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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
Monday, May 9, 2022
Multiple Billions In
Absurd Over-Taxation
Keeps Piling Up —
But Still No Tax Relief
Jump directly
to CLT's Commentary on the News
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Most Relevant News
Excerpts
(Full news reports follow Commentary)
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Massachusetts Department of Revenue (DOR)
Commissioner Geoffrey Snyder today announced that
preliminary revenue collections for April 2022
totaled $6.941 billion, which is $3.076 billion
or 79.6% more than actual collections in April 2021,
and $2.057 billion or 42.1% more than benchmark....
FY2022
year-to-date collections totaled approximately
$34.487 billion, which is $8.038 billion or 30.4%
more than collections in the same period of FY2021,
and $4.241 billion or 14.0% more than the
year-to-date benchmark.
Commonwealth of Massachusetts
Department of Revenue
Press Release —
Wednesday, May 4, 2022
April Revenue Collections Total $6.941 Billion
Monthly collections up $3.076 billion or 79.6% vs.
April 2021 actual;
$2.057 billion above benchmark
The state
revenue gravy train kept rolling right along in
April as Department of Revenue tax collectors hauled
in more than $2 billion more than what was expected
during the month, giving Gov. Charlie Baker cause to
press his case for the Legislature to take up his
proposals to provide roughly $700 million in tax
relief to residents.
The April
haul pushed the state at least $3.5 billion ahead of
its year-to-date benchmark with just two months left
in the fiscal year. Collections last month added up
to $6.941 billion, $3.076 billion or nearly 80
percent more than what was collected in April 2021
and $2.057 billion or just over 42 percent more than
DOR's own monthly benchmark.
April is
historically the single-largest month for tax
collections, and the windfall should be reason
enough, Baker said, for lawmakers to share some of
the money with the taxpayers.
"You could
easily pay, more than one time, for all the tax
proposals we made with just a piece of the overage
in April," Baker told the News Service in an
interview. "Inflation isn't going away. It's not
transitory. It's for real. And people are paying it
everywhere. They're paying it in food costs. They're
paying it in gas costs. They're paying it in rent.
They're paying it in property taxes as the value of
their home goes up. And I think this is a time when
we should give a piece of the benefit that's being
accrued here by the work of the people of
Massachusetts back to them, because we can afford
it." ...
Baker also
said that Massachusetts has "never been more
protected against a downturn than we are right now,"
with a "rainy day" fund that could potentially top
$6 billion by the end of this fiscal year, with more
expected to be deposited into reserves through the
fiscal year 2023 budget under consideration.
"Any
reasonable assumption about the next two years with
respect to taxes would leave you to believe our tax
proposals are eminently affordable in the short
term, and more importantly the people who are
suffering right now deserve it and we are in a
position to help them, and we should," Baker
said....
Now
through 10 months of fiscal year 2022, tax receipts
of $34.487 billion are more than $8 billion or 30
percent ahead of actual FY 2021 collections and are
$4.241 billion or 14 percent above DOR's
year-to-date benchmark. After adjusting for a
pass-through entity excise that officials have said
has affected comparisons, year-to-date tax
collections are $3.573 billion or 12.3 percent above
the year-to-date benchmark.
The state
took in more than $5 billion more than it was
expecting in fiscal year 2021 and this year could be
on a similar track, setting up the Legislature to
dispense with an election year budget surplus....
Republican
Rep. Nicholas Boldyga of Southwick seized on that
news to point at votes last week by the
Massachusetts House to reject gas tax relief, while
raising the salaries of judges and sheriffs.
"As every
state around us helps their working-class citizens.
Democrats in the Baystate continue to give pay
raises to the States' Payroll 1%ers!" Boldyga
tweeted....
"What's
striking is not just that the state continues to
collect a substantial amount of tax revenue; it's
that the pattern is so unusual. All the volatile
stuff - which you expect to swing up and down - just
keeps swinging up, be it corporate profits or
capital gains. I'm tempted to say this can't go on
but I would have said the same thing three months or
six months ago and been very, very wrong," said Evan
Horowitz, executive director of the Center for State
Policy Analysis at Tufts University.
State
House News Service
Wednesday, May 4, 2022
State Taxes Soar $3
Billion Higher Than Last April
Baker: More Evidence That Tax Relief Warranted,
Affordable
Massachusetts Tax revenues continued to soar in
April, astonishing experts who track the numbers and
prompting Senate President Karen Spilka to announce
that she intends to push for some sort of tax relief
package before the end of June.
April tax
collections totaled $6.9 billion, up more than $3
billion compared to the same month a year ago and
more than $2 billion ahead of the state’s revenue
forecast for the month. Even after adjustments for
an excise tax that is temporarily accelerating tax
payments, revenues in April were up 77 percent from
a year ago and 43 percent ahead of the state’s
consensus revenue forecast, according to numbers
released by the Department of Revenue on Wednesday.
Year to
date, the state has taken in $34.5 billion in tax
revenue, $8 billion, or 30 percent, more than last
year, and $4 billion, or 14 percent, higher than
what was forecast. Last year also saw major
increases in tax revenue growth.
Eileen
McAnneny, president of the Massachusetts Taxpayers
Foundation, said the increase in revenue is
something she hasn’t seen in her lifetime. “It is
incredible,” she said.
Evan
Horowitz, executive director of the Policy Center at
Tufts University, said each month he has tried to
forecast where tax revenues will land and each month
he has been wrong.
“Post-pandemic madness continues to reign over state
tax revenues,” he said. “The stable and reliable
stuff, like income withholding and sales taxes,
remain stable and reliable, 2 to 5 percent higher
than anticipated for the year. But the volatile
parts defy gravity, with revenue from corporate
profits and capital gains way above expectation. As
a forecaster, it’s hard to stomach but there’s no
question state finances are in very good shape.”
Corporate
and business tax collections totaled $690 million in
April, a whopping $291 million, or 73 percent, above
what was forecast....
The state
also has a rainy day surplus fund approaching $6
billion and billions of federal dollars that have
yet to be spent.
“Those
numbers warrant some kind of tax relief,” said
McAnneny.
[Senate
President Karen] Spilka late on Wednesday indicated
she agrees. “In light of today’s news on revenues, I
have asked Senate leaders to work with their
partners in government to pursue a tax relief
package for residents before the end of session,”
Spilka said in a statement. “While the details
remain to be worked out, I believe we can safely
balance targeted spending investments to a number of
crucial areas, such as housing, childcare, and
higher education, with tax relief for individuals
and families who are feeling the effects of
inflation and continued economic disruption. I look
forward to working with my colleagues in the Senate
and our partners in the House after conclusion of
the Senate budget to explore providing tax relief to
the people of the Commonwealth.”
Until
Spilka’s announcement, legislative leaders had not
ruled out a tax relief package but had shown little
interest in it. House Speaker Ron Mariano on several
occasions indicated a tax relief package was not a
high priority....
In the
race for governor, Sen. Sonia Chang-Díaz said she
would not support a tax relief package. “It’s time
to make the investments to actually meet the scale
of the issues Bay Staters are facing every day in
this tough moment for our state. In our tax code we
should support low-income and working class families
across our state through measures like the Earned
Income Tax Credit — not give more money to the
wealthy and corporations,” Chang-Diaz said in a
statement....
Karissa
Hand, a spokeswoman for the campaign of Maura
Healey, said the attorney general favors a
combination of tax relief and investments.... She
supports tax relief as part of the solution, but
believes it should be targeted in ways that make
sense and that go to those who need it most,” Hand
said.
CommonWealth Magazine
Wednesday, May 4, 2022
With tax revenues
soaring, Spilka calls for relief package
Senate president offers no details, promises action
before end of June
With the
annual House budget debate now in the rearview
mirror, Speaker Ronald Mariano said Monday that top
Democrats are still looking at tax relief options
but conceded he is "not sure" when they will be
ready to advance a proposal or what it would entail.
The House
last week rejected efforts to incorporate a
temporary gas tax freeze or Gov. Charlie Baker's
proposed estate, capital gains and senior tax
reforms into its fiscal 2023 state budget bill.
Mariano,
who spoke with reporters after meeting privately
with Baker and Senate President Karen Spilka, said
his team "continue(s) to look at a couple of things
that we have investigated in the past" and is
watching economic trends. The state's coffers for
more than a year have been flooded with surplus tax
revenue, but new reports show the state economy
contracted in the first quarter.
State
House News Service
Monday, May 3, 2022
Tax Relief Slipping Into
Extended Review Phase
FARM FUEL
TAX REBATE (H 4700)
House
29-127, rejected an amendment that would provide a
tax rebate to farmers for the cost of fuel taxes
paid for the operation of farm equipment from July
1, 2022 through December 31, 2022.
Amendment
supporters said the rebate will help hardworking
farmers during this difficult economic time. They
noted it will also help combat food shortages.
Amendment
opponents said this rebate is a new idea and should
be filed as a separate bill in order to hold public
hearings on the measure.
Reps. Nick
Boldyga (R-Southwick), the sponsor of the amendment
and Mark Cusack (D-Braintree), the main opponent of
the amendment, did not respond to repeated requests
from Beacon Hill Roll Call for a comment.
“Farmers,
like everyone in this ‘Bidenflation’ economy, are
struggling to survive, and with the state’s historic
surplus revenue bonanza (aka, over-taxation), the
state can certainly afford to lighten some of their
burden easily,” said Chip Ford, executive
director of Citizens for Limited Taxation.
“Every small savings for producers will reduce the
inflated end-cost for beleaguered consumers.”
REDUCE
CAPITAL GAINS TAX FROM 12 PERCENT TO 5 PERCENT (H
4700)
House
29-127, rejected an amendment that would reduce the
short-term capital gains tax from 12 percent to 5
percent.
Chip
Ford, executive director of Citizens for
Limited Taxation said that anything that can
help the investors in Massachusetts keep up with
mounting inflation is a positive step for the
commonwealth’s economy, “Why should the capital
gains or any tax imposed be charged at a higher rate
than earned income, especially considering the
multi-billions in historic revenue surpluses?” asked
Ford.
Beacon
Hill Roll Call
April 25-29, 2022
By Bob Katzen
Beacon
Hill Democrats, who are easily able to change
deadlines that they can't meet, could take decisions
about whether to pursue tax relief right down to the
end-of-session wire.
With the
state's accounts overflowing from a torrent of
surplus tax dollars, the Revenue Committee moved to
grant itself until July 31 -- the final day to
conduct formal lawmaking business in the 2021-2022
session -- to decide the fate of Gov. Charlie
Baker's $700 million tax relief package and nearly
100 other bills.
The panel
had faced a Wednesday deadline to take a position on
Baker's bill (H 4361), which itself had already been
delayed from the March 2 decision date prescribed
under a section of internal rules giving lawmakers
30 days to tackle any legislation filed in the
second year of a two-year session.
The
Revenue Committee on Tuesday afternoon filed an
extension order kicking its deadline until the last
day of July. The extension applies to 95 bills,
representing all but four pieces of legislation
before the committee.
Rep. Mark
Cusack, a Braintree Democrat who co-chairs the
panel, said lawmakers have not had enough time to
fully vet a proposal Baker rolled out in January....
Cusack
said the panel is also working through other
tax-related proposals beyond Baker's push including
some that have vocal supporters on the left, such as
legislation that would double the state's deeds
excise tax and steer the new revenue toward housing
and climate change mitigation (H 2890 / S 1853).
House
Democrats shot down a Republican-led attempt to fold
Baker's proposed capital gains, estate and senior
tax proposals into their fiscal 2023 budget, and
they have not outlined any plans for tackling the
topic with another legislative vehicle or standalone
bill.
Cusack
said lawmakers have had "initial discussions" about
the smoothest process to advance a proposal.
Massachusetts posted a surplus of about $5 billion
in fiscal year 2021, and with more money heading
into savings, the state's "rainy day" fund could
surpass $6 billion by the end of the current fiscal
year.
That
balance would represent more than 12 percent of the
House-approved $49.7 billion fiscal 2023 state
budget, enough to keep state government
hypothetically running for more than six weeks on
savings alone.
