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Post Office Box 1147
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Marblehead, Massachusetts 01945
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“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
48 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Sunday, July 31, 2022
CLT's 1986 Tax Cap to
Rebate $3 Billion to Taxpayers
Comes Under Threat!
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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While
lawmakers scramble to put together a package of tax
breaks in the final days of the legislative session,
a little-known law from the mid-1980s is about to
change the Beacon Hill debate over tax relief.
Record tax
revenues in fiscal 2021 are expected to trigger the
state’s tax cap for the first time in more than 30
years, setting the stage for Massachusetts taxpayers
to claim sizable credits on their 2022 returns.
The exact
size of the credits is unclear because some of the
information needed to calculate them is not yet
available. But sources say the amount of money at
stake could be significant. It’s also unclear
whether the return of the money under the tax cap
will affect ongoing discussions about a package of
tax breaks and cash payments to residents totaling
roughly $1 billion.
The tax
cap is one of those laws that has largely faded from
memory. It was passed by voters in 1986, in the
midst of the so-called Massachusetts Miracle. Put
forward by Citizens for Limited Taxation and the
Massachusetts High Technology Council, the ballot
question sought to restrict how much tax revenue the
state could take in, limiting the growth in revenues
to no more than the growth in total wages and
salaries....
Now the
process is set to resume again for the first time in
35 years....
State
Auditor Suzanne Bump typically certifies in
September the state’s allowable revenues and actual
revenues, the numbers needed to determine the size
of the tax cap credits. Her office said there would
be no comment on the tax cap until all those numbers
are available....
Jim
Stergios, executive director of the Pioneer
Institute think tank, said his staff reviewed the
numbers after being told about the situation.
“We’ve
looked closely at revenues through May. While we
don’t have the final June numbers, the economy is
generating a ton of state tax revenue — so much so
that it looks like the 1986 revenue cap will kick in
for the first time in decades. Taxpayers across the
state may get refunds, and the totals could be
substantial,” he said in an email.
Chris
Anderson, president of the Massachusetts High
Technology Council, said he had been working at the
council for two years when the 1986 ballot campaign
for the tax cap was mounted. He said the purpose of
the tax cap ballot question was to rein in
government spending.
“It was
designed to act as a governor on what the
Legislature has to spend,” he said. He noted an
unsuccessful court challenge to the question was
filed by the Tax Equity Alliance for Massachusetts,
or TEAM, which was headed by Jim Braude, who today
is a radio and TV host at GBH.
Anderson
said the expectation was that the cap would be
triggered more than just once over the years, but he
said wage and salary growth has been bigger than tax
revenue growth until now. “This year the revenue
growth was so astronomical,” he said.
CommonWealth Magazine
Wednesday, July 27, 2022
Long-forgotten tax cap about
to be triggered
State to return millions to taxpayers for first time
in 35 years
By Bruce Mohl
Anticipating that a 1980s law that's largely been
relegated to the depths of Beacon Hill memories will
be triggered by the fiscal year 2022 surplus, the
Baker administration is preparing to make "north of
$2.5 billion" in tax rebates available to
Massachusetts residents later this year....
Under
terms of the tax cap referendum sponsored by the
Citizens for Limited Taxation and approved by the
electorate in 1986, if revenues grow by more than
the growth in wages and salaries, the excess money
must be returned to taxpayers. Once the auditor
determines that the state did collect tax revenue
above and beyond the cap, the Department of Revenue
"shall take all the necessary action to effectuate a
tax credit equal to the total amount of such
excess," the auditor's office said.
The law
states that the auditor's determination "shall
result in a credit equal to the total amount of such
excess" and that the credit "shall be applied to the
then current personal income tax liability of all
taxpayers on a proportional basis to the personal
income tax liability incurred by all taxpayers in
the immediately preceding taxable year."
State
House News Service
Thursday, July 28, 2022
Baker Sees 1986 Law
Triggering $2.5 Billion In Rebates
“I’m sure
Barbara Anderson is up there looking down on us with
a grin pumping her fist in the heavens,” said Chip
Ford, executive director of Citizens for Limited
Taxation.
The news that CLT’s (and the Massachusetts High Tech
Council’s) tax cap, approved by 54% of the voters on
the 1986 statewide ballot, is eligible to kick in
for only the second time since its adoption is
exhilarating. It solves the situation of billions of
dollars in tax overpayments, the multi-billions in
historic revenue surpluses, and who that windfall
rightfully belongs to.
Taxpayers have CLT under the tireless leadership of
Barbara Anderson and founding president of the MHTC
Howard Foley to thank for their foresight and the
energy and commitment of the two organizations and
its members for this expected tax rebate.
CLT News
Release
Thursday, July 28, 2022
Thanks to
Barbara Anderson for CLT’s Ticking Tax-Cap Time Bomb
Boston -
The Massachusetts Fiscal Alliance made the following
statement after today’s remarks from Governor
Charlie Baker in which the Governor said taxpayers
could be entitled to over $2.5 billion in rebates
due to a law originally passed in 1986 and
championed by Citizens for Limited Taxation (CLT)
and the tireless advocacy of the Barbara Anderson.
“The
Massachusetts Fiscal Alliance is pleasantly
surprised. It’s never too late to embrace these
common sense approaches, especially when they are
written into our laws,” stated Paul Diego Craney.
“Governor
Baker is right to want to give back this money, we
are just disappointed that tax relief has only
become so popular during the last few days of his
final legislative session in office,” continued
Craney.
“The
legacy of Citizens for Limited Taxation and the
advocacy by the late Barbara Anderson are so strong
that they are still providing protections to
Massachusetts taxpayers four decades on. Chip Ford,
who continues to run the organization, should be
proud to see Barbara’s legacy still benefiting
Massachusetts taxpayers. MassFiscal and our alliance
hope to continue their great work,” concluded Craney.
MassFiscal
Thursday,
July 28, 2022
MassFiscal Responds to 1986 Law Passed by CLT That
Could Provide Over $2.5 Billion in Tax Relief
With state
coffers overflowing, Massachusetts taxpayers could
receive nearly $3 billion in tax relief under an
obscure 36-year-old law, Governor Charlie Baker’s
administration said Thursday, surprising lawmakers
just as separate tax relief talks seemed to be
reaching a crescendo.
The
likelihood of a decades-old law forcing the state to
give back billions to taxpayers quickly shook Beacon
Hill on the same day data showed the economy had
edged closer to, if not officially in a recession.
It also
complicated legislators’ negotiations over a $1
billion package of tax breaks and rebates — a
mammoth proposal lawmakers pursued to help ease the
pinch of ballooning inflation but were still
scrambling to complete before their legislative
session ends Sunday night.
How much
the state could ultimately hand back to taxpayers is
unclear. But Baker said Thursday the state appears
poised to trigger a 1986 voter-passed law that seeks
to limit state tax revenue growth to the growth of
total wages and salaries in the state.
Should
revenue exceed that so-called “allowable” amount,
taxpayers are then due a credit equal to the excess
amount. The state auditor is tasked with determining
the final amount from the previous fiscal year each
September.
The state
has yet to release its final revenue numbers for the
fiscal year that ended June 30, though officials
said they could come as early as next week. Still,
with collections running more than 21 percent above
projections through the end of May — prompting one
estimate of a $3.6 billion budget surplus — Baker
said Thursday that his administration believes the
excess amount is “probably north of $2.5 billion.”
His budget
office later released estimates showing the excess
could, as of now, actually near $2.97 billion,
meaning more than 3 million taxpayers could get back
roughly 7 percent of the income taxes they paid in
2021, administration officials said.
For
example, for someone whose taxable income was
$75,000 after deductions and exemptions, that could
mean a return of $250, according to Baker’s budget
office.
“These are
sort of unprecedented increases in tax revenue,”
Baker said Thursday after signing the state’s $52.7
billion state budget, “which is, in some ways,
exactly what this thing was designated [to do], to
ensure that people of Massachusetts participated in
that windfall.”
Since the
1986 law was passed by voters, the cap was triggered
just once, in fiscal year 1987, when revenues
exceeded the allowable amount by $29.2 million,
according to a
state auditor report. At the time,
the state added a line to the 1987 version of the
state’s individual income tax return form, where
individual taxpayers could “insert his or her
individually calculated share,” according to the
auditor’s office. The state ultimately issued
$16.8
million in credits, leaving nearly $12.4 million
unclaimed....
Pushed by
Citizens for Limited Taxation and the Massachusetts
High Technology Council, the proposal was intended
to curtail the Legislature’s habit of
“overcommitting resources when tax resources are
bountiful,” and then raising taxes to sustain the
spending, said Chris Anderson, the council’s current
president, who started with the group two years
before voters passed the ballot question by a margin
of nearly 8 percentage points.
“It’s a
fiscally prudent policy that’s timeless,” said
Anderson, who pointed to repeated budget surpluses
in recent years. “It’s nice to see the seeds that we
sowed in 1986 are now coming into play at an
appropriate time.” ...
Despite
the 1986 law being in statute for decades, state
Representative Aaron Michlewitz, the House budget
chief, said when lawmakers crafted the tax packages,
they did not know it could be triggered. Senator
Michael J. Rodrigues, his Senate counterpart, said
Baker’s administration informed lawmakers of it
coming into play “literally days ago.”
With the
potential of the economy tipping into a recession,
Michlewitz said lawmakers have to reevaluate their
spending plans quickly. The Legislature’s formal
sessions end Sunday night, when lawmakers will also
be racing to complete a host of other unfinished
bills.
“It
definitely, I think, puts everything back on the
table for conversation on exactly what we can afford
or can’t afford going forward,” said Michlewitz, a
North End Democrat.
Baker said
Thursday he believes the state can absorb both the
tax relief package and billions in other tax credits
given the state’s flush coffers, the expected
multibillion-dollar surplus, and the state’s
record-high savings account that, under the budget
he signed Thursday, would grow to $8.4 billion, his
administration estimates.
“So yeah,”
Baker said, “we think it’s affordable.”
Evan
Horowitz, executive director of the Center for State
Policy Analysis at Tufts University, said the state
should have the resources to afford all the various
tax relief measures. But he said legislative leaders
should consider changing the formula attached to the
1986 law, or even suspending its implementation to
avoid money going out in a “not very progressive
way.”
Those who
pay more in taxes would get more in relief through
the excess revenue, as opposed to the lawmakers’
rebate plan, which is targeted toward those making a
certain amount.
Horowitz
also acknowledged that changing the law — including
just before it’s primed to spit out potentially
billions of dollars in relief to taxpayers — may not
be politically feasible.
“The
timing of this is awkward. It’s also awkward
politically,” Horowitz said. “Even if it’s a
sensible thing [to argue], ‘This is triggered at a
weird time, and we want to make it better,’ going
into the election season you open yourself to the
charge that you’re standing against tax cuts.”
The
Boston Globe
Thursday, July 28, 2022
In a surprise, Baker says
taxpayers could receive ‘north of $2.5 billion’
in tax relief under little-known law
By Matt Stout and Samantha J. Gross
The state
took in so much revenue last year taxpayers may see
a rebate sent back to them under a fairly unused
30-year-old law, the governor said.
“We think
the number is probably north of $2.5 billion that
would be tax rebates to the people of
Massachusetts,” Gov. Charlie Baker said Thursday....
“I’m sure
Barbara Anderson is up there looking down on us with
a grin pumping her fist in the heavens,” said Chip
Ford, executive director of Citizens for Limited
Taxation. Anderson was a driving force behind the
law which implements the rebates.
“The news
that CLT’s (and the Massachusetts High Tech
Council’s) tax cap, approved by 54% of the voters on
the 1986 statewide ballot, is eligible to kick in
for only the second time since its adoption is
exhilarating. It solves the situation of billions of
dollars in tax overpayments, the multi-billions in
historic revenue surpluses, and who that windfall
rightfully belongs to,” Ford said.
He wasn’t
the only one surprised by the state’s potential
payback.
“The
Massachusetts Fiscal Alliance is pleasantly
surprised. It’s never too late to embrace these
common sense approaches, especially when they are
written into our laws,” Paul Craney, a spokesman for
the Alliance said in a release.
“Governor
Baker is right to want to give back this money, we
are just disappointed that tax relief has only
become so popular during the last few days of his
final legislative session in office,” he said.
LASTING LEGACY: Barbara Anderson of Marblehead holds
a letter from her insurance company in her home
office for Citizens for Limited Taxation in
September 2014. Anderson was a driving force behind
the statute in 1986 that allows for some tax revenue
to be returned to taxpayers. Anderson died in 2016.
The
Boston Herald
Thursday, July 28, 2022
Rebate checks may be
coming,
with billions in 2022 excess tax takings expected
“I’m sure
Barbara Anderson is up there looking down on us with
a grin pumping her fist in the heavens,” said Chip
Ford, executive director of Citizens for Limited
Taxation, in a written statement Thursday, July 28.
Anderson,
who died in 2016, was the head of Citizens for
Limited Taxation when that organization and the
Massachusetts High Technology Council pushed the
proposal.
The 1986
initiative petition rolled back a surtax on state
income tax that the state legislature had passed.
It also
stated, in part: “The allowable state tax revenues
for any fiscal year are limited to the allowable
state tax revenues for the prior fiscal year as
increased by the average rate of growth of
Massachusetts wages and salaries for the three
immediately preceding calendar years. … If state tax
revenues exceed the limit imposed by the proposed
law, as determined by the State Auditor, a tax
credit would have to be granted equal to the total
amount of excess tax revenue. The credit would be
applied to the then current personal income tax
liability of all taxpayers in proportion to their
personal income tax liability in the preceding
year.” ...
Paul
Craney, spokesman for the Massachusetts Fiscal
Alliance, which supports tax cuts, congratulated
Citizens for Limited Taxation for the forthcoming
tax rebate, which few knew about before CommonWealth
magazine reported it on Wednesday, July 27.
“The
legacy of Citizens for Limited Taxation and the
advocacy by the late Barbara Anderson are so strong
that they are still providing protections to
Massachusetts taxpayers four decades on. Chip Ford,
who continues to run the organization, should be
proud to see Barbara’s legacy still benefiting
Massachusetts taxpayers,” Craney said in a written
statement.
Anderson
is largely responsible for several limits on
spending and taxes in Massachusetts — including,
most famously, Proposition 2½, a 1980 referendum
approved by the voters that limits increases in the
property tax levy of cities and towns in
Massachusetts to 2.5 percent plus allowances for new
growth.
The New
Boston Post
Thursday, July 28, 2022
Barbara
Anderson Strikes Again
Massachusetts Taxpayers To Get Tax Rebate
Thanks To Obscure 1986 Referendum
With just
three days left to hold formal sessions this year,
Beacon Hill Democrats may have to take their
long-discussed $1 billion tax reform and relief plan
back to the drawing board now that it appears that a
1980s law largely relegated to the depths of Beacon
Hill memories will be triggered by the fiscal year
2022 surplus, resulting in nearly $3 billion being
returned to taxpayers....
Under
terms of the tax cap referendum sponsored by the
Citizens for Limited Taxation and approved with 54
percent support from voters in 1986, if revenues
grow by more than the growth in wages and salaries,
the excess money must be returned to taxpayers. Once
the auditor determines that the state did collect
tax revenue above and beyond the cap, the Department
of Revenue "shall take all the necessary action to
effectuate a tax credit equal to the total amount of
such excess," the auditor's office said.
The final
determination of how much state tax revenue should
be returned is due from Auditor Suzanne Bump's
office by Sept. 20. Bump's office said Thursday that
the data required for the report is not yet
available....
CLT, which
pushed for the 1986 law with the Massachusetts High
Technology Council, said Thursday that the idea that
the excess revenue relief could be triggered for the
first time in 35 years was "exhilarating."
"I'm sure
Barbara Anderson is up there looking down on us with
a grin pumping her fist in the heavens," Chip Ford,
Executive Director of CLT, said Thursday, referring
to the late CLT leader who was one of the authors of
Proposition 2½ and a steadfast opponent of
tax-raising efforts within the Massachusetts
Legislature.
The Mass.
Fiscal Alliance also praised Anderson and CLT on
Thursday, saying their legacies "are so strong that
they are still providing protections to
Massachusetts taxpayers four decades on."
"Everything's on the Table"
The
potential appeared to catch legislative Democrats
off guard, as the possible windfall for taxpayers
was not a topic of public discussion throughout the
long budget cycle and while surplus revenues were
piling up. None of the current members of the
Legislature were in office in 1986. The House dean,
Rep. Kevin Honan, was elected in 1986 and took
office in 1987, and the Senate dean, Sen. Marc
Pacheco, was first elected in 1988.
