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48 years as “The Voice of Massachusetts Taxpayers”
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CLT UPDATE
Sunday, August 7, 2022
CLT's $3B Tax Cap
Rebate: What's Ahead?
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Most Relevant News
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Massachusetts Department of Revenue (DOR)
Commissioner Geoffrey Snyder today announced that
preliminary revenue collections for June 2022
totaled $4.143 billion as of August 4, 2022, which
is $470 million or 12.8% more than actual
collections in June 2021 and $780 million or 23.2%
more than benchmark....
Revenue
collections for FY2022 were $41.105 billion, which
is $6.982 billion or 20.5% more than collections in
FY2021, and $3.438 billion or 9.1% more than the
benchmark.
Massachusetts Department of Revenue
Thursday, August 4, 2022
Press Release
Fiscal Year 2022 Revenue Collections
Total $41.105 Billion
Following
the Department of Revenue’s release of June 2022
collections earlier today, the Executive Office for
Administration and Finance announced that the
Commonwealth will end Fiscal Year 2022 (FY22) with a
$1.9 billion surplus, according to preliminary
figures. This surplus accounts for $3 billion in
automatic tax refunds required under Chapter 62F of
the Massachusetts General Laws, $1.4 billion in
statutory transfers, including capital gains
transfers to the Stabilization Fund, and
approximately $800 million in supplemental funding
appropriated in FY22.
As
announced by the Department of Revenue, in total,
$41.105 billion was collected in FY22, representing
overall revenue growth of approximately 20.5% above
Fiscal Year 2021. This total is $6.7 billion above
the total taxes assumed at the time the FY22 budget
was enacted.
Massachusetts Executive Office for Administration
and Finance
Michael J. Hefferan
Secretary of Administration and Finance
Thursday, August 4, 2022
State Budget Officials Announce $1.9
Billion Fiscal Year 2022 Surplus
Following Tax Refunds
State tax
collections soared by more than 20 percent in the
last year and are up nearly 40 percent over the last
two years, the Department of Revenue said Thursday
as it announced that it took in $41.105 billion for
the budget year that ended June 30.
Final
fiscal year 2022 collections of $41.105 billion were
up $6.982 billion or 20.5 percent over actual
collections in fiscal year 2021 and were $3.438
billion or 9.1 percent more than what the Baker
administration was expecting to collect. June
collections of $4.143 billion ($780 million or 23.2
percent above benchmark) helped fuel the strong
finish to the fiscal year....
Now that
DOR has published June and year-end revenue figures
for fiscal year 2022, Snyder will begin preparing a
report that will detail the revenue cap as specified
under Chapter 62F and how fiscal 2022 collections
compare to the cap. That report is due to Auditor
Suzanne Bump by Sept. 1 and Bump must certify by
Sept. 20 whether the state collected revenue in
excess of the cap. If she does, then Chapter 62F
calls for the excess amount to be returned to
taxpayers.
The
Executive Office of Administration and Finance said
later Thursday that, after accounting for "$3
billion in automatic tax refunds required under
Chapter 62F," and other transfers, the state will
end fiscal 2022 with a surplus of $1.9 billion.
State
House News Service
Thursday, August 4, 2022
State Tax Collections Soared More
Than 20 Percent In FY 2022
The
Massachusetts Fiscal Alliance made the following
statement in response to late in the day breaking
news from the Department of Revenue (DOR) announcing
that the Commonwealth will end Fiscal Year 2022
(FY22) with a $1.9 billion surplus, according to
preliminary figures. DOR reports this surplus takes
into account the $3 billion in automatic tax refunds
required under Chapter 62F of the Massachusetts
General Laws, $1.4 billion in statutory transfers,
including capital gains transfers to the
Stabilization Fund, and approximately $800 million
in supplemental funding appropriated in FY22. The $3
billion in automatic tax refunds is due to a
citizen-initiated petition led by Citizens for
Limited Taxation (CLT) and the late Barbara Anderson
during the 1986 ballot campaign.
Massachusetts Fiscal Alliance
Thursday, August 4, 2022
MassFiscal Responds to State
Announcing $1.9 Billion
in Surplus Money After Automatic Tax Rebates Law of
1986 is Paid Out
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 —
Massachusetts Taxpayers Foundation
Friday, July 29, 2022
M.G.L.c. 62F: Tax Revenues in Excess of Allowable
Amount
One of the
longest House sessions in decades, perhaps one of
the longest ever, was marked by an absence of floor
speeches and yet an abundance of drama.... The House
adjourned at 10:10 a.m.
State
House News Service
Monday, August 1, 2022
House Session Summary - Sunday, July 31, 2022 to
Monday, Aug. 1, 2022
By Craig Sandler
The sun
was up and Monday was well underway by the time the
Senate gaveled out of the two-year term's final
formal session that began shortly after 11 a.m.
Sunday, a historically long affair punctuated by
deals on major bills that have been in the works for
months....
Sen. Adam
Hinds of Pittsfield, who is not running for
reelection and was involved in his final formal
session, gaveled the marathon to a close at 10:13
a.m., drawing applause from those still in
attendance.
State
House News Service
Monday, August 1, 2022
Senate Session Summary - Sunday, July 31, 2022 to
Monday, Aug. 1, 2022
Final Formal Session Runs 23 Hours
By Chris Lisinski
“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 Citizens for Limited Taxation
In 1986,
Barbara Anderson, founder of Citizens for Limited
Taxation, working with the Mass. High Tech Council,
authored a successful ballot question that requires
the state to return money to taxpayers when state
tax revenues grow by more than wages and salaries in
the same year.
Anderson,
as historians and state government wonks may
remember, was the tax-cutting pioneer who is famous
for pushing through Proposition 2½, another
successful ballot question that limited the annual
increase in property taxes that cities and towns are
allowed to charge to 2.5 percent. While Proposition
2½ limited tax increases at the local level, the
1986 ballot question was intended to limit increases
in state taxes.
The only
problem is that except for one other time — in 1987
— the growth in tax revenues has never outstripped
the growth in wages and salaries. Enter the current
year. While final tallies are yet to be certified by
state Auditor Suzanne Bump — something she will do
in September — it is clear that the amount of tax
revenue collected by the state is much higher than
this year’s increase in salaries and wages....
During a
period of historic inflation, the right thing to do
is to give taxpayers a break. Indeed, that’s
something Barbara Anderson, who died in 2016,
understood 35 years ago when she pushed for passage
of the refund referendum. As Chip Ford said, she’s
probably pumping her fist looking down on
Massachusetts, maligned for so many years as “Tax-a-chusetts.”
That moniker seems to have gone by the wayside,
thankfully, although taxes still are high in this
state.
But it
would be a fitting thing to do — perhaps in
remembrance of Barbara Anderson if not for taxpayers
— to implement this refund program approved by
voters in 1986, and put the slur “Tax-a-chusetts” to
rest once and for all.
A Salem
News editorial
Monday, August 1, 2022
Baker pulls rabbit out of hat with
1986 refund law
Hour 4
— 6:00 p.m.
August 1, 2022 • 37 min
Chip Ford, Executive Director at Citizens for
Limited Taxation joins Howie to talk about the
excess of funds in the coffers of the Commonwealth
and the possibility of a refund for Massachusetts
taxpayers.
. . . The
conference committee did not act on the economic
development bill so the $1 billion in tax relief is
still bottled up in the conference committee. In the
meantime, legislators are discussing the $3 billion
windfall. Some legislators favor repealing the law
which has only been used once since 1986. Others say
the law should not be repealed and the $2.5 billion
should go back to taxpayers.
House
Speaker Ron Mariano (D-Quincy) said last Friday that
he would consider all courses of action, up to and
including altogether scrapping the $2.5 billion in
tax relief. "Sure, it's an option," Mariano told
reporters when asked if lawmakers would consider
undoing the trigger enshrined 62F. "Everything's on
the table. We could undo the law, we could change
it, we could postpone."
But three
days later on Monday, Mariano said that 62F is the
law of the land and it's going to happen. "The
governor has said it's the law of the land and
that's worth, he thinks, $2.5 billion but he's not
even sure, and he thinks he can get it out this
year. So I think that's an important return to the
taxpayers.”
Gov. Baker
said that he thinks that both the $1 billion and the
$2.5 billion are affordable in tandem.
“CLT’s tax
cap law (Chapter 62F) is still working exactly as
designed and intended,” said Chip Ford,
executive director of Citizens for Limited
Taxation, which put the tax cap proposal on the
1986 ballot. “That it was triggered only once in
1987 before now isn’t a bug but a feature. Nobody
can say with a straight face that multi-billions of
dollars of excess revenue raked in over the past two
years should remain with the state and not be
returned to those from whom it was unnecessarily
extracted.”
Beacon
Hill Roll Call
Volume 47 - Report No. 30
Week of July 25-31, 2022
By Bob Katzen
In an
extraordinary turnabout, Massachusetts lawmakers on
Monday failed to strike a deal on a hulking economic
development package that included plans for $1
billion in tax relief, saying they had deep concerns
over what the state can afford amid a chaotic end to
their legislative session.
Democratic
leaders passed a host of other major legislation,
including bills that would legalize sports betting
in Massachusetts, expand access to mental health
care, and reshape the state’s firearms laws — all
hours after blowing past a midnight deadline to
complete their work following 19 months of
lawmaking.
But as
their final marathon session stretched to 10:13 a.m.
Monday — 23 hours after it began in the Senate —
Democratic leaders stalled perhaps their most
high-profile proposal, and one they had celebrated
only weeks earlier, arguing they were thrown a
late-session curveball in the form of a 1980s-era
law that could ultimately send an additional $3
billion back to taxpayers in the coming months.
That
likelihood, they said, muddied the state’s economic
picture even as Governor Charlie Baker argued
Massachusetts has more than enough of a fiscal
cushion to absorb both sets of tax relief.
The
lawmakers’ decision scuttles, for now, a plan to
ease the burden on residents pinched by rising
inflation with a mix of one-time $250 rebates and
permanent tax changes as part of more than $4
billion in spending....
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.
With
revenues from last fiscal year far surpassing
expectations, the Baker administration last week
estimated taxpayers could be due back more than $2.9
billion under the law, which hasn’t been triggered
since 1987. In response, House Speaker Ronald
Mariano had left open the possibility of seeking to
undo, change, or suspend the law just as it’s about
to benefit potentially millions of taxpayers.
Lawmakers ultimately opted for none of the above,
for now.
“We
thought it would be the wisest choice to make sure
we do this properly,” Mariano told reporters Monday.
“Getting $3 billion dropped on you the week before
you are finalizing your year-end finances doesn’t
lead to good decision-making. We want to be fiscally
prudent, and know what we are getting into.” ...
We are
kind of perplexed,” Senator Cindy F. Friedman told
reporters shortly before midnight Sunday. “We’ve got
this tax piece, which is really serious and was laid
in front of us in a pretty short amount of time.”