State
House News Service
Wednesday, May 4, 2022
Tax Relief Deadline Spurs
Dems To Seek More Time
Deadline For Tax Measures Pushed Way Out 'Til July
31
Just a
week ago, the fate of Gov. Charlie Baker’s tax cut
proposal seemed all but sealed, confined to the
dustbin of the State House committee where it
languished – and then April’s tax revenue numbers
came in.
“You could
fund our entire tax proposal – more than one time –
with just the surplus in the month of April,” Baker
told reporters Thursday.
April tax
revenues, according to the Department of Revenue,
were a whopping $3 billion higher than they were
last year, coming in at nearly $7 billion and a full
$2 billion more than expected....
The
Massachusetts Taxpayers Foundation, a nonpartisan
watchdog group, has endorsed the tax plan and says
now more than ever the state should move on relief
for residents.
“The
totality of resources available to the commonwealth
warrants tax relief now,” Eileen McAnneny, MTF
president, told the Herald Thursday.
The
House’s nearly $50 billion budget proposal was
approved last week but absent any of the governor’s
tax cut proposals....
On
Wednesday, and in light of the tax revenue report,
Senate President Karen Spilka indicated the upper
chamber would look at taxes this session, saying she
had told senators to “work with their partners in
government to pursue a tax relief package for
residents before the end of session.”
The Senate
will begin debating their budget proposal this
month, with amendments due next week. The
legislative session ends July 31.
“I believe
we can safely balance targeted spending investments
to a number of crucial areas, such as housing,
childcare and higher education, with tax relief for
individuals and families who are feeling the effects
of inflation and continued economic disruption,”
Spilka said.
The
Boston Herald
Thursday, May 5, 2022
Charlie Baker says April revenue
could
pay for his entire tax cut proposal – twice!
Rep. Mark
Cusack, a Braintree Democrat who co-chairs the
[Revenue Committee] panel, said lawmakers have not
had enough time to fully vet the tax cut package
Baker rolled out in January.
“The
governor wanting it is one thing, but there’s 155
members of the House and 40 in the Senate. There’s a
lot more that goes into it than saying ‘I want it,
so do it,'” Cusack told the News Service. “We need
more time to game out that process.”
I'm old
enough to remember when the Democrats wanted
across-the-board pay raises, so they did it
immediately.
MassGOP
Record tax revenue and they still won't give people
a break
Thursday, May 5, 2022
Massachusetts should get its first look at the
Senate Ways and Means Committee's proposed fiscal
2023 state budget next week, and debate on the
inevitable deluge of amendments will take place in
the final full week of May.
The Senate
on Thursday adopted an order laying out a timeline
for the annual budget debate.
Senators
will have until 1 p.m. on Friday, May 13 to file
amendments to the spending bill, which will likely
emerge early next week. It was not immediately clear
Thursday which day the committee planned to release
its proposal.
The order,
sponsored by Ways and Means Chair Sen. Michael
Rodrigues, scheduled the first day of budget debate
for Tuesday, May 24.
Like the
House, the Senate typically spends three or four
consecutive days working through budget amendments
that bulk up the bill's bottom line with scores of
earmarks and in some cases broaden its scope through
policy changes.
Once the
Senate approves its bill, top Democrats will appoint
a conference committee to negotiate a final version
with the House, which last month approved a $49.7
billion budget for the fiscal year that begins July
1.
State
House News Service
Thursday, May 5, 2022
Senate Budget Due Out Next Week, Debate Starts May
24
By Chris Lisinski
The dam
appears to have broken on tax relief as state
revenues continue to surge and Gov. Charlie Baker
now expects that the Legislature, despite its recent
tax votes, will approve some kind of a tax cut by
the time formal lawmaking ends this summer.
"The
commonwealth of Mass. is awash in revenue and we've
been saying since January, this needs to go back to,
a piece of this needs to go back to the taxpayers,"
Baker said Friday morning during the Associated
Industries of Massachusetts annual meeting.
"And I
really do anticipate that there will be some sort of
tax cut that makes it through the process between
now and the end of the legislative session," he
added.
Baker this
week ratcheted up pressure on legislative leaders to
get on board with tax relief as April revenues came
in more than $2 billion ahead of expectation....
[Senate
President Karen] Spilka said she now thinks
Massachusetts can balance investments in things like
child care and higher education with a tax relief
package for residents.
State
House News Service
Friday, May 6, 2022
Tax Relief? Baker Really Does
Anticipate It.
The first
case on the docket Wednesday dealt with the
information voters will get on the November ballot
about how revenue from the proposed surtax on
household income over $1 million could be spent. The
justices paid close attention to the phrase "subject
to appropriation" and whether voters will understand
that that means state lawmakers retain ultimate
spending authority.
Having
successfully kept the so-called millionaire's tax
off the ballot in 2018, Massachusetts High Tech
Council President Chris Anderson and a group of
state representatives and right-leaning groups
lodged a complaint that the surtax summary that
Attorney General Maura Healey has prepared for
voters will misguide them and could lead to "the
nightmare scenario of the Constitution being amended
based not on the will of the people, but because the
people were misled."
Healey's
summary reads: "This proposed constitutional
amendment would establish an additional 4% state
income tax on that portion of annual taxable income
in excess of $1 million. This income level would be
adjusted annually, by the same method used for
federal income-tax brackets, to reflect increases in
the cost of living. Revenues from this tax would be
used, subject to appropriation by the state
Legislature, for public education, public colleges
and universities; and for the repair and maintenance
of roads, bridges, and public transportation. The
proposed amendment would apply to tax years
beginning on or after January 1, 2023."
The suit
seeks to have the SJC order that ballot materials
tell voters that "the Legislature could choose to
reduce funding on education and transportation from
other sources and replace it with the new surtax
revenue because the proposed amendment does not
require otherwise" and order that Healey and
Secretary of State William Galvin not put the
question on the 2022 ballot without the added
proviso.
"Subject
to appropriation indicates that the 4 percent monies
that are raised may not be used, may not be spent,
right? That indicates that ... this could pass and
we wouldn't have the 4 percent actually
appropriated, right?" Justice Scott Kafker asked
less than two minutes into the presentation from the
plaintiffs' attorney, Kevin Martin....
The
proposal would shift the state away from the flat
income tax rate structure enshrined in the
Massachusetts Constitution. If the amendment is
approved by voters, the first $1 million of
household income would still be taxed at the current
5 percent tax rate and household income above that
first $1 million would be taxed at an effective rate
of 9 percent....
Justice
David Lowy took note during Wednesday's oral
arguments of the significance of voters being asked
to amend the Massachusetts Constitution rather than
an individual law passed by the Legislature.
"The
stakes are a lot higher when we're dealing with
Constitutional as opposed to statutory," he said....
When
Assistant Attorney General Robert Toone presented on
behalf of Healey's office, he argued that the phrase
"subject to appropriation" does alert voters that
spending is contingent upon future legislative
action and said the court has "always held" that it
was sufficient notice to voters.
"What if
we were concerned that just subject to appropriation
is inside baseball language?" Lowy asked. He asked
Toone whether letting voters know in the summary
that the Legislature retains the ability to enhance
or reduce funding within budget categories would
help.
Toone
replied, "I think it would be more confusing and
potentially misleading than helpful." ...
Gov.
Charlie Baker, who has been critical of the income
surtax and whose budget chief called it "dangerous
policy," nominated all seven of the high court's
seven justices. Healey supports the surtax and is
running for governor this year, leading that race in
public opinion polls.
State
House News Service
Wednesday, May 4, 2022
Court Judging Fairness Of
Income Surtax Summary
Massachusetts voters this fall will decide whether
to raise taxes on the state’s wealthiest residents.
Before that, the state’s highest court is weighing a
wonky question: How well do voters speak legalese?
The
Supreme Judicial Court on Wednesday took up the
latest challenge to the proposal to tax annual
earnings above $1 million, with opponents asking the
justices to change how the measure is summarized for
voters.
The
proposal, dubbed the Fair Share Amendment and often
called the millionaires tax, would amend the state
Constitution to create a 9-percent income tax rate
on annual earnings above $1 million, while retaining
the broad 5 percent rate for earnings below that
amount. The measure says that all new revenue from
this tax — estimated to be anywhere from $1.3
billion to more than $2 billion annually — would be
earmarked for education or transportation.
But it
also includes a crucial phrase: The money would be
“subject to appropriation” by the Legislature,
meaning lawmakers ultimately decide how it’s spent.
The
Massachusetts High Technology Council, a business
group which filed the challenge with the SJC, has
asked that a line be inserted into the summary
indicating that the Legislature could ultimately
reduce funding on education and transportation from
other sources and simply replace it with the new
surtax revenue.
Critics
argue that the current summary is misleading to
voters, while Attorney General Maura Healey’s
office, which is responsible for ballot question
wording, argues the SJC has previously determined
that the phrase “subject to appropriation”
sufficiently lets voters know that any spending is
contingent on legislative decision-making.
The
dispute surfaced almost immediately during oral
arguments on Wednesday.
“‘Subject
to appropriation’ indicates that the 4 percent
monies that are raised . . . may not be spent,
right? That indicates that this could pass and we
wouldn’t have the 4 percent actually appropriated,
right?” Justice Scott L. Kafker asked attorney Kevin
P. Martin, who represents Mass. High Tech.
In
response, Martin argued that a “reasonable voter”
would not think the Legislature could spend the
money any way it wants to.
Kafker
quickly cut in, suggesting opponents could make that
argument by “bombarding the airwaves with that
point, in advertising and other things.”
Justices
often thread oral arguments with a devil’s advocate
line of questioning, sometimes making it difficult
to discern where individual judges are leaning — let
alone the court as a whole.
But the
question of how effective “subject to appropriation”
is in accurately describing how the money would be
used repeatedly surfaced Wednesday. Justice David A.
Lowy at one point asked an assistant attorney
general whether it would be helpful to let voters
know that lawmakers could also reduce or expand
funding in certain budget categories.
“What if
we were concerned that just ‘subject to
appropriation’ is inside baseball language?” Lowy
asked.
Robert E.
Toone, representing Healey’s office, told Lowy the
extra wording “would be more confusing and
potentially misleading than helpful.”
Other
judges continued to press, including Justice Dalila
Argaez Wendlandt, who noted that the plaintiffs in
the case are simply asking that the attorney
general’s office make clear that the phrase “subject
to appropriation” is really a “technical term for
‘subject to the Legislature’s discretion.’”
“Why would
that be . . . too much?” she said....
The forces
opposed to the existing language say that lawmakers
could simply use the money raised by the tax on high
earners to supplant some existing spending on
transportation or education and that the inclusion
of these two popular causes are designed to be a
“sweetener” to persuade voters to adopt a graduated
income tax.
The need
for clarity is underscored, the critics say, by the
fact this is proposed as an amendment to the state
Constitution, not simply a change in state law.
Constitutional amendments are much tougher to alter
or adjust, in part because such an act would require
two votes in the Legislature as well as a statewide
referendum.
The
Boston Globe
Wednesday, May 4, 2022
On ‘millionaires
tax’ ballot question,
Mass. high court weighs just how well voters speak
legalese
A massive
revenue haul in April, more than $2 billion more
than what was expected, had Baker again pressing for
passage of his multi-pronged tax relief plan.
April's surplus alone, Baker noted, could cover the
costs of his nearly $700 million package multiple
times, and ease some of the pain that high inflation
continues to inflict on household and business
budgets.
The
revenue news prompted [Senate President Karen]
Spilka to announce her branch would pursue a tax
relief package, something she said would involve
working with the House after the Senate wraps up its
budget this month.
Because
bills changing state revenues must start in the
House, the Senate can't act alone -- though senators
could add their relief ideas, whatever they may be,
into any bill they receive involving tax policy.
It seems
unlikely that the more progressive Senate would want
the exact same tax breaks as Baker -- for one thing,
Senate Revenue Chair Adam Hinds at a February
hearing was sharply critical of the governor's
proposed cut to the short-term capital gains tax
rate -- and it's still unclear what path the House
intends to take. It's not even clear whether
lawmakers might use a tax relief package as a
vehicle for select tax increases.