Ways and
Means Chairmen Sen. Michael Rodrigues and Rep. Aaron
Michlewitz told reporters Thursday afternoon that
they are still trying to discern what the new-found
relief might mean for their own tax relief plans,
which are hung up in negotiations over a massive
economic development bill that must be completed by
the end of the weekend.
"I
definitely think it puts everything back on the
table for conversation on exactly what we can afford
or can't afford going forward. And again, to [Rodrigues']
point of saying that when we did this package, we
did this not expecting, necessarily, the trigger
would take effect. We didn't have the revenue
numbers, we did not know what the wage growth
calculations would work out to be," Michlewitz said
of the tax relief package House and Senate leaders
announced on July 7. "So I don't think we had this
potential number in play when we were making those
decisions. So obviously, everything has to be still
put back on the table for conversation. ... We have
to reevaluate exactly what we can afford going
forward."
The Ways
and Means chairmen did not rule out the Legislature
making changes to the 1986 law to take the
automatically-triggered relief off the table.
"We
haven't gotten to that point to make any decisions
yet," Rodrigues said when asked if changes to 62F
were under consideration. "Remember, the
administration just discovered and informed us about
this literally days ago. And we had to understand,
we're still trying to understand, and working with
some outside folks that know the tax codes even
better ... How did COVID affect this? The fact that,
you know, we know that billions of dollars came into
the commonwealth with COVID relief dollars, with
supplemental unemployment insurance payments and the
like. How did that weigh into the fact there was no
COVID pandemic back in 1986 when this statute was
put on the books?"
Michlewitz
added, "Everything's on the table in this
conversation right now. You know, in the last couple
of days here." ...
"The tax
breaks that are currently pending before the
Legislature are eminently affordable within the
context of the rest of this. I mean, you're talking
about a tax year this past year in which tax revenue
went up by over 20 percent, which came on the heels
of a tax revenue increase in the previous year that
went up by 15 percent," the governor said. "I mean,
these are sort of unprecedented increases in tax
revenue, which is in some ways exactly what this
thing was designed [to do], to ensure that people in
Massachusetts participated in that windfall."
A Baker
administration official argued Thursday that the
Legislature's plan for targeted tax relief to a
specific band of taxpayers and the idea of returning
one-time money that the state essentially
overcollected are two different concepts and that
one should not preclude the other.
Baker also
pointed to the fiscal year 2023 budget he signed
Thursday morning, which includes a major spending
increase that he said "is absolutely affordable." He
said the state has "a lot of room there" and that he
believes there will still be enough leftover to make
additional investments in the MBTA and other things
in the final close-out budget bill for fiscal year
2022.
"So yeah,"
Baker said, "we think it's affordable."
Through
the middle of June, the final month of fiscal 2022,
Massachusetts had collected $39.199 billion in tax
revenue for fiscal year 2022, enough that the
Massachusetts Taxpayers Foundation estimated a
surplus in the neighborhood of $3.5 billion. DOR has
not yet reported final fiscal year-end revenue
figures, or figures covering the full month of June,
generally the second-largest month for receipts. An
administration official said Thursday that June will
be a big over-benchmark month.
But
Baker's budget office said Thursday that the state
was $3.5 billion over revenue benchmarks through
June with $2.1 billion still available after
statutory transfers of excess capital gains. On top
of that, the administration said, is $3.1 billion in
"tax upside" or additional over-benchmark
collections realized between January and May.
Subtracting $3 billion for excess revenue credits or
rebates would leave $2.7 billion available, the
administration said....
How It
Would Work
"We're
looking at what's the quickest and most efficient
way to get that money back to the taxpayers," the
secretary of administration and finance said.
That's a
point that Michlewitz would also like some clarity
around.
"You even
just said there's now credit [or] rebate. I don't
think we have that full answer of what that actually
is," he said after a reporter asked about rebates or
credits under 62F. "I think the administration has
given a little mixed message on that conversation as
well. So getting a full vetting and a full
understanding of that is going to be critical for us
to really know whether or not we need to move
forward with any conversations related to 62F."
The only
time the excess revenue cap was hit, in fiscal 1987,
the $29.22 million in credits was made available to
taxpayers through the addition of a line on the 1987
Massachusetts individual income tax return "upon
which each individual taxpayer could insert their
individually calculated share of the $29,221,675
credit," the auditor's office said.
From
fiscal year 1987 through fiscal 2021, net state tax
revenues increased by about 328 percent, from about
$8.1 billion to more than $34.65 billion. The
"allowable" state tax revenues -- or the maximum
that can be collected without hitting the cap --
increased by 356 percent over the same time period,
from $8.07 billion to about $36.79 billion.
Each year
from fiscal year 1988 through fiscal year 2021, the
state auditor has determined that net state tax
revenues were less than allowable state tax revenues
and that, therefore, no tax credits were required
under 62F.
State
House News Service
Thursday, July 28, 2022
Baker Sees 1986 Law
Triggering $2.5 Billion In Rebates
Tax Relief Bombshell Catches Beacon Hill Off Guard
Pioneer
Institute projects that the state will refund
approximately $3.2 billion to taxpayers due to a
state law sponsored by Citizens for Limited Taxation
and voted on by taxpayers in 1986 that caps the
amount of revenue the state can collect in any given
year....
To
estimate the refund to taxpayers, Pioneer replicated
the calculations prepared by the state auditor in
prior years to determine if a refund was due and
estimated June revenue based on historic trends.
Pioneer
Institute
Friday, July 29, 2022
Pioneer Institute Expects That
Massachusetts Taxpayers
Will Be Refunded $3.2B Due To State Revenue Cap
With
Democrats heading into the weekend scrambling for a
path forward on tax relief, House Speaker Ron
Mariano said Friday that he is open to changing,
delaying or spiking a 1986 voter law that appears
poised to return nearly $3 billion to taxpayers....
Mariano
said Friday that he would consider all courses of
action, up to and including altogether scrapping the
tax relief trigger law voters enacted in 1986.
"Sure,
it's an option," Mariano told reporters when asked
if lawmakers would consider undoing the trigger
enshrined in Chapter 62F. "Everything's on the
table. We could undo the law, we could change it, we
could postpone."
He
added,"I think it's open up for discussion, and I'm
not going to be the only decision-maker in that
process," Mariano said. "It has to go through the
House, the Senate and it has to be voted on and
signed by the governor."
Executing
any changes to that law could pose a challenge for
Democrats, who at this late date in their formal
session calendar would need Republican Gov. Charlie
Baker to be on board with the idea....
The law,
enacted in 1986 after 54 percent of voters endorsed
a measure sponsored by Citizens for Limited
Taxation, requires state government to return excess
money to taxpayers if state revenues grow at a rate
higher than the increase in wages and salaries....
The
last-minute emergence of the tax cap appears to have
caught top Democrats off guard. Mariano on Friday
described the trigger as a "one-time event" that
"popped up."
"We knew
it existed, but we didn't know how close we were,"
Mariano said. "The formula is very convoluted. We're
not even sure if the numbers are accurate, and we
won't know until September how accurate the numbers
are." ...
The
Massachusetts Fiscal Alliance called Friday
afternoon for legislative leaders to leave the cap
in place, describing it as "designed to protect
taxpayers when situations exactly like this arise."
"Speaker
Mariano and Senate President Spilka should not alter
or water down this law through deceptive last minute
insider tactics to make sure they don't lose control
of taxpayer dollars. If they do, their integrity
will be forever damaged and the Governor should use
his veto without hesitation," said MassFiscal
spokesperson Paul Craney. "If the Speaker and Senate
President did this at the last minute, they would be
stealing money that didn't belong to them, it would
be tantamount to corruption. Taxpayers deserve this
rebate and will certainly spend their hard-earned
tax dollars better than the so called 'budget
experts' on Beacon Hill who are so knowledgeable in
their field that they didn't even seem to be aware
of the law."
After a
year of overflowing tax collections, Baker initially
estimated the size of the pot as "north of $2.5
billion," and the administration's budget office
said later Thursday it estimates $2.965 billion
could be returned to taxpayers in a one-time
event....
Any action
to circumvent or block billions of dollars from
heading back to taxpayers could generate
election-year blowback for Democrats, particularly
because the trigger was enacted by voters.
Less than
half of incumbent lawmakers face any declared
major-party opponent in either the Sept. 6 primary
or the Nov. 8 general election. Both Mariano and
Senate President Karen Spilka are unopposed.
State
House News Service
Friday, July 29, 2022
Mariano Mulling
Changes To 1986 Tax Relief Law
Differs With Baker On Affordability Of Pending Tax
Relief
Reportedly
legislative leaders are contemplating hoisting the
middle-finger Beacon Hill salute to voters and
taxpayers once again.
According
to the State House News Service: "’Sure, it's an
option,’ Mariano told reporters when asked if
lawmakers would consider undoing the 1986 voter law.
‘Everything's on the table. We could undo the law,
we could change it, we could postpone.’"
They could
also leave it alone as mandated by 54% of voters,
their constituents. That would be the correct option
“on the table” in a truly representative government
– the only honorable course.
“That
Speaker Mariano would even consider such an
affront to democracy, to election results, and to
voters themselves – that he even dares speak it
aloud – demonstrates the degree of sheer political
arrogance that permeates ‘The Great and General
Court’ of the Commonwealth,” said Chip Ford,
Executive Director of Citizens for Limited Taxation
which co-sponsored the successful 1986 ballot
question along with the Mass. High Tech Council....
CLT News
Release
Friday, July 29, 2022
The Timing
Couldn’t Be Better
“This law
was designed to protect taxpayers when situations
exactly like this arise. Speaker Mariano and Senate
President Spilka should not alter or water down this
law through deceptive last minute insider tactics to
make sure they don’t lose control of taxpayer
dollars. If they do, their integrity will be forever
damaged and the Governor should use his veto without
hesitation. If the Speaker and Senate President did
this at the last minute, they would be stealing
money that didn’t belong to them, it would be
tantamount to corruption. Taxpayers deserve this
rebate and will certainly spend their hard-earned
tax dollars better than the so called “budget
experts” on Beacon Hill who are so knowledgeable in
their field that they didn’t even seem to be aware
of the law,” said Paul D. Craney, spokesman for the
Massachusetts Fiscal Alliance.
“The fact
that we’re even having this conversation right now
speaks to the absolute hypocrisy of Beacon Hill
politicians. With one hand, Beacon Hill politicians
are trying to push Massachusetts residents to pass a
deceptive 80% tax hike amendment to fund their pet
projects, while with the other they’re considering
undermining the will of a previous ballot question
that would actually benefit Massachusetts families.
It’s the height of hypocrisy,” continued Craney.
“This potential last minute deceptive tactic is what
you would expect from a third world dictator. If it
happens at our State House, it should not be
tolerated.” ...
“It’s a
true testament to the legacy of Barbara Anderson and
Citizens for Limited Taxation that Beacon Hill
bosses are trying to scheme a way to dismantle yet
another taxpayer protection measure clearly passed.
The Speaker and Senate President MUST honor the will
of the people and return this over-collection to the
hard-working taxpayers,” concluded Craney.
MassFiscal
Thursday, July 28, 2022
MassFiscal Calls on Speaker and Senate President to
Honor Rebate Law,
Avoid Efforts to Evade the Will of Voters in End of
Session Scramble
Integrity of the Legislature Under Microscope
Governor
Charlie Baker’s announcement Thursday that the state
is poised to trigger a 1980s-era tax cap law that,
by his estimates, could require sending more than
$2.9 billion back to taxpayers has upended Beacon
Hill’s already chaotic finish to formal sessions,
making things cloudier — not clearer — the closer it
moves toward a Sunday night deadline.
Most
pointedly, it quickly upended talks over a separate
$1 billion tax relief proposal that lawmakers had
spent months developing and were aiming to finalize
before the end of the weekend.
But it
also lobbed a wrench into Democratic leaders’
already growing to-do list, and raised the
uncomfortable prospect of lawmakers undoing an older
law on tax relief just as they were poised to
deliver significant amounts of money to many of
their constituents.
With two
working days left before formal sessions end, the
tax cap bombshell “does call into question all of
the decisions we made going up to this point about
our tax cuts,” House Speaker Ronald Mariano told
reporters Friday, while also keeping open the option
of undoing the old tax cap law....
The
possibility of undoing the law drew swift criticism
from its supporters, who said it would amount to a
“cavalier betrayal” of voters.
“That
Speaker Mariano would even consider such an
affront to democracy, to election results, and to
voters themselves — that he even dares speak it
aloud — demonstrates the degree of sheer political
arrogance that permeates” the Legislature, said Chip
Ford, executive director of Citizens for Limited
Taxation, which pushed the ballot question in 1986
along with the Massachusetts High Technology
Council.
The
Boston Globe
Friday, July 29, 2022
In rush to the finish,
Mass. lawmakers face
a unexpected hurdle in 1986 tax cap law
The late Barbara Anderson, a longtime taxpayer
advocate who died in 2016, was back in the headlines
this week. As a result of fiscal 2022's blockbuster
revenue haul, Bay State taxpayers could be due a
credit totalling close to $3 billion under a 1986
tax cap law that Anderson spearheaded. (CLT's
current executive director Chip Ford stands alongside
her.) - SHNS/File 2004
Oh, right
- August 1!
If you're
morbidly, or just professionally, obsessed with
issues and action in and around 24 Beacon St., you
can forget there's life after July 31, when the
proposals you've been fixating on face their fate,
and in theory you can catch your breath.
Not so
fast there, bucky.
While the
bulk of the news from Beacon Hill this week did
indeed concern the final triumph or final hours of
measures that have been in development for months or
years, at least two major state-government stories
broke that won't be resolved by Sunday at midnight,
the deadline driving the State House news all month.
The first
affects nearly every household in the state. Bruce
Mohl of CommonWealth magazine broke the news that
revenue poured into state coffers so abundantly in
fiscal 2022 that taxpayers collectively could be due
a credit totalling close to $3 billion. The final
number has yet to be calculated - that's partly why
it's an August-and-after story - and officials will
have to determine the mechanism by which tax filers
will claim their credit.
The issue
arises out of a 1986 law put on the books through a
ballot question. It caps allowable growth in state
tax collections at the same rates as wages and
salaries grow in a given fiscal year, and mandates
any excess be returned to taxpayers.
The law
was passed by voters in a bygone Massachusetts that
had chosen Ronald Reagan in two consecutive
presidential elections, and one wonders if the same
question would pass today. Even if it wouldn't,
current officeholders will mess with the terms of
the tax credit at their peril in this election year.
Inflation, a looming recession, and a mood of deep
dissatisfaction generally make testing the tolerance
of the electorate with State House chicanery a bad
idea. But such talk is already being heard, from no
less a light than Speaker Ronald Mariano, and a new,
momentous public conversation is just beginning.
State
House News Service
Friday, July 29, 2022
Weekly Roundup - Signings of the
Times
It's two
sides of the same coin. Legislators are rushing to
complete critical business, and they are also
scrambling to finish work they could have done
months ago or last year....
While
there's great anticipation about what will be
included and excluded from those bills, the end of
formal sessions approaching on Sunday night is
punctuated this year by an unexpected drama
unfolding over tax relief.
Democrats
baked into their economic development bill about
$500 million in one-time rebates and $500 million in
permanent tax relief, but appear to have been
blindsided by this week's news that an existing
state law is poised to trigger nearly $3 billion in
tax relief this fall.
House
Speaker Ron Mariano on Friday expressed an openness
to changing, delaying or even undoing the 1986 voter
law known as Chapter 62F, but Gov. Charlie Baker
believes all of the tax relief is affordable and
others are demanding that the will of the voters be
honored since the state is swimming in excess
revenue due mainly to tax collections that have
soared in the past two years without any tax
increases.
"While
perhaps none of us would have predicted the
astonishing amounts of revenue being collected by
state government, this is exactly the type of
situation that voters addressed clearly in 1986, and
we need to honor their directive," Senate Minority
Leader Bruce Tarr said in a Saturday morning
statement. "Moreover, the very levels of tax
collection that trigger the 1986 law also give us
the capacity and the obligation to provide the
additional relief approved by the House and Senate
in the Bill Relating to Economic Growth and Relief
for the Commonwealth. The circumstances of
ballooning state surpluses and the enormous pressure
on household budgets due to inflation and other
costs demand no less, and we must proceed on both
fronts."
Conference
committees are supposed to limit deliberations to
matters in the House and Senate bills they're
negotiating, and Chapter 62F was not a consideration
in either economic development bill. The lead
negotiators are Ways and Means Chairs Rep. Aaron
Michlewitz and Michael Rodrigues; the other
conferees are Reps. Mark Cusack and Michael Soter
and Sens. Eric Lesser and Patrick O'Connor....