Supporters
of the tax cap law, however, said lawmakers’ effort
to cast its emergence as a reason not to pursue the
wider package is a “convenient excuse,” said Chris
Anderson, president of the Massachusetts High
Technology Council, which pushed the original 1986
voter-passed law.
“It still
doesn’t undercut their ability to pursue the
economic development bill, at least major sections
of it,” Anderson said. “If they were caught by
surprise, it’s probably because they were distracted
by the billions of dollars they had a free hand to
spend.”
The
Boston Globe
Monday, August 1, 2022
Sports betting, gun
control, tax relief.
Here’s what Mass. lawmakers did — and didn’t — agree
to overnight.
Barbara
Anderson has been dead these six long years, but
now she’s done the taxpayers of Massachusetts one
huge final favor – blowing up a multi-billion-dollar
flim flam by the hackerama on Beacon Hill.
Her 1986
referendum-created law could mean that as much as $3
billion in tax revenues above “allowable” levels
will be returned to the working classes it was
shamelessly stolen from.
From
beyond the grave, Barbara has stopped one of the
biggest heists in the heist-ridden history of Bay
State government....
Thank you,
Barbara, and thanks also to your group, Citizens
for Limited Taxation.
You must
never forget just how greedy these Democrat hacks
are. They have the same philosophy as the Mob:
What’s
theirs is theirs and what’s yours is theirs.
This is
why the hacks have absolutely no qualms about
beggaring you with their insane tax increases and
the inflation they create, but they squeal like
stuck pigs if you dare ask for some of your own
money back.
The
Democrats tell you, with a straight face, that they
can’t “afford” to give you back a dime from the
dollar they stole....
What gall
– that argument was made by the same people who in
1989 passed a “temporary emergency” 18-month
increase in the state income tax. After 11 years of
refusing to repeal their so-called emergency tax, it
was finally repealed by the voters in a landslide
referendum in 2000.
Even after
that, the income tax wasn’t finally reduced to its
previous level until 2020 – 31 years and tens of
billions of dollars after the 18-month “emergency.”
It makes 15 days to flatten the curve in 2020 seem
like a little white lie.
Consider
all the nonsense you always hear from these con men
and women about why they need more and more of your
hard-earned money...
Even if
the hacks eventually figure out a way not to return
our money (because they can’t “afford” it), this has
totally blown up the Deep State rationale for the 80
percent increase in the income tax that’s on the
Massachusetts ballot in November.
How much
do the payroll patriots really need to steal from
working people, if they had $3 billion just laying
there, not to mention the $1 billion they were
grudgingly going to return to nobody you know. Plus,
when 62F reared its ugly head after all these
decades, everyone suddenly realized that the state’s
rainy-day fund is now flush with almost $7 billion.
Seven
billion dollars, just sitting there, in reserve, in
case some non-binary antifa-type blows in from
Minnesota and needs a job (as opposed to work). And
that’s on top of the $3 billion from 62F and the $1
billion in “tax relief” from the legislature!
Eleven
billion dollars in the hacks’ secret stash, and now
for the next three months they’re going to be
rattling the tin cup on the steps of the State House
clamoring for an 80 percent increase in the state
income tax rate....
Truly, it
would take a heart of stone not to laugh at the
tragedy that has befallen the hacks.
Thank you,
Barbara Anderson.
The
Boston Herald
Wednesday, August 3, 2022
Barbara Anderson could see
lawmakers in your pockets years ago
By Howie Carr
Not
everyone on Beacon Hill shares Mariano’s view of how
Baker handled the tax law. [Senate President Karen]
Spilka said Tuesday that she believes Baker’s
contention that this was a “late-breaking issue” and
that it only became clear with revenue figures later
in the fiscal year, which ended in June.
“There’s
no reason not to believe him,” the Ashland Democrat
said. Regardless, she said, she believes lawmakers
still had time to pass an economic development and
tax relief bill. Spilka said the Senate offered
proposals in closed-door negotiations to pass at
least part of the tax relief package, as well as
reshaping how the money goes out through the 1986
tax law, but couldn’t strike a deal with the House.
“There’s
certainly enough money to do some significant tax
relief and targeted economic development. We did not
have to do the entire package,” she said. “But the
approach was all or nothing. I have said in the
past: We should not be taking an all-or-nothing
approach.” ...
Mariano
was more hesitant, saying that should the
Legislature revisit a tax relief package later this
year or early next, it could come in a “completely
different economy.” He did suggest, however,
openness to reshaping the 1986 law to change how the
credit goes to taxpayers.
“This is a
one-time regressive cash windfall for taxpayers. I
think we can disperse it a lot fairer and more
equitably if we made some changes,” he said without
offering a specific proposal.
But it’s
unclear if that, too, could face headwinds, either
within or outside the State House. Anthony Amore, a
Republican candidate for state auditor, said Tuesday
that he’s prepared to file a lawsuit should the
state not release the money as required.
The law
allows for 24 taxpayers to petition the court to
“enforce” it.
“The
people want and need tax refund checks now,” Amore
said in a statement. “My campaign is already lining
up the 24 taxpayers needed to go to court to enforce
this provision of state law should it be regrettably
necessary.”
The
Boston Globe
Tuesday, August 2, 2022
Mass. House speaker
accuses Baker of keeping key tax info from lawmakers
before tax relief package stalled
As their
carefully crafted plans for tax relief and massive
spending outlays began to slip away with last
Thursday's stunning news about a 1986 tax law,
frustrated Democrats on Beacon Hill went into spin
mode.
First,
late Friday afternoon, Rep. Christine Barber of
Somerville took to the House floor to suggest that
plans by the Baker administration to sweep a $225
million fund may have been part of the
administration's move to trigger the 36-year-old law
that the Baker administration a day earlier said
could force nearly $3 billion in tax relief later
this year, or about 7 percent of the income taxes
paid in 2021....
Then
Sunday rolled around, the last day of formal
sessions for 2022, and the branches gaveled in
sessions that would end late Monday morning.
During the
overnight, the News Service reported that in May,
long before the 62F tax relief became public, the
Department of Revenue, an agency controlled by the
Baker administration, 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
said at the time. "If a credit becomes available,
DOR will issue guidance and update forms specific to
the year the credit is allowed."
The
Department of Revenue on April 14 circulated an
email notice regarding the repeal regulation with a
link to the May 12 public hearing notice.
On Sunday
afternoon, the News Service inquired about whether
the regulation (830 CMR 62F.6.1) was repealed and if
anyone testified at the public hearing on it. An
administration official, communicating on
background, said the regulation had not been
rescinded.
"As part
of routine review and cleanup of outdated
regulations, DOR identified this regulation as it
had not been used since 1987," the official said. "DOR
initiated the recission process by putting it out
for public comment (no public comments were
received), but has not completed the process of
rescinding the regulation ... If 62F were triggered,
DOR would then issue relevant guidance or
regulations for this year's implementation." ...
"The 62F
statute has been law for over thirty years, so of
course the Administration was aware of its
existence," said Baker communications director Sarah
Finlaw. "The 62F rebate is triggered by tax revenue
which is publicly available and sent to the
Legislature on a monthly basis. As revenue figures
change month to month, the final amounts cannot be
confirmed until the end of the fiscal year." ...
It's
unclear why no one in the Legislature or on its
House and Senate Ways and Means, or Joint Committee
on Revenue staffs publicly identified Chapter 62F
implications during the final months of fiscal 2022
when revenues were bounding higher and higher, and
apparently triggering the 1986 law's tax relief.
Mariano
told the Globe: "You expect our Ways and Means staff
to keep abreast of every change or every potential
change they're going to make?" ...
On Friday,
Mariano described the tax relief trigger as a
"one-time event" that "popped up."
"We knew
it existed, but we didn't know how close we were,"
Mariano said....
On
Wednesday, after a public event in Medford, Baker
said last year's annual report from the state
auditor on the 62F law, which he noted is a public
report and is sent to the administration and the
Legislature, "made very clear that tax revenue last
year got the commonwealth very close to triggering
this tax cap."
"You don't
know where you are on this process until you
actually get to the end of the year," Baker said....
people did the math to try to figure out, because
last year in the auditor's report was close, if we
could predict where we thought this thing would
land. And we came up with a range and when we came
up with the range on that we talked to the
Legislature about it and went from there."
A Baker
spokesman said the talk with lawmakers about the
possibility of hitting the 62F revenue cap occurred
in July....
Mariano
said "getting a $3 billion bill dropped on you the
week before you are about to finalize the year-end
finances doesn't lead to good decision-making."
Mariano
called 62F "the law of the land and it's going to
happen" but also said he hasn't given up hope of
moving some form of the economic development bill
out of conference committee and forward during
informal sessions, when bills can only advance if
there is unanimous support and no one objects....
Auditor
candidate Sen. Diana DiZoglio on Wednesday said
quarterly revenue reports should be discussed by the
Comptroller Advisory Board, a panel with a seat for
the auditor, who each September makes the
determination of whether tax relief is warranted
under Chapter 62F, which triggers income tax credits
only when tax collections exceed an annual limit
that is based in part on the three-year average
growth in state wages and salaries.
"If they
were made part of the regular agenda for all of
those meetings, this 62F issue may not have caught
folks by surprise the way that it did -- putting an
entire economic development and tax relief bill in
jeopardy," DiZoglio said.
State
House News Service
Wednesday, August 3, 2022
Dems Feel
Baker Knew of Brewing Tax Relief Blockbuster
"Eye-Opening" April Collections Caught Guv's
Attention,
But Apparently Not Dems
When it
comes to the 1986 tax relief voter law that
paralyzed the House and Senate during critical hours
last weekend, is holding back significant economic
development spending around the state and could
return nearly $3 billion in excess state tax revenue
back to taxpayers, Democrats on Beacon Hill have
their knives -- or sledgehammers -- out.
"This made
up 1986 Reaganomics 'tax break' is derailing tax
relief and permanent taxation changes. DYK some
members of our state legislature weren't even alive
then? SLEDGEHAMMER by Peter Gabriel was the #1 song
37 yrs ago tonight," Topsfield Rep. Jamie Belsito
tweeted during the marathon session that stretched
for nearly 24 hours in large part due to the
late-breaking realization about Chapter 62F. "Now
let's sledgehammer this 1986 law."
All the
way to the top of the House leadership chart, public
comments about 62F have at times been dismissive of
the law and leaders have openly floated the idea
that they could either undo or change what voters
put into place 36 years ago....
"This is a
stunt that was triggered by a law made in 1986 that
gives people a one-time opportunity to get money,"
House Speaker Ron Mariano said Friday on Bloomberg
BayState Business a few hours after he said that,
with the possibility that Chapter 62F could require
more direct tax relief than the Legislature was
prepared to fund, "Everything's on the table. We
could undo the law, we could change it, we could
postpone."
Changing
or repealing Chapter 62F before it is officially
triggered for fiscal year 2022 would be practically
impossible -- the objection of any one
representative or senator can derail any legislation
now that formal sessions have ended and Gov. Charlie
Baker has made clear that he's ready to make the 62F
tax relief a reality.