The
Revenue Committee is seeking to push its deadline to
consider nearly 100 tax bills, including Baker's,
until July 31, the last day of formal sessions for
this year. With the opinions of 155 House lawmakers
to consider, Speaker Ron Mariano said he doesn't
know what's going to happen.
State
House News Service
Friday, May 6, 2022
Weekly Roundup
Halftime
in the annual state budget game ends next week when
the Senate on Tuesday rolls out an alternative to
the $49.7 billion fiscal 2023 budget the House
approved in April. Senators will spend the bulk of
next week drafting amendments they hope to attach to
the spending bill when it is debated the week before
Memorial Day weekend. Then it will be on to a
conference committee in June.
Six-member
conferences have already been charged with coming up
with a consensus election reform bill and
legislation overhauling operations as the state's
two long-term care facilities for veterans. This
week, the House and Senate dumped into conference
competing bills addressing offshore wind and carbon
emission reductions....
The
branches have a host of issues to square away on the
health care and mental health front, and legislative
leaders haven't signaled any path forward there.
Other bills expected to pass this session, but which
have long paths ahead, address the business
landscape for marijuana companies, economic
development, and infrastructure.
Gov.
Charlie Baker's $9.7 billion infrastructure bill has
yet to reach the floor of either branch, and his
$3.5 billion economic development bill will be aired
next week during a hybrid hearing featuring both
in-person and virtual testimony.
State
House News Service
Friday, May 6, 2022
Advances - Week of May 8, 2022
A
long-debated proposal to expand driver's license
access to undocumented immigrants took a major step
Thursday toward becoming law, clearing the Senate
with a strong enough margin to overcome the prospect
of Gov. Charlie Baker's formal opposition.
Senators
voted 32-8 in favor of the controversial reform,
which has drawn skepticism from Baker and split
voters. Five Democrats joined the chamber's three
Republicans in dissent, but backers still got more
than enough favorable votes on record to signal the
Senate would clear the two-thirds vote needed to
override a potential veto. The House passed a
similar bill by a veto-proof 120-36 margin in
February.
Pitching
the bill as a road safety and immigration measure,
supporters said it would ensure that some of the
185,000 immigrants who already live in Massachusetts
without legal status are properly tested before
driving and relieve their fears of traffic stops
spiraling into devastating consequences....
Democrat
Sens. Nick Collins of Boston, Anne Gobi of Spencer,
Marc Pacheco of Taunton, Walter Timilty of Milton
and John Velis of Westfield voted against the bill,
as did all three Republican senators - Bruce Tarr of
Gloucester, Ryan Fattman of Sutton and Patrick
O'Connor of Weymouth....
Legislators have several more steps to complete
before the bill can become state law. House and
Senate leaders will need to agree on final language
to send to Baker's desk, which they could try to do
informally -- senators previously said the changes
they made before bringing the proposal to the floor
were technical in nature -- or by appointing a
conference committee.
The House
approved its version of the license access bill in
February with a 120-36 vote, well above the number
of representatives in support that would be needed
to override a veto.
Existing
state law prohibits anyone "who does not have lawful
presence in the United States" from acquiring either
a standard Massachusetts or expanded REAL
ID-compliant driver's license.
The bill
would open up access to the former license type,
which cannot be used to board a flight or access a
federal building, regardless of immigration
status....
Over the
course of Thursday's debate, senators beat back
attempts by Republicans and a handful of Democrats
to distinguish the licenses that could be awarded to
undocumented immigrants, either by offering them
entirely separate "driver privilege cards" or by
requiring a standard Massachusetts license issued to
an immigrant without legal status to be printed in a
different color or declare that it is not eligible
as a form of identification....
One
amendment, offered by Fattman, would have required
the RMV to transmit licensing information to any
city or town clerk seeking to verify the identity of
someone using a license to register to vote.
Fattman
said local elections officials in his district had
contacted him expressing concerns about the topic,
and bill backers fired back that the state already
has protections in place to prevent ineligible
residents from registering to vote. [Sen. Adam
Gomez, D-Springfield] called concerns that the bill
would unleash voter fraud a "red herring."
Senators
voted 10-29 to reject Fattman's amendment....
While the
legislation has now cleared both chambers with more
than three-quarters of elected lawmakers in support,
Bay Staters in general are nearly evenly split on
the idea of allowing people without legal
immigration status to acquire Massachusetts
licenses, according to a new poll.
A Suffolk
University-Boston Globe poll of 800 Massachusetts
residents published Monday found 46.6 percent oppose
the proposal, 46.1 percent support it and nearly 7
percent are undecided.
State
House News Service
Thursday, May 5, 2022
Veto Not A Threat As
Senate Approves Licensing Reform
Activists Cheer As Odds Rise For Long-Sought Reform
|
Chip Ford's CLT
Commentary |
Massachusetts Department of
Revenue (DOR) Commissioner Geoffrey Snyder [on
Wednesday]
announced that preliminary revenue
collections for April 2022 totaled $6.941
billion, which is $3.076 billion or 79.6%
more than actual collections in April 2021,
and $2.057 billion or 42.1% more than
benchmark....
FY2022 year-to-date
collections totaled approximately $34.487
billion, which is $8.038 billion or 30.4%
more than collections in the same period of
FY2021, and $4.241 billion or 14.0% more
than the year-to-date benchmark.
In response to the
Department of Revenue's stunning April revenue report on Wednesday, the State
House News Service reported:
"You could easily pay, more
than one time, for all the tax proposals we made
with just a piece of the overage in April,"
Baker told the News Service in an interview.
"Inflation isn't going away. It's not
transitory. It's for real. And people are paying
it everywhere. They're paying it in food costs.
They're paying it in gas costs. They're paying
it in rent. They're paying it in property taxes
as the value of their home goes up. And I think
this is a time when we should give a piece of
the benefit that's being accrued here by the
work of the people of Massachusetts back to
them, because we can afford it." ...
Baker also said that
Massachusetts has "never been more protected
against a downturn than we are right now," with
a "rainy day" fund that could potentially top $6
billion by the end of this fiscal year, with
more expected to be deposited into reserves
through the fiscal year 2023 budget under
consideration.
"Any reasonable assumption
about the next two years with respect to taxes
would leave you to believe our tax proposals are
eminently affordable in the short term, and more
importantly the people who are suffering right
now deserve it and we are in a position to help
them, and we should," Baker said....
Now through 10 months of
fiscal year 2022, tax receipts of $34.487
billion are more than $8 billion or 30 percent
ahead of actual FY 2021 collections and are
$4.241 billion or 14 percent above DOR's
year-to-date benchmark. After adjusting for a
pass-through entity excise that officials have
said has affected comparisons, year-to-date tax
collections are $3.573 billion or 12.3 percent
above the year-to-date benchmark.
The state took in more than
$5 billion more than it was expecting in fiscal
year 2021 and this year could be on a similar
track, setting up the Legislature to dispense
with an election year budget surplus.
Commonwealth Magazine
noted:
Year to date, the state has
taken in $34.5 billion in tax revenue, $8
billion, or 30 percent, more than last year, and
$4 billion, or 14 percent, higher than what was
forecast. Last year also saw major increases in
tax revenue growth.
Eileen McAnneny, president
of the Massachusetts Taxpayers Foundation, said
the increase in revenue is something she hasn’t
seen in her lifetime. “It is incredible,” she
said.
Evan Horowitz, executive
director of the Policy Center at Tufts
University, said each month he has tried to
forecast where tax revenues will land and each
month he has been wrong.
“Post-pandemic madness
continues to reign over state tax revenues,” he
said. “The stable and reliable stuff, like
income withholding and sales taxes, remain
stable and reliable, 2 to 5 percent higher than
anticipated for the year. But the volatile parts
defy gravity, with revenue from corporate
profits and capital gains way above expectation.
As a forecaster, it’s hard to stomach but
there’s no question state finances are in very
good shape.”
Corporate and business tax
collections totaled $690 million in April, a
whopping $291 million, or 73 percent, above what
was forecast....
The state also has a rainy
day surplus fund approaching $6 billion and
billions of federal dollars that have yet to be
spent.
“Those numbers warrant some
kind of tax relief,” said McAnneny.
You can
guess how all this unrelenting tax relief talk is
being received on Beacon Hill, where "What's ours is
ours and what's yours is ours too" is the perverse
and pervasive attitude, the norm among
Democrat-Socialists always clutching for more from
the productive.
●
Commonwealth
Magazine: In the
race for governor, Sen. Sonia Chang-Díaz said she
would not support a tax relief package. “It’s time
to make the investments to actually meet the scale
of the issues Bay Staters are facing every day in
this tough moment for our state. In our tax code we
should support low-income and working class families
across our state through measures like the Earned
Income Tax Credit — not give more money to the
wealthy and corporations,” Chang-Diaz said in a
statement....
Karissa
Hand, a spokeswoman for the campaign of Maura
Healey, said the attorney general favors a
combination of tax relief and investments.... She
supports tax relief as part of the solution, but
believes it should be targeted in ways that make
sense and that go to those who need it most,” Hand
said.
●
State
House News Service: With the
annual House budget debate now in the rearview
mirror, Speaker Ronald Mariano said Monday that top
Democrats are still looking at tax relief options
but conceded he is "not sure" when they will be
ready to advance a proposal or what it would entail....
Mariano ... said
his team "continue(s) to look at a couple of things
that we have investigated in the past" and is
watching economic trends. The state's coffers for
more than a year have been flooded with surplus tax
revenue, but new reports show the state economy
contracted in the first quarter.
●
Boston Herald: “I believe
we can safely balance targeted spending investments
to a number of crucial areas, such as housing,
childcare and higher education, with tax relief for
individuals and families who are feeling the effects
of inflation and continued economic disruption,”
[Senate President Karen] Spilka said.
●
State
House News Service: It seems
unlikely that the more progressive Senate would want
the exact same tax breaks as Baker -- for one thing,
Senate Revenue Chair Adam Hinds at a February
hearing was sharply critical of the governor's
proposed cut to the short-term capital gains tax
rate -- and it's still unclear what path the House
intends to take. It's not even clear whether
lawmakers might use a tax relief package as a
vehicle for select tax increases.
●
State
House News Service: The
Revenue Committee is seeking to push its deadline to
consider nearly 100 tax bills, including Baker's,
until July 31, the last day of formal sessions for
this year. With the opinions of 155 House lawmakers
to consider, Speaker Ron Mariano said he doesn't
know what's going to happen.
In the
face of the indefensible the Legislature spins and
dawdles, thinking how cute they are by stalling
until the final day of this legislative session when
it'll be "Oops, too late — we ran out of time.
We'll have to circle back on that next year," and
next year never comes.
Failing
the stalling game (remember, they're all up for reelection in the
fall, which is the reason for this session recessing
on July 31 instead of later in the year in non-election
years), they'll settle for spending even more of the
rapacious over-taxation on income redistribution,
buying votes from the blessed: More for "investments to a
number of crucial areas, such as housing, childcare
and higher education, with tax relief for
individuals and families who are feeling the effects
of inflation and continued economic disruption.”
General
tax relief as commonly recognized, a rebate
of the unnecessary over-taxation extracted well
above and beyond what is necessary to run the
government, will be perverted into "From each
according to his ability to each according to his
need." Even Gov. Baker's tax relief package
leaned heavily on income redistribution, no doubt at
least in part to hopefully satisfy The Takers
and smooth its way to passage. But at least
his package recognized and included to some extent
the revenue producers.
"It's not
even clear whether lawmakers might use a tax relief
package as a vehicle for select tax increases" the
State House News Service noted. This means the
News Service has likely picked up on some chatter
among legislators. For example, remember that
the four stealth assaults on Proposition 2½
are still lurking in the shadows waiting to strike.
In its
Advances for the coming week, the News Service
noted:
Other bills expected to pass this session, but
which have long paths ahead, address the
business landscape for marijuana companies,
economic development, and infrastructure....
Gov. Charlie Baker's $9.7 billion infrastructure
bill has yet to reach the floor of either
branch, and his $3.5 billion economic
development bill will be aired next week during
a hybrid hearing featuring both in-person and
virtual testimony....
There is excitement around this
[economic development] bill because a version of it
is expected to pass the Legislature and it will serve as a
late-session vehicle for proposals that would not likely
pass as standalone legislation.