Informal
sessions are planned from August through early
January, and represent an opportunity to continue
some work. However, certain bills can't be tackled
in informals, such as bond bill and veto overrides.
Also, unanimous consent - the approval of all
members present - is required to advance bills
during informals, which can severely limit how much
can be accomplished in those sessions that unfold
before and after election season.
State
House News Service
Saturday, July 30, 2022 [9:03 AM]
Session Scramble
Punctuated By Tax Relief Drama
Democrats Juggling Massive Late-Session Workload
Senate
Republicans are putting pressure on Democratic
legislators to uphold the provisions of a 1986 law
that could return nearly $3 billion to taxpayers.
Led by
Senate Minority Leader Bruce Tarr, the Republicans’
call for the Legislature to honor the “will of
voters” comes on the heels of comments made Friday
by House Speaker Ron Mariano, who said he was open
to changing or eliminating the decades-old law....
“While
perhaps none of us would have predicted the
astonishing amounts of revenue being collected by
state government, this is exactly the type of
situation that voters addressed clearly in 1986, and
we need to honor their directive,” Tarr said in a
Saturday morning statement.
“Moreover,
the very levels of tax collection that trigger the
1986 law also give us the capacity and the
obligation to provide the additional relief approved
by the House and Senate in the Bill Relating to
Economic Growth and Relief for the Commonwealth,” he
added....
While Gov.
Charlie Baker has said he thinks providing
additional tax relief to residents through the
provisions of the 1986 law is affordable, Mariano
indicated Friday that he was interested in changing,
delaying or removing the trigger included in what is
known as Chapter 62F.
“Sure,
it’s an option,” Mariano told reporters on Friday.
“Everything’s on the table. We could undo the law.
We could change it. We could postpone it.”
The
Boston Herald
Saturday, July 30, 2022
Massachusetts Senate
Republicans pressure Democrats to
uphold 1986 law that could return cash to taxpayers
RETURNS:
The House returned from recess at 11:01 a.m.
The House
sifted through a handful of Gov. Charlie Baker's
budget amendments Saturday during the penultimate
formal session of the two-year term, before moving
into an overnight recess that will take around 19
hours off the shrinking timeframe they have left for
major votes....
RECESS
'TIL SUNDAY, JULY 31: Rep. Garballey of Arlington
gaveled the House to order at 5:10 p.m. On a Rep.
Frost motion, the House recessed until the hour of
12 noon Sunday, July 31. Rep. Garballey said roll
calls will be at noon.
State
House News Service
Saturday, July 30, 2020
House Session Summary -
Saturday, July 30, 2022
CONVENES:
The Senate convened today at 12:20 p.m.
With the
clock winding down on formal sessions for 2022, the
Senate spent much of the day in recess -- testament
to the reality that, at this late stage, the real
work of legislating is occurring in the rooms where
it happens -- coming to agreement, or not, on the
marquee issues left in the session, such as the
economic development, mental health access and
sports betting bills....
ADJOURNS
'TIL SUNDAY, JULY 31: The Senate adjourned at 5:38
p.m. to meet again Sunday, July 31 in a full formal
session without a calendar.
State
House News Service
Saturday, July 30, 2020
Senate Session Summary -
Saturday, July 30, 2022
The
taxpayers — real-life Americans who actually work
for a living — may be in line to get back $3 billion
in public funds that the parasitical hacks were
conniving to lavish on themselves and their fellow
leeches in the non-working classes.
This will
not stand! But the problem is, who will stop this
unspeakable hate crime against the hackerama? ...
Theoretically the Democrats could overturn the law,
but then Gov. Charlie Baker would just veto it…
after they’ve gone home for the year.
Another
option: a lawsuit. Maybe get one of the
public-sector thug unions to take a break from
turning over tables outside Market Baskets where
Americans are gathering signatures to stop illegals
from getting drivers’ licenses.
The
nose-ring-wearing comrades could seek an injunction
to halt the return of the stolen funds, claiming the
cash hasn’t been “appropriated,” as if the amigos
are suddenly concerned about following the letter of
gringo law.
A less
likely option: the lame-duck auditor Suzanne Bump
must “certify” the amount to be returned to
Americans. Bump is utterly shameless, so perhaps she
could be convinced to declare that the $3 billion
surplus has shrunk to… $79.38.
After all,
this is a woman whose private-sector company was
sued for sexual discrimination last year. It turned
out that Auditor Bump’s CEO was a convicted serial
bank robber — his Bureau of Prisons number is
18581-038. You could look it up.
Seriously,
this is the woman who gets to decide how much money
Americans will get back from the regime occupying
the State House. You can’t make this stuff up....
The timing
couldn’t be worse, because the legislature goes out
of session for the year tonight at midnight.
Granted, these solons have never been shy about
stealing a hot stove and then coming back for the
smoke.
But $3
billion is a lot to heist — before midnight!
The
Boston Herald
Sunday, July 31, 2022
Massachusetts State House presents
‘Nightmare on Beacon Hill’ to stop tax rebate
By Howie Carr
The day of
decisions has arrived....
And a
multibillion-dollar question -- whether or how the
Legislature will adjust their own plans for tax
relief in light of a long-forgotten law that appears
could send billions back to taxpayers -- still
lingers....
Now the
talks are revolving around whether that 1986 voter
law known as Chapter 62F should be undone, changed,
or delayed, and whether the Legislature will still
go ahead with its own tax relief plans in parallel.
Folks on the right say both approaches are
affordable, but Democrats especially seem unsure
about what to do.
House
Speaker Ronald Mariano, who gave voice Friday to the
idea that Democrats could strike or render
ineffective the 1986 law in favor of their own tax
relief package, told Bloomberg BayState Business on
Friday that he supports paying out the money called
for in 62F.
"Well I
am, but that doesn't mean that you're going to get
the tax cuts too," he said when asked why he
wouldn't support doing something that has been a
matter of law for 35 years. "I didn't say we were
gonna cut it out, I said we're considering it. You
know, it comes down to what people want. Do they
want the tax cut that's permanent and is diverse or
do you want the windfall?"
And if
people want both...
"Well,
we'd have to see if we can afford both," Mariano
said Friday, adding that he does not think he and
others on Beacon Hill are being "stingy" with relief
for taxpayers.
"I think
we have permanent tax cuts that we're putting into
effect; permanent tax cuts. This is a stunt that was
triggered by a law made in 1986 that gives people a
one-time opportunity to get money," he said. "When
it was rolled out to us, they weren't even sure how
they get the money back. The last time they did this
in [1987], half the people didn't get the money that
they were owed because they didn't know how to apply
for it."
On Friday,
Mariano said he was "optimistic that a lot of things
that we are exchanging proposals on now will come to
some agreement." Asked Saturday evening where talks
around 62F and the economic development bill stood,
Mariano told a News Service reporter, "everything is
still up in the air."
An
economic development bill is typically one of the
last items of business that Beacon Hill finishes
before the session concludes, but this year's bill
has some unique features that could make the task
this year even more complicated....
State
House News Service
Sunday, July 31, 2022 [10:45 AM]
Deadline Deals On Menu For
Dug-In Democrats
Mariano: "Everything Is Still Up In The Air"
Sen. Eric
Lesser, who is a negotiator on the sports betting
legalization bill and a major economic development
bill, said Sunday afternoon that the betting bill
talks are still alive and that the economic
development bill conferees are talking about Chapter
62F, the 1986 law that appears poised to trigger
massive tax relief.
Asked if
he favors implementing the voter law, Lesser
referenced talks on the economic development bill,
which lawmakers voted to close to outsiders. "Right
now we're just trying to get a conference committee
done. So you know my personal opinion is not ...
we've just got to focus on the conference committee
and we're in executive session," he said. "So
there's talks going on about it. Everyone feels
strongly about it."
Speaking
while walking back to the Senate from a visit to the
House chamber, Lesser wouldn't say whether he
favored implementation....
In May,
the Department of Revenue initiated proceedings to
repeal the regulation governing how a taxpayer
obtains a credit toward personal income tax
liability when the state auditor has determined
under Chapter 62F that excess tax revenues for the
previous fiscal year exist.
"This
regulation is being repealed because it is obsolete;
no credit has been required since 1987," the agency,
which is managed by the Baker administration, said
at the time. "If a credit becomes available, DOR
will issue guidance and update forms specific to the
year the credit is allowed."
State
House News Service
Sunday, July 31, 2022 [5:04 PM]
Lesser Addresses Sports
Betting, Tax Relief
With just
a handful of hours left to strike agreements and
pass them, a House leader told the News Service that
"the whole fiscal picture" is now being reconsidered
as talks continue around a massive economic
development and tax reform bill that's been
complicated by the realization that an existing law
could trigger nearly $3 billion in tax relief this
year.
The
reemergence in recent days of Chapter 62F, a law
from 1986 that has not been triggered since 1987 but
which is poised to send roughly $3 billion back to
taxpayers, is weighing heavily on the economic
development bill talks as negotiators reevaluate the
Legislature's spending decisions in that more than
$4 billion bill and the decision to include $500
million in one-time tax rebates and $500 million in
permanent tax cuts in it.
"I think
we have to figure we have to figure out whether we
want to take that risk right now," Rep. Alice Peisch,
the House's Education Committee chair, told the News
Service Sunday night. "There are things we can do
later if things look better. I'm not sure what the
what the answer is, but I know that since this came
up this has really thrown a real wrench in the
works. And what I hear is that everything is on the
table. It's not just a question of negotiating the
last few pieces of some bills with the Senate. It's
suddenly having to look at the whole fiscal picture,
because these bills were developed without having
any idea that this was on the horizon." ...
"That's
the question that I think people are grappling with,
is do we have enough money? Is there enough money to
fund the budget, the economic development plan and
this unknown amount in September?" Peisch said. "And
then, for me, and I think for many of my colleagues,
the second question is and what does that mean for
the next fiscal year, when we may be, if we're not
already, in the middle of a recession, we may see a
significant decline in revenues." ...
Senate
Ways and Means Chairman Michael Rodrigues -- who is
leading the negotiations for the Senate on the
massive economic development bill, sports betting
and cannabis industry reforms -- said he's confident
that some of the major issues still hung up in
negotiations will emerge for votes Sunday night....
Asked
about a rumor that circulated at the State House on
Sunday that the economic development conference
committee might not come to an agreement in part due
to the sticky issue of 62F, Rodrigues would neither
confirm nor deny it.
"That
would be disappointing," he said before adding, "If
I had a nickel for every rumor I heard in this
building, I'd be a millionaire."
State
House News Service
Sunday, July 31, 2022 [9:38 PM]
Tax Relief May
Squeeze Economic Development Bill
Rep Says Colleagues Worried That Fiscal Picture May
Worsen
Remembering Barbara Anderson
A Blast from the Past
Barbara
Anderson still isn't satisfied.
The
erstwhile Marblehead housewife and champion of the
Massachusetts tax revolt has saved property owners,
renters and drivers billions of dollars over the
nine years since she placed Proposition 2½ on the
ballot. She has pried another $750 million from the
state's clutches as chief sponsor of the 1986 repeal
of the income tax surcharge, also achieved by the
ballot.
Her chief
disciple, WRKO radio talk show host Jerry Williams,
calls her "governor," not entirely in jest, and
often devotes four hours every weekday to delivering
over the airwaves her message of governmental
minimalism. Powerful officials quake before the
antigovernment rage she embodies and just barely
contains....
In 1980
the Massachusetts High Technology Council bankrolled
Anderson's "people's movement" for Proposition 2½ to
the tune of $250,000. "The other business groups
gave zippo," Foley once said with pride. High tech
has continued to fund Citizens for Limited
Taxation's other ballot drives, including the surtax
repeal and statewide tax cap in 1986. . . .
Anderson rejects the notion that her crusades have been
motivated by greed. "The level of taxation isn't that
important to us," she explained. "It's the level of control.
The only control we have is the power of the purse. It isn't
even a matter of winning, it's a matter of being a player,
not being used in a serf capacity but having
something to say about it, making them justify what
they're doing by withholding the money until they
justify it." . . .
Anderson demurs whenever the conversation gets around to her
power. Nervously twirling a lock of her hair, she says, "I'm
uncomfortable with the idea. To me power is something you
have, to prevent other people from having power over you.
It's not, "Let's get power and have fun pushing everybody
around." It's, "I think I'll get power and prevent people
from pushing me around."
The
Boston Globe
July 23, 1989
For Tax Opponent, Same War, New
Front
By Renee Loth, Globe Staff
|
Chip Ford's CLT
Commentary |
There will be no
commentary today as I'm working around the clock, literally day and
night, to keep up with all that's happening, to protect CLT's tax
cap from elimination and insure the required $3B rebate is
disbursed. I'll pass on my thoughts when all this chaos
settles down and we have reached some conclusion. Meanwhile,
the battle for taxpayers has been fully joined. I hope you
will find this information enlightening and useful.
Last year's (2021)
State Auditor's report:
Official Audit Report –
Issued September 20, 2021
Determination of Whether Net State Tax Revenues
Exceeded Allowable State Tax Revenues
For the period July 1, 2020 through June 30, 2021
Massachusetts General
Laws Part I, Title IX, Chapter 62F:
LIMITATION ON THE GROWTH OF STATE TAX REVENUES
Note especially
Section 7 — Taxpayer suits:
Section 7. The Supreme Judicial Court or Superior Court
may, upon the petition of not less than twenty-four
taxable inhabitants of the Commonwealth, not more than six of whom
shall be from any one county, enforce
the provisions of this chapter. If successful, said taxable
inhabitants shall be entitled to recover reasonable
attorneys' fees and other costs from the Commonwealth incurred in
maintaining such suit.
Massachusetts
General Laws
Chapter 555 Legislative History (FY19)
An overview of tax legislation related to Chapter 555
Overview
In November 1986, “An
Act Phasing Out the Surtax on the State Personal Income Tax and
Limiting State Tax Revenue Growth to the Level of Growth in
State Wages and Salaries” was approved by the voters of the
Commonwealth. On December 4, 1986, it became law as Chapter 555
of the Acts of 1986, which added Chapter 62F to the
Massachusetts General Laws.
As shown below, the
history of tax legislation related to Chapter 555 is complex.
On November 8, 1975,
Chapter 684 of the Acts of 1975 became law and imposed,
beginning in calendar year 1975, a 7.5% surtax.
In September 1985, the
law that was proposed by initiative petition and that ultimately
became Chapter 555 of the Acts of 1986 was drafted by the
Citizens for Limited Taxation (CLT) and the Massachusetts
High Technology Council, and on December 4, 1985, the signatures
necessary for the initiative petition to become a legislative
referendum were filed with the Secretary of the Commonwealth.
On December 18, 1985,
Chapter 593 of the Acts of 1985 repealed the 7.5% surtax imposed
by Chapter 684 of the Acts of 1975 and imposed a 3.75% surtax
for calendar year 1986.
On January 3, 1986,
the initiative petition was introduced as a legislative
referendum (H4004).
On May 6, 1986, the
initiative petition was rejected in the House of
Representatives. It was not acted upon in the Senate by the May
7, 1986 deadline.
On August 7, 1986,
sufficient additional signatures were collected by CLT,
and the initiative petition was submitted to the Secretary of
the Commonwealth for placement on the November 4, 1986 state
election ballot and became known as Question Number 3:
“Limiting State Tax Revenue Increases.”
On October 25, 1986,
Chapter 488 of the Acts of 1986 repealed the 3.75% surtax
imposed by Chapter 593 of the Acts of 1985 for calendar year
1986 and imposed controls over the growth of state revenue.
On November 4, 1986, the electorate voted in favor of limiting
the growth of state tax revenues, repealing the 7.5% surtax of
Chapter 684 of the Acts of 1975 and imposing a new 3.75% surtax
for calendar year 1986.
On December 4, 1986,
the Secretary of the Commonwealth certified the initiative
petition as Chapter 555 of the Acts of 1986 (An Act Phasing Out
the Surtax on the State Personal Income Tax and Limiting State
Tax Revenue Growth to the Level of Growth in State Wages and
Salaries).
On December 9, 1986,
Chapter 577 of the Acts of 1986 became effective immediately as
an emergency law and repealed all surtaxes retroactively,
beginning January 1, 1986.
Massachusetts
Taxpayers Foundation
July 29, 2022
PUBLIC FINANCE | Budget | FY 2022
M.G.L.c. 62F: Tax Revenues in Excess of Allowable Amount
Two straight years of surging tax collections have put in focus
M.G.L.c. 62F, a little known state law that establishes a limit
on allowable tax revenues. This brief summarizes the law
and assesses what it could mean for fiscal year 2022 and beyond.