And even
altering the law at a late date could also pose some
tricky political questions for Beacon Hill
Democrats, who face re-election this fall, if they
hope to stay in office.
"It was
voted by the voters? So that's a big philosophical
question," Rep. Erika Uyterhoeven of Somerville said
early Monday morning when asked about the
possibility of altering or repealing Chapter 62F.
"Also, which voters are still alive who voted for
that? I haven't done the math on that."
Indeed,
more than 1.5 million Massachusetts voters weighed
in on the 1986 ballot question, 863,130 (almost 55
percent) of them in favor of establishing a revenue
cap and a credit system for excess state revenues to
be returned to taxpayers.
People who
could have voted on the question are at least 54
years old in 2022, and Massachusetts has an
estimated 2,113,910 residents who are 55 years old
or older, according to the U.S. Census Bureau's 2019
American Community Survey....
As they
ran out of time and their weekend talks were not
able to find a way to advance their own tax relief
plans in tandem with 62F, Beacon Hill Democrats
seemed to accept their fate and acknowledged there
is little they could do to prevent the law that
voters installed in the 1980s from kicking in.
"We have
62F. That's the law of the land and it's gonna
happen," Mariano said as the sun rose Monday.
State
House News Service
Wednesday, August 3, 2022
Some Dems
Have Harsh Words For Tax Relief Law
Changing Voter Law Shaping Up As Uphill Battle
Finally
something all the candidates for governor can agree
on.
Democrat
Maura Healey and Republicans Chris Doughty and Geoff
Diehl all said Tuesday that they support refunding
state tax revenue in excess of a cap established in
1986, even while top Democrats on Beacon Hill
continue to suggest an openness to repealing or
tinkering with the law....
"Maura
believes taxpayers are entitled to the 62F rebates
if the law is triggered and certified by the
Auditor," campaign spokeswoman Karissa Hand told
MASSterList. Bump said Tuesday that determination
would be made on the third Tuesday in September.
Hand said
Healey also "urges the Legislature to return to pass
targeted tax relief for Massachusetts residents and
make the long term investments needed to lower the
cost of living in our state."
The
statement from Healey puts the Democratic
frontrunner for governor at odds with legislative
leadership, particularly House Speaker Ron Mariano,
who endorsed her campaign when she still faced a
primary opponent....
Mariano
and Senate President Karen Spilka have also
criticized the law as outdated and one that would
not deliver relief to those who need it the most,
though any changes or repeal would likely have to
wait until next year....
Doughty
held a press conference outside the State House on
Tuesday where he pledged to veto any attempt by
Legislative Democrats to repeal the 1986 ballot law.
"Massachusetts residents have been suffering for
months due to high inflation," Doughty said in a
statement. "The legislature has refused to suspend
the gas tax and they have been dragging their feet
on providing any form of relief. The needs of hard
working taxpayers have been ignored. It appears the
1986 law and Governor Baker are the only ones trying
to help."
Doughty
and running mate Kate Campanale also slammed the
Legislature for procrastinating on economic
development and allowing the late revelation of 62F
to derail needed investments....
Diehl also
supports the 1986 law, but still took a shot at
Doughty over the Wrentham manufacturer's acceptance
of a $2.79 million PPP loan he received during the
COVID-19 pandemic, as well as a $277,000 economic
development grant from the state in 2015.
State
House News Service
Wednesday, August 3, 2022
Guv Candidates
Line Up Behind Ch. 62F
Healey, Doughty and Diehl Favor 62F Relief
The
resurfacing of the long-dormant tax cap after 35
years was enough to kill the Legislature’s $1
billion tax relief initiative. Now some are
wondering whether the cap can also put a dent in the
momentum behind a constitutional amendment appearing
on the November ballot to create a millionaire tax.
The tax
cap limits how much tax revenue Massachusetts can
collect and requires the state to return to
taxpayers any amount collected above the cap.
The cap is
being triggered this year for the first time since
1987, and some analysts say a millionaire tax, which
could boost tax revenues by as much as $2 billion a
year, could help trigger it again in the coming
years.
Eileen
McAnneny, the president of the Massachusetts
Taxpayers Foundation, said she thinks it’s possible.
And she questioned whether it made sense to impose
what she considers a politically risky tax on
millionaires when the cap is simply going to return
a large portion of the revenue the tax will yield
back to taxpayers.
“If the
state is in a position to give back billions of
dollars, then it probably has sufficient revenue,”
she said. “Is the millionaire tax really necessary?”
Andrew
Farnitano, a spokesman for the Fair Share coalition
working to pass the millionaire tax, said the group
has been looking at the issue. “We are trying to
figure out exactly what this means,” he said.
But
Farnitano said the tax cap is not a major concern
because the millionaire tax is a long-term
initiative. He said it’s about providing more
revenue for education and transportation in the
state and making the tax system more progressive by
assessing a 4 percent surtax on income over $1
million....
Budget
analysts are uncertain whether the tax cap is going
to become a recurring phenomenon, but the cap’s
formula provides some clues.
The tax
cap is calculated by multiplying the average of the
growth in wages and salaries over the previous three
years by the “allowable revenue” from the previous
year. If actual tax revenues exceed that amount, the
excess must be returned to taxpayers on a
proportional basis, meaning those who pay more in
taxes get more back.
CommonWealth Magazine
Friday, August 5, 2022
Could tax cap influence
fight over millionaire tax?
By Bruce Mohl, CommonWealth editor
It didn't
have to be like this.
Historic
23-hour sessions in a desperate attempt to wrap up
important work, deals struck by sleep-deprived
lawmakers to advance major bills that had been in
play for a year and a half, and the subsequent
collapse of ideas that had broad, veto-proof support
-- none of that actually needed to happen the way it
did.
Yes,
legislative rules have for more than two decades
called for House and Senate formal sessions to end
on July 31 in even-numbered years. Unlike rules that
require fair notice to review substantive bills or
that aim to prevent overnight sessions, the July 31
rule is one that the Legislature has obeyed over the
years.
But this
year, with Speaker Ron Mariano and Senate President
Karen Spilka managing their first end-of-July affair
together, they had a rough go of it. The deadlines
that were supposed to trigger deals simply didn't.
So the
Democrats chose to extend their stop-start session
into the equivalent of quadruple overtime....
The list
of casualties from the overnight session is topped
by one of the most surprising outcomes in modern
legislative history: Democrats tossed a $4 billion
bill with featuring $1 billion in tax relief, which
had cleared both branches unanimously and was just
awaiting final compromise, back onto the shelf with
a shrug.
Legislative leaders decided they could not figure
out what to do with the entire package in the final
days, after they were apparently blindsided late
last week by Baker announcing that Massachusetts is
on track to trigger a 1986 tax cap law requiring
close to $3 billion to be returned to taxpayers.
"We
thought it was the wisest choice to make to make
sure that we do this properly," a bleary-eyed House
Speaker Ron Mariano said shortly after 5:30 a.m.
Monday. "Getting a $3 billion bill dropped on you
the week before you're about to finalize the
year-end finances doesn't lead to good
decision-making."
Mariano
and other top Democrats said they could still return
to sections of the economic development bill during
their informal sessions, but its demise spills a jar
of complications all over other government work.
State
House News Service
Friday, August 5, 2022
Weekly Roundup - Sunrise, Sunset
It didn't have to be like this....
They were
seemingly blindsided by a tax policy already on the
books, which caused them to derail their own
carefully crafted and sweeping tax relief and
economic development spending plans....
Now, the
Legislature is in what Republican Sen. Ryan Fattman
recently described as "unanimous consent
operations," when an objection from any lawmaker can
sideline any proposal for the rest of the session.
By waiting until the eleventh hour to pass bills and
once again approving a new annual budget weeks after
their July 1 deadline, Democrats have effectively
ceded some of their power to the Republican
super-minority on Beacon Hill, and now have no way
of dealing with any vetoes handed down by Baker or
taking up his budget amendments if they are
controversial in any way....
Monday,
Aug. 8, 2022
HOUSE AND
SENATE: Both branches start the week with 11 a.m.
sessions. The House and Senate are restricted by
their own rules from holding formal sessions for the
remainder of the year. Noncontroversial matters, or
unfinished business from July's formal sessions, can
spill over into these quieter times but it requires
unanimous consent from all the members present in
the chamber. (Monday, 11 a.m., House and Senate
chambers)
State
House News Service
Friday, August 5, 2022
Advances - Week of Aug. 7, 2022
Saturday,
Aug. 13, 2022
SALES TAX HOLIDAY STARTS: Saturday is the first day
of the annual sales tax holiday, when shoppers can
buy most items under $2,500 in value without having
to pay the state's 6.25 percent sales tax. The
annual sales-tax-free weekend was made permanent by
a 2018 law and was set by the Legislature for Aug.
13 and 14 this year. The tax holiday does not apply
to the purchase of motor vehicles, motorboats,
meals, alcoholic beverages, tobacco products,
marijuana products, telecommunications services like
prepaid calls, natural gas, steam, or electricity.
Sales tax will not be due on items purchased online
during the two-day holiday, even if the items are
delivered after the weekend is over.
State
House News Service
Friday, August 5, 2022
Advances - Week of Aug.
7, 2022
|
Chip Ford's CLT
Commentary |
When asked
by Bob Katzen, publisher of Beacon Hill Roll Call,
for a comment on the triggering of our 1986 tax cap
law for only the second time (the first was in
1987), I responded ("Week of July 25-31, 2022"):
“CLT’s tax
cap law (Chapter 62F) is still working exactly as
designed and intended,” said Chip Ford,
executive director of Citizens for Limited
Taxation, which put the tax cap proposal on the
1986 ballot. “That it was triggered only once in
1987 before now isn’t a bug but a feature. Nobody
can say with a straight face that multi-billions of
dollars of excess revenue raked in over the past two
years should remain with the state and not be
returned to those from whom it was unnecessarily
extracted.”
I've had to up my game
from the usual 100 hours a week I work year-round for CLT to some
140 hours since the news broke that CLT's 1986 Tax Cap law (now
designated
Chapter 62F) was about to be triggered, returning "north of $2.5
billion" — now increased to $3 BILLION — to
the taxpayers of Massachusetts, if the Legislature didn't manage to
kill it first before the end of formal sessions. Now that it
is operating in informal sessions that's not likely to
happen, but it's not over yet by any means. When and if that
$3 Billion in rebates is returned to taxpayers as it should be,
it'll be worth every moment of my exhaustion.
At
this time that's miraculously still on track to happen:
Massachusetts Department of Revenue (DOR)
Commissioner Geoffrey Snyder today announced that
preliminary revenue collections for June 2022
totaled $4.143 billion as of August 4, 2022, which
is $470 million or 12.8% more than actual
collections in June 2021 and $780 million or 23.2%
more than benchmark....