If you
look over the
History of Assaults on Proposition 2½
you'll find that
economic development and infrastructure
bills
are two of the frequent end-of-session
"must pass" huge bills they get buried in.
Also
lurking in the background is the next graduated
income tax constitutional amendment question on the
ballot in November, The Fair Share Amendment, aka,
the "Millionaires Tax."
Even with
the $5.5 Billion in revenue surplus (over-taxation)
from last fiscal year about to be exceeded by an
additional $8 Billion revenue surplus this year,
despite the $6.5 Billion in federal pandemic
"relief" showered upon the state, regardless of the
$6 Billion-plus stashed away in the state's "rainy
day" stabilization fund and growing, and in the face
of proposed record-shattering state spending of
$50 Billion for coming fiscal year's state
budget — despite all
that — the
Democrat-Socialists continue to lust for more, more,
always more.
You may
recall that the Massachusetts High Tech Council (an
early ally of CLT with Proposition 2½
and other ballot campaigns of yore) took the
first iteration of this sixth attempt to
constitutionally change the income tax from a flat
tax (all income is taxed at the same rate) to a
graduated income tax (taxes on income can vary by
income brackets) to the state's Supreme Judicial
Court in October of 2017, where the petition was
ultimately struck down in 2018 as unconstitutional.
(CLT led the opposition campaigns which defeated the
previous two grad tax ballot questions, in 1976 and
1994.) Mass. High Tech took this latest
incarnation back to the court to get its ballot
question summary changed —
made at least honest and clear to voters.
The
challenge was heard before the SJC on Wednesday, as
reported by the State
House News Service and
Boston Globe
(important excerpts from the Globe report follow):
Massachusetts voters this fall will decide whether
to raise taxes on the state’s wealthiest residents.
Before that, the state’s highest court is weighing a
wonky question: How well do voters speak legalese?
The
Supreme Judicial Court on Wednesday took up the
latest challenge to the proposal to tax annual
earnings above $1 million, with opponents asking the
justices to change how the measure is summarized for
voters.
The
proposal, dubbed the Fair Share Amendment and often
called the millionaires tax, would amend the state
Constitution to create a 9-percent income tax rate
on annual earnings above $1 million, while retaining
the broad 5 percent rate for earnings below that
amount. The measure says that all new revenue from
this tax — estimated to be anywhere from $1.3
billion to more than $2 billion annually — would be
earmarked for education or transportation.
But it
also includes a crucial phrase: The money would be
“subject to appropriation” by the Legislature,
meaning lawmakers ultimately decide how it’s spent.
The
Massachusetts High Technology Council, a business
group which filed the challenge with the SJC, has
asked that a line be inserted into the summary
indicating that the Legislature could ultimately
reduce funding on education and transportation from
other sources and simply replace it with the new
surtax revenue.
Critics
argue that the current summary is misleading to
voters, while Attorney General Maura Healey’s
office, which is responsible for ballot question
wording, argues the SJC has previously determined
that the phrase “subject to appropriation”
sufficiently lets voters know that any spending is
contingent on legislative decision-making....
“‘Subject
to appropriation’ indicates that the 4 percent
monies that are raised . . . may not be spent,
right? That indicates that this could pass and we
wouldn’t have the 4 percent actually appropriated,
right?” Justice Scott L. Kafker asked attorney Kevin
P. Martin, who represents Mass. High Tech....
But the
question of how effective “subject to appropriation”
is in accurately describing how the money would be
used repeatedly surfaced Wednesday. Justice David A.
Lowy at one point asked an assistant attorney
general whether it would be helpful to let voters
know that lawmakers could also reduce or expand
funding in certain budget categories.
“What if
we were concerned that just ‘subject to
appropriation’ is inside baseball language?” Lowy
asked....
Other
judges continued to press, including Justice Dalila
Argaez Wendlandt, who noted that the plaintiffs in
the case are simply asking that the attorney
general’s office make clear that the phrase “subject
to appropriation” is really a “technical term for
‘subject to the Legislature’s discretion.’”
“Why would
that be . . . too much?” she said....
On
Thursday the Senate voted 32-8 in favor of providing
driver licenses to "undocumented immigrants" (aka,
illegal aliens). "The House passed a similar
bill by a veto-proof 120-36 margin in February," the
News Service noted. Massachusetts will soon
join sixteen other states who provide this benefit
to those who should not be here.
The State
House News Service reported on Thursday ("Veto Not A Threat As
Senate Approves Licensing Reform;
Activists Cheer As Odds Rise For Long-Sought Reform"):
Over the course of Thursday's debate, senators beat back
attempts by Republicans and a handful of Democrats to
distinguish the licenses that could be awarded to
undocumented immigrants, either by offering them entirely
separate "driver privilege cards" or by requiring a standard
Massachusetts license issued to an immigrant without legal
status to be printed in a different color or declare that it
is not eligible as a form of identification....
One
amendment, offered by Fattman, would have
required the RMV to transmit licensing
information to any city or town clerk seeking to
verify the identity of someone using a license
to register to vote.
Fattman said local elections officials in his
district had contacted him expressing concerns
about the topic, and bill backers fired back
that the state already has protections in place
to prevent ineligible residents from registering
to vote. Gomez called concerns that the bill
would unleash voter fraud a "red herring."
Senators voted 10-29 to reject Fattman's
amendment....
House Republicans unsuccessfully pushed a
similar amendment during their debate on the
bill, which Baker described as a "perfectly
reasonable way to deal with this."
"Green card holders are required to explicitly
demonstrate lawful presence, OK? We're talking
about a situation now where, under the current
statute as I understand it, all the rules
associated with determining lawful presence are
going to go away. That's a problem," Baker said
Thursday morning. "It basically means, in some
respects, the Registry is going to be flying
blind with respect to what it issues when it
issues these licenses. And it puts tremendous
pressure on cities and towns to do the cleanup
on the back end."
"Entirely separate 'driver
privilege cards' or by requiring a standard Massachusetts license
issued to an immigrant without legal status to be printed in a
different color or declare that it is not eligible as a form of
identification" would have satisfied most if not all opponents of
this law — but it was not acceptable to
its proponents. After defeat of that amendment alone, it's not
difficult to see what is behind this long-pursued effort and where
it's going, is it?
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
State House News
Service
Wednesday, May 4, 2022
State Taxes Soar $3 Billion Higher Than Last April
Baker: More Evidence That Tax Relief Warranted, Affordable
By Colin A. Young and Matt Murphy
The state revenue gravy train kept rolling right along in
April as Department of Revenue tax collectors hauled in more
than $2 billion more than what was expected during the
month, giving Gov. Charlie Baker cause to press his case for
the Legislature to take up his proposals to provide roughly
$700 million in tax relief to residents.
The April haul pushed the state at least $3.5 billion ahead
of its year-to-date benchmark with just two months left in
the fiscal year. Collections last month added up to $6.941
billion, $3.076 billion or nearly 80 percent more than what
was collected in April 2021 and $2.057 billion or just over
42 percent more than DOR's own monthly benchmark.
April is historically the single-largest month for tax
collections, and the windfall should be reason enough, Baker
said, for lawmakers to share some of the money with the
taxpayers.
"You could easily pay, more than one time, for all the tax
proposals we made with just a piece of the overage in
April," Baker told the News Service in an interview.
"Inflation isn't going away. It's not transitory. It's for
real. And people are paying it everywhere. They're paying it
in food costs. They're paying it in gas costs. They're
paying it in rent. They're paying it in property taxes as
the value of their home goes up. And I think this is a time
when we should give a piece of the benefit that's being
accrued here by the work of the people of Massachusetts back
to them, because we can afford it."
Baker said it "troubles" him, for instance, that the
threshold to pay income taxes is lower at the federal level
than it is in Massachusetts. Part of his plan would exempt
more low-income households from state income tax liability.
"We shouldn't be in that position," the governor said.
Baker also said that Massachusetts has "never been more
protected against a downturn than we are right now," with a
"rainy day" fund that could potentially top $6 billion by
the end of this fiscal year, with more expected to be
deposited into reserves through the fiscal year 2023 budget
under consideration.
"Any reasonable assumption about the next two years with
respect to taxes would leave you to believe our tax
proposals are eminently affordable in the short term, and
more importantly the people who are suffering right now
deserve it and we are in a position to help them, and we
should," Baker said.
Collections increased in most major tax types in comparison
to April 2021 collections and the April 2022 monthly
benchmark, including increases in withholding,
non-withholding, corporate and businesses taxes, said
Revenue Commissioner Geoffrey Snyder, while sales and use
taxes decreased relative to April 2021 collections but
increased compared to the April 2022 benchmark
"The increase in withholding in comparison to April 2021
collections is likely related to labor market conditions,
while the increase in non-withholding tax collections is
mostly due to an increase in income return payments," Snyder
said in a statement. "The decrease in sales and use tax in
comparison to April 2021 collections is partially due to a
law requiring the early remittance of certain sales, meals,
and room occupancy tax collections, which became effective
in April 2021 and generated a one-time increase in sales and
use tax collections in that month."
Now through 10 months of fiscal year 2022, tax receipts of
$34.487 billion are more than $8 billion or 30 percent ahead
of actual FY 2021 collections and are $4.241 billion or 14
percent above DOR's year-to-date benchmark. After adjusting
for a pass-through entity excise that officials have said
has affected comparisons, year-to-date tax collections are
$3.573 billion or 12.3 percent above the year-to-date
benchmark.
The state took in more than $5 billion more than it was
expecting in fiscal year 2021 and this year could be on a
similar track, setting up the Legislature to dispense with
an election year budget surplus.
With $34.487 billion already in the bank, DOR would have to
bring in just $1.461 billion more over the next two months
to meet the agreed-upon annual revenue estimate of $35.948
billion. DOR has set its May benchmark at $2.339 billion and
its June benchmark at $3.363 billion.
The calls for tax relief will compete with a strong
legislative appetite to spend surplus revenues.
Baker proposed a series of estate, capital gains, rent and
senior property tax reforms that the Legislature has neither
ruled in or out, but legislative Democrats have focused on
investing and saving over-budget revenues and repeatedly
rejected attempts to suspend the state's gas tax during a
period of high fuel prices and surging tax revenues. The
Joint Committee on Revenue did not report on Baker's tax
package by its original deadline, March 2, and on Wednesday
sought an extension that would push its reporting deadline
all the way out to July 31, the final day of formal sessions
allowed this year under legislative rules.
"These good times may not roll forever. We want to make sure
that we have money in case there is a sudden downturn. You
know, we're on the brink of major confrontations in Europe,
the oil production is being cut way down; if I was an
economic prognosticator, I would think we were in for some
tough times," House Speaker Ronald Mariano said last month
when asked about the decision to leave Baker's tax relief
proposals out of the House's fiscal 2023 budget and to push
the state's rainy day fund to a record high $6.55 billion by
the end of the next budget. "So obviously we wanted to
strengthen our ability to pivot if revenues do take a
downward plunge."
Mariano's position seems to be supported by S&P Global
Ratings, which said in a report last week that it expects
things will change as the federal stimulus injections, low
bond interest rates and pent-up consumer demand that have
benefitted state budgets in the last year fade over the
coming year.
The credit rating agency cautioned that states using
above-benchmark tax receipts to fund tax reforms could find
themselves in tougher positions than states that elect to
sock the surplus money away for uncertain or severe times.
"As federal support tapers off and interest rates climb, we
expect fiscal 2023 budgets will see slower revenue growth as
the economy cools. We believe some states will be better
positioned for this slowdown while others, which are
depending on economic growth to offset tax rate reductions,
could face structural pressures depending on the accuracy of
their revenue forecasting," S&P said.
The firm said 13 states have already pursued personal income
tax reforms for fiscal 2023 while two are working on
property tax changes and one is pursuing corporate tax
reforms. S&P also noted that some states are suspending
sales taxes on groceries and others are pursuing temporary
gas tax holidays for similar household spending relief.
Connecticut Gov. Ned Lamont reported Wednesday that a budget
adjustment bill approved by General Assembly in that state
gives taxpayers "their largest tax cut in history,"
estimated at $500 million and aimed at working people,
middle class, and retirees.