MTF BRIEF
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
CommonWealth
Magazine
Wednesday, July 27, 2022
Long-forgotten tax cap about to be triggered
State to return millions to taxpayers for first time in 35
years
By Bruce Mohl
While lawmakers scramble to put together a package of tax
breaks in the final days of the legislative session, a
little-known law from the mid-1980s is about to change the
Beacon Hill debate over tax relief.
Record tax revenues in fiscal 2021 are expected to trigger
the state’s tax cap for the first time in more than 30
years, setting the stage for Massachusetts taxpayers to
claim sizable credits on their 2022 returns.
The exact size of the credits is unclear because some of the
information needed to calculate them is not yet available.
But sources say the amount of money at stake could be
significant. It’s also unclear whether the return of the
money under the tax cap will affect ongoing discussions
about a package of tax breaks and cash payments to residents
totaling roughly $1 billion.
The tax cap is one of those laws that has largely faded from
memory. It was passed by voters in 1986, in the midst of the
so-called Massachusetts Miracle. Put forward by Citizens for
Limited Taxation and the Massachusetts High Technology
Council, the ballot question sought to restrict how much tax
revenue the state could take in, limiting the growth in
revenues to no more than the growth in total wages and
salaries.
Prior to now, the only time the cap has been triggered was
in fiscal year 1987, when actual revenues exceeded
“allowable revenues” by $29.2 million, according to an
auditor’s report on the cap. The report said individual
taxpayers were allowed to claim credits on their 1987 tax
returns for their share of the $29.2 million, but not
everyone did. Only $16.8 million in credits were issued,
leaving $12.4 million unclaimed.
Now the process is set to resume again for the first time in
35 years.
Officials in the governor’s office and the Department of
Revenue did not respond to questions about the tax cap.
State Auditor Suzanne Bump typically certifies in September
the state’s allowable revenues and actual revenues, the
numbers needed to determine the size of the tax cap credits.
Her office said there would be no comment on the tax cap
until all those numbers are available.
Allowable revenues are based on a calculation of the
percentage growth in wages and salaries multiplied by the
previous year’s revenue. Actual revenues for fiscal 2022
won’t be known until numbers for June, the final month of
the fiscal year, are released. Through the end of May,
however, tax collections totaled $36.9 billion, up $6.5
billion, or 21.4 percent, from the previous year.
Jim Stergios, executive director of the Pioneer Institute
think tank, said his staff reviewed the numbers after being
told about the situation.
“We’ve looked closely at revenues through May. While we
don’t have the final June numbers, the economy is generating
a ton of state tax revenue — so much so that it looks like
the 1986 revenue cap will kick in for the first time in
decades. Taxpayers across the state may get refunds, and the
totals could be substantial,” he said in an email.
Chris Anderson, president of the Massachusetts High
Technology Council, said he had been working at the council
for two years when the 1986 ballot campaign for the tax cap
was mounted. He said the purpose of the tax cap ballot
question was to rein in government spending.
“It was designed to act as a governor on what the
Legislature has to spend,” he said. He noted an unsuccessful
court challenge to the question was filed by the Tax Equity
Alliance for Massachusetts, or TEAM, which was headed by Jim
Braude, who today is a radio and TV host at GBH.
Anderson said the expectation was that the cap would be
triggered more than just once over the years, but he said
wage and salary growth has been bigger than tax revenue
growth until now. “This year the revenue growth was so
astronomical,” he said.
Sources said a number of top officials on Beacon Hill are
aware of the tax cap but have not gone public with the
information. The sources said issuing the tax credits should
not affect the current year’s budget, but could have an
impact in future years as the credits are claimed.
News of the tax cap trigger comes as the Legislature and
Gov. Charlie Baker prepare to offer a series of expanded tax
credits and/or rebate checks to Massachusetts residents that
could total $1 billion. The package includes expanded tax
breaks for renters, seniors who own their own homes,
children, and low-income people. The package also includes
rebates of $250 to $500 for moderate income residents and a
sharp reduction in the estate tax. The House and Senate are
currently trying to work out their differences on the tax
relief package; the legislative session ends on Sunday at
midnight.
State House News
Service
Thursday, July 28, 2022
Baker Sees 1986 Law Triggering $2.5 Billion In Rebates
By Colin A. Young
Anticipating that a 1980s law that's largely been relegated
to the depths of Beacon Hill memories will be triggered by
the fiscal year 2022 surplus, the Baker administration is
preparing to make "north of $2.5 billion" in tax rebates
available to Massachusetts residents later this year.
With a historic surplus expected from the budget year that
ended June 30, Democrats in the Legislature are pursuing
about $500 million in permanent annual tax breaks and
credits and another $500 million in one-time, $250 payments
to middle-income earners.
But the idea that a 1986 voter law that set a cap on state
tax revenue growth and requires the overage to be returned
to taxpayers could be triggered for just the second time
ever has the governor feeling confident that Bay Staters
will ultimately get even more relief. CommonWealth Magazine
was first to report on the possibility.
"Based on the performance of our economy and our tax
collections for the last fiscal year, we do believe there'll
be a significant return to the taxpayers, according to
existing state law, sometime later this year," Gov. Charlie
Baker said Thursday morning. He added, "We think the
number's probably north of $2.5 billion that would be in tax
rebates to the people in Massachusetts."
The final determination of how much state tax revenue should
be returned is due from Auditor Suzanne Bump's office by
Sept. 20.
Under terms of the tax cap referendum sponsored by the
Citizens for Limited Taxation and approved by the electorate
in 1986, if revenues grow by more than the growth in wages
and salaries, the excess money must be returned to
taxpayers. Once the auditor determines that the state did
collect tax revenue above and beyond the cap, the Department
of Revenue "shall take all the necessary action to
effectuate a tax credit equal to the total amount of such
excess," the auditor's office said.
The law states that the auditor's determination "shall
result in a credit equal to the total amount of such excess"
and that the credit "shall be applied to the then current
personal income tax liability of all taxpayers on a
proportional basis to the personal income tax liability
incurred by all taxpayers in the immediately preceding
taxable year."
But the law has only ever been triggered in 1987, when
collections exceed the cap by $29.22 million and taxpayers
claimed almost $17 million of it, and budget chief Michael
Heffernan said his team is working to clarify exactly how
the rebates or credits would work.
"We're looking at what's the quickest and most efficient way
to get that money back to the taxpayers," the secretary of
administration and finance said.
Through the middle of June, the final month of fiscal 2022,
Massachusetts had collected $39.199 billion in tax revenue
for fiscal year 2022, enough that the Massachusetts
Taxpayers Foundation estimated a surplus in the neighborhood
of $3.5 billion. DOR has not yet reported final fiscal
year-end revenue figures, or figures covering the full month
of June, a big month for receipts.
The Boston
Globe
Thursday, July 28, 2022
In a surprise, Baker says taxpayers could receive ‘north of
$2.5 billion’
in tax relief under little-known law
By Matt Stout and Samantha J. Gross
With state coffers overflowing, Massachusetts taxpayers
could receive nearly $3 billion in tax relief under an
obscure 36-year-old law, Governor Charlie Baker’s
administration said Thursday, surprising lawmakers just as
separate tax relief talks seemed to be reaching a crescendo.
The likelihood of a decades-old law forcing the state to
give back billions to taxpayers quickly shook Beacon Hill on
the same day data showed the economy had edged closer to, if
not officially in a recession.
It also complicated legislators’ negotiations over a $1
billion package of tax breaks and rebates — a mammoth
proposal lawmakers pursued to help ease the pinch of
ballooning inflation but were still scrambling to complete
before their legislative session ends Sunday night.
How much the state could ultimately hand back to taxpayers
is unclear. But Baker said Thursday the state appears poised
to trigger a 1986 voter-passed law that seeks to limit state
tax revenue growth to the growth of total wages and salaries
in the state.
Should revenue exceed that so-called “allowable” amount,
taxpayers are then due a credit equal to the excess amount.
The state auditor is tasked with determining the final
amount from the previous fiscal year each September.
The state has yet to release its final revenue numbers for
the fiscal year that ended June 30, though officials said
they could come as early as next week. Still, with
collections running more than 21 percent above projections
through the end of May — prompting one estimate of a $3.6
billion budget surplus — Baker said Thursday that his
administration believes the excess amount is “probably north
of $2.5 billion.”
His budget office later released estimates showing the
excess could, as of now, actually near $2.97 billion,
meaning more than 3 million taxpayers could get back roughly
7 percent of the income taxes they paid in 2021,
administration officials said.
For example, for someone whose taxable income was $75,000
after deductions and exemptions, that could mean a return of
$250, according to Baker’s budget office.
“These are sort of unprecedented increases in tax revenue,”
Baker said Thursday after signing the state’s $52.7 billion
state budget, “which is, in some ways, exactly what this
thing was designated [to do], to ensure that people of
Massachusetts participated in that windfall.”
Since the
1986 law was passed by voters, the cap was triggered
just once, in fiscal year 1987, when revenues
exceeded the allowable amount by $29.2 million,
according to a
state auditor report. At the time,
the state added a line to the 1987 version of the
state’s individual income tax return form, where
individual taxpayers could “insert his or her
individually calculated share,” according to the
auditor’s office. The state ultimately issued
$16.8
million in credits, leaving nearly $12.4 million
unclaimed.
CommonWealth Magazine first reported Wednesday that the cap
could be triggered.
Under the law, the credit would be applied to the “current
personal income tax liability of all taxpayers on a
proportional basis” to the tax liability from the previous
tax year.
But Michael Heffernan, Baker’s budget chief, said the law is
unclear in exactly how the state should issue those credits,
suggesting the timing and form could be flexible. Baker also
suggested the money returned to residents could be issued as
rebates — a more direct form of payment than a credit, which
typically reduces the taxes a person owes.
“We’re looking at what’s the quickest, most efficient way to
get that money back to the taxpayers,” Heffernan said
Thursday.
Pushed by Citizens for Limited Taxation and the
Massachusetts High Technology Council, the proposal was
intended to curtail the Legislature’s habit of
“overcommitting resources when tax resources are bountiful,”
and then raising taxes to sustain the spending, said Chris
Anderson, the council’s current president, who started with
the group two years before voters passed the ballot question
by a margin of nearly 8 percentage points.
“It’s a fiscally prudent policy that’s timeless,” said
Anderson, who pointed to repeated budget surpluses in recent
years. “It’s nice to see the seeds that we sowed in 1986 are
now coming into play at an appropriate time.”
Baker on Thursday
described the development of a potential multibillion-dollar
excess as a “fairly recent” one, given it’s hooked on
end-of-fiscal-year tax revenue.
Yet, how it could affect ongoing tax relief talks remains to
be seen. The House and Senate have each passed, and are
trying to reconcile, different versions of a $1 billion tax
relief package as part of a hulking economic development
bill, including more than $500 million in one-time rebates
to potentially millions of taxpayers.
The bills also feature a variety of permanent tax changes
that would increase the state’s Earned Income Tax Credit,
raise the deduction renters can claim, and reshape the
state’s estate tax, among other proposals.
Despite the 1986 law being in statute for decades, state
Representative Aaron Michlewitz, the House budget chief,
said when lawmakers crafted the tax packages, they did not
know it could be triggered. Senator Michael J. Rodrigues,
his Senate counterpart, said Baker’s administration informed
lawmakers of it coming into play “literally days ago.”
With the potential of the economy tipping into a recession,
Michlewitz said lawmakers have to reevaluate their spending
plans quickly. The Legislature’s formal sessions end Sunday
night, when lawmakers will also be racing to complete a host
of other unfinished bills.
“It definitely, I think, puts everything back on the table
for conversation on exactly what we can afford or can’t
afford going forward,” said Michlewitz, a North End
Democrat.
Baker said Thursday he believes the state can absorb both
the tax relief package and billions in other tax credits
given the state’s flush coffers, the expected
multibillion-dollar surplus, and the state’s record-high
savings account that, under the budget he signed Thursday,
would grow to $8.4 billion, his administration estimates.
“So yeah,” Baker said, “we think it’s affordable.”
Evan Horowitz, executive director of the Center for State
Policy Analysis at Tufts University, said the state should
have the resources to afford all the various tax relief
measures. But he said legislative leaders should consider
changing the formula attached to the 1986 law, or even
suspending its implementation to avoid money going out in a
“not very progressive way.”
Those who pay more in taxes would get more in relief through
the excess revenue, as opposed to the lawmakers’ rebate
plan, which is targeted toward those making a certain
amount.
Horowitz also acknowledged that changing the law — including
just before it’s primed to spit out potentially billions of
dollars in relief to taxpayers — may not be politically
feasible.
“The timing of this is awkward. It’s also awkward
politically,” Horowitz said. “Even if it’s a sensible thing
[to argue], ‘This is triggered at a weird time, and we want
to make it better,’ going into the election season you open
yourself to the charge that you’re standing against tax
cuts.”
The Boston
Herald
Thursday, July 28, 2022
Rebate checks may be coming,
with billions in 2022 excess tax takings expected
By Matthew Medsger
The state took in so much revenue last year taxpayers may
see a rebate sent back to them under a fairly unused
30-year-old law, the governor said.
“We think the number is probably north of $2.5 billion that
would be tax rebates to the people of Massachusetts,” Gov.
Charlie Baker said Thursday.
Last year’s tax revenues came in dramatically higher than
expected, April alone saw over $2 billion more than
expected. The exact amount of the cash haul from taxpayers
will depend on the final numbers tallied by the state
auditor.
How the money would be returned to tax payers is hard to
say. Baker thinks it would be a rebate, but according to
Secretary of Administration and Finance Michael Heffernan
the law is unclear about how money should be returned when
the state has over taxed.
“That statute goes back to 1986, it’s actually unclear. It
happened once in 1987. It was done as a credit,” he said.
“But then it was 14 cents,” Baker pointed out.
Now it could be much more, though it’s too soon to say how
much.
“I’m sure Barbara Anderson is up there looking down on us
with a grin pumping her fist in the heavens,” said Chip
Ford, executive director of Citizens for Limited Taxation.
Anderson was a driving force behind the law which implements
the rebates.
“The news that CLT’s (and the Massachusetts High Tech
Council’s) tax cap, approved by 54% of the voters on the
1986 statewide ballot, is eligible to kick in for only the
second time since its adoption is exhilarating. It solves
the situation of billions of dollars in tax overpayments,
the multi-billions in historic revenue surpluses, and who
that windfall rightfully belongs to,” Ford said.
He wasn’t the only one surprised by the state’s potential
payback.
“The Massachusetts Fiscal Alliance is pleasantly surprised.
It’s never too late to embrace these common sense
approaches, especially when they are written into our laws,”
Paul Craney, a spokesman for the Alliance said in a release.
“Governor Baker is right to want to give back this money, we
are just disappointed that tax relief has only become so
popular during the last few days of his final legislative
session in office,” he said.
June’s tax haul, and the year as a whole, have not yet been
reported.
LASTING LEGACY: Barbara Anderson of Marblehead holds a
letter from her insurance company in her home office for
Citizens for Limited Taxation in September 2014. Anderson
was a driving force behind the statute in 1986 that allows
for some tax revenue to be returned to taxpayers. Anderson
died in 2016.
The New Boston
Post
Thursday, July 28, 2022
Barbara Anderson Strikes Again
Massachusetts Taxpayers To Get Tax Rebate
Thanks To Obscure 1986 Referendum
By Matt McDonald
Massachusetts taxpayers are in line for tax relief whether
state legislators give it to them or not, thanks to a
little-known provision in state law that voters approved in
1986.
Estimates on how much vary. But it could be about 7 percent
of what taxpayers paid to the state in 2021, state officials
told The Boston Globe.
“I’m sure Barbara Anderson is up there looking down on us
with a grin pumping her fist in the heavens,” said Chip
Ford, executive director of Citizens for Limited Taxation,
in a written statement Thursday, July 28.
Anderson, who died in 2016, was the head of Citizens for
Limited Taxation when that organization and the
Massachusetts High Technology Council pushed the proposal.
The 1986 initiative petition rolled back a surtax on state
income tax that the state legislature had passed.
It also stated, in part: “The allowable state tax revenues
for any fiscal year are limited to the allowable state tax
revenues for the prior fiscal year as increased by the
average rate of growth of Massachusetts wages and salaries
for the three immediately preceding calendar years. … If
state tax revenues exceed the limit imposed by the proposed
law, as determined by the State Auditor, a tax credit would
have to be granted equal to the total amount of excess tax
revenue. The credit would be applied to the then current
personal income tax liability of all taxpayers in proportion
to their personal income tax liability in the preceding
year.”