Revenue
collections for FY2022 were $41.105 billion, which
is $6.982 billion or 20.5% more than collections in
FY2021, and $3.438 billion or 9.1% more than the
benchmark.
Massachusetts Department of Revenue
Thursday, August 4, 2022
Press Release
Fiscal Year 2022 Revenue Collections
Total $41.105 Billion
Following
the Department of Revenue’s release of June 2022
collections earlier today, the Executive Office for
Administration and Finance announced that the
Commonwealth will end Fiscal Year 2022 (FY22) with a
$1.9 billion surplus, according to preliminary
figures. This surplus accounts for $3 billion in
automatic tax refunds required under Chapter 62F of
the Massachusetts General Laws, $1.4 billion in
statutory transfers, including capital gains
transfers to the Stabilization Fund, and
approximately $800 million in supplemental funding
appropriated in FY22.
As
announced by the Department of Revenue, in total,
$41.105 billion was collected in FY22, representing
overall revenue growth of approximately 20.5% above
Fiscal Year 2021. This total is $6.7 billion above
the total taxes assumed at the time the FY22 budget
was enacted.
Massachusetts Executive Office for Administration
and Finance
Michael J. Hefferan
Secretary of Administration and Finance
Thursday, August 4, 2022
State Budget Officials Announce $1.9
Billion Fiscal Year 2022 Surplus
Following Tax Refunds
State tax
collections soared by more than 20 percent in the
last year and are up nearly 40 percent over the last
two years, the Department of Revenue said Thursday
as it announced that it took in $41.105 billion for
the budget year that ended June 30.
Final
fiscal year 2022 collections of $41.105 billion were
up $6.982 billion or 20.5 percent over actual
collections in fiscal year 2021 and were $3.438
billion or 9.1 percent more than what the Baker
administration was expecting to collect. June
collections of $4.143 billion ($780 million or 23.2
percent above benchmark) helped fuel the strong
finish to the fiscal year....
Now that
DOR has published June and year-end revenue figures
for fiscal year 2022, Snyder will begin preparing a
report that will detail the revenue cap as specified
under Chapter 62F and how fiscal 2022 collections
compare to the cap. That report is due to Auditor
Suzanne Bump by Sept. 1 and Bump must certify by
Sept. 20 whether the state collected revenue in
excess of the cap. If she does, then Chapter 62F
calls for the excess amount to be returned to
taxpayers.
The
Executive Office of Administration and Finance said
later Thursday that, after accounting for "$3
billion in automatic tax refunds required under
Chapter 62F," and other transfers, the state will
end fiscal 2022 with a surplus of $1.9 billion.
State
House News Service
Thursday, August 4, 2022
State Tax Collections Soared More
Than 20 Percent In FY 2022
The $3 Billion tax rebate
is still not a given to happen. The Beacon Hill kleptocracy
does not abide well with returning anything to taxpayers
once in their possession
— certainly nothing more than they absolutely
must when their greed is exposed, like their token $1 billion
"targeted tax relief" to some whether any tax overages were paid by
them or
not. Rumors have arisen over the past week of schemes being
hatched to deny taxpayers and voters their mandated tax cap rebate one way
or another — but that doesn't come as a surprise nor should it with
well over $3 Billion in taxpayers' overpayments now ensconced in the
state's coffers waiting to be spent.
The State House News
Service reported on Wednesday ("Some
Dems Have Harsh Words For Tax Relief Law —
changing Voter Law Shaping Up As Uphill Battle"):
When it comes to the 1986 tax relief voter law that paralyzed
the House and Senate during critical hours last weekend, is
holding back significant economic development spending around
the state and could return nearly $3 billion in excess state tax
revenue back to taxpayers, Democrats on Beacon Hill have their
knives -- or sledgehammers -- out.
"This made up 1986 Reaganomics 'tax break' is derailing tax
relief and permanent taxation changes. DYK some members of our
state legislature weren't even alive then? SLEDGEHAMMER by Peter
Gabriel was the #1 song 37 yrs ago tonight," Topsfield Rep.
Jamie Belsito tweeted during the marathon session that stretched
for nearly 24 hours in large part due to the late-breaking
realization about Chapter 62F. "Now let's sledgehammer this 1986
law."
All the way to the top of the House leadership chart, public
comments about 62F have at times been dismissive of the law and
leaders have openly floated the idea that they could either undo
or change what voters put into place 36 years ago....
"This is a stunt that was triggered by a law made in 1986 that
gives people a one-time opportunity to get money," House Speaker
Ron Mariano said Friday on Bloomberg BayState Business a few
hours after he said that, with the possibility that Chapter 62F
could require more direct tax relief than the Legislature was
prepared to fund, "Everything's on the table. We could undo the
law, we could change it, we could postpone."
Changing or repealing Chapter 62F before it is officially
triggered for fiscal year 2022 would be practically impossible
-- the objection of any one representative or senator can derail
any legislation now that formal sessions have ended and Gov.
Charlie Baker has made clear that he's ready to make the 62F tax
relief a reality.
And even altering the law at a late date could also pose some
tricky political questions for Beacon Hill Democrats, who face
re-election this fall, if they hope to stay in office.
"It was voted by the voters? So that's a big philosophical
question," Rep. Erika Uyterhoeven of Somerville said early
Monday morning when asked about the possibility of altering or
repealing Chapter 62F. "Also, which voters are still alive who
voted for that? I haven't done the math on that."
Indeed, more than 1.5 million Massachusetts voters weighed in on
the 1986 ballot question, 863,130 (almost 55 percent) of them in
favor of establishing a revenue cap and a credit system for
excess state revenues to be returned to taxpayers.
People who could have voted on the question are at least 54
years old in 2022, and Massachusetts has an estimated 2,113,910
residents who are 55 years old or older, according to the U.S.
Census Bureau's 2019 American Community Survey....
As they ran out of time and their weekend talks were not able to
find a way to advance their own tax relief plans in tandem with
62F, Beacon Hill Democrats seemed to accept their fate and
acknowledged there is little they could do to prevent the law
that voters installed in the 1980s from kicking in.
"We have 62F. That's the law of the land and it's gonna happen,"
Mariano said as the sun rose Monday.
"Changing or repealing
Chapter 62F before it is officially triggered for fiscal year 2022
would be practically impossible," the News Service observed
— with the operative word being
"practically." When that amount of money is in play and
the rightful owners of it are mere taxpayers nothing is
impossible on Beacon Hill, as we know too well from experience — all
bad. Just remember the "temporary, just for 18-months" Dukakis
income tax hike of 1989, and the Legislature's obstruction despite
the voters' overwhelming mandate to roll it back to 5% on the 2000
state ballot. It didn't finally drop back to 5% until 2020,
just two years ago.
CLT's
Tax Cap law is a straightforward mathematical formula derived
from annual revenue totals provided by the Department of Revenue to
the state Auditor, who in turn applies the rate of change between
revenue totals and the rate of change of wages and salaries provided
by wage data from Bureau of Economic Analysis of the U.S.
Department of Commerce. From that information the Auditor
determines how much (if any) over the "allowable state tax revenues"
must be rebated to taxpayers, by "the third Tuesday of September"
(September 20 this year), then the results transmitted to the Commissioner of the
Department of Revenue for distribution to each taxpayer in the
proportion of which they paid. (See the
Auditor's 2021 determination report.)
But
what if State Auditor Suzanne Bump stalls certification until
January when the Legislature is back in formal session, safely
re-elected with the maximum time before again standing for election,
down the road when repeal of our law "back then" is not as risky?
Legislators have
played that game before with their obscene pay grab in 2017, you
may recall, and with impunity.
If
for any reason this tax cap rebate does not occur when it should, then Section 7 of our law provides:
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.
Paul
Craney of Massachusetts Fiscal Alliance and I for CLT are already in
consultations with attorneys and are recruiting from among our
respective memberships those "taxable inhabitants" as plaintiffs so
that such a law suit is ready to immediately launch should it become
necessary.
CommonWealth Magazine
editor Bruce Mohl, who
broke the story on July 27 of CLT's tax cap law about to be
triggered, had an interesting perspective on how our $3 Billion tax
rebate might now work to take down the sixth proposed graduated
income tax ballot question (aka "The Fair Share Amendment" or
"Millionaire's Tax") on the November ballot. From his column
on Friday ("Could tax cap influence fight
over millionaire tax?"):
The resurfacing of the long-dormant tax cap after 35 years was
enough to kill the Legislature’s $1 billion tax relief
initiative. Now some are wondering whether the cap can also put
a dent in the momentum behind a constitutional amendment
appearing on the November ballot to create a millionaire tax.
The tax cap limits how much tax revenue Massachusetts can
collect and requires the state to return to taxpayers any amount
collected above the cap.
The cap is being triggered this year for the first time since
1987, and some analysts say a millionaire tax, which could boost
tax revenues by as much as $2 billion a year, could help trigger
it again in the coming years.
Eileen McAnneny, the president of the Massachusetts Taxpayers
Foundation, said she thinks it’s possible. And she questioned
whether it made sense to impose what she considers a politically
risky tax on millionaires when the cap is simply going to return
a large portion of the revenue the tax will yield back to
taxpayers.
“If the state is in a position to give back billions of dollars,
then it probably has sufficient revenue,” she said. “Is the
millionaire tax really necessary?”
Andrew Farnitano, a spokesman for the Fair Share coalition
working to pass the millionaire tax, said the group has been
looking at the issue. “We are trying to figure out exactly what
this means,” he said.
But Farnitano said the tax cap is not a major concern because
the millionaire tax is a long-term initiative. He said it’s
about providing more revenue for education and transportation in
the state and making the tax system more progressive by
assessing a 4 percent surtax on income over $1 million....
Budget analysts are uncertain whether the tax cap is going to
become a recurring phenomenon, but the cap’s formula provides
some clues.
The tax cap is calculated by multiplying the average of the
growth in wages and salaries over the previous three years by
the “allowable revenue” from the previous year. If actual tax
revenues exceed that amount, the excess must be returned to
taxpayers on a proportional basis, meaning those who pay more in
taxes get more back.
"The cap is being
triggered this year for the first time since 1987, and some analysts
say a millionaire tax, which could boost tax revenues by as much as
$2 billion a year, could help trigger [CLT's Tax Cap law] again in
the coming years."
Now that would be
the frosting on the cake, if our tax cap law simultaneously helps
with defeating the proposed constitutional amendment ballot question
for a graduated income tax in one fell swoop —
or, should it pass this time, returns to taxpayers another tax
cap rebate
in the proportion to what they paid — even "millionaires"!
What delicious irony that would be.
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
Massachusetts Department of
Revenue
Thursday, August 4, 2022
Press Release
Fiscal Year 2022 Revenue Collections Total $41.105 Billion
June 2022 revenue collections total $4.143 billion, $780
million above the June 2022 benchmark. FY22 revenue
collections were 9.1% above the annual benchmark and 20.5%
above FY21 collections.