Republican Rep. Nicholas Boldyga of Southwick seized on that
news to point at votes last week by the Massachusetts House
to reject gas tax relief, while raising the salaries of
judges and sheriffs.
"As every state around us helps their working-class
citizens. Democrats in the Baystate continue to give pay
raises to the States' Payroll 1%ers!" Boldyga tweeted.
Baker said he didn't want to theorize as to why the
Legislature has been more cautious than some peers in other
states, but he remains optimistic.
"They are talking to people on our team at the staff level
about details associated with these items so that says to me
they are interested in these issues. That doesn't mean
they're going to do it, but I think they're interested,"
Baker said.
In Massachusetts, the Baker administration and legislative
leaders agreed to a consensus revenue forecast of $36.915
billion for the fiscal year beginning July 1, which would
represent 2.7 percent growth over the sure-to-be-surpassed
revenue estimate for the current fiscal year.
"What's striking is not just that the state continues to
collect a substantial amount of tax revenue; it's that the
pattern is so unusual. All the volatile stuff - which you
expect to swing up and down - just keeps swinging up, be it
corporate profits or capital gains. I'm tempted to say this
can't go on but I would have said the same thing three
months or six months ago and been very, very wrong," said
Evan Horowitz, executive director of the Center for State
Policy Analysis at Tufts University.
S&P said the most recent S&P Global Economics baseline
forecast lowered projections for the nation's economic
growth over the next two years; from 3.9 percent to 3.2
percent for 2022 and from 2.7 percent to 2.1 percent in
2023.
Slowing economic growth worldwide, rising interest rates and
high inflation have plunged the state pension fund into "all
hands on deck situation," Executive Director Michael Trotsky
said Tuesday.
"Personally, I believe that this is the most uncertain and
difficult environment that I've witnessed in my entire and
very long investment career," he said.
— Michael P. Norton
contributed reporting
CommonWealth
Magazine
Wednesday, May 4, 2022
With tax revenues soaring, Spilka calls for relief package
Senate president offers no details, promises action before
end of June
By Bruce Mohl
Massachusetts Tax revenues continued to soar in April,
astonishing experts who track the numbers and prompting
Senate President Karen Spilka to announce that she intends
to push for some sort of tax relief package before the end
of June.
April tax collections totaled $6.9 billion, up more than $3
billion compared to the same month a year ago and more than
$2 billion ahead of the state’s revenue forecast for the
month. Even after adjustments for an excise tax that is
temporarily accelerating tax payments, revenues in April
were up 77 percent from a year ago and 43 percent ahead of
the state’s consensus revenue forecast, according to numbers
released by the Department of Revenue on Wednesday.
Year to date, the state has taken in $34.5 billion in tax
revenue, $8 billion, or 30 percent, more than last year, and
$4 billion, or 14 percent, higher than what was forecast.
Last year also saw major increases in tax revenue growth.
Eileen McAnneny, president of the Massachusetts Taxpayers
Foundation, said the increase in revenue is something she
hasn’t seen in her lifetime. “It is incredible,” she said.
Evan Horowitz, executive director of the Policy Center at
Tufts University, said each month he has tried to forecast
where tax revenues will land and each month he has been
wrong.
“Post-pandemic madness continues to reign over state tax
revenues,” he said. “The stable and reliable stuff, like
income withholding and sales taxes, remain stable and
reliable, 2 to 5 percent higher than anticipated for the
year. But the volatile parts defy gravity, with revenue from
corporate profits and capital gains way above expectation.
As a forecaster, it’s hard to stomach but there’s no
question state finances are in very good shape.”
Corporate and business tax collections totaled $690 million
in April, a whopping $291 million, or 73 percent, above what
was forecast.
McAnneny said inflation and labor shortages are pushing up
wages and as they increase so do taxes on them. She said tax
returns in April were accompanied by income tax levies on
the receipt of dividends and capital gains from the sale of
stock over the prior year.
The state also has a rainy day surplus fund approaching $6
billion and billions of federal dollars that have yet to be
spent.
“Those numbers warrant some kind of tax relief,” said
McAnneny.
Spilka late on Wednesday indicated she agrees. “In light of
today’s news on revenues, I have asked Senate leaders to
work with their partners in government to pursue a tax
relief package for residents before the end of session,”
Spilka said in a statement. “While the details remain to be
worked out, I believe we can safely balance targeted
spending investments to a number of crucial areas, such as
housing, childcare, and higher education, with tax relief
for individuals and families who are feeling the effects of
inflation and continued economic disruption. I look forward
to working with my colleagues in the Senate and our partners
in the House after conclusion of the Senate budget to
explore providing tax relief to the people of the
Commonwealth.”
Until Spilka’s announcement, legislative leaders had not
ruled out a tax relief package but had shown little interest
in it. House Speaker Ron Mariano on several occasions
indicated a tax relief package was not a high priority.
Lawmakers rejected a gas tax holiday and asked for more time
to study Gov. Charlie Baker’s proposed package of tax cuts.
The governor’s $741 million tax relief package lowers estate
and capital gains taxes and provides relief to renters and
seniors who own homes.
In the race for governor, Sen. Sonia Chang-Díaz said she
would not support a tax relief package. “It’s time to make
the investments to actually meet the scale of the issues Bay
Staters are facing every day in this tough moment for our
state. In our tax code we should support low-income and
working class families across our state through measures
like the Earned Income Tax Credit — not give more money to
the wealthy and corporations,” Chang-Diaz said in a
statement. “Kids are waiting for weeks at a time in
emergency rooms across our state for mental health care; we
have a $10 billion state of good repair backlog in our
roads, bridges, and transit; we have the immediate impacts
of climate change we need to get ahead of. If we’re serious
about tackling our state’s biggest challenges, we need to
back up all our pretty words with the political courage and
investments to deliver for working people across our state.”
Karissa Hand, a spokeswoman for the campaign of Maura
Healey, said the attorney general favors a combination of
tax relief and investments. “Many people across
Massachusetts are struggling with high costs. Maura is going
to prioritize investing in programs that will help reduce
the high costs of housing, child care, energy, and transit
that are impacting families. She supports tax relief as part
of the solution, but believes it should be targeted in ways
that make sense and that go to those who need it most,” Hand
said.
With tax revenue currently running more than $4 billion
ahead of consensus forecasts with two months remaining in
the fiscal year, the issue of what to do with the surplus is
likely to come to a head soon.
The recently passed House budget did not adjust upward the
revenue forecast, leaving that decision for later. Even so,
the House budget boosted spending by more than $1.5 billion
above what Baker had proposed in his spending plan in
January. Roughly $600 million of the increase went for
MassHealth, the state-federal health insurance program for
the poor and elderly.
According to an analysis by the Massachusetts Taxpayers
Foundation, the House budget includes $130 million added
during floor debate. The money added on the House floor
included $62 million for 617 earmarks for local projects and
$68 million to boost spending in a number of areas — $40
million for nursing homes; $18 million for judicial pay
raises; $2 million more (a 43 percent increase) for the
Commonwealth Zoological Corporation, which oversees the
Franklin Park and Stone Zoos; and $500,000 for three
organizations that help people needing financial assistance
in obtaining abortions.
State House News
Service
Monday, May 3, 2022
Tax Relief Slipping Into Extended Review Phase
By Chris Lisinski
With the annual House budget debate now in the rearview
mirror, Speaker Ronald Mariano said Monday that top
Democrats are still looking at tax relief options but
conceded he is "not sure" when they will be ready to advance
a proposal or what it would entail.
The House last week rejected efforts to incorporate a
temporary gas tax freeze or Gov. Charlie Baker's proposed
estate, capital gains and senior tax reforms into its fiscal
2023 state budget bill.
Mariano, who spoke with reporters after meeting privately
with Baker and Senate President Karen Spilka, said his team
"continue(s) to look at a couple of things that we have
investigated in the past" and is watching economic trends.
The state's coffers for more than a year have been flooded
with surplus tax revenue, but new reports show the state
economy contracted in the first quarter.
In response to a question about whether Bay Staters could
bet on the House finalizing some form of tax relief, Mariano
pointed to another topic in which there's uncertainty: the
still-in-progress legislative discussions about legalizing
sports betting.
"Right now, we don't have a gaming bill, so I'm going to
wait before we take bets," he said before continuing, "I
don't mean to be flip, it's just I don't know what's going
to happen. We have a diverse group of 155 members, so we're
going to have to do some homework."
Baker has made a $700 million package of tax relief a
priority during his final year in office, arguing taxpayers
deserve to share in the state's surplus revenues and that
his proposed policy changes can make Massachusetts more
competitive. His bill (H 4361) is pending before the Revenue
Committee, which has until Wednesday to decide its fate.
Democrats who control the committee could seek another
extension to give themselves more time to work on Mariano's
"homework."
Asked if the committee would make a decision this week,
Mariano replied, "I'm not sure, to be honest with you."
Beacon Hill Roll
Call
Volume 47-Report No. 17
April 25-29, 2022
By Bob Katzen
FARM FUEL TAX REBATE (H 4700)
House 29-127, rejected an
amendment that would provide a tax rebate to farmers for the
cost of fuel taxes paid for the operation of farm equipment
from July 1, 2022 through December 31, 2022.
Amendment supporters said the rebate will help hardworking
farmers during this difficult economic time. They noted it
will also help combat food shortages.
Amendment opponents said this rebate is a new idea and
should be filed as a separate bill in order to hold public
hearings on the measure.
Reps. Nick Boldyga (R-Southwick), the sponsor of the
amendment and Mark Cusack (D-Braintree), the main opponent
of the amendment, did not respond to repeated requests from
Beacon Hill Roll Call for a comment.
“Farmers, like everyone in this ‘Bidenflation’ economy, are
struggling to survive, and with the state’s historic surplus
revenue bonanza (aka, over-taxation), the state can
certainly afford to lighten some of their burden easily,”
said Chip Ford, executive director of Citizens for
Limited Taxation. “Every small savings for producers
will reduce the inflated end-cost for beleaguered
consumers.”
REDUCE CAPITAL GAINS TAX FROM 12 PERCENT TO 5 PERCENT (H
4700)
House 29-127, rejected an
amendment that would reduce the short-term capital gains tax
from 12 percent to 5 percent.
Chip Ford, executive director of Citizens for
Limited Taxation said that anything that can help the
investors in Massachusetts keep up with mounting inflation
is a positive step for the commonwealth’s economy, “Why
should the capital gains or any tax imposed be charged at a
higher rate than earned income, especially considering the
multi-billions in historic revenue surpluses?” asked Ford.
“The Massachusetts Legislature had a great opportunity to
lower the capital gains tax, which taxes economic growth,”
said Paul Craney, Executive Director of the Mass Fiscal
Alliance. “Unfortunately they refused to lower it and in
fact, their legislature’s ballot question this November
hopes to increase the tax from 12 percent to 17 percent for
some earners. It’s clear the Legislature wants to bring us
back to Taxachusetts.”
Amendment opponents again said that this amendment is
premature and urged the House not to act on tax reductions
one at a time but instead to wait and consider Gov. Baker’s
comprehensive tax reduction package which might be voted on
in a few weeks.
Reps. Nick Boldyga (R-Southwick), the sponsor of the
amendment and Rep. Mark Cusack (D-Braintree), the main
opponent of the amendment, did not respond to repeated
requests from Beacon Hill Roll Call for a comment.
State House News
Service
Wednesday, May 4, 2022
Tax Relief Deadline Spurs Dems To Seek More Time
Deadline For Tax Measures Pushed Way Out 'Til July 31
By Chris Lisinski
Beacon Hill Democrats, who are easily able to change
deadlines that they can't meet, could take decisions about
whether to pursue tax relief right down to the
end-of-session wire.
With the state's accounts overflowing from a torrent of
surplus tax dollars, the Revenue Committee moved to grant
itself until July 31 -- the final day to conduct formal
lawmaking business in the 2021-2022 session -- to decide the
fate of Gov. Charlie Baker's $700 million tax relief package
and nearly 100 other bills.