That means that if increases in state tax revenues outstrip
increases in wages and salaries of state residents, the
state government has to give a tax credit to taxpayers.
Massachusetts voters in November 1986 approved the
referendum, 54.4 to 45.6 percent.
The next year – 1987 – is the only time the law has applied
to the state budget. But 2022 figures to be the second time,
because of historically high tax revenues and lagging wages
and salaries.
Paul Craney, spokesman for the Massachusetts Fiscal
Alliance, which supports tax cuts, congratulated Citizens
for Limited Taxation for the forthcoming tax rebate, which
few knew about before CommonWealth magazine reported it on
Wednesday, July 27.
“The legacy of Citizens for Limited Taxation and the
advocacy by the late Barbara Anderson are so strong that
they are still providing protections to Massachusetts
taxpayers four decades on. Chip Ford, who continues to run
the organization, should be proud to see Barbara’s legacy
still benefiting Massachusetts taxpayers,” Craney said in a
written statement.
Anderson is largely responsible for several limits on
spending and taxes in Massachusetts — including, most
famously, Proposition 2½, a 1980 referendum approved by the
voters that limits increases in the property tax levy of
cities and towns in Massachusetts to 2.5 percent plus
allowances for new growth.
Governor Baker on Thursday, July 28 signed a $52.7 billion
budget bill for the state government for fiscal year 2023,
which runs from July 1, 2022 through June 30, 2023.
“And based on the performance of our economy and our tax
collections for the last fiscal year, we do believe there’ll
be a significant return to the taxpayers, according to
existing state law, sometime later this year,” Baker said
during the press conference.
The tax rebate is “probably north of $2.5 billion,” Baker
said during the press conference, though administration
officials later put the figure at $2.97 billion, according
to The Boston Globe.
The governor said the state government has plenty of cash to
give back some to taxpayers.
“The tax breaks that are currently pending before the
legislature are eminently affordable, within the context of
the rest of this. I mean, you’re talking about a tax year
this past year in which tax revenue went up by over 20
percent, which came on the heels of a tax revenue increase
in the previous year that went up by 15 percent. I mean,
these are sort of unprecedented increases in tax revenue,
which is, in some ways, exactly what this thing was designed
— to ensure that people of Massachusetts participated in
that windfall,” Baker said.
State legislators have been slow to include tax decreases as
part of the state’s fiscal planning, even though tax
revenues are high. Legislative leaders are still evaluating
$700 million in tax cuts proposed by the governor in April,
including changes to the state’s estate tax that would
decrease the number of people it applies to and the amount
they would pay; a change in the so-called circuit breaker
law that decreases the state income taxes of senior citizens
whose incomes are low enough to qualify; lowering the
threshold at which people pay state income taxes in
Massachusetts; and decreasing the short-term capital gains
tax to 5 percent from the current 12 percent.
The state legislative session runs out Sunday, July 31.
State House News
Service
Thursday, July 28, 2022
Baker Sees 1986 Law Triggering $2.5 Billion In Rebates
Tax Relief Bombshell Catches Beacon Hill Off Guard
By Colin A. Young and Chris Lisinski
With just three days left to hold formal sessions this year,
Beacon Hill Democrats may have to take their long-discussed
$1 billion tax reform and relief plan back to the drawing
board now that it appears that a 1980s law largely relegated
to the depths of Beacon Hill memories will be triggered by
the fiscal year 2022 surplus, resulting in nearly $3 billion
being returned to taxpayers.
With a historic surplus expected from the budget year that
ended June 30, Democrats in the Legislature have been
pursuing about $500 million in permanent annual tax breaks
and credits and another $500 million in one-time, $250
payments to middle-income earners. But the idea that a 1986
voter law that set a cap on state tax revenue growth and
requires the overage to be returned to the approximately 3.8
million individuals who paid income taxes last year could be
triggered for just the second time ever has the governor
feeling confident that Bay Staters will ultimately get even
more relief.
"Based on the performance of our economy and our tax
collections for the last fiscal year, we do believe there'll
be a significant return to the taxpayers, according to
existing state law, sometime later this year," Gov. Charlie
Baker said Thursday morning. He added, "We think the
number's probably north of $2.5 billion that would be in tax
rebates to the people in Massachusetts."
Later Thursday, Baker's budget office said its estimate is
that $2.965 billion will be slated to be returned to the
taxpayers under the law known as Chapter 62F. If that figure
holds, it would result in taxpayers getting back about 7
percent of the income taxes they paid in 2021, the Executive
Office of Administration and Finance said. A person with
$75,000 of taxable income could expect a return of about
$250, officials said.
Under terms of the tax cap referendum sponsored by the
Citizens for Limited Taxation and approved with 54 percent
support from voters in 1986, if revenues grow by more than
the growth in wages and salaries, the excess money must be
returned to taxpayers. Once the auditor determines that the
state did collect tax revenue above and beyond the cap, the
Department of Revenue "shall take all the necessary action
to effectuate a tax credit equal to the total amount of such
excess," the auditor's office said.
The final determination of how much state tax revenue should
be returned is due from Auditor Suzanne Bump's office by
Sept. 20. Bump's office said Thursday that the data required
for the report is not yet available.
CommonWealth Magazine was first to report on the possibility
that the excess revenue cap would be triggered.
CLT, which pushed for the 1986 law with the Massachusetts
High Technology Council, said Thursday that the idea that
the excess revenue relief could be triggered for the first
time in 35 years was "exhilarating."
"I'm sure Barbara Anderson is up there looking down on us
with a grin pumping her fist in the heavens," Chip Ford,
Executive Director of CLT, said Thursday, referring to the
late CLT leader who was one of the authors of Proposition 2½
and a steadfast opponent of tax-raising efforts within the
Massachusetts Legislature.
The Mass. Fiscal Alliance also praised Anderson and CLT on
Thursday, saying their legacies "are so strong that they are
still providing protections to Massachusetts taxpayers four
decades on."
"Everything's on the Table"
The potential appeared to catch legislative Democrats off
guard, as the possible windfall for taxpayers was not a
topic of public discussion throughout the long budget cycle
and while surplus revenues were piling up. None of the
current members of the Legislature were in office in 1986.
The House dean, Rep. Kevin Honan, was elected in 1986 and
took office in 1987, and the Senate dean, Sen. Marc Pacheco,
was first elected in 1988.
Ways and Means Chairmen Sen. Michael Rodrigues and Rep.
Aaron Michlewitz told reporters Thursday afternoon that they
are still trying to discern what the new-found relief might
mean for their own tax relief plans, which are hung up in
negotiations over a massive economic development bill that
must be completed by the end of the weekend.
"I definitely think it puts everything back on the table for
conversation on exactly what we can afford or can't afford
going forward. And again, to [Rodrigues'] point of saying
that when we did this package, we did this not expecting,
necessarily, the trigger would take effect. We didn't have
the revenue numbers, we did not know what the wage growth
calculations would work out to be," Michlewitz said of the
tax relief package House and Senate leaders announced on
July 7. "So I don't think we had this potential number in
play when we were making those decisions. So obviously,
everything has to be still put back on the table for
conversation. ... We have to reevaluate exactly what we can
afford going forward."
The Ways and Means chairmen did not rule out the Legislature
making changes to the 1986 law to take the
automatically-triggered relief off the table.
"We haven't gotten to that point to make any decisions yet,"
Rodrigues said when asked if changes to 62F were under
consideration. "Remember, the administration just discovered
and informed us about this literally days ago. And we had to
understand, we're still trying to understand, and working
with some outside folks that know the tax codes even better
... How did COVID affect this? The fact that, you know, we
know that billions of dollars came into the commonwealth
with COVID relief dollars, with supplemental unemployment
insurance payments and the like. How did that weigh into the
fact there was no COVID pandemic back in 1986 when this
statute was put on the books?"
Michlewitz added, "Everything's on the table in this
conversation right now. You know, in the last couple of days
here."
Though there are always competing interests when the state
has unappropriated money on its hands, Baker said the
state's financial positions means that the excess revenue
tax relief and the Legislature's roughly $1 billion package
of tax reform and direct payments can both happen.
"The tax breaks that are currently pending before the
Legislature are eminently affordable within the context of
the rest of this. I mean, you're talking about a tax year
this past year in which tax revenue went up by over 20
percent, which came on the heels of a tax revenue increase
in the previous year that went up by 15 percent," the
governor said. "I mean, these are sort of unprecedented
increases in tax revenue, which is in some ways exactly what
this thing was designed [to do], to ensure that people in
Massachusetts participated in that windfall."
A Baker administration official argued Thursday that the
Legislature's plan for targeted tax relief to a specific
band of taxpayers and the idea of returning one-time money
that the state essentially overcollected are two different
concepts and that one should not preclude the other.
Baker also pointed to the fiscal year 2023 budget he signed
Thursday morning, which includes a major spending increase
that he said "is absolutely affordable." He said the state
has "a lot of room there" and that he believes there will
still be enough leftover to make additional investments in
the MBTA and other things in the final close-out budget bill
for fiscal year 2022.
"So yeah," Baker said, "we think it's affordable."
Through the middle of June, the final month of fiscal 2022,
Massachusetts had collected $39.199 billion in tax revenue
for fiscal year 2022, enough that the Massachusetts
Taxpayers Foundation estimated a surplus in the neighborhood
of $3.5 billion. DOR has not yet reported final fiscal
year-end revenue figures, or figures covering the full month
of June, generally the second-largest month for receipts. An
administration official said Thursday that June will be a
big over-benchmark month.
But Baker's budget office said Thursday that the state was
$3.5 billion over revenue benchmarks through June with $2.1
billion still available after statutory transfers of excess
capital gains. On top of that, the administration said, is
$3.1 billion in "tax upside" or additional over-benchmark
collections realized between January and May. Subtracting $3
billion for excess revenue credits or rebates would leave
$2.7 billion available, the administration said.
After accounting for roughly $1.5 billion of state spending
expected to be included in the pending economic development
bill and some other spending, an administration official
estimated that between $400 million and $500 million could
be left for the final supplemental budget.
How It Would Work
The law states that the auditor's determination that the
state took in revenue in excess of the cap "shall result in
a credit equal to the total amount of such excess" and that
the credit "shall be applied to the then current personal
income tax liability of all taxpayers on a proportional
basis to the personal income tax liability incurred by all
taxpayers in the immediately preceding taxable year."
But the law has only ever been triggered in 1987, when
collections exceed the cap by $29.22 million and taxpayers
claimed almost $17 million of it, and budget chief Michael
Heffernan said his team is working to clarify exactly how
the credits -- or possibly rebates, as Baker repeatedly
referred to them -- would work.
"We're looking at what's the quickest and most efficient way
to get that money back to the taxpayers," the secretary of
administration and finance said.
That's a point that Michlewitz would also like some clarity
around.
"You even just said there's now credit [or] rebate. I don't
think we have that full answer of what that actually is," he
said after a reporter asked about rebates or credits under
62F. "I think the administration has given a little mixed
message on that conversation as well. So getting a full
vetting and a full understanding of that is going to be
critical for us to really know whether or not we need to
move forward with any conversations related to 62F."
The only time the excess revenue cap was hit, in fiscal
1987, the $29.22 million in credits was made available to
taxpayers through the addition of a line on the 1987
Massachusetts individual income tax return "upon which each
individual taxpayer could insert their individually
calculated share of the $29,221,675 credit," the auditor's
office said.
From fiscal year 1987 through fiscal 2021, net state tax
revenues increased by about 328 percent, from about $8.1
billion to more than $34.65 billion. The "allowable" state
tax revenues -- or the maximum that can be collected without
hitting the cap -- increased by 356 percent over the same
time period, from $8.07 billion to about $36.79 billion.
Each year from fiscal year 1988 through fiscal year 2021,
the state auditor has determined that net state tax revenues
were less than allowable state tax revenues and that,
therefore, no tax credits were required under 62F.
Pioneer
Institute
Friday, July 29, 2022
Pioneer Institute Expects That Massachusetts Taxpayers
Will Be Refunded $3.2B Due To State Revenue Cap
By Editorial Staff
Pioneer Institute projects that the state will refund
approximately $3.2 billion to taxpayers due to a state law
sponsored by Citizens for Limited Taxation and voted on by
taxpayers in 1986 that caps the amount of revenue the state
can collect in any given year.
Under the cap, state revenues are limited based on the
average growth of wages and salaries during the previous
three years. While the Department of Revenue has disclosed
collections through May, the state’s fiscal year ended on
June 30 and June revenues are not yet available. To estimate
the refund to taxpayers, Pioneer replicated the calculations
prepared by the state auditor in prior years to determine if
a refund was due and estimated June revenue based on
historic trends.
The state auditor is required by law to perform the
calculation annually based on information supplied by the
Department of Revenue. This is the first time in decades the
state will return money to the taxpayers.
“We’ve hit a tipping point where Massachusetts taxpayers
have maxed out their obligations to fund state government,”
said Pioneer Institute Executive Director Jim Stergios. “The
lesson is: stable tax laws allow the economic growth that
generates these giant government surpluses. So why are we
even considering tax hikes?”
State House News
Service
Friday, July 29, 2022
Mariano Mulling Changes To 1986 Tax Relief Law
Differs With Baker On Affordability Of Pending Tax Relief
By Chris Lisinski
With Democrats heading into the weekend scrambling for a
path forward on tax relief, House Speaker Ron Mariano said
Friday that he is open to changing, delaying or spiking a
1986 voter law that appears poised to return nearly $3
billion to taxpayers.
This week's revelation that Massachusetts is on track to
trigger a decades-old provision requiring excess tax
collections above a certain threshold to flow back to the
taxpayers discombobulated plans on Beacon Hill, where
Democrats face a weekend deadline to reach agreement on an
economic development bill that features the tax package they
spent months crafting.
Mariano said Friday that he would consider all courses of
action, up to and including altogether scrapping the tax
relief trigger law voters enacted in 1986.
"Sure, it's an option," Mariano told reporters when asked if
lawmakers would consider undoing the trigger enshrined in
Chapter 62F. "Everything's on the table. We could undo the
law, we could change it, we could postpone."
He added,"I think it's open up for discussion, and I'm not
going to be the only decision-maker in that process,"
Mariano said. "It has to go through the House, the Senate
and it has to be voted on and signed by the governor."
Executing any changes to that law could pose a challenge for
Democrats, who at this late date in their formal session
calendar would need Republican Gov. Charlie Baker to be on
board with the idea.
Baker has indicated he wants the trigger to take effect,
saying as he signed the fiscal year 2023 state budget
Thursday that his administration anticipates "there'll be a
significant return to the taxpayers, according to existing
state law, sometime later this year."
The law, enacted in 1986 after 54 percent of voters endorsed
a measure sponsored by Citizens for Limited Taxation,
requires state government to return excess money to
taxpayers if state revenues grow at a rate higher than the
increase in wages and salaries.
A final calculation of the numbers would come from Auditor
Suzanne Bump's office by Sept. 20.
The last-minute emergence of the tax cap appears to have
caught top Democrats off guard. Mariano on Friday described
the trigger as a "one-time event" that "popped up."
"We knew it existed, but we didn't know how close we were,"
Mariano said. "The formula is very convoluted. We're not
even sure if the numbers are accurate, and we won't know
until September how accurate the numbers are."
Asked if the governor jumped the gun by announcing his
administration's projection for a nearly $3 billion return
months before the auditor finalizes the report, Mariano
replied, "You'll have to ask him that. I don't have an
opinion on that."
Any action to circumvent or block billions of dollars from
heading back to taxpayers could generate election-year
blowback for Democrats, particularly because the trigger was
enacted by voters.
Less than half of incumbent lawmakers face any declared
major-party opponent in either the Sept. 6 primary or the
Nov. 8 general election. Both Mariano and Senate President
Karen Spilka are unopposed.
The Massachusetts Fiscal Alliance called Friday afternoon
for legislative leaders to leave the cap in place,
describing it as "designed to protect taxpayers when
situations exactly like this arise."
"Speaker Mariano and Senate President Spilka should not
alter or water down this law through deceptive last minute
insider tactics to make sure they don't lose control of
taxpayer dollars. If they do, their integrity will be
forever damaged and the Governor should use his veto without
hesitation," said MassFiscal spokesperson Paul Craney. "If
the Speaker and Senate President did this at the last
minute, they would be stealing money that didn't belong to
them, it would be tantamount to corruption. Taxpayers
deserve this rebate and will certainly spend their
hard-earned tax dollars better than the so called 'budget
experts' on Beacon Hill who are so knowledgeable in their
field that they didn't even seem to be aware of the law."