(Boston, MA) – Massachusetts Department of Revenue (DOR)
Commissioner Geoffrey Snyder today announced that
preliminary revenue collections for June 2022 totaled $4.143
billion as of August 4, 2022, which is $470 million or 12.8%
more than actual collections in June 2021 and $780 million
or 23.2% more than benchmark.[1] June
2022 revenue collections were impacted by the recently
enacted elective pass-through entity (PTE) excise. After
adjusting for PTE excise, June 2022 collections are $213
million or 5.8% above actual collections in June 2021, and
$710 million or 22.3% more than benchmark.
Revenue collections for FY2022 were $41.105 billion, which
is $6.982 billion or 20.5% more than collections in FY2021,
and $3.438 billion or 9.1% more than the benchmark. After
adjusting for PTE excise, FY2022 collections are $4.932
billion or 14.5% more than collections in FY2021 and $2.668
billion or 7.3% more than benchmark.
Since FY21, when sales tax acceleration was implemented,
entities subject to sales tax acceleration make estimated
payments in June for which returns are due in late July, and
only once those returns are filed can DOR assess the split
between taxes that are collected on behalf of the state,
versus local option taxes that go to municipalities and
taxes owed to the convention center fund.
“Fiscal Year 2022 revenue collections reflect unprecedented
capital gains tax revenue, the temporary impact of PTE
excise payments, current labor market conditions, and
strength in retail sales”, said Commissioner Snyder.
In general, June is a significant month for revenues because
many individuals and corporations are required to make
estimated payments. In most years, the month of June has
ranked second (behind only April) in the proportion of
annual revenue received during the month.
[1] With the enactment of the FY2022
budget, monthly revenue benchmarks were developed for the
August 2021 through June 2022 period only. In December 2021,
monthly benchmarks from December 2021 through June 2022 were
further modified to reflect the impact of the recently
enacted pass-through entity excise (PTE excise) and the
impact of taxation of non-residents. On January 14, 2022,
the Secretary of Administration and Finance announced a
revised tax revenue estimate of $35.9 billion for FY2022, an
increase of $1.5 billion from the prior estimate of $34.4
billion. This revision is based on recent revenue
performance and improved economic data. The revised FY2022
benchmark estimate of $35.9 billion represented July 2021
through December 2021 actual collections, adjusted for PTE
excise collections, and the then forecasted collections for
the months of January 2022 through June 2022. On May 18,
2022, the Secretary of Administration and Finance announced
a revised FY2022 tax revenue estimate of $37.7 billion, an
increase of $1.7 billion from the prior estimate of $35.9
billion. The full fiscal year benchmark has been adjusted to
reflect the revised forecast. However, the benchmarks for
May 2022 and June 2022 have not changed.
###
Massachusetts Executive
Office for Administration and Finance
Michael J. Hefferan
Secretary of Administration and Finance
Thursday, August 4, 2022
State Budget Officials Announce $1.9 Billion Fiscal Year
2022 Surplus Following Tax Refunds
BOSTON – Following the Department of Revenue’s release of
June 2022 collections earlier today, the Executive Office
for Administration and Finance announced that the
Commonwealth will end Fiscal Year 2022 (FY22) with a $1.9
billion surplus, according to preliminary figures. This
surplus accounts for $3 billion in automatic tax refunds
required under Chapter 62F of the Massachusetts General
Laws, $1.4 billion in statutory transfers, including capital
gains transfers to the Stabilization Fund, and approximately
$800 million in supplemental funding appropriated in FY22.
As announced by the Department of Revenue, in total, $41.105
billion was collected in FY22, representing overall revenue
growth of approximately 20.5% above Fiscal Year 2021. This
total is $6.7 billion above the total taxes assumed at the
time the FY22 budget was enacted.
The FY22 surplus reflects significantly
stronger-than-expected revenue collections throughout the
fiscal year. In both January and May 2022, the
Administration revised FY22 tax benchmarks upward in
response to the high collections, increasing the revenue
forecast by a cumulative $3.3 billion. Collections
nonetheless exceeded the revised benchmarks by $3.5 billion
by the end of the fiscal year.
Of FY22 tax collections, per state law, a total of $1.4
billion in excess capital gains and sales tax revenue was
transferred to the MBTA, the School Building Authority, and
budget reserves including the Stabilization Fund. Made up of
$1.1 billion in budgeted excess capital gains tax transfers
and $1.2 billion in further excess capital gains revenue, a
total of $2.3 billion was deposited into the Stabilization
Fund during FY22, bringing its balance to a historic $6.9
billion. Another approximately $800 million was appropriated
by the Legislature in two supplemental budgets, passed in
February and April.
After accounting for the above, the approximately $3 billion
in tax refunds to Commonwealth taxpayers as required under
c.62F, and other year-end closing activities, the
Commonwealth still closes FY22 with a preliminary surplus of
$1.9 billion.
This $1.9 billion surplus is in addition to approximately
$2.3 billion in American Rescue Plan Act (ARPA) Fiscal
Recovery Funds that remain unallocated and available for
appropriation.
###
State House News
Service
Thursday, August 4, 2022
State Tax Collections Soared More Than 20 Percent In FY 2022
By Colin A. Young
State tax collections soared by more than 20 percent in the
last year and are up nearly 40 percent over the last two
years, the Department of Revenue said Thursday as it
announced that it took in $41.105 billion for the budget
year that ended June 30.
Final fiscal year 2022 collections of $41.105 billion were
up $6.982 billion or 20.5 percent over actual collections in
fiscal year 2021 and were $3.438 billion or 9.1 percent more
than what the Baker administration was expecting to collect.
June collections of $4.143 billion ($780 million or 23.2
percent above benchmark) helped fuel the strong finish to
the fiscal year.
Despite worries early in the COVID-19 pandemic that the
state could face massive budget shortfalls, state tax
collections have instead taken off. The fiscal year 2022
haul is 38.83 percent greater than what the state took in
during fiscal year 2020, which included the earliest months
of the pandemic. And the fiscal 2022 total of $41.105
billion is about 4 percent more than the $39.576 billion
revenue expectation that the administration and lawmakers
agreed to bake into the fiscal year 2023 budget.
"Fiscal Year 2022 revenue collections reflect unprecedented
capital gains tax revenue, the temporary impact of
[pass-through entity] excise payments, current labor market
conditions, and strength in retail sales," Revenue
Commissioner Geoffrey Snyder said.
By dollar amount, the areas that produced the greatest
growth during fiscal 2022 were income taxes ($4.718 billion
more than fiscal 2021), income tax payments with returns and
bills ($2.041 billion more than fiscal 2021) and estimated
payments ($1.647 billion more than fiscal 2021), DOR said.
Each tax type that DOR reports brought in more revenue in
fiscal 2022 than it did in fiscal 2021.
Now that DOR has published June and year-end revenue figures
for fiscal year 2022, Snyder will begin preparing a report
that will detail the revenue cap as specified under Chapter
62F and how fiscal 2022 collections compare to the cap. That
report is due to Auditor Suzanne Bump by Sept. 1 and Bump
must certify by Sept. 20 whether the state collected revenue
in excess of the cap. If she does, then Chapter 62F calls
for the excess amount to be returned to taxpayers.
The Executive Office of Administration and Finance said
later Thursday that, after accounting for "$3 billion in
automatic tax refunds required under Chapter 62F," and other
transfers, the state will end fiscal 2022 with a surplus of
$1.9 billion.
Massachusetts Fiscal
Alliance
Thursday, August 4, 2022
MassFiscal Responds to State Announcing $1.9 Billion in
Surplus Money After Automatic Tax Rebates Law of 1986 is
Paid Out
Legislative Leaders Have No More Excuses for Failing to
Provide a Tax Relief Package in the Legislature
BOSTON - The Massachusetts Fiscal Alliance made the
following statement in response to late in the day breaking
news from the Department of Revenue (DOR) announcing that
the Commonwealth will end Fiscal Year 2022 (FY22) with a
$1.9 billion surplus, according to preliminary figures. DOR
reports this surplus takes into account the $3 billion in
automatic tax refunds required under Chapter 62F of the
Massachusetts General Laws, $1.4 billion in statutory
transfers, including capital gains transfers to the
Stabilization Fund, and approximately $800 million in
supplemental funding appropriated in FY22. The $3 billion in
automatic tax refunds is due to a citizen-initiated petition
led by Citizens for Limited Taxation (CLT) and the late
Barbara Anderson during the 1986 ballot campaign.
“As the dust settles following the legislature’s recess for
the remainder of the year, it is absolutely clear that the
state can afford to deliver the $3 billion in
overcollections back to taxpayers as well as pass their
economic development bill which includes other tax relief
measures. It is disappointing that Speaker Ron Mariano and
Senate President Karen Spilka failed to deliver their very
modest tax relief package of $500 million and tax rebate
program of $500 million, which this report demonstrates is
eminently affordable,” said Paul Diego Craney, spokesman for
the Massachusetts Fiscal Alliance.
“After today’s DOR announcement, this settles the matter
that legislative leaders questioned if the state could
afford both. Clearly, the state can afford the $3 billion in
automatic tax rebates and the legislature’s modest tax
package. Speaker Mariano and Senate President Spilka have no
more excuses, Massachusetts middle class taxpayers need them
to take action and do it now,” continued Craney.
###
Massachusetts Taxpayers
Foundation
Friday, 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 —
The Salem
News
Monday, August 1, 2022
A Salem News editorial
Baker pulls rabbit out of hat with 1986 refund law
“ 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 Citizens for Limited
Taxation
In 1986, Barbara Anderson, founder of Citizens for Limited
Taxation, working with the Mass. High Tech Council, authored
a successful ballot question that requires the state to
return money to taxpayers when state tax revenues grow by
more than wages and salaries in the same year.
Anderson, as historians and state government wonks may
remember, was the tax-cutting pioneer who is famous for
pushing through Proposition 2½, another successful ballot
question that limited the annual increase in property taxes
that cities and towns are allowed to charge to 2.5 percent.
While Proposition 2½ limited tax increases at the local
level, the 1986 ballot question was intended to limit
increases in state taxes.
The only problem is that except for one other time — in 1987
— the growth in tax revenues has never outstripped the
growth in wages and salaries. Enter the current year. While
final tallies are yet to be certified by state Auditor
Suzanne Bump — something she will do in September — it is
clear that the amount of tax revenue collected by the state
is much higher than this year’s increase in salaries and
wages.
As reported in Sunday’s edition of The Eagle-Tribune by
Statehouse reporter Christian Wade, “On Thursday, Gov.
Charlie Baker said based on the state’s robust tax
collections — which have increased by about 20% over the
past year — he expects the law to be triggered for the first
time in decades, with estimates upwards of $2.5 billion in
potential rebates to taxpayers.”
That $2.5 billion would be added to residents’ refund checks
next year. For an individual making $75,000, it would mean a
refund of around $250. That’s on top of several other refund
programs being considered by the Legislature and the
governor this year.