The panel had faced a Wednesday deadline to take a position
on Baker's bill (H 4361), which itself had already been
delayed from the March 2 decision date prescribed under a
section of internal rules giving lawmakers 30 days to tackle
any legislation filed in the second year of a two-year
session.
The Revenue Committee on Tuesday afternoon filed an
extension order kicking its deadline until the last day of
July. The extension applies to 95 bills, representing all
but four pieces of legislation before the committee.
Rep. Mark Cusack, a Braintree Democrat who co-chairs the
panel, said lawmakers have not had enough time to fully vet
a proposal Baker rolled out in January.
"The governor wanting it is one thing, but there's 155
members of the House and 40 in the Senate. There's a lot
more that goes into it than saying 'I want it, so do it,'"
Cusack told the News Service. "We need more time to game out
that process."
Cusack's co-chair, Sen. Adam Hinds of Pittsfield, said
"there is a genuinely robust conversation ongoing about
these items."
Baker launched his lame-duck push for tax relief in January,
arguing that the suite of measures he offered -- including
changes to the estate and capital gains taxes as well as
breaks for renters, seniors and low-income earners -- would
make Massachusetts more competitive and would return some of
the state's surplus money to taxpayers.
Since then, Democrats have been facing a steady stream of
pressure to act, particularly as the state's tax haul
clobbers projections jointly agreed to by the Baker
administration and legislative leaders.
The Department of Revenue reported Wednesday that it
collected more than $2 billion more than it expected in
April, putting the state at least $3.5 billion ahead of
benchmarks with two months remaining in the fiscal year and
inflating the bottom line of an all-but-inevitable election
year surplus.
"Obviously, a rosy revenue picture helps when you're talking
tax deductions versus tax increases, but everything's
cyclical," Cusack said, recalling the state faced a more
strained economic picture when he first took office in 2011.
"The good times don't last forever. You have to be an adult
about that, that it's not always going to be $2 billion over
benchmarks. But obviously when talking about reducing our
tax revenue, this money obviously helps in that discussion."
"A $2 billion surprise clearly begs the question about which
investments or targeted tax relief could be valuable in this
moment," Hinds, who declined a phone interview because he
was out sick, added via a text message to the News Service.
Cusack said the panel is also working through other
tax-related proposals beyond Baker's push including some
that have vocal supporters on the left, such as legislation
that would double the state's deeds excise tax and steer the
new revenue toward housing and climate change mitigation (H
2890 / S 1853).
House Democrats shot down a Republican-led attempt to fold
Baker's proposed capital gains, estate and senior tax
proposals into their fiscal 2023 budget, and they have not
outlined any plans for tackling the topic with another
legislative vehicle or standalone bill.
Cusack said lawmakers have had "initial discussions" about
the smoothest process to advance a proposal.
Massachusetts posted a surplus of about $5 billion in fiscal
year 2021, and with more money heading into savings, the
state's "rainy day" fund could surpass $6 billion by the end
of the current fiscal year.
That balance would represent more than 12 percent of the
House-approved $49.7 billion fiscal 2023 state budget,
enough to keep state government hypothetically running for
more than six weeks on savings alone.
Economists and budget experts have varying views on how much
states should sock away for potential downturns. According
to the National Conference of State Legislatures, most
states cap their rainy day funds between 5 percent and 15
percent of general fund revenues, while others limit savings
balances based on appropriations.
Data compiled by Pew Charitable Trusts estimated that,
toward the end of fiscal 2021, a total of 21 states had
rainy day fund balances equal to or greater than 10 percent
of their general fund expenditures for the year.
The Boston
Herald
Thursday, May 5, 2022
Charlie Baker says April revenue could
pay for his entire tax cut proposal – twice!
By Matthew Medsger
Just a week ago, the fate of Gov. Charlie Baker’s tax cut
proposal seemed all but sealed, confined to the dustbin of
the State House committee where it languished – and then
April’s tax revenue numbers came in.
“You could fund our entire tax proposal – more than one time
– with just the surplus in the month of April,” Baker told
reporters Thursday.
April tax revenues, according to the Department of Revenue,
were a whopping $3 billion higher than they were last year,
coming in at nearly $7 billion and a full $2 billion more
than expected.
Baker had previously proposed a now modest looking $700
million series of tax cuts which included relief for
renters, adoption of federal standards for no-tax status for
low-income residents, an adjustment of the “low income
circuit breaker” on property tax relief for older residents,
and a proposal to lower the estate and short-term capital
gains taxes.
The Massachusetts Taxpayers Foundation, a nonpartisan
watchdog group, has endorsed the tax plan and says now more
than ever the state should move on relief for residents.
“The totality of resources available to the commonwealth
warrants tax relief now,” Eileen McAnneny, MTF president,
told the Herald Thursday.
The House’s nearly $50 billion budget proposal was approved
last week but absent any of the governor’s tax cut
proposals.
Republicans in the House presented several amendments which
would have added the cuts or some version to the budget but
none were approved. The approved budget would add another
$785 million to the rainy day fund, already at a historic
high of $4.6 billion.
On Wednesday, and in light of the tax revenue report, Senate
President Karen Spilka indicated the upper chamber would
look at taxes this session, saying she had told senators to
“work with their partners in government to pursue a tax
relief package for residents before the end of session.”
The Senate will begin debating their budget proposal this
month, with amendments due next week. The legislative
session ends July 31.
“I believe we can safely balance targeted spending
investments to a number of crucial areas, such as housing,
childcare and higher education, with tax relief for
individuals and families who are feeling the effects of
inflation and continued economic disruption,” Spilka said.
Baker said he has been speaking with leaders in the House
and the Senate but wasn’t prepared to guess what sort of tax
cuts they may be willing to consider.
“The legislature is always going to be a little careful
about what they tell me about what their plans are, just as
they are careful about telling you what their plans are. But
there is a lot of back and forth at the staff level about
details and that’s a really good sign,” he told reporters.
— Herald wire service
contributed.
State House News
Service
Friday, May 6, 2022
Tax Relief? Baker Really Does Anticipate It.
By Colin A. Young
The dam appears to have broken on tax relief as state
revenues continue to surge and Gov. Charlie Baker now
expects that the Legislature, despite its recent tax votes,
will approve some kind of a tax cut by the time formal
lawmaking ends this summer.
"The commonwealth of Mass. is awash in revenue and we've
been saying since January, this needs to go back to, a piece
of this needs to go back to the taxpayers," Baker said
Friday morning during the Associated Industries of
Massachusetts annual meeting.
"And I really do anticipate that there will be some sort of
tax cut that makes it through the process between now and
the end of the legislative session," he added.
Baker this week ratcheted up pressure on legislative leaders
to get on board with tax relief as April revenues came in
more than $2 billion ahead of expectation.
Until this week, House Speaker Ronald Mariano and Senate
President Karen Spilka mostly kept the idea of tax relief
and reform at an arm's length. The Revenue Committee has
kept Baker's $700 tax relief proposal on ice, Democrats
repeatedly rejected calls for a gas tax suspension, the
House passed a budget without incorporating tax relief plans
sought by Republicans, and the speaker and Senate president
were noncommittal about putting a relief plan before their
chambers.
But after the Department of Revenue reported a massive April
of tax collections, Spilka said she now thinks Massachusetts
can balance investments in things like child care and higher
education with a tax relief package for residents. She said
she directed Senate leaders to "work with their partners in
government to pursue a tax relief package for residents
before the end of session" but after the Senate passes its
own fiscal year 2023 budget. The budget is due by July 1,
but a budget accord is often tardy.
Mariano, who has been open to tax relief proposals and said
the House last year had started looking into some of the
same ideas that Baker proposed, told the News Service on
Wednesday night that he would expect tax relief
conversations with Spilka to wait until after the Senate's
budget debate the last week of May.
State House News
Service
Wednesday, May 4, 2022
Court Judging Fairness Of Income Surtax Summary
Alcohol, Gig Worker Ballot Questions Face "Relatedness"
Challenges
By Colin A. Young
The justices of the Supreme Judicial Court waded Wednesday
into the fray over three issues that are on track to go
before voters on the November ballot: the long-debated
surtax on households that earn more than $1 million, a
proposal to shape the classification of gig economy workers
like Uber drivers and the latest bid to reshape the state's
alcohol licensing structure.
Anderson v. Attorney General
The first case on the docket Wednesday dealt with the
information voters will get on the November ballot about how
revenue from the proposed surtax on household income over $1
million could be spent. The justices paid close attention to
the phrase "subject to appropriation" and whether voters
will understand that that means state lawmakers retain
ultimate spending authority.
Having successfully kept the so-called millionaire's tax off
the ballot in 2018, Massachusetts High Tech Council
President Chris Anderson and a group of state
representatives and right-leaning groups lodged a complaint
that the surtax summary that Attorney General Maura Healey
has prepared for voters will misguide them and could lead to
"the nightmare scenario of the Constitution being amended
based not on the will of the people, but because the people
were misled."
Healey's summary reads: "This proposed constitutional
amendment would establish an additional 4% state income tax
on that portion of annual taxable income in excess of $1
million. This income level would be adjusted annually, by
the same method used for federal income-tax brackets, to
reflect increases in the cost of living. Revenues from this
tax would be used, subject to appropriation by the state
Legislature, for public education, public colleges and
universities; and for the repair and maintenance of roads,
bridges, and public transportation. The proposed amendment
would apply to tax years beginning on or after January 1,
2023."
The suit seeks to have the SJC order that ballot materials
tell voters that "the Legislature could choose to reduce
funding on education and transportation from other sources
and replace it with the new surtax revenue because the
proposed amendment does not require otherwise" and order
that Healey and Secretary of State William Galvin not put
the question on the 2022 ballot without the added proviso.
"Subject to appropriation indicates that the 4 percent
monies that are raised may not be used, may not be spent,
right? That indicates that ... this could pass and we
wouldn't have the 4 percent actually appropriated, right?"
Justice Scott Kafker asked less than two minutes into the
presentation from the plaintiffs' attorney, Kevin Martin.
Martin agreed that the language would indicate to a
reasonable voter that the money raised might not be
appropriated at all, but said that "what it would not
indicate to a reasonable voter, when put into a
Constitutional amendment, is that the Legislature actually
can spend it however it wants."
Kafker responded, "I mean, that's the entire appropriation
process, right? That the Legislature can do what it wants
with the money, right?"
The proposal would shift the state away from the flat income
tax rate structure enshrined in the Massachusetts
Constitution. If the amendment is approved by voters, the
first $1 million of household income would still be taxed at
the current 5 percent tax rate and household income above
that first $1 million would be taxed at an effective rate of
9 percent.
Justice David Lowy took note during Wednesday's oral
arguments of the significance of voters being asked to amend
the Massachusetts Constitution rather than an individual law
passed by the Legislature.
"The stakes are a lot higher when we're dealing with
Constitutional as opposed to statutory," he said.
The language of the surtax amendment itself says it is meant
to "provide the resources for quality public education and
affordable public colleges and universities, and for the
repair and maintenance of roads, bridges and public
transportation" and requires that "all revenues received in
accordance with this paragraph shall be expended, subject to
appropriation, only for these purposes."
The suit addresses one of the opponents' main arguments --
that the money raised by the surtax would not necessarily be
used for transportation and education and that it may not
result in actual increases in spending in those areas -- and
argues that Healey's summary of the question and description
of what a 'yes' vote would do misleads voters in that
regard.
When Assistant Attorney General Robert Toone presented on
behalf of Healey's office, he argued that the phrase
"subject to appropriation" does alert voters that spending
is contingent upon future legislative action and said the
court has "always held" that it was sufficient notice to
voters.
"What if we were concerned that just subject to
appropriation is inside baseball language?" Lowy asked. He
asked Toone whether letting voters know in the summary that
the Legislature retains the ability to enhance or reduce
funding within budget categories would help.
Toone replied, "I think it would be more confusing and
potentially misleading than helpful."
While Lowy seemed to suggest some additional summary
language about the Legislature's ultimate appropriating
power may be within bounds, he also told Martin directly
that "what you want to add is one-sided."
"Your proposal is not to add to the summary that the
Legislature retains the ability to enhance or reduce funding
in budget categories. Arguably, that's neutral. You've got
an enormous amount of advocacy -- which is fine within the
fulsomeness of a political debate -- but not in a concise
summary, when you only need to make sure that you avoid
confusion," Lowy said.