After a year of overflowing tax collections, Baker initially
estimated the size of the pot as "north of $2.5 billion,"
and the administration's budget office said later Thursday
it estimates $2.965 billion could be returned to taxpayers
in a one-time event.
That would be several times larger than the tax relief
package Baker unveiled in January and the corresponding
proposal legislative Democrats spent months crafting.
The House and Senate each approved spending roughly $500
million on one-time $250 checks for middle-income earners
and another $500 million in permanent tax breaks for
renters, low-income earners, parents and seniors as well as
changes to the estate tax. They wove those provisions into
an economic development bill, which remains bottled up in
conference committee negotiations and -- because it features
bond authorizations -- requires a roll call vote before
formal sessions end on Sunday, July 31.
Asked Thursday if the Chapter 62F returns were affordable,
Baker replied by pointing to the record surges in statewide
tax revenue, which increased 15 percent in FY2021 and
another 20 percent in FY2022.
"We put gobs of money into our stabilization fund. I just
signed a budget that's got a 9 percent increase in it that
we believe is absolutely affordable," Baker said. "The
permanent tax reductions that we proposed were around $700
million, which is reasonably consistent with where the
Legislature's proposals on the House and Senate have been.
This thing is, as I said, north of $2.5 billion. There's a
lot of room there."
"So yeah, I think it's affordable," Baker added.
But for Mariano, the idea of authorizing Legislature's
proposed tax package and also returning $3 billion under the
trigger law poses "a big hurdle."
"I don't know," Mariano replied when asked if state
government could afford to do both. "We haven't followed the
numbers as closely as the governor has. We're going to check
it out, we're going to look at it."
The Quincy Democrat voiced uncertainty about the state's
fiscal outlook despite the record stretch of tax
collections, describing Massachusetts as "in a bit of
uncertain economic times."
A massive outlay could "raise a concern as to what's going
to happen with future budgets," Mariano said, particularly
if lawmakers also implement a series of permanent tax cuts
that would reduce future revenue.
"I know that's something that's really far more important to
us than it is to the folks in the executive branch right
now, but we do have to be mindful of the fact that we're one
of the highest-inflation states on the East Coast," he said.
"We do have to protect our future. It calls into question
everything that's on the table right now."
The Boston
Globe
Friday, July 29, 2022
In rush to the finish, Mass. lawmakers face
a unexpected hurdle in 1986 tax cap law
By Matt Stout and Samantha J. Gross
The Massachusetts Legislature entered the final days of its
legislative session in typical mad-dash fashion, moving
long-gestating proposals, negotiating major bills behind
closed doors, and preparing for a flood of eleventh-hour
votes.
That was before the $3 billion bomb dropped.
Governor Charlie Baker’s announcement Thursday that the
state is poised to trigger a 1980s-era tax cap law that, by
his estimates, could require sending more than $2.9 billion
back to taxpayers has upended Beacon Hill’s already chaotic
finish to formal sessions, making things cloudier — not
clearer — the closer it moves toward a Sunday night
deadline.
Most pointedly, it quickly upended talks over a separate $1
billion tax relief proposal that lawmakers had spent months
developing and were aiming to finalize before the end of the
weekend.
But it also lobbed a wrench into Democratic leaders’ already
growing to-do list, and raised the uncomfortable prospect of
lawmakers undoing an older law on tax relief just as they
were poised to deliver significant amounts of money to many
of their constituents.
With two working days left before formal sessions end, the
tax cap bombshell “does call into question all of the
decisions we made going up to this point about our tax
cuts,” House Speaker Ronald Mariano told reporters Friday,
while also keeping open the option of undoing the old tax
cap law.
“It does raise a concern as to what is going to happen with
future budgets,” the Quincy Democrat said. “It calls into
question anything that is on the table.”
That’s a difficult reality with literal hours left in a
19-month legislative session. The estimated $2.9 billion
credit taxpayers would be owed dwarfs the one-time rebates
and permanent tax cuts the House and Senate separately
approved and have to be reconciled by negotiators by the end
of the weekend if they are to become law.
The competing pressures have left lawmakers scrambling for a
response. The 1986 voter-passed law at issue seeks to limit
state tax revenue growth to the growth of total wages and
salaries in the state. Should revenue exceed that
“allowable” amount, taxpayers are then due a credit equal to
the excess amount.
Thanks to record-setting tax revenues from the fiscal year
that ended in June, the state appears on track to trigger
the law for the first time since 1987, this time with
multibillion-dollar ramifications.
Mariano said lawmakers are weighing a range of options,
including seeking to “undo the law,” changing it, or
postponing it. He also cast doubt on whether the law would
even be triggered, even though both chambers’ budget
committees said in a letter to Baker’s revenue commissioner
on Wednesday that they do, in fact, believe that is the
case.
Yet, in that same letter, they were also seeking a range of
basic data from Baker’s administration that would help
explain its estimate, illustrating how the development had
caught lawmakers by surprise.
The Pioneer Institute, a free market think tank, on Friday
said it believes the refund will actually be even higher —
roughly $3.2 billion — based on estimates of June revenue
numbers, which the state is expected to release as early as
next week. State Auditor Suzanne M. Bump will verify what
the excess amount is in September.
“This formula is very convoluted, and we’re not even sure if
the numbers are accurate,” Mariano said Friday.
The possibility of undoing the law drew swift criticism from
its supporters, who said it would amount to a “cavalier
betrayal” of voters.
“That Speaker Mariano would even consider such an affront to
democracy, to election results, and to voters themselves —
that he even dares speak it aloud — demonstrates the degree
of sheer political arrogance that permeates” the
Legislature, said Chip Ford, executive director of Citizens
for Limited Taxation, which pushed the ballot question in
1986 along with the Massachusetts High Technology Council.
Nevertheless, legislative leaders still must decide whether,
or how, it affects their own tax plans. The House and Senate
are in lockstep on many parts of their tax relief proposal,
which Mariano says is a “well-thought-out plan that will
work.” Part of their proposal includes $250 rebates for
potentially millions of taxpayers, as well as permanent
relief for seniors, renters, and others whom lawmakers say
the changes will help as inflation squeezes residents’
wallets.
But accommodating both the Legislature’s tax relief
proposals and the tax cap credit is “a big hurdle,” Mariano
said.
“It’s new, and we have a lot of bills out there,” Senator
Michael J. Rodrigues, the Senate’s budget chief, said of
addressing the tax cap law. “We are burning the midnight
oil, and trying to do the best we can.”
It’s also far from the only thing left on lawmakers’ plate.
A half-dozen bills remained parked in closed-door
negotiations Friday evening, including proposals that would
reshape the state’s cannabis laws and borrow billions of
dollars for infrastructure projects.
Lawmakers are still trying to reconcile bills that would
legalize sports betting, an effort that’s played out amid a
public dispute between Mariano and Senate President Karen E.
Spilka over whether to include college sports among contests
that people can place wagers on.
On Thursday, Baker also sent back to lawmakers several
policies they had included in the state’s $52.7 billion
budget with requests for changes. For example, Baker asked
them to amend a section that would provide prison inmates
free phone calls by adding unrelated language that would
allow a court to hold people suspected of certain dangerous
crimes without bail.
The Legislature had essentially killed a similar proposal
the previous week, infuriating Baker and ratcheting up
tensions to such a degree that Mariano on Friday opted
against attending a bill-signing ceremony with Baker for a
high-profile abortion rights law.
On Friday, Baker also sent lawmakers back a sweeping climate
and energy bill with several amendments, including changes
to efforts to streamline the offshore wind industry’s
bidding process. Lawmakers can accept Baker’s
recommendations, or they can opt to reject or rework them,
after which the bill would head back to Baker.
Then, there are also proposals that still have to pass both
chambers. The Senate has yet to take up legislation the
House passed last week that would tighten the state’s
firearms laws following a Supreme Court decision expanding
gun rights across the country.
Spilka has said the chamber is committed to passing
legislation reshaping the state’s gun laws, but it could
pursue different language, which would require lawmakers to
reconcile the differences on a short clock.
It’s also not clear whether the Senate will take up a House
bill, and a Baker priority, to criminalize so-called revenge
porn, targeting a form of abuse that is already outlawed in
48 other states.
And yet, the tax debate may overshadow it all — and will
likely come to define the last-minute crush lawmakers again
find themselves in.
“It’s not the way it should be,” Phineas Baxandall, a senior
tax analyst at the left-leaning Massachusetts Budget and
Policy Center, said of the tax cap law coming into play now.
“When people may have voted for this 40 years ago, I don’t
think they were imagining dropping a bomb in the waning days
of legislative planning for the coming years, [and] taking
billions of revenue off the table after months of careful
planning.”
The late Barbara Anderson, a longtime taxpayer advocate who
died in 2016, was back in the headlines this week. As a
result of fiscal 2022's blockbuster revenue haul, Bay State
taxpayers could be due a credit totalling close to $3
billion under a 1986 tax cap law that Anderson spearheaded.
(CLT's current executive director Chip Ford stands alongside
her.) - SHNS/File 2004
State House News Service
Friday, July 29, 2022
Weekly Roundup - Signings of the Times
Recap and analysis of the week in state government
By Craig Sandler
Oh, right - August 1!
If you're morbidly, or just professionally, obsessed with
issues and action in and around 24 Beacon St., you can
forget there's life after July 31, when the proposals you've
been fixating on face their fate, and in theory you can
catch your breath.
Not so fast there, bucky.
While the bulk of the news from Beacon Hill this week did
indeed concern the final triumph or final hours of measures
that have been in development for months or years, at least
two major state-government stories broke that won't be
resolved by Sunday at midnight, the deadline driving the
State House news all month.
The first affects nearly every household in the state. Bruce
Mohl of CommonWealth magazine broke the news that revenue
poured into state coffers so abundantly in fiscal 2022 that
taxpayers collectively could be due a credit totalling close
to $3 billion. The final number has yet to be calculated -
that's partly why it's an August-and-after story - and
officials will have to determine the mechanism by which tax
filers will claim their credit.
The issue arises out of a 1986 law put on the books through
a ballot question. It caps allowable growth in state tax
collections at the same rates as wages and salaries grow in
a given fiscal year, and mandates any excess be returned to
taxpayers.
The law was passed by voters in a bygone Massachusetts that
had chosen Ronald Reagan in two consecutive presidential
elections, and one wonders if the same question would pass
today. Even if it wouldn't, current officeholders will mess
with the terms of the tax credit at their peril in this
election year. Inflation, a looming recession, and a mood of
deep dissatisfaction generally make testing the tolerance of
the electorate with State House chicanery a bad idea. But
such talk is already being heard, from no less a light than
Speaker Ronald Mariano, and a new, momentous public
conversation is just beginning.
The second lookahead story that broke directly affects just
a couple of hundred people, yet raises issues that will
generate great copy and could bedevil Karen Spilka for
months, if not years. After a Senate Democratic caucus held
late in the day where the topic was discussed, President
Karen Spilka effectively announced she's ending
consideration of a union push by Senate staffers who want
better pay and working conditions. President Pro Tempore
Will Brownsberger argued the Upper Branch is too
decentralized to make labor-management relations amenable to
a union situation - a claim quickly denounced by leaders of
the unionization drive.
We raise those two items first because they're the
definition of news - something important you didn't see
coming. But their big consequences lie ahead. It was also an
engrossing week (forgive the pun) for stories, bills and
issues that came to full fruition legislatively.
It was the kind of week where approval of the number-one
piece of legislation on any legislative calendar wasn't the
number one story, though that approval came with the
continuation of a gubernatorial-legislative shoving match
the likes of which has rarely been seen in the Baker years.
The governor signed the annual state budget Thursday, and
certainly had no problem with a roughly $5 billion hike in
spending - he vetoed nine one-hundred thousandths of one
percent, or $475,000 from a nearly $53 billion plan. More
notable was an amendment he sent back to the Legislature
linking the criminal-justice reform of free phone calls for
prisoners to a modification of the rules for pre-trial
release that would keep more alleged violent offenders from
getting out on bail.
The debate over the "dangerousness bill," as it's been
known, got intense. The governor accused the lawmakers who
consigned the bill to study of a "harsh, cold and callous"
response to the pleas of domestic violence victims that the
measure move forward. The chairmen of the Judiciary
Committee rejoined edgily, accusing Baker of ignoring the
Constitution's guarantees of due process and using victims
as pieces of a PR campaign.
The two branches, and legislative chambers, did align
agreeably on a few other high-profile matters this week, and
made headlines doing so. A reproductive rights bill shoring
up legal protections for abortion providers and expanding
the ability of women to terminate their pregnancies emerged
from conference committee Monday and passed through both
branches the next day. There were some days of wondering if
the governor would veto any of this bill, as he did the Roe
Act in 2020, but in the end his approval on Friday seemed
robust.
That was not the case with a sweeping climate policy and
clean energy bill that Baker returned to the Legislature
with amendments early Friday night. Baker and his deputies
said they liked much of what was in the bill, but want a
chance to make additions -- such as spending $750 million in
federal stimulus funds on clean energy investments -- and
fix sections the governor said would be "difficult or
impossible to implement."
House and Senate conferees came to agreement on two more of
the various significant measures sent to conference
committee in recent weeks. They unanimously passed what
could be a silver lining from an agonizingly dark moment of
the pandemic - a bill to reform the oversight and raise the
operating standards of the state's Soldier's Homes. In 2020,
at least 76 veterans died at the Holyoke Soldiers Home when
administrators fatally mishandled a COVID-19 outbreak there.
The bill also improves other housing services for veterans.
Service members and their families will also be the
beneficiaries of newly-minted state statute if, as expected,
the governor signs the SPEED Act. It emerged from conference
Thursday night and was sent to Baker's desk before nightfall
on Friday.
The catchy acronym refers to the major intent of the
legislation - accelerate approval of professional licenses,
school acceptances and other state-controlled clearances for
family members of servicemen and women, to make adjustment
to Massachusetts easier for service families whose duty
frequently forces them to relocate. Left out of the
conference report was a House proposal to allow slot
machines at military halls; that issue will be studied by a
special commission if and when the bill is signed.
State House News
Service
Saturday, July 30, 2022 [9:03 AM]
Session Scramble Punctuated By Tax Relief Drama
Democrats Juggling Massive Late-Session Workload
By Michael P. Norton
It's two sides of the same coin. Legislators are rushing to
complete critical business, and they are also scrambling to
finish work they could have done months ago or last year.
House and Senate members will trudge back into the State
House on Saturday, or deliberate from their homes or other
remote locations, for the start of a pair of rare weekend
formal sessions where Massachusetts residents will learn
whether Democrats can put aside longstanding differences on
a range of pressing issues.
The branches continue to wait for compromise bills to emerge
from a series of six-member conference committees, all
controlled by Democrats, that were charged with coming up
with accords on mental health access, sports betting,
cannabis industry reforms, open space protection, a massive
infrastructure bill, and a more than $4 billion economic
development package.
While there's great anticipation about what will be included
and excluded from those bills, the end of formal sessions
approaching on Sunday night is punctuated this year by an
unexpected drama unfolding over tax relief.
Democrats baked into their economic development bill about
$500 million in one-time rebates and $500 million in
permanent tax relief, but appear to have been blindsided by
this week's news that an existing state law is poised to
trigger nearly $3 billion in tax relief this fall.
House Speaker Ron Mariano on Friday expressed an openness to
changing, delaying or even undoing the 1986 voter law known
as Chapter 62F, but Gov. Charlie Baker believes all of the
tax relief is affordable and others are demanding that the
will of the voters be honored since the state is swimming in
excess revenue due mainly to tax collections that have
soared in the past two years without any tax increases.
"While perhaps none of us would have predicted the
astonishing amounts of revenue being collected by state
government, this is exactly the type of situation that
voters addressed clearly in 1986, and we need to honor their
directive," Senate Minority Leader Bruce Tarr said in a
Saturday morning statement. "Moreover, the very levels of
tax collection that trigger the 1986 law also give us the
capacity and the obligation to provide the additional relief
approved by the House and Senate in the Bill Relating to
Economic Growth and Relief for the Commonwealth. The
circumstances of ballooning state surpluses and the enormous
pressure on household budgets due to inflation and other
costs demand no less, and we must proceed on both fronts."