House and Senate negotiators are working this weekend —
right up to the Sunday midnight deadline when the
legislative session ends — on a “series of expanded tax
credits and/or rebate checks to Massachusetts residents that
could total $1 billion,” according to a report in
Commonwealth Magazine. “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.”
This last-minute jockeying — along with Baker’s invoking of
the 1986 refund ballot question — was likely completely
avoidable and demonstrates the unfortunate dynamic at the
Statehouse. Baker has been pushing for tax cuts for months,
filing legislation that would have reduced the gas tax for a
few months along with other measures that have been snubbed
by Democratic leadership in the House and Senate.
Statehouse Republicans, a largely ignored and powerless
minority, have been on the correct side of the issue, along
with Baker.
During a period of historic inflation, the right thing to do
is to give taxpayers a break. Indeed, that’s something
Barbara Anderson, who died in 2016, understood 35 years ago
when she pushed for passage of the refund referendum. As
Chip Ford said, she’s probably pumping her fist looking down
on Massachusetts, maligned for so many years as “Tax-a-chusetts.”
That moniker seems to have gone by the wayside, thankfully,
although taxes still are high in this state.
But it would be a fitting thing to do — perhaps in
remembrance of Barbara Anderson if not for taxpayers — to
implement this refund program approved by voters in 1986,
and put the slur “Tax-a-chusetts” to rest once and for all.
Beacon Hill Roll
Call
Volume 47 - Report No. 30
Week of July 25-31, 2022
By Bob Katzen
While the House and Senate approved many bills, one measure
that stood out was a bill that didn’t get approved. The
House and Senate had previously approved different versions
of a $4.57 billion economic development package which
included some $1 billion in tax relief -- $500 million in
one-time tax rebates and $500 million for several permanent
tax cuts. A conference committee was working on hammering
out a compromise version but talks stalled because of the
recent “discovery” of 62F, a 1986 law approved by the
voters. That law requires that tax revenue above a certain
amount collected by the state go back to the taxpayers. It
is estimated that the 1986 law would return $2.5 billion in
fiscal year 2022 revenue to Massachusetts taxpayers.
The conference committee did not act on the economic
development bill so the $1 billion in tax relief is still
bottled up in the conference committee. In the meantime,
legislators are discussing the $3 billion windfall. Some
legislators favor repealing the law which has only been used
once since 1986. Others say the law should not be repealed
and the $2.5 billion should go back to taxpayers.
House Speaker Ron Mariano (D-Quincy) said last Friday that
he would consider all courses of action, up to and including
altogether scrapping the $2.5 billion in tax relief. "Sure,
it's an option," Mariano told reporters when asked if
lawmakers would consider undoing the trigger enshrined 62F.
"Everything's on the table. We could undo the law, we could
change it, we could postpone."
But three days later on Monday, Mariano said that 62F is the
law of the land and it's going to happen. "The governor has
said it's the law of the land and that's worth, he thinks,
$2.5 billion but he's not even sure, and he thinks he can
get it out this year. So I think that's an important return
to the taxpayers.”
Gov. Baker said that he thinks that both the $1 billion and
the $2.5 billion are affordable in tandem.
“CLT’s tax cap law (Chapter 62F) is still working exactly as
designed and intended,” said Chip Ford, executive
director of Citizens for Limited Taxation, which put
the tax cap proposal on the 1986 ballot. “That it was
triggered only once in 1987 before now isn’t a bug but a
feature. Nobody can say with a straight face that
multi-billions of dollars of excess revenue raked in over
the past two years should remain with the state and not be
returned to those from whom it was unnecessarily extracted.”
“Let’s face it, the Speaker and Senate President have never
had any record on giving back money to the taxpayers, so
early morning news that they failed to act once again should
surprise no one,” said Paul Craney, a spokesman for the
Massachusetts Fiscal Alliance. “Instead of spending the last
few days passing tax relief, they spent them trying to hold
onto as much taxpayer money as humanly possible. Despite
record tax collections, Speaker Ron Mariano and Senate
President Karen Spilka have proven once again they are so
greedy, they'd rather scrap an entire economic development
bill than having to give even a penny more back to
taxpayers.”
The Boston
Globe
Monday, August 1, 2022
Sports betting, gun control, tax relief.
Here’s what Mass. lawmakers did — and didn’t — agree to
overnight.
By Matt Stout and Samantha J. Gross
In an extraordinary turnabout, Massachusetts lawmakers on
Monday failed to strike a deal on a hulking economic
development package that included plans for $1 billion in
tax relief, saying they had deep concerns over what the
state can afford amid a chaotic end to their legislative
session.
Democratic leaders passed a host of other major legislation,
including bills that would legalize sports betting in
Massachusetts, expand access to mental health care, and
reshape the state’s firearms laws — all hours after blowing
past a midnight deadline to complete their work following 19
months of lawmaking.
But as their final marathon session stretched to 10:13 a.m.
Monday — 23 hours after it began in the Senate — Democratic
leaders stalled perhaps their most high-profile proposal,
and one they had celebrated only weeks earlier, arguing they
were thrown a late-session curveball in the form of a
1980s-era law that could ultimately send an additional $3
billion back to taxpayers in the coming months.
That likelihood, they said, muddied the state’s economic
picture even as Governor Charlie Baker argued Massachusetts
has more than enough of a fiscal cushion to absorb both sets
of tax relief.
The lawmakers’ decision scuttles, for now, a plan to ease
the burden on residents pinched by rising inflation with a
mix of one-time $250 rebates and permanent tax changes as
part of more than $4 billion in spending.
“The fiscally responsible thing to do is to hit pause right
now on all of this spending,” state Senator Michael J.
Rodrigues, the Senate’s budget chairman, told reporters
early Monday. “We’re disappointed, but we want to make sure
we get it right. We are committed to getting some real,
long-term permanent tax relief done.”
Rodrigues said lawmakers could seek to move the tax package
in one of the informal sessions that will dot the
legislative calendar between now and January, as well as
other spending initiatives that were supposed to help prop
up housing production, financially strained hospitals, and
the state’s unemployment trust fund, among a slew of other
things in the bill they failed to move to Baker Monday.
But the decision to not move on the economic development
bill nevertheless marked a stark — and, for longtime State
House observers, stunning — reversal for legislation that
overwhelmingly passed both chambers in recent weeks and was
touted by legislative leaders as a once-in-a-generation bid
to help taxpayers.
Baker’s announcement last week that the state’s
record-setting revenues are poised to trigger a nearly
40-year-old tax cap law upended negotiations over the $1
billion tax relief proposal that lawmakers spent months
developing.
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.
With revenues from last fiscal year far surpassing
expectations, the Baker administration last week estimated
taxpayers could be due back more than $2.9 billion under the
law, which hasn’t been triggered since 1987. In response,
House Speaker Ronald Mariano had left open the possibility
of seeking to undo, change, or suspend the law just as it’s
about to benefit potentially millions of taxpayers.
Lawmakers ultimately opted for none of the above, for now.
“We thought it would be the wisest choice to make sure we do
this properly,” Mariano told reporters Monday. “Getting $3
billion dropped on you the week before you are finalizing
your year-end finances doesn’t lead to good decision-making.
We want to be fiscally prudent, and know what we are getting
into.”
Aides to Baker did not immediately respond to a request for
comment Monday morning.
Lawmakers’ constituents face rapidly rising inflation, and
economic worries have topped residents’ list of concerns.
Aiming to help, the House and Senate tucked similar tax
relief packages into hulking economic development
legislation, including proposals to increase a tax deduction
for renters, hike the Earned Income Tax Credit, and lift the
state’s child and dependent tax credits. The economic
development bill itself would spend more than $4 billion,
including pulling money from an expected budget surplus and
unspent federal stimulus funds.
But that package remained locked in negotiations into early
Monday before legislators announced they could not reach an
agreement before formal lawmaking ended.
“We are kind of perplexed,” Senator Cindy F. Friedman told
reporters shortly before midnight Sunday. “We’ve got this
tax piece, which is really serious and was laid in front of
us in a pretty short amount of time.”
Supporters of the tax cap law, however, said lawmakers’
effort to cast its emergence as a reason not to pursue the
wider package is a “convenient excuse,” said Chris Anderson,
president of the Massachusetts High Technology Council,
which pushed the original 1986 voter-passed law.
“It still doesn’t undercut their ability to pursue the
economic development bill, at least major sections of it,”
Anderson said. “If they were caught by surprise, it’s
probably because they were distracted by the billions of
dollars they had a free hand to spend.”
Lawmakers didn’t leave everything on the table.
Among the bills that they reached agreements on in the early
hours of Monday morning and later shipped to Baker was a
long-awaited package to legalize sports betting and bolster
mental health care in the state.
The gaming legislation allows betting on professional and
collegiate sports, but excludes betting on colleges in
Massachusetts, a significant compromise between the House
and the Senate’s differing philosophical views. The bill
does, however, allow for betting on in-state colleges if
they are competing in national tournaments, Rodrigues said.
It also includes some of the Senate’s proposed guardrails,
like banning the use of credit cards to place bets.
If signed into law by Baker, who has expressed his support
for sports betting in the past, Massachusetts will join 30
states and Washington, D.C., in allowing for the
increasingly popular type of gambling, according to the
American Gaming Association.
Ever since the Supreme Court in 2018 struck down a federal
law that banned sports betting, the concept has been a
priority of Mariano, the House speaker, who said a year ago
that a sports betting bill without the ability to bet on
college games “probably would be” a deal-breaker for him.
Last week, Senate President Karen E. Spilka told WBUR’s
“Radio Boston” that Mariano should soften his “all or
nothing” stance.
“We thought by taking [Massachusetts college sports] out, it
would speed things along,” Mariano told reporters of the
compromise bill early Monday morning.
The sweeping mental health bill also is headed to Baker’s
desk. The legislation, among other things, would mandate
insurance coverage for an annual mental health wellness exam
and ensure compliance with the state’s mental health parity
laws.
A late-session crunch is typical on Beacon Hill. Lawmakers’
self-imposed deadlines often prove the last antidote to
legislative logjams, forcing compromise, horse-trading, or
in some cases, the death of major bills. But not in at least
a generation has the Legislature entertained such major tax
relief plans, let alone in the session’s waning hours.
While joint legislative rules require formal lawmaking to
conclude by midnight, on Beacon Hill lawmakers can — and
often do — suspend their own rules.
Besides barreling toward making major changes to state law
in the dead of night, lawmakers’ tardiness also gave the
upper hand to Baker, a lame-duck Republican governor who
isn’t seeking reelection this fall. Baker is allowed 10 days
to act on any legislation that reaches his desk, meaning he
can veto a bill and the Legislature will have little ability
to act beyond calling a special session, a rarity on Beacon
Hill.
Baker was in the State House at around 9 p.m. Sunday and was
in “regular communication” with legislative leadership on
major bills still being negotiated, including the economic
development bill, spokeswoman Sarah Finlaw said.