Martin responded by telling the justice that the attorney
general's summary and 'yes' vote statement suggest to voters
that the money is to be used for only two purposes, "our
proposal is that voters be made aware that the money
actually could be spent on other purposes in addition to
those two."
Gov. Charlie Baker, who has been critical of the income
surtax and whose budget chief called it "dangerous policy,"
nominated all seven of the high court's seven justices.
Healey supports the surtax and is running for governor this
year, leading that race in public opinion polls.
The surtax would add about $1.3 billion in annual revenue
for the state, according to a report published this year by
the Center for State Policy Analysis at Tufts University,
revenues that would be worked into an annual state budget
that is approaching $50 billion.
The Boston
Globe
Wednesday, May 4, 2022
On ‘millionaires tax’ ballot question,
Mass. high court weighs just how well voters speak legalese
By Matt Stout and Jon Chesto
Massachusetts voters this fall will decide whether to raise
taxes on the state’s wealthiest residents. Before that, the
state’s highest court is weighing a wonky question: How well
do voters speak legalese?
The Supreme Judicial Court on Wednesday took up the latest
challenge to the proposal to tax annual earnings above $1
million, with opponents asking the justices to change how
the measure is summarized for voters.
The proposal, dubbed the Fair Share Amendment and often
called the millionaires tax, would amend the state
Constitution to create a 9-percent income tax rate on annual
earnings above $1 million, while retaining the broad 5
percent rate for earnings below that amount. The measure
says that all new revenue from this tax — estimated to be
anywhere from $1.3 billion to more than $2 billion annually
— would be earmarked for education or transportation.
But it also includes a crucial phrase: The money would be
“subject to appropriation” by the Legislature, meaning
lawmakers ultimately decide how it’s spent.
The Massachusetts High Technology Council, a business group
which filed the challenge with the SJC, has asked that a
line be inserted into the summary indicating that the
Legislature could ultimately reduce funding on education and
transportation from other sources and simply replace it with
the new surtax revenue.
Critics argue that the current summary is misleading to
voters, while Attorney General Maura Healey’s office, which
is responsible for ballot question wording, argues the SJC
has previously determined that the phrase “subject to
appropriation” sufficiently lets voters know that any
spending is contingent on legislative decision-making.
The dispute surfaced almost immediately during oral
arguments on Wednesday.
“‘Subject to appropriation’ indicates that the 4 percent
monies that are raised . . . may not be spent, right? That
indicates that this could pass and we wouldn’t have the 4
percent actually appropriated, right?” Justice Scott L.
Kafker asked attorney Kevin P. Martin, who represents Mass.
High Tech.
In response, Martin argued that a “reasonable voter” would
not think the Legislature could spend the money any way it
wants to.
Kafker quickly cut in, suggesting opponents could make that
argument by “bombarding the airwaves with that point, in
advertising and other things.”
Justices often thread oral arguments with a devil’s advocate
line of questioning, sometimes making it difficult to
discern where individual judges are leaning — let alone the
court as a whole.
But the question of how effective “subject to appropriation”
is in accurately describing how the money would be used
repeatedly surfaced Wednesday. Justice David A. Lowy at one
point asked an assistant attorney general whether it would
be helpful to let voters know that lawmakers could also
reduce or expand funding in certain budget categories.
“What if we were concerned that just ‘subject to
appropriation’ is inside baseball language?” Lowy asked.
Robert E. Toone, representing Healey’s office, told Lowy the
extra wording “would be more confusing and potentially
misleading than helpful.”
Other judges continued to press, including Justice Dalila
Argaez Wendlandt, who noted that the plaintiffs in the case
are simply asking that the attorney general’s office make
clear that the phrase “subject to appropriation” is really a
“technical term for ‘subject to the Legislature’s
discretion.’”
“Why would that be . . . too much?” she said.
Toone argued that Mass. High Tech and other critics will
have no shortage of opportunities to make that point in the
public arena.
“Our role as the attorney general is to keep partisan or
disputed, unnecessary arguments out of the summary,” he
said.
The tax proposal has traveled a long legal path. The Supreme
Judicial Court rejected an earlier iteration of the measure
as a citizen-filed ballot question before it could make it
to the 2018 ballot, ruling it was unconstitutional because
it combined multiple subjects — spending on transportation
and on education, as well as the income tax surcharge — that
were not related. (The Mass. High Tech Council led that
challenge before the SJC as well.)
Lawmakers later took up the mantle, passing it in two
consecutive sessions, including last June, to put it on the
November ballot. Referendum language submitted by state
lawmakers, instead of citizens, does not need to pass the
so-called relatedness test that tripped up the proposal four
years ago.
On this tax proposal, its supporters have both defended the
attorney general’s wording and the need for the proposal,
arguing it is asking the state’s wealthiest to “pay a little
more” to help fund needed investments in schools, roads, and
mass transit.
“The funds are constitutionally dedicated to be spent on
education and transportation,” Steve Crawford, spokesman for
the union-backed Raise Up Massachusetts campaign, said in a
statement.
The forces opposed to the existing language say that
lawmakers could simply use the money raised by the tax on
high earners to supplant some existing spending on
transportation or education and that the inclusion of these
two popular causes are designed to be a “sweetener” to
persuade voters to adopt a graduated income tax.
The need for clarity is underscored, the critics say, by the
fact this is proposed as an amendment to the state
Constitution, not simply a change in state law.
Constitutional amendments are much tougher to alter or
adjust, in part because such an act would require two votes
in the Legislature as well as a statewide referendum.
“The bar for clarity is higher, given the intent to put this
in the Constitution,” said Greater Boston Chamber of
Commerce chief Jim Rooney, whose group filed a
friend-of-court brief aligned with the plaintiffs. “It’s at
best misleading not to clarify the language.”
Mass. High Tech president Chris Anderson said he remained
hopeful that the SJC would agree with his group’s plea and
clarify that increases in spending for education and
transportation are not guaranteed. He noted that a previous
case came up during the hearing in which it was clearly
spelled out that the mandated spending would be on top of
existing levels — something that is not detailed with this
question.
“I think we did everything we can to make sure the court
considers why ordering a revised ballot summary is necessary
to provide information that is not misleading to the
voters,” Anderson said.
Dan Ryan, a partner at the law firm of Sullivan & Worcester
who represents an affiliate of the libertarian-leaning
Pioneer Institute, said the SJC’s line of questioning showed
at least some of the justices believe it’s better for voters
to be more informed than less informed.
“It seems to me that they’re really going to be thinking
about striking a balance between having an informed
electorate as opposed to just relying on that ‘subject to
appropriation’ language,” Ryan said.
The income tax surcharge was one of three ballot proposals
that came before the SJC on Wednesday. The others would
change the statewide availability of licenses for sale of
alcoholic beverages and would allow Uber, Lyft, and DoorDash
drivers to be classified as independent contractors.
Opponents of both these two ballot questions are arguing
that they contain unrelated elements, essentially using the
same “relatedness” argument that sidelined the millionaires
tax four years ago.
State House News
Service
Friday, May 6, 2022
Weekly Roundup - Differences Of Opinion
Recap and analysis of the week in state government
By Katie Lannan
One Friday in June 2018, when 18 legislative Democrats
gathered around Gov. Charlie Baker as he signed a law
striking a 173-year-old abortion ban from the state's books,
the governor declared it "a good day for Massachusetts."
Almost four years later, Senate President Karen Spilka would
reference that law on what she deemed to be "one of the
saddest days in the United States' history."
"We will not go quietly," Spilka said. "We will not go into
a devastating future that seeks to treat us as second-class
citizens."
Massachusetts, where abortion rights were codified into
state law in 2020, was not quiet the day after a leaked
draft of a Supreme Court opinion that would overturn Roe v.
Wade set off shockwaves throughout the country.
Elected Democrats gathered outside the State House for a
press conference Tuesday, urging people to fight at the
ballot box and warning of the potential ripple effects on
civil rights if the draft decision stands. They recalled the
reproductive health laws Massachusetts has passed in recent
years, legislation meant as a counterbalance as the Supreme
Court's conservative majority strengthened during the Trump
administration.
While Baker and lawmakers alike feted the 2018 law rolling
back archaic statues on abortion, adultery and contraception
for unmarried women, the Republican governor and Democrats
who control the Legislature were at odds over the 2020 law.
The House and Senate overrode Baker's veto when he struck
the abortion language from that year's state budget.
Baker, at the time, described some parts of the bill --
including officially writing abortion rights into state law
-- as important protections for reproductive rights, but
said he could not support certain measures expanding access
to later-term abortions and allowing 16- and 17-year-olds to
get abortions without parental or court consent.
This week, Baker said striking down Roe v. Wade would be an
"enormous setback for women across the country" and that he
was proud Massachusetts "has and will always protect every
woman's right to choose what is best for them." He said he's
open to the concept of a law shielding providers from
liability if they offer abortion care to patients from
states where such services are illegal.
Spilka on Tuesday drew cheers from the crowd when she
mentioned that lawmakers got the 2020 abortion law on the
books over Baker's objections. But she and Baker this week
became at least partial allies on the issue of tax relief.
A massive revenue haul in April, more than $2 billion more
than what was expected, had Baker again pressing for passage
of his multi-pronged tax relief plan. April's surplus alone,
Baker noted, could cover the costs of his nearly $700
million package multiple times, and ease some of the pain
that high inflation continues to inflict on household and
business budgets.
The revenue news prompted Spilka to announce her branch
would pursue a tax relief package, something she said would
involve working with the House after the Senate wraps up its
budget this month.
Because bills changing state revenues must start in the
House, the Senate can't act alone -- though senators could
add their relief ideas, whatever they may be, into any bill
they receive involving tax policy.
It seems unlikely that the more progressive Senate would
want the exact same tax breaks as Baker -- for one thing,
Senate Revenue Chair Adam Hinds at a February hearing was
sharply critical of the governor's proposed cut to the
short-term capital gains tax rate -- and it's still unclear
what path the House intends to take. It's not even clear
whether lawmakers might use a tax relief package as a
vehicle for select tax increases.
The Revenue Committee is seeking to push its deadline to
consider nearly 100 tax bills, including Baker's, until July
31, the last day of formal sessions for this year. With the
opinions of 155 House lawmakers to consider, Speaker Ron
Mariano said he doesn't know what's going to happen.
Eventually, Mariano might only have 154 reps to worry about.
But that depends on the U.S. Senate.
The Senate Committee on Energy and Natural Resources
deadlocked on Rep. Maria Robinson's nomination as assistant
secretary of energy in the Office of Electricity, a vote
that was already delayed once amid GOP opposition. Now it's
up to Majority Leader Chuck Schumer to decide if he wants to
bring the Framingham Democrat's nomination to the floor for
a full Senate vote, where Vice President Kamala Harris could
be the tiebreaker.
Regardless of if and when she leaves the House, the would-be
federal energy official won't have a formal role to play in
the negotiations on competing energy and climate bills on
Beacon Hill.
The House and Senate this week charged Telecommunications,
Energy and Utility Committee chairs Rep. Jeff Roy and Sen.
Mike Barrett with leading that significant lift. Sen. Cindy
Creem, Rep. Tackey Chan and minority leaders Rep. Brad Jones
and Sen. Bruce Tarr round out the conference committee that
will strive for a pre-July 31 reconciliation between the
House's offshore wind bill and the Senate's broader
emissions-reductions package.
The dealmaking, Barrett said, will be "very tough stuff" and
not a matter of "trading one of our apples for one of the
House's oranges and neatly coming to a conclusion."
While the two chairs have different philosophies on the best
next step in tackling the climate crisis, Roy said he's up
for the challenge, pledging to use "every ounce of my energy
and blood to reach a deal with the Senate on this to get
this bill done."
A deal may be closer in sight on bills opening up access to
driver's licenses for Massachusetts residents without legal
immigration status. The Senate this week joined the House in
passing its bill with a veto-proof majority, and the two
bills' texts are very similar.