Conference committees are supposed to limit deliberations to
matters in the House and Senate bills they're negotiating,
and Chapter 62F was not a consideration in either economic
development bill. The lead negotiators are Ways and Means
Chairs Rep. Aaron Michlewitz and Michael Rodrigues; the
other conferees are Reps. Mark Cusack and Michael Soter and
Sens. Eric Lesser and Patrick O'Connor.
And there's another mess newly before the Legislature. The
sweeping climate policy and clean energy bill that Democrats
took most of the session to assemble was returned to them
late Friday with equally sweeping amendments from Baker. Now
it's up to the Legislature to decide what to do with the
amendments. They could try to strike an eleventh-hour deal
with the governor, or they could reject the amendments and
just return their original bill and see whether Baker will
sign or veto it.
Lastly, because this year's state budget was completed on
Thursday, four weeks after the start of the fiscal year,
legislators are also fielding amendments to the $52.7
billion bill returned by Baker.
Informal sessions are planned from August through early
January, and represent an opportunity to continue some work.
However, certain bills can't be tackled in informals, such
as bond bill and veto overrides. Also, unanimous consent -
the approval of all members present - is required to advance
bills during informals, which can severely limit how much
can be accomplished in those sessions that unfold before and
after election season.
The House gavels in at 11 a.m. and the Senate at noon.
The Boston
Herald
Saturday, July 30, 2022
Massachusetts Senate Republicans pressure Democrats to
uphold 1986 law that could return cash to taxpayers
By Gayla Cawley
Senate Republicans are putting pressure on Democratic
legislators to uphold the provisions of a 1986 law that
could return nearly $3 billion to taxpayers.
Led by Senate Minority Leader Bruce Tarr, the Republicans’
call for the Legislature to honor the “will of voters” comes
on the heels of comments made Friday by House Speaker Ron
Mariano, who said he was open to changing or eliminating the
decades-old law.
The rarely-used law could kick in due to excess tax revenue
the state took in this year, which, under the terms of a
voter-approved 1986 ballot question, would flow back to
residents as tax rebates as it exceeds allowable state
revenue limits.
“While perhaps none of us would have predicted the
astonishing amounts of revenue being collected by state
government, this is exactly the type of situation that
voters addressed clearly in 1986, and we need to honor their
directive,” Tarr said in a Saturday morning statement.
“Moreover, the very levels of tax collection that trigger
the 1986 law also give us the capacity and the obligation to
provide the additional relief approved by the House and
Senate in the Bill Relating to Economic Growth and Relief
for the Commonwealth,” he added.
That economic development bill, which includes $500 million
in tax relief and an additional $500 million in one-time
rebates, is pending before a legislative conference
committee. The deadline for implementing these changes is
fast approaching, with the formal legislative session ending
on Sunday.
While Gov. Charlie Baker has said he thinks providing
additional tax relief to residents through the provisions of
the 1986 law is affordable, Mariano indicated Friday that he
was interested in changing, delaying or removing the trigger
included in what is known as Chapter 62F.
“Sure, it’s an option,” Mariano told reporters on Friday.
“Everything’s on the table. We could undo the law. We could
change it. We could postpone it.”
The statute in question went into effect after 54% of voters
approved a measure co-sponsored by Citizens for Limited
Taxation. If used this year, it would mark only the second
time the provision has kicked in since the law went into
effect more than three decades ago.
“That Speaker Mariano would even consider such an affront to
democracy, to election results, and to voters themselves —
that he even dares to speak it aloud — demonstrates the
sheer political arrogance that permeates the great and
general court of the commonwealth,” said Chip Ford,
executive director of Citizens for Limited Taxation.
According to Baker’s Executive Office of Administration and
Finance, the Massachusetts Department of Revenue estimates
that state tax revenues exceed allowable limits, as defined
by the 1986 law, “thus automatically triggering more than
$2.5 billion to be returned to taxpayers.”
In addition, the agencies found there is sufficient funding
available to also enact the $1 billion tax cut package now
pending as part of the economic development bill in the
Legislature, Tarr’s office said.
State House News
Service
Saturday, July 30, 2020
House Session Summary - Saturday, July 30, 2022
Rejects Baker Dangerousness Plan, No Conference Accords
Emerge
By Sam Doran
RETURNS: The House returned from recess at 11:01 a.m.
The House sifted through a handful of Gov. Charlie Baker's
budget amendments Saturday during the penultimate formal
session of the two-year term, before moving into an
overnight recess that will take around 19 hours off the
shrinking timeframe they have left for major votes.
Pressure will be on the select lawmakers who serve on
conference committees negotiating bills in areas like sports
betting, the cannabis industry, mental health access, and
economic development to come to accord. A legislative rule
says those deals ought to be reached by 8 p.m. tonight --
with the intention of giving lawmakers and the public time
to digest the bills' contents -- but in reality that rule is
often tossed aside on a crucible day like the final formal
sessions on July 31.
The branches also have yet to communicate how they will
handle Baker's amendment to a major clean energy and climate
policy bill which he sent back to the Legislature on Friday
afternoon. The House started out Saturday morning by
rejecting Baker's budget amendment that would have changed
the process around how criminal defendants are deemed
dangerous and detained prior to trial. After a couple of
speeches, the vote was largely along party lines with four
Democrats -- Reps. Colleen Garry, Dave Robertson, Paul
Tucker, and Jeff Turco -- crossing the aisle to support the
Republican governor's language with the minority caucus.
The House also moved through several land bills and a
measure "clarifying the application of judicial retirement
law" (H 5149), and enacted a bill dealing with glucose
testing and insulin delivery in schools (H 5052). The
House's overnight recess stretches until 12 p.m. on Sunday.
RECESS 'TIL SUNDAY, JULY 31: Rep. Garballey of Arlington
gaveled the House to order at 5:10 p.m. On a Rep. Frost
motion, the House recessed until the hour of 12 noon Sunday,
July 31. Rep. Garballey said roll calls will be at noon.
State House News
Service
Saturday, July 30, 2020
Senate Session Summary - Saturday, July 30, 2022
Judiciary IT Bill Highlight Of Upper Chamber Waiting Game
By Craig Sandler
CONVENES: The Senate convened today at 12:20 p.m.
With the clock winding down on formal sessions for 2022, the
Senate spent much of the day in recess -- testament to the
reality that, at this late stage, the real work of
legislating is occurring in the rooms where it happens --
coming to agreement, or not, on the marquee issues left in
the session, such as the economic development, mental health
access and sports betting bills.
Senators did pass a $164 billion bond bill to modernize the
digital infrastructure and security of the state's court
system, and included language to conform the state's gun
laws to the U.S. Supreme Court's decision in New York State
Rifle and Pistol Association v. Bruen.
The Senate used mechanisms different than the House to
address some of the policy matters in the bond package,
meaning one more high-importance item has been added to the
pile of unfinished business with only a day of formal
sessions in the legislative year.
ADJOURNS 'TIL SUNDAY, JULY 31: The Senate adjourned at 5:38
p.m. to meet again Sunday, July 31 in a full formal session
without a calendar.
The Boston
Herald
Sunday, July 31, 2022
Massachusetts State House presents ‘Nightmare on Beacon
Hill’ to stop tax rebate
By Howie Carr
It’s like they’re filming a horror movie at the State House
this weekend, and the script, as the trailers used to say,
is Ripped from Today’s Headlines:
“Nightmare on Beacon Hill.”
It’s got the scariest plot the hacks, payroll patriots and
assorted Democrat deadbeats could ever imagine:
The taxpayers — real-life Americans who actually work for a
living — may be in line to get back $3 billion in public
funds that the parasitical hacks were conniving to lavish on
themselves and their fellow leeches in the non-working
classes.
This will not stand! But the problem is, who will stop this
unspeakable hate crime against the hackerama?
That’s why Nightmare on Beacon Hill, even in pre-pro, looks
like a classic disaster film. It poses the traditional
apocalypse-movie question:
Which matinee idol will step up to prevent the end of the
world?
The hacks need a Hollywood superstar to rescue them — think
Bruce Willis in Armageddon, Will Smith in Independence Day,
Steve McQueen in The Blob, etc.
Who on Beacon Hill has the blockbuster box-office potential
to become the name above the title?
How about Speaker Ron Mariano? He’ll be 76 on Halloween.
Lyndon Johnson was president when Mariano first lowered his
snout into the public trough, and he’s been placidly chewing
on his cud ever since.
He’s been muttering about stopping these damn MAGA
deplorables with calluses on their hands from reclaiming
even a nickel from his stash of phony-baloney jobs and
flim-flams like windmills and “job training.”
Sadly, Mariano long ago had a charisma-bypass operation —
he’d be better cast in the role of the feckless president
who can’t decide how to stop the Martians from overrunning
the planet.
The only possible starring role for the Speaker on the
silver screen might be in a Slim Fast infomercial — at least
the “Before” part — but let’s face it, he’s no Johnny Depp.
Speaking of which, at least in terms of lifestyle vices, the
State House teems with Johnny Depp types — think Sen.
Michael Brady or Rep. David LeBoeuf.
Either would be perfect in a low-budget Netflix or Hulu film
— say, Invasion of the Bad Ice Cubes.
But right now, the hacks must deal with this current
over-budget production — Nightmare on Beacon Hill.
In case you missed it, last week an obscure state law from
1986 was discovered that calls for the return of excess
state revenues to people who work, that is, not Democrats.
The timing couldn’t be worse, because the legislature goes
out of session for the year tonight at midnight. Granted,
these solons have never been shy about stealing a hot stove
and then coming back for the smoke.
But $3 billion is a lot to heist — before midnight!
The good news is, this is the kind of nail-biting deadline
every disaster movie requires. But it makes for a truncated
shooting schedule. First thing the hacks need is a script,
i.e., how to overturn the law.
The problem is, the General Court is no longer exactly
teeming with masterminds, criminal or otherwise. Most of the
“legislation,” such as it is, is now written by lobbyists.
The actual legislature is more like a sheltered workshop,
minus the work, that is.
Lobbyists have filled the brain vacuum. They have become
quite adept at stealing, which they describe as
public-private partnerships, in which public funds go into
private pockets, no strings attached, just maxed-out $200
contributions to every legislative “leader.”
Nowadays the heisters may call themselves “climate
advocates” or consultants in diversity, inclusion and
equity, but it’s still the same old kleptocracy.
This weekend, however, the Beautiful People are facing the
unthinkable prospect of having to give back $3 billion they
wanted to dole out to their beloved constituencies —
shiftless illegals, community activists, drifters, the
gender-confused, racial arsonists, junkies, winos, the
Tattoo-American community, blow-ins, goateed trust-funded
pajama boys, antifa, puberty-blocker advocates etc.
In other words, Democrats.
This is just a guess, but I’m thinking the legislature won’t
pull the trigger to repeal the law. It’s too close to Nov.
6.
It would draw too much attention to their even bigger scam —
the proposed 80 percent hike in the income tax on
“millionaires,” a definition that within two weeks of
passage would include everyone who makes more than $40,000 a
year.
Theoretically the Democrats could overturn the law, but then
Gov. Charlie Baker would just veto it… after they’ve gone
home for the year.
Another option: a lawsuit. Maybe get one of the
public-sector thug unions to take a break from turning over
tables outside Market Baskets where Americans are gathering
signatures to stop illegals from getting drivers’ licenses.
The nose-ring-wearing comrades could seek an injunction to
halt the return of the stolen funds, claiming the cash
hasn’t been “appropriated,” as if the amigos are suddenly
concerned about following the letter of gringo law.
A less likely option: the lame-duck auditor Suzanne Bump
must “certify” the amount to be returned to Americans. Bump
is utterly shameless, so perhaps she could be convinced to
declare that the $3 billion surplus has shrunk to… $79.38.
After all, this is a woman whose private-sector company was
sued for sexual discrimination last year. It turned out that
Auditor Bump’s CEO was a convicted serial bank robber — his
Bureau of Prisons number is 18581-038. You could look it up.
Seriously, this is the woman who gets to decide how much
money Americans will get back from the regime occupying the
State House. You can’t make this stuff up.
A more likely prospect: Charlie Baker folds, cowers under
his desk in the Corner Office and lets the Democrats run
amok. It is, after all, his m.o. these last eight years.
Bottom line: don’t make any plans for spending your windfall
until after tonight’s preview midnight showing of Nightmare
on Beacon Hill.
Why do I have this gnawing fear that, one way or another, in
the final scene, the taxpayers are going to get exactly what
Janet Leigh got at the end of Psycho?
The only question is, in a building full of Anthony
Perkinses, who will emerge as the next Norman Bates?
State House News
Service
Sunday, July 31, 2022 [10:45 AM]
Deadline Deals On Menu For Dug-In Democrats
Mariano: "Everything Is Still Up In The Air"
By Colin A. Young
The day of decisions has arrived.
As senators and representatives prepare to gavel in Sunday
for the final formal session of the year as allowed by their
joint rules, all eyes will be on the five conference
committees still negotiating significant policy topics that
the House and Senate each have passed legislation to
address: economic development, cannabis industry reforms,
sports betting, mental health access and open space
preservation.
There's also the issue of the offshore wind and climate
policy bill that Gov. Charlie Baker sent back Friday covered
in the red ink of amendments, and the soldiers' homes
administration bill he similarly returned on Saturday that
the Legislature will also likely have to address before they
are limited to informal sessions, during which the objection
of any one member of the House or Senate can derail a piece
of legislation.
And a multibillion-dollar question -- whether or how the
Legislature will adjust their own plans for tax relief in
light of a long-forgotten law that appears could send
billions back to taxpayers -- still lingers.
"Definitely a long day. We do have a lot of work and that's
when things will come together, we hope," Sen. Will
Brownsberger told reporters late Saturday afternoon as he
forecast that the Legislature will be working "late" Sunday
night or even into the early hours of Monday.
Where the Democrats who hold supermajorities in the House
and Senate come down on tax relief Sunday will likely end up
as one of the most consequential decisions of the session,
both in terms of policy and politics.
"Everybody's talking about it, everybody's thinking about
it," Brownsberger said.
Having already approved $500 million in one-time rebates and
$500 million in permanent tax relief in the
still-under-negotiations economic development bill,
legislative leaders were caught off guard this week when it
became clear that an existing state law could require the
state to soon return between $2.5 billion and $3 billion
from its gangbusters tax collections to taxpayers.
Now the talks are revolving around whether that 1986 voter
law known as Chapter 62F should be undone, changed, or
delayed, and whether the Legislature will still go ahead
with its own tax relief plans in parallel. Folks on the
right say both approaches are affordable, but Democrats
especially seem unsure about what to do.
House Speaker Ronald Mariano, who gave voice Friday to the
idea that Democrats could strike or render ineffective the
1986 law in favor of their own tax relief package, told
Bloomberg BayState Business on Friday that he supports
paying out the money called for in 62F.
"Well I am, but that doesn't mean that you're going to get
the tax cuts too," he said when asked why he wouldn't
support doing something that has been a matter of law for 35
years. "I didn't say we were gonna cut it out, I said we're
considering it. You know, it comes down to what people want.
Do they want the tax cut that's permanent and is diverse or
do you want the windfall?"
And if people want both...
"Well, we'd have to see if we can afford both," Mariano said
Friday, adding that he does not think he and others on
Beacon Hill are being "stingy" with relief for taxpayers.
"I think we have permanent tax cuts that we're putting into
effect; permanent tax cuts. This is a stunt that was
triggered by a law made in 1986 that gives people a one-time
opportunity to get money," he said. "When it was rolled out
to us, they weren't even sure how they get the money back.
The last time they did this in [1987], half the people
didn't get the money that they were owed because they didn't
know how to apply for it."
On Friday, Mariano said he was "optimistic that a lot of
things that we are exchanging proposals on now will come to
some agreement." Asked Saturday evening where talks around
62F and the economic development bill stood, Mariano told a
News Service reporter, "everything is still up in the air."
An economic development bill is typically one of the last
items of business that Beacon Hill finishes before the
session concludes, but this year's bill has some unique
features that could make the task this year even more
complicated.
In addition to the roughly $1 billion in tax rebates and
reforms, the Legislature included billions of dollars of
fiscal year 2022 surplus, more than $1 billion in bond
authorizations, and nearly $1.5 billion of American Rescue
Plan Act money -- federal funding that does not need to be
designated for any particular use until the end of 2024.
"We've made decisions. We've made decisions based on the
fact that we didn't owe $2.5 billion. So now we have to go
back and reevaluate all those decisions we made," Mariano
said Friday on Bloomberg about the way the various parts of
the economic development bill related to Chapter 62F.
There are also other bills floating in the Beacon Hill ether
that have not received the same kind of attention as tax
relief, sports betting (a topic where talks were stirring
Sunday morning) and other headlining topics, but which still
face crucial decisions Sunday.