Shortly before 5 a.m., lawmakers said they reached a deal on
language that would retool the state’s firearms laws in the
wake of a Supreme Court decision expanding gun rights across
the country.
The agreement would broaden who is prohibited from getting a
license to carry to anyone who has a temporary or permanent
harassment prevention order against them, as well as require
police to conduct a “personal interview” of anyone seeking a
license to carry, according to legislative officials.
The language would also bar police from imposing
restrictions on licenses, something Massachusetts officials
said the high court case, known as New York State Rifle &
Pistol Association v. Bruen, demanded. The decision
overturned a New York law — similar to one in Massachusetts
— that required applicants to prove a special need to get a
license to carry a firearm in public.
Lawmakers, however, discarded a more far-reaching House
proposal that would have required gun owners to renew their
licenses twice as often.
“This is consistent with what the chambers aimed to do,
which was a narrow response to Bruen, to start and a promise
of a lot more to come on gun control,” state Representative
Michael S. Day, the House judiciary chairman, told reporters
early Monday.
Hours earlier, the chambers sent to Baker an $11.3 billion
infrastructure and transportation borrowing bill that also
includes a slew of policy, including regulations on
so-called e-bikes and $275 million in funding to extend
passenger rail service from Boston to the western part of
the state.
Cut from the final version, however, was a Senate-passed
provision that would have required the MBTA to produce a
plan for a low-income fare program. A coalition of transit
advocates called the decision “deeply disappointing.”
Lawmakers also delivered a response to a series of
amendments Baker sought on a sweeping climate and energy
bill, shipping it back to him Sunday night.
They agreed to several of Baker’s proposed changes, notably
one to eliminate the “price cap” on offshore wind projects —
a mechanism that requires each new project to offer power at
a lower price than the one brought online before it. Some
have worried that the cap has discouraged bids, and while
lawmakers had initially left it intact, they ultimately
capitulated to Baker’s push to kill it.
“Removing the price cap has been a top priority for the
governor, and we share his view that it will allow our
future procurements to give us more value per dollar,”
Representative Jeffrey N. Roy, the House’s lead negotiator,
said from the chamber floor.
Legislative leaders, however, rejected other changes,
including Baker’s bid to inject $750 million of federal
American Rescue Plan Act funding into the legislation.
Legislators in the overwhelmingly Democratic House and
Senate also accepted changes Baker made to a bill that would
reshape oversight of the state’s two soldiers’ homes,
including elevating the Department of Veterans Services to a
Cabinet-level executive office that reports directly to the
governor.
In a letter to lawmakers, Baker said he supports the
changes, but asked that deadlines for setting up new offices
be pushed back four months until March — when Baker’s
successor, not him, will be in office.
And early Monday, lawmakers sent Baker a compromise package
of reforms to the state’s marijuana industry that cracked
down on steep local fees charged to marijuana operators and
steered a significant chunk of the state excise tax on
recreational pot sales into a fund for disenfranchised
cannabis entrepreneurs.
Advocates, cannabis businesses, and progressive lawmakers
had spent years lobbying for the reforms, arguing they are
straightforward fixes to well-documented problems with the
original legalization law, passed by voters in 2016 and
rewritten by the Legislature in 2017.
Among those issues: an onerous municipal approval process
that has been implicated in two federal corruption
investigations, and a lack of institutional financing that
has allowed larger corporations backed by wealthy private
investors to dominate the space at the expense of smaller,
locally owned businesses with more diverse ownership.
— Dan Adams of the Globe
staff and Globe correspondent Simon Levien contributed to
this report.
The Boston
Herald
Wednesday, August 3, 2022
Barbara Anderson could see lawmakers in your pockets years
ago
By Howie Carr
Barbara Anderson has been dead these six long years, but now
she’s done the taxpayers of Massachusetts one huge final
favor – blowing up a multi-billion-dollar flim flam by the
hackerama on Beacon Hill.
Her 1986 referendum-created law could mean that as much as
$3 billion in tax revenues above “allowable” levels will be
returned to the working classes it was shamelessly stolen
from.
From beyond the grave, Barbara has stopped one of the
biggest heists in the heist-ridden history of Bay State
government.
This obscure provision in the law – 62F, as it’s already
known in hack shorthand — has thrown multiple monkey
wrenches into countless scams, schemes and grifts of the
professional non-working classes of Massachusetts.
Thank you, Barbara, and thanks also to your group, Citizens
for Limited Taxation.
You must never forget just how greedy these Democrat hacks
are. They have the same philosophy as the Mob:
What’s theirs is theirs and what’s yours is theirs.
This is why the hacks have absolutely no qualms about
beggaring you with their insane tax increases and the
inflation they create, but they squeal like stuck pigs if
you dare ask for some of your own money back.
The Democrats tell you, with a straight face, that they
can’t “afford” to give you back a dime from the dollar they
stole.
Remember a few months back the calls for a temporary
suspension of the 23-cent-a-gallon state gas tax after
Brandon’s crushing fuel price hikes?
The Democrats claimed any gas-tax holiday would destroy the
state’s bond rating – a total lie. So they pivoted to, well,
you can’t trust the oil companies to keep their promises to
reduce prices at the pump.
What gall – that argument was made by the same people who in
1989 passed a “temporary emergency” 18-month increase in the
state income tax. After 11 years of refusing to repeal their
so-called emergency tax, it was finally repealed by the
voters in a landslide referendum in 2000.
Even after that, the income tax wasn’t finally reduced to
its previous level until 2020 – 31 years and tens of
billions of dollars after the 18-month “emergency.” It makes
15 days to flatten the curve in 2020 seem like a little
white lie.
Consider all the nonsense you always hear from these con men
and women about why they need more and more of your
hard-earned money:
It’s for the children.
It’s for the crumbling infrastructure.
It’s for mass transit, job training, bicycle paths,
sustainability advocates, pay raises for clam inspectors and
drawbridge operators, not to mention herring runs, the
endangered Plymouth red-bellied turtle, transgendered
windmills and the Puberty-Blocker Industrial Complex, and
don’t forget the 50 or 100 additional gender-fluid assistant
associate senior deputy deans for Diversity, Equity and
Inclusion at ZooMass, every last one of them making at least
$200,000 a year….
Less than a week ago, all these climate and poverty pimps
and assorted tax-fattened hyenas were drooling at the
thought of the biggest treasure trove of handouts from
Beacon Hill ever – EVER!
Even if the hacks eventually figure out a way not to return
our money (because they can’t “afford” it), this has totally
blown up the Deep State rationale for the 80 percent
increase in the income tax that’s on the Massachusetts
ballot in November.
How much do the payroll patriots really need to steal from
working people, if they had $3 billion just laying there,
not to mention the $1 billion they were grudgingly going to
return to nobody you know. Plus, when 62F reared its ugly
head after all these decades, everyone suddenly realized
that the state’s rainy-day fund is now flush with almost $7
billion.
Seven billion dollars, just sitting there, in reserve, in
case some non-binary antifa-type blows in from Minnesota and
needs a job (as opposed to work). And that’s on top of the
$3 billion from 62F and the $1 billion in “tax relief” from
the legislature!
Eleven billion dollars in the hacks’ secret stash, and now
for the next three months they’re going to be rattling the
tin cup on the steps of the State House clamoring for an 80
percent increase in the state income tax rate.
Can someone say, insatiable greed?
By the way, that miserly $1 billion the State House wanted
to give back to the working classes was described as
“targeted” tax relief. Targeted, as we all know, means
Democrats targeting people who work to make sure they get
mere crumbs, to use Nancy Pelosi’s memorable phrase.
They target just like they “earmark” funds, and just like
they “sunset” some taxes (like the tolls on the Mass Pike –
remember how they were supposed to “sunset” back in 1988?)
And by the way, that billion-dollar targeted tax relief was
supposed to be tucked into a larger “economic development”
package, i.e., handouts to their cronies and campaign
contributors.
C’mon down, Sen. Michael Rodrigues. You may recall him as
the career layabout who once voted to impose a sales tax on
top of the excise tax on alcohol. A few hours later, he was
recorded on a taxpayer’s cell-phone camera in the parking
lot of a New Hampshire state liquor store loading up the
trunk of his hackmobile with the legislative license plates
with cases of… tax-free booze.
Now Rodrigues is Senate chairman of Ways and Means, and he’s
absolutely devastated by what a revoltin’ development this
busted heist is turning out to be.
“You’re know we’re all disappointed because we all had
projects and investments… for our human service workforce,
for early education….”
And don’t forget that pilot program for the transgendered
windmills!
Truly, it would take a heart of stone not to laugh at the
tragedy that has befallen the hacks.
Thank you, Barbara Anderson.
The Boston
Globe
Tuesday, August 2, 2022
Mass. House speaker accuses Baker of keeping key tax info
from lawmakers
before tax relief package stalled
By Matt Stout
A day after state lawmakers failed to pass a sweeping tax
relief package, the leader of the House of Representatives
accused Governor Charlie Baker’s administration of keeping
lawmakers in the dark for months about the potential of the
state triggering a 1980s-era tax cap law that could require
it to send $3 billion back to taxpayers.
The charge from Speaker Ronald Mariano, which Baker’s office
denied Tuesday, offered a view into the frustration and
suspicions that bled into the chaotic final days of the
Legislature’s formal session, when the windfall was
revealed.
The accusation also exposed deep rifts, not only between the
House and the Republican governor, but between the
legislative chambers as well. Senate leaders did not lay
blame at Baker’s feet Tuesday, and said they felt there
still was a way forward on an economic development bill that
promised $1 billion in rebates and tax breaks to residents
but collapsed in talks with the House during the predawn
hours Monday.
At the heart of the controversy was the news, revealed last
week, that the state will likely have to refund residents
billions from a 1986 law that is intended to limit state tax
revenue growth to the growth of total wages and salaries and
turn the excess back over to taxpayers.
Lawmakers said they only learned of the possibility last
week when they were flagged by Baker, who by Thursday
publicly estimated the credit could total more than $2.9
billion.
“He could have handled it differently. Absolutely,” Mariano
said Tuesday of Baker. “We had a $3 billion assessment
dropped on us that we didn’t know was coming, that we hadn’t
figured into the mix. And we had to make adjustments. . . .
I wasn’t ready to make that commitment” of money.
Mariano, a Quincy Democrat, pointed to a May notice from the
Department of Revenue saying it intended to repeal a
regulation tied to the 1986 law, which it called “obsolete”
because the law had not been triggered since 1987. The
regulation implements how a taxpayer obtains a credit when
there is an “excess” revenue under the law.
That, Mariano charged, shows Baker administration officials
“were already looking at this in early May,” when tax
revenues were surging to record levels. The State House News
Service first reported the existence of the bulletin on
Sunday.
“They were obviously aware in May that this potentially was
going to happen. We had leadership meetings [with Baker]. It
was never brought to our attention,” Mariano said. “We went
through May, all through June, and into July without ever
getting a heads-up that this might be a problem.”