Baker hasn't exactly said he'd veto the license bill, but
when asked about it he repeats his concerns around how the
policy would interact with the state's automatic voter
registration law. Baker could try to amend the bill, but the
sound rejection of Republican-sponsored amendments in both
branches suggest he might not have much luck there.
Senators passed their licensing bill on Thursday, the same
day they heard from Senate counsel that staffers' bid to
unionize involves a lot of murky legal questions and learned
that two of their colleagues -- Hinds and Sen. Eric Lesser,
both candidates for lieutenant governor -- had tested
positive for COVID-19.
With more people back in the State House and an overall
uptick in COVID across the state, reports of confirmed cases
and possible exposures have been periodically rolling in.
The latest came Friday morning, when House lawmakers and
staff were notified that three people last in the building
on Wednesday or earlier had tested positive.
Saying the COVID-19 treatment Paxlovid has been highly
effective, the Baker administration on Wednesday announced a
new, free telehealth program to help connect people with the
antiviral pills when they're an appropriate option.
Also Wednesday, the state's Supreme Judicial Court was busy
with challenges to questions bound for November's ballot.
The justices heard a case arguing that Attorney General
Maura Healey's summary of the income surtax ballot question
is misleading, as well as a pair of cases contending other
questions -- one changing the state's liquor-licensing rules
and the other involving status and benefits for app-based
drivers -- each improperly mix unrelated subjects.
A similar relatedness challenge for the other potential
ballot question, which seeks to cap dental insurer profits,
came before the SJC Monday.
Before all talk of the U.S. Supreme Court became about the
bombshell leak and the future of Roe v. Wade, the high court
on Monday ruled 9-0 that the City of Boston violated the
First Amendment in not agreeing to raise what city resident
Harold Shurtleff described as the Christian flag.
The 2017 denial was the first time the city refused a
request to fly a specific flag, Justice Stephen Breyer wrote
in the opinion that held Boston's flag-raising program is
not a form of government speech, so a denial based on
religious viewpoint was discriminatory.
Breyer also took a moment to consider what he described as
the somewhat controversial design of the brutalist, blocky
City Hall building itself.
He both noted that late 1960s critics said the concrete
structure "articulates its functions" with "strength,
dignity, grace, and even glamor" ... and then linked to the
2008 Boston Herald story on it being named the world's
ugliest building.
STORY OF THE WEEK: With an unprecedented judicial leak, the
fate of Roe v. Wade now looms large in an election year, and
over countless individual medical, personal and political
choices.
State House News
Service
Friday, May 6, 2022
Advances - Week of May 8, 2022
Halftime in the annual state budget game ends next week when
the Senate on Tuesday rolls out an alternative to the $49.7
billion fiscal 2023 budget the House approved in April.
Senators will spend the bulk of next week drafting
amendments they hope to attach to the spending bill when it
is debated the week before Memorial Day weekend. Then it
will be on to a conference committee in June.
Six-member conferences have already been charged with coming
up with a consensus election reform bill and legislation
overhauling operations as the state's two long-term care
facilities for veterans. This week, the House and Senate
dumped into conference competing bills addressing offshore
wind and carbon emission reductions.
The branches are far apart on sports betting bills, which
have yet to be assigned to a conference, but closer on
legislation making undocumented immigrants eligible for
state-issued driver's licenses.
The branches have a host of issues to square away on the
health care and mental health front, and legislative leaders
haven't signaled any path forward there. Other bills
expected to pass this session, but which have long paths
ahead, address the business landscape for marijuana
companies, economic development, and infrastructure.
Gov. Charlie Baker's $9.7 billion infrastructure bill has
yet to reach the floor of either branch, and his $3.5
billion economic development bill will be aired next week
during a hybrid hearing featuring both in-person and virtual
testimony.
Monday, May 9, 2022
ECONOMIC DEVELOPMENT COMMITTEE: Economic Development
and Emerging Technologies Committee holds virtual and
in-person public hearing on Gov. Charlie Baker's economic
development bill. People have the option of testifying
in-person or virtually. Baker, Lt. Gov. Polito, Energy and
Environmental Affairs Secretary Beth Card, Housing and
Economic Development Secretary Mike Kennealy, and Department
of Housing and Community Development Undersecretary Jennifer
Maddox are expected to testify, according to the committee.
There is excitement around this bill because a version of it
is expected to pass the Legislature and it will serve as a
late-session vehicle for proposals that would not likely
pass as standalone legislation....
Tuesday, May 10, 2022
SENATE BUDGET RELEASE: Senate Committee on Ways and
Means releases its recommendations for the Fiscal Year 2023
budget during a hybrid executive session.
The House passed a $49.7 billion fiscal 2023 budget on April
27 after adding nearly $130 million in spending through
seven mega-amendments over the course of three days. The
action is now on the Senate, where President Karen Spilka
has already hinted at targeted investments in housing, child
care and higher education, and told POLITICO that the Senate
budget will include $2 million for abortion access.
The Senate, like the House, has agreed to base its budget on
the consensus revenue accord that calls for $36.915 billion
in fiscal year 2023 collections. Through April of this
budget year, fiscal 2022, the state had collected $34.487
billion.
Senators will have until Friday, May 13 to file their budget
amendments and debate is scheduled to begin Tuesday, May 24.
State House News
Service
Thursday, May 5, 2022
Veto Not A Threat As Senate Approves Licensing Reform
Activists Cheer As Odds Rise For Long-Sought Reform
By Chris Lisinski
A long-debated proposal to expand driver's license access to
undocumented immigrants took a major step Thursday toward
becoming law, clearing the Senate with a strong enough
margin to overcome the prospect of Gov. Charlie Baker's
formal opposition.
Senators voted 32-8 in favor of the controversial reform,
which has drawn skepticism from Baker and split voters. Five
Democrats joined the chamber's three Republicans in dissent,
but backers still got more than enough favorable votes on
record to signal the Senate would clear the two-thirds vote
needed to override a potential veto. The House passed a
similar bill by a veto-proof 120-36 margin in February.
Pitching the bill as a road safety and immigration measure,
supporters said it would ensure that some of the 185,000
immigrants who already live in Massachusetts without legal
status are properly tested before driving and relieve their
fears of traffic stops spiraling into devastating
consequences.
"Allowing parents to drive their kids to school, take them
to doctor's appointments or be in charge of carpooling to
take their kids to soccer, all without the concern they may
be separated if they are pulled over, will allow children of
undocumented immigrants to breath and have a sigh of
relief," said Sen. Adam Gomez, a Springfield Democrat and
one of the bill's main sponsors.
Democrat Sens. Nick Collins of Boston, Anne Gobi of Spencer,
Marc Pacheco of Taunton, Walter Timilty of Milton and John
Velis of Westfield voted against the bill, as did all three
Republican senators - Bruce Tarr of Gloucester, Ryan Fattman
of Sutton and Patrick O'Connor of Weymouth.
When Sen. William Brownsberger read out the final result,
attendees in the Senate gallery erupted into applause and
cheers -- some shouting "thank you" -- loud enough to prompt
Brownsberger to bang the gavel and ask them to quiet down.
"Sorry, we can't have this," Brownsberger told the crowd.
"We can't have this in here. Thank you for your support, but
we can't have this in here."
Legislators have several more steps to complete before the
bill can become state law. House and Senate leaders will
need to agree on final language to send to Baker's desk,
which they could try to do informally -- senators previously
said the changes they made before bringing the proposal to
the floor were technical in nature -- or by appointing a
conference committee.
The House approved its version of the license access bill in
February with a 120-36 vote, well above the number of
representatives in support that would be needed to override
a veto.
Existing state law prohibits anyone "who does not have
lawful presence in the United States" from acquiring either
a standard Massachusetts or expanded REAL ID-compliant
driver's license.
The bill would open up access to the former license type,
which cannot be used to board a flight or access a federal
building, regardless of immigration status. To apply for a
license, someone without legal presence would need to
provide the Registry of Motor Vehicles with a foreign
passport or a consular identification document as well as at
least one of five other documents: a driver's license from
another state, a foreign driver's license, a birth
certificate, a foreign national ID card, or a marriage
certificate from any U.S. territory.
Over the course of Thursday's debate, senators beat back
attempts by Republicans and a handful of Democrats to
distinguish the licenses that could be awarded to
undocumented immigrants, either by offering them entirely
separate "driver privilege cards" or by requiring a standard
Massachusetts license issued to an immigrant without legal
status to be printed in a different color or declare that it
is not eligible as a form of identification.
"I am one of those who comes to the chamber concerned about
some of the provisions before us, concerned because a
driver's license is one of the most, if not the most,
recognizable, important pieces of identification in our
society, bar none," Tarr, the chamber's minority leader,
said at the start of the session.
"Trying to ensure our driver's licenses have integrity and
cannot be misused for various purposes -- those are
important things, and those things don't go away because of
the hardships we've heard about," Tarr added.
Bill sponsor Sen. Brendan Crighton, a Lynn Democrat,
contended that bifurcating licenses awarded to immigrants
without legal status and all other licenses could have a
"chilling effect" on the bill's goal to get more drivers
road tested.
"We believe that could lead to stigma, open up opportunities
to discriminate," Crighton said. "It is unnecessary because
we are just focused on the ability of someone to drive."
One amendment, offered by Fattman, would have required the
RMV to transmit licensing information to any city or town
clerk seeking to verify the identity of someone using a
license to register to vote.
Fattman said local elections officials in his district had
contacted him expressing concerns about the topic, and bill
backers fired back that the state already has protections in
place to prevent ineligible residents from registering to
vote. Gomez called concerns that the bill would unleash
voter fraud a "red herring."
Senators voted 10-29 to reject Fattman's amendment.
House Republicans unsuccessfully pushed a similar amendment
during their debate on the bill, which Baker described as a
"perfectly reasonable way to deal with this."
"Green card holders are required to explicitly demonstrate
lawful presence, OK? We're talking about a situation now
where, under the current statute as I understand it, all the
rules associated with determining lawful presence are going
to go away. That's a problem," Baker said Thursday morning.
"It basically means, in some respects, the Registry is going
to be flying blind with respect to what it issues when it
issues these licenses. And it puts tremendous pressure on
cities and towns to do the cleanup on the back end."
Sixteen other states already have laws on the books allowing
undocumented immigrants to acquire licenses, Crighton told
his colleagues. Sen. Sonia Chang-Díaz, a Boston Democrat,
added that in many of them, the rate of uninsured drivers
and hit-and-run crashes dropped after implementation of the
policy.
"This bill means trust and dignity for immigrants in our
state who lack federal status," Chang-Díaz said. "Without a
license, a routine traffic stop can have a lasting and
traumatic set of repercussions: arrest, ICE detention,
deportation. It can tear families apart, and that is a
heavy, heavy burden to carry that fear through the daily
activities of one's life."
While the legislation has now cleared both chambers with
more than three-quarters of elected lawmakers in support,
Bay Staters in general are nearly evenly split on the idea
of allowing people without legal immigration status to
acquire Massachusetts licenses, according to a new poll.
A Suffolk University-Boston Globe poll of 800 Massachusetts
residents published Monday found 46.6 percent oppose the
proposal, 46.1 percent support it and nearly 7 percent are
undecided. The poll was conducted from April 24 to April 28
and has a margin of error of 3.5 percentage points.
Road safety and immigration reform advocates spent years
unsuccessfully pressing lawmakers to act, arguing that
expanding license access would ensure undocumented
immigrants who already live in Massachusetts are properly
tested before getting on the road and rein in their fears of
law enforcement entanglement.
The Driving Families Forward coalition, which includes a
range of civil rights, immigration reform and organized
labor groups, praised the Senate's vote and called for Baker
to sign the legislation, arguing it "provides all the
safeguards necessary to answer any doubts he may has (sic)
raised previously."
"We are once again overcome with happiness, pride and
gratitude for today's historic vote in the Massachusetts
Senate," 32BJ SEIU Vice President Roxana Rivera and
Brazilian Worker Center Executive Director Lenita Reason,
who together lead the coalition, said in a joint statement.
"The legislature has now resoundingly supported the Work and
Family Mobility Act, moving all state residents toward
greater road safety, improved security, better public health
and a more vibrant economy, and promising a profound
transformation in the lives of undocumented immigrants
across the Commonwealth." |
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