakers, many legislators, operating with newly drawn
districts, have already begun thinking about reelection or
running for another office and will be looking to make
progress on myriad issues that would provide grist for their
campaigns later in the year.
Both branches met quickly on Wednesday morning, moving
through the steps necessary to get the second year of the
session underway, but eschewing some of the ceremonial
trappings that typically took place before COVID-19 made
larger gatherings, even for the vaccinated, seem risky.
Sen. Michael Rodrigues, the Senate chair of Ways and Means,
was on hand for the session, and said his focus to start the
year is on "gearing up for the fiscal 2023 budget."
Legislative leaders and the Baker administration must by
Jan. 15 agree to an estimate of tax revenues for the next
fiscal year that will inform budget decisions in the months
ahead. In the coming weeks, Gov. Charlie Baker will deliver
his final State of the Commonwealth address and before the
end of the month file a budget for fiscal year 2023 that
will be his last chance to shape the way the state invests
billions of dollars in growing tax revenues.
Baker begins 2022 staring down the final year of his
governorship, and hoping to make progress on issues like
sports betting and drugged driving prevention. Baker has
also said he will propose a major health care bill early
this year, and he's likely to also soon file an annual
borrowing bill for the Chapter 90 local road repair program
that is often among the first on the annual docket for
lawmakers.
On the Legislature's side of the State House, most
committees face a Feb. 2 deadline to report out any bills
currently before them for consideration and lawmakers will
most likely want to pass legislation as soon as possible
setting a date for the primary elections later this year.
"Just in general, I would like to see committees start
releasing more bills for us to act upon," Sen. Michael Moore
said after Wednesday's session.
Sen. William Brownsberger, who presided over the start of
the new year in the Senate, said he'd like to see the
Legislature "make some more progress in the criminal justice
space, correctional space," and also flagged civil liberties
and archaic laws that have never been repealed as personal
priorities.
"Sodomy still on the books as a felony in this commonwealth.
We should address that, especially with the Supreme Court
changing," the third-ranking member of the Senate said.
Neither Mariano nor Spilka addressed their respective
chambers to start the new year, but many of their priorities
are already known. Mariano was among the few House members
at Wednesday's session.
Mariano has identified the continued development of the
offshore wind industry as a goal, and in a statement he told
the News Service that Rep. Jeff Roy, the co-chair of the
Committee on Telecommunications, Utilities and Energy, is
"finalizing" a bill to make changes to the process used to
solicit bids for wind power projects.
"The House of Representatives has been a leader in offshore
wind and will continue to advance this industry in
Massachusetts. If we want to lead our clean energy future,
we must improve our bidding process to remain competitive
with neighboring states, invest in our port infrastructure,
and incentivize economic development opportunities," Mariano
said.
The Quincy Democrat also said he has a bill on his radar to
reform the oversight and management of the state's two
soldiers' homes in Holyoke and Chelsea after an early
pandemic outbreak of COVID-19 at the Holyoke Soldiers' home
brought new scrutiny on its management. And the House passed
the speaker's bill last year to provide more scrutiny of
large hospital expansions into the suburbs.
Spilka, in a statement, said that in addition to the
ever-evolving response to the COVID-19 pandemic she hopes in
2022 to see voting and mental health access legislation
signed into law. The Senate passed legislation on both of
those topics last year.
She also said she was interested in seeing the Senate tackle
challenges confronting families with regard to child care
and consider "reforms to the criminal legal system and how
it disproportionately impacts underserved youth and adults,
as well as revisit the Senate's prescription drug cost
containment legislation, known as the PACT Act."
"All of these priorities will be considered in the
ever-changing landscape of the COVID-19 pandemic. The Senate
will continue to work with our partners in government at
every level to ensure residents' voices are heard as we
continue to navigate through this pandemic," Spilka said.
While legislators have adapted to new working conditions on
Beacon Hill during the pandemic, the State House remains the
last state capitol building in the country completely closed
to the public and most staff and legislators continue to
work and vote remotely.
Several senators said these circumstances make the process
more challenging than under normal conditions. Moore and
Sen. John Keenan both said they both look forward to the day
when they can again have regular face-to-face interactions
with their colleagues to engage on bills they've filed and
would like to see move forward.
"Really hope that we will be doing that in person, that's my
biggest hope," Moore said.
The emergence of the omicron variant, however, has added to
the slow-moving plans to reopen the State House.
"Unfortunately this omicron reared its head a little bit and
kind of put a little bit of a twist to it, but we'll be
fine," Rodrigues said about the start of the second year of
the session.
Rodrigues said his committee has been taking meetings about
the possible legalization of sports betting, which passed
the House but has again stalled in the Senate, and said he
will continue to urge the Baker administration to "step it
up" with regard to COVID-19 testing availability, which he
said is the most common concern he's hearing from
constituents.
The Westport Democrat also downplayed any urgency to
developing a plan to spend the state's remaining $2.25
billion in American Rescue Plan Act funds, despite some
senators indicating they would support voting on a second
ARPA spending bill this year.
"We still have three years before we even have to allocate
it, so we'll do so when we think the time is right,"
Rodrigues said. |
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