Plainridge Park is planning to host live harness horse
racing Monday afternoon, but that is contingent upon the
House and Senate agreeing to an extension of the legal
authority for racing and simulcasting since the current
authority ends after Sunday. The Senate on Thursday added a
provision to the extension bill that the House did not: a
ban on simulcast wagering on greyhound dog races taking
place in other states or countries.
Both branches have also taken slightly different tacks on
legislation to put restrictions on -- but not totally ban --
step therapy, the practice in which some patients are made
to try and fail on insurance-preferred treatments before
their insurer will approve a more expensive treatment
prescribed by a doctor. That one is not in a conference
committee, but would need to be ironed out into a final
version amid all of the other activity at the State House on
Sunday.
— Chris Lisinski contributed
to this report.
State House News
Service
Sunday, July 31, 2022 [5:04 PM]
Lesser Addresses Sports Betting, Tax Relief
By Michael P. Norton
Sen. Eric Lesser, who is a negotiator on the sports betting
legalization bill and a major economic development bill,
said Sunday afternoon that the betting bill talks are still
alive and that the economic development bill conferees are
talking about Chapter 62F, the 1986 law that appears poised
to trigger massive tax relief.
Asked if he favors implementing the voter law, Lesser
referenced talks on the economic development bill, which
lawmakers voted to close to outsiders. "Right now we're just
trying to get a conference committee done. So you know my
personal opinion is not ... we've just got to focus on the
conference committee and we're in executive session," he
said. "So there's talks going on about it. Everyone feels
strongly about it."
Speaking while walking back to the Senate from a visit to
the House chamber, Lesser wouldn't say whether he favored
implementation.
"Looking at it right now. Looking through it right now," he
said. Asked his position on it as a lieutenant governor
candidate, he said, "We'll be coming out with a statement on
it."
The voter law has exploded onto the end-of-formal-session
scene, with the Baker administration saying it may lead to
almost $3 billion in relief and arguing that another $500
million in tax rebates and $500 million in permanent tax
relief in the economic development bills is also affordable.
Some high-ranking Democrats in the Legislature disagree
though, but have not come out with a strategy with just
hours left for formal sessions.
In May, the Department of Revenue initiated proceedings to
repeal the regulation governing how a taxpayer obtains a
credit toward personal income tax liability when the state
auditor has determined under Chapter 62F that excess tax
revenues for the previous fiscal year exist.
"This regulation is being repealed because it is obsolete;
no credit has been required since 1987," the agency, which
is managed by the Baker administration, said at the time.
"If a credit becomes available, DOR will issue guidance and
update forms specific to the year the credit is allowed."
Lesser initially said "no update right now" when asked about
a compromise on the sports betting bill, versions of which
have cleared both branches. But when asked if the conference
talks were dead, he said, "No no no. No no no." Are the
sides still talking? "Oh yeah," he said. The bills are still
alive? "Absolutely," he said.
State House News
Service
Sunday, July 31, 2022 [9:38 PM]
Tax Relief May Squeeze Economic Development Bill
Rep Says Colleagues Worried That Fiscal Picture May Worsen
By Colin A. Young and Michael P. Norton
With just a handful of hours left to strike agreements and
pass them, a House leader told the News Service that "the
whole fiscal picture" is now being reconsidered as talks
continue around a massive economic development and tax
reform bill that's been complicated by the realization that
an existing law could trigger nearly $3 billion in tax
relief this year.
The reemergence in recent days of Chapter 62F, a law from
1986 that has not been triggered since 1987 but which is
poised to send roughly $3 billion back to taxpayers, is
weighing heavily on the economic development bill talks as
negotiators reevaluate the Legislature's spending decisions
in that more than $4 billion bill and the decision to
include $500 million in one-time tax rebates and $500
million in permanent tax cuts in it.
"I think we have to figure we have to figure out whether we
want to take that risk right now," Rep. Alice Peisch, the
House's Education Committee chair, told the News Service
Sunday night. "There are things we can do later if things
look better. I'm not sure what the what the answer is, but I
know that since this came up this has really thrown a real
wrench in the works. And what I hear is that everything is
on the table. It's not just a question of negotiating the
last few pieces of some bills with the Senate. It's suddenly
having to look at the whole fiscal picture, because these
bills were developed without having any idea that this was
on the horizon."
The Chapter 62F tax relief would come from excess fiscal
year 2022 state tax revenue and the economic development
bill was already in line to tap that same source for some of
its spending, with fiscal year 2023 revenues, borrowing or
American Rescue Plan Act funding accounting for most of the
support in that bill.
"That's the question that I think people are grappling with,
is do we have enough money? Is there enough money to fund
the budget, the economic development plan and this unknown
amount in September?" Peisch said. "And then, for me, and I
think for many of my colleagues, the second question is and
what does that mean for the next fiscal year, when we may
be, if we're not already, in the middle of a recession, we
may see a significant decline in revenues."
Gov. Charlie Baker, whose administration is already looking
ahead to how it might make the Chapter 62F tax relief a
reality for taxpayers, has said he thinks that both the
statutorily-required 62F relief and the Legislature's
roughly $1 billion tax plan are "eminently affordable" given
that state tax revenues have soared 15 percent and 20
percent in the last two years, respectively.
Peisch said inflation is also a concern for state
government.
"It seems to me that spending all this money right now with
all those other costs that I know we have -- we are
obligated to -- I'm not as confident that we do that we do
have enough money to do all of this," she said. "And maybe,
you know, maybe by the end of tonight, we'll have some
information that will lead us to believe that we can do it,
but I'm skeptical."
She said the shifting picture makes her "a little nervous"
about fully funding the K-12 Student Opportunity Act in the
coming years and continuing early education investments that
she said are "going to require significant dollars in the
next several fiscal years, I would imagine."
Senate Ways and Means Chairman Michael Rodrigues -- who is
leading the negotiations for the Senate on the massive
economic development bill, sports betting and cannabis
industry reforms -- said he's confident that some of the
major issues still hung up in negotiations will emerge for
votes Sunday night.
"There are a lot of people working very hard on a lot of
issues. Communication is open, constant and robust and I'm
confident," Rodrigues told a clutch of reporters that
followed him from the Senate Chamber to his office. "This is
my 14th end of session and it's just like all the rest."
Rodrigues would not disclose specifics about how those talks
are progressing, other than to say "everything's going
well."
Asked about a rumor that circulated at the State House on
Sunday that the economic development conference committee
might not come to an agreement in part due to the sticky
issue of 62F, Rodrigues would neither confirm nor deny it.
"That would be disappointing," he said before adding, "If I
had a nickel for every rumor I heard in this building, I'd
be a millionaire."
Remembering Barbara Anderson
A Blast from the Past
Anderson rejects the notion that her crusades have been
motivated by greed. "The level of taxation isn't that
important to us," she explained. "It's the level of control.
The only control we have is the power of the purse. It isn't
even a matter of winning, it's a matter of being a player,
not being used in a serf capacity but having something to
say about it, making them justify what they're doing by
withholding the money until they justify it." . . .
Anderson demurs whenever the conversation gets around to her
power. Nervously twirling a lock of her hair, she says, "I'm
uncomfortable with the idea. To me power is something you
have, to prevent other people from having power over you.
It's not, "Let's get power and have fun pushing everybody
around." It's, "I think I'll get power and prevent people
from pushing me around."
The Boston
Globe
July 23, 1989
For Tax Opponent, Same War, New Front
By Renee Loth, Globe Staff
Barbara Anderson still isn't satisfied.
The erstwhile Marblehead housewife and champion of the
Massachusetts tax revolt has saved property owners, renters
and drivers billions of dollars over the nine years since
she placed Proposition 2½ on the ballot. She has pried
another $750 million from the state's clutches as chief
sponsor of the 1986 repeal of the income tax surcharge, also
achieved by the ballot.
Her chief disciple, WRKO radio talk show host Jerry
Williams, calls her "governor," not entirely in jest, and
often devotes four hours every weekday to delivering over
the airwaves her message of governmental minimalism.
Powerful officials quake before the antigovernment rage she
embodies and just barely contains.
This legislative season, Anderson carved several more
notches in her belt.
Hers was among the first voices deriding Gov. Dukakis' $604
million tax plan, which was quickly discarded by the
Legislature.
She elevated House Ways and Means Committee chairman Richard
Voke's no-new-taxes budget from a mere proposal to the level
of Scripture -- a transformation that elevated Voke to the
status of folk hero and possible statewide candidate for
1990.
Taking their cues from increasingly sarcastic memos she
delivered to their offices, legislators in both branches
held the line against permanent new taxes in 1990,
eliminated certain "sacred cow" accounts and last week
overrode the governor's veto of $100 million in local aid.
But the 46-year-old executive director of Citizens for
Limited Taxation, the state's premier antitax group, is
savoring not her victories but the battle still ahead. "I'm
out of being a lobbyist right now and back to being a
revolutionary," she said in an interview.
With Howard Foley of the High Technology Council, Ron
Zooleck of the South Shore Chamber of Commerce and other
business leaders, Anderson has been plotting yet another
ballot initiative that will take her brand of direct
democracy to new levels in 1990.
The initiative is still in the drafting stage and all of its
elements won't be revealed until Aug. 2, the deadline for
filing statewide ballot questions. But its centerpiece will
almost certainly be a bid to roll back the temporary $750
million hike in the income tax that was passed with much
anguish by the Legislature to finance back bills.
Also under consideration are the elimination of several
state fee increases, repeal of the deeds excise tax and a
"sunset" provision to assure that the temporary income tax
hike is indeed temporary. No longer content with reflexively
reacting to the Legislature's more profligate ways, Anderson
has gone on the offensive, crafting a complex, multifaceted
tax policy that citizens can enact directly though the
referendum process.
Anderson finds representative democracy at best an
impediment and at worst, irrelevant. "As long as Michael
Dukakis is still governor, nothing matters anyway and
nothing the Legislature does makes any difference," she told
a panel of legislators to their faces after the $750 million
temporary income tax was approved. "At this point we just
sort of withdraw from the situation and collect signatures."
Anderson rejects the notion that her crusades have been
motivated by greed. "The level of taxation isn't that
important to us," she explained. "It's the level of control.
The only control we have is the power of the purse. It isn't
even a matter of winning, it's a matter of being a player,
not being used in a serf capacity but having something to
say about it, making them justify what they're doing by
withholding the money until they justify it."
Anderson has had remarkable staying power in a fickle and
volatile political environment. She has been compared to
Joan of Arc for her antiestablishment crusade against an
unpopular sovereign, and to Lucille Ball for her disarming
redheaded dizziness. She wears her blue jeans and red hair
like the defiant flag of her nation, where individualism and
self-determination are supposed to rule.
"I tend to relate everyone to myself," she said. "I am
personally capable of voting on any issue and being
responsible. That's the essence of respect. If you don't
have anyone at the top pushing you around, eventually people
come around to basically the right decision. I really
believe in that, because not to believe in that is not to
believe in myself. "
Are you a Libertarian? she is asked. "I'm an Aquarian," she
responds. "With Libra rising."
Born Barbara Hervatin in the midst of World War II, Anderson
grew up in a Pennsylvania factory town and "never cared much
for school." As a girl she read Ayn Rand's "Anthem" -- a
futuristic novel about a dystopia where the word "ego" had
been banned -- and biographies of Thomas Jefferson.
"He was always my favorite," she said. "His whole concept
that government has to be controlled, that it belonged to
the people, particularly coming from an aristocrat, always
fascinated me. Jefferson wanted less government because he
felt the average person could make decisions for themselves
better than the government could. That's what I relate to
more than anything."
Anderson, twice divorced, has always been something of a
do-your-own-thing child of the '60s, which sometimes puts
her at odds with her conservative membership. She opposed
the Vietnam War and favors keeping abortion legal. In 1984
nearly half the board of directors left Citizens for Limited
Taxation in protest of her determination to join the nascent
rules reform movement in the House.
"They thought it was a left-wing plot to control the
Legislature," she said.
Anderson's first political act was canvassing for Barry
Goldwater's presidential campaign in 1964. Today, Anderson
has combined Goldwater's apotheosis of the individual and
Jefferson's emphasis on state's rights into an organization
that extols the values of America's early patriots.
Last month, for example, the antitax group held a
$500-a-head anniversary fund-raiser at Anthony's Pier 4.
Edward F. King, the organization's founder, gave the keynote
speech, heavily laced with quotes from Patrick Henry, Nathan
Hale and other American revolutionaries.
As the crowd listened, King asked them to imagine the scene
if these men were to return to Massachusetts today. No
doubt, he said, they would look around them at the sales
tax, and the income tax, and the capital gains tax, and the
property tax, and the deeds excise tax, and the meals tax,
and the gasoline tax, and the hotel tax, and the fees.
Surely, they would turn to the populace and ask, "Have you
no muskets? Is your powder not dry?"
"The whole room went absolutely nuts," said one person who
was there.
Almost from the beginning of her public career, Anderson's
critics have put forth the proposition that she is merely a
populist front for the political agenda for the business
community, particularly the entrepreneurial pioneers of
high-technology industry.
Anderson does not consider herself the tool of high tech,
but their relationship surely is symbiotic.
In 1980 the Massachusetts High Technology Council bankrolled
Anderson's "people's movement" for Proposition 2½ to the
tune of $250,000. "The other business groups gave zippo,"
Foley once said with pride. High tech has continued to fund
Citizens for Limited Taxation's other ballot drives,
including the surtax repeal and statewide tax cap in 1986.
And the High Technology Council, like the antitax group,
opposes moves to curtail the growth in local aid, without
which Proposition 2½ would have caused far greater hardship
for the cities and towns.
Additionally, the institutional impatience of the high-tech
community -- an industry founded on mobility, individualism
and growth -- nicely mirrors Anderson's own personality.
Anderson described her relationship with Foley, who cuts an
elegant figure on Beacon Hill, as "Henry Higgins to Eliza
Doolittle." She said Foley, with his "IBM training," has
taught her over the years how to comport herself with
greater poise, even telling her what to wear to certain
business functions.
"Howard has been a real help in teaching me civilized
behavior," she explained. "I have learned there's an
appropriate time to do things. I've learned that when I got
to a Christmas party at his office I'm supposed to pour the
beer in the glass and not drink it from the bottle. These
are things that it doesn't hurt me to learn, all right?"
Most people find Anderson's blunt, self-effacing ways
refreshing.
"I find virtually everything she stands for abhorrent, and
she has elevated the personal attack to an art form," said
James Braude, director of the Tax Equity Alliance of
Massachusetts and Anderson's most frequent foil. "But
there's something likable about her."
But not everyone agrees with Braude's assessment.
Judy Meredith, a lobbyist for poor people's concerns who has
been a figure at the State House at least as long as
Anderson, thinks her movement appeals to the worst instincts
in people.
"There's a dirty little secret many of us have, that we
resent paying taxes that go to things that are not important
to us," Meredith said. "Old women who won't pay for school
children, people with healthy children who resent paying for
services for the retarded child down the street -- that's a
nasty little piece in all of us that usually doesn't have a
voice because it is contrary to basic, traditional human
values.
"Barbara Anderson has made it OK to admit and to revel in
that resentment," Meredith concluded. "She is not a nice
person."
"A main asset is her sense of humor," said Charles D. Baker,
former staff aide to Howard Foley. "She's never been afraid
to take and give the cheap shots of politics. She never
forgets where it is she's trying to get and she rarely gets
mired up in details." Indeed, Anderson recently has
displayed near ignorance of the details. When the Globe
reported last week that a mere 17 cents of each dollar
raised by her organization's political action committee
actually went directly to the PAC's endorsed candidates,
Anderson initially said she couldn't say how much Elliot
Savitz, the group's finance chairman, was paid.
Asked later to characterize her organization's 10,000
members, she said, "I don't know, they're just individuals.
We've never done a demographic study. We know there's a lot
of senior citizens because they communicate with us, and you
can tell by the voice or the handwriting."
In a recent interview, Anderson wasn't even sure of her own
age, calling later to correct the figure, and saying "I've
just counted it on my fingers." Her boyfriend, accountant
John Cunningham, does her taxes.
Anderson demurs whenever the conversation gets around to her
power. Nervously twirling a lock of her hair, she says, "I'm
uncomfortable with the idea. To me power is something you
have, to prevent other people from having power over you.
It's not, 'Let's get power and have fun pushing everybody
around.' It's, 'I think I'll get power and prevent people
from pushing me around.
|
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interest in receiving this information for non-profit research and educational purposes
only. For more information go to:
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Citizens for Limited Taxation ▪
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