The actual existence of the law, known as Section 62F,
should not be news on Beacon Hill. The state auditor is
required every September to determine using Department of
Revenue data whether the state has triggered the law and
file a report with the governor and legislative leaders.
That included last year, when Mariano and Senate President
Karen E. Spilka’s office both received the report.
But Mariano suggested it was incumbent on Baker to flag
lawmakers that the law might come into play if his
administration was already seeking to change the regulations
around it.
“You expect our Ways and Means staff to keep abreast of
every change or every potential change they’re going to
make?” Mariano said. “They were aware they were getting
closer [to triggering the law]. I don’t know if it was
intentional. I don’t prescribe motives.”
An official in Baker’s budget office said officials
identified the regulation as a “routine review and cleanup
of outdated regulations that happens on a regular basis.”
The regulation has not been rescinded, officials said, and
Baker last week said his administration identified the
potential multibillion-dollar credit as “part of the
year-end wrap-up” on the state’s finances.
“The 62F statute has been law for over 30 years, so of
course the administration was aware of its existence,” said
Sarah Finlaw, a Baker spokeswoman, adding that monthly tax
revenue figures are both publicly available and sent to the
Legislature each month. “As revenue figures change month to
month, the final amounts cannot be confirmed until the end
of the fiscal year.”
Tensions were already high between Mariano and Baker late
last week. Baker had fiercely criticized Mariano’s judiciary
chairman by name for comments he made after killing a
separate bill Baker had pushed on dangerousness hearings.
Mariano then skipped a bill-signing ceremony with the
governor for a high-profile abortion rights law Friday.
Mariano said they smoothed it over — “I called him up and
had a personal conversation,” Mariano said — but it was
unusually public friction between a Democrat and Republican
who have enjoyed a good working relationship.
Not everyone on Beacon Hill shares Mariano’s view of how
Baker handled the tax law. Spilka said Tuesday that she
believes Baker’s contention that this was a “late-breaking
issue” and that it only became clear with revenue figures
later in the fiscal year, which ended in June.
“There’s no reason not to believe him,” the Ashland Democrat
said. Regardless, she said, she believes lawmakers still had
time to pass an economic development and tax relief bill.
Spilka said the Senate offered proposals in closed-door
negotiations to pass at least part of the tax relief
package, as well as reshaping how the money goes out through
the 1986 tax law, but couldn’t strike a deal with the House.
“There’s certainly enough money to do some significant tax
relief and targeted economic development. We did not have to
do the entire package,” she said. “But the approach was all
or nothing. I have said in the past: We should not be taking
an all-or-nothing approach.”
Mariano last week publicly floated the possibility of
undoing, changing, or suspending the 1986 law. But with the
Legislature entering the final days of its 19-month session
last week, and Baker allowed a 10-day window to act on any
bill that reaches him, the Legislature would have had little
recourse if Baker disagreed with a potential bill.
Lawmakers can only override a veto in formal sessions, which
ended for the year on Monday after a 23-hour marathon
sitting, and Mariano said he believes Baker would have
“probably” vetoed changes to the 1986 law.
“We were kind of boxed into the position that we sort of had
to live with it,” he said.
Now, the prospects of the Legislature’s tax relief plans
passing are unclear — and perhaps seriously in doubt.
Senator Michael J. Rodrigues, the Senate’s budget chairman,
said Monday that lawmakers could move parts of the tax
package and other spending initiatives through informal
sessions between now and January.
And while a single dissenting vote can kill a bill in an
informal session, the economic development package had
unanimous support in both chambers. The House passed its
version, 154-0; the Senate’s was approved, 40-0.
The question dogging Mariano is whether the money is there
to pay for it.
“I know the speaker says it isn’t there, the governor says
it is. There’s certainly enough money to do some significant
tax relief,” Spilka said.
Mariano was more hesitant, saying that should the
Legislature revisit a tax relief package later this year or
early next, it could come in a “completely different
economy.” He did suggest, however, openness to reshaping the
1986 law to change how the credit goes to taxpayers.
“This is a one-time regressive cash windfall for taxpayers.
I think we can disperse it a lot fairer and more equitably
if we made some changes,” he said without offering a
specific proposal.
But it’s unclear if that, too, could face headwinds, either
within or outside the State House. Anthony Amore, a
Republican candidate for state auditor, said Tuesday that
he’s prepared to file a lawsuit should the state not release
the money as required.
The law allows for 24 taxpayers to petition the court to
“enforce” it.
“The people want and need tax refund checks now,” Amore said
in a statement. “My campaign is already lining up the 24
taxpayers needed to go to court to enforce this provision of
state law should it be regrettably necessary.”
State House News
Service
Wednesday, August 3, 2022
Dems Feel Baker Knew of Brewing Tax Relief Blockbuster
"Eye-Opening" April Collections Caught Guv's Attention,
But Apparently Not Dems
By Michael P. Norton
As their carefully crafted plans for tax relief and massive
spending outlays began to slip away with last Thursday's
stunning news about a 1986 tax law, frustrated Democrats on
Beacon Hill went into spin mode.
First, late Friday afternoon, Rep. Christine Barber of
Somerville took to the House floor to suggest that plans by
the Baker administration to sweep a $225 million fund may
have been part of the administration's move to trigger the
36-year-old law that the Baker administration a day earlier
said could force nearly $3 billion in tax relief later this
year, or about 7 percent of the income taxes paid in 2021.
"It's becoming clear that to cover closing costs for 2022
and to possibly pay for the $2.8 billion that will go to the
taxpayers under Chapter 62F, there may have been some other
need for these funds," Barber said. "I hope that those funds
were not used at the expense of covering low and moderate
income families' health care, but that looks like what might
be happening. But we know that rather than spend these funds
that were in the Commonwealth Care Trust Fund, the governor
swept those funds out and then replaced this new program
that we created with a study."
In an email to the News Service, the Baker administration on
Saturday shot that claim down, saying the fund was never
swept and that the 62F analyses the administration has
publicly shared to show the affordability of the 62F tax
relief and the Legislature's $1 billion in targeted tax
relief "do not account for or rely on the funds that would
become available if the trust sweep were completed."
The Baker administration declined to speak on the record
about the trust fund sweep plan, which was presented June 30
by the Administration and Finance Secretary Michael
Heffernan as an option in correspondence to House and Senate
Ways and Means Committee chairs Rep. Aaron Michlewitz and
Sen. Michael Rodrigues. But a senior administration official
said there was an "established understanding" between the
Ways and Means committees in the Legislature and the
Executive Office of Administration and Finance since the
start of fiscal 2022, which was back in July 2021, that the
Commonwealth Care Trust Fund sweep may be necessary "due to
an issue in the way the Legislature structured the final
budget, which mismatched spending and revenue from that
fund."
"It is not uncommon for the Administration to send
authorizations for trust fund sweeps at the close of a
fiscal year, as having these authorizations can provide
flexibility through the year-end reconciliation process, if
needed," the official said on Saturday. "For example, the
Administration has filed before to sweep the CCTF, but then
not done so after confirming it was not needed to close the
books. The FY22 financial close-out process is ongoing, and
the need for the CCTF could be impacted by the spending
decisions that the Legislature makes over the next day in
terms of pending legislation."
April Regulatory Effort
Then Sunday rolled around, the last day of formal sessions
for 2022, and the branches gaveled in sessions that would
end late Monday morning.
During the overnight, the News Service reported that in May,
long before the 62F tax relief became public, the Department
of Revenue, an agency controlled by the Baker
administration, 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 said at
the time. "If a credit becomes available, DOR will issue
guidance and update forms specific to the year the credit is
allowed."
The Department of Revenue on April 14 circulated an email
notice regarding the repeal regulation with a link to the
May 12 public hearing notice.
On Sunday afternoon, the News Service inquired about whether
the regulation (830 CMR 62F.6.1) was repealed and if anyone
testified at the public hearing on it. An administration
official, communicating on background, said the regulation
had not been rescinded.
"As part of routine review and cleanup of outdated
regulations, DOR identified this regulation as it had not
been used since 1987," the official said. "DOR initiated the
recission process by putting it out for public comment (no
public comments were received), but has not completed the
process of rescinding the regulation ... If 62F were
triggered, DOR would then issue relevant guidance or
regulations for this year's implementation."
House officials, in the throes of internal debate about
sidelining their tax relief and spending proposals in the
economic development bill, made Rep. Alice Peisch available
to discuss the 62F regulation issue.
"I don't know that I draw any conclusions," Peisch, the
Education Committee co-chair, told the News Service during
an interview in her office Sunday night. "I think the
information that we got this week from the governor was
obviously very concerning. And it would have been very
helpful to have known that this was a possibility several
weeks, if not months ago. I appreciate that no one knows
what the numbers are ahead of time. But I don't know whether
that activity in May suggests that they were looking at the
numbers and thinking that maybe we were going to hit it. DOR
has the numbers, we don't."
On Tuesday, the Boston Globe reported that House Speaker
Ronald Mariano believed the May regulatory proceeding
indicated the administration saw something coming.
"They were obviously aware in May that this potentially was
going to happen. We had leadership meetings [with Baker]. It
was never brought to our attention," Mariano said, according
to the Globe. "We went through May, all through June, and
into July without ever getting a heads-up that this might be
a problem."
The once-regular private meetings between Democratic
legislative leaders and Baker have trailed off considerably
in recent months, although it's unclear how frequently the
governor and top lawmakers communicate outside of those
meetings.
The Department of Revenue publicly reports tax collection
numbers at the mid-point of each month and just after the
end of each month. However, the agency has still not
reported collections for the full month of June, the last
month of fiscal 2022 and historically a big month for tax
collections.
A Baker administration official said Wednesday that June
revenue numbers would be released "soon" and said a change
in sales tax collection policies since fiscal 2021 means
that some June sales tax receipts data is not available
until late July.
"The 62F statute has been law for over thirty years, so of
course the Administration was aware of its existence," said
Baker communications director Sarah Finlaw. "The 62F rebate
is triggered by tax revenue which is publicly available and
sent to the Legislature on a monthly basis. As revenue
figures change month to month, the final amounts cannot be
confirmed until the end of the fiscal year."
"Eye-Opening April Surge"
It's unclear why no one in the Legislature or on its House
and Senate Ways and Means, or Joint Committee on Revenue
staffs publicly identified Chapter 62F implications during
the final months of fiscal 2022 when revenues were bounding
higher and higher, and apparently triggering the 1986 law's
tax relief.
Mariano told the Globe: "You expect our Ways and Means staff
to keep abreast of every change or every potential change
they're going to make?"
Last Thursday, when asked about an estimate of 62F rebates
and when the administration became aware the state would be
hitting the cap, Gov. Baker said, "It's obviously something
we've been tracking for a while."
"We get a report every year from the state auditor in
September that basically lays out whether or not in fact we
did hit it. I think the $2 billion surge in April was
certainly kind of eye-opening -- in tax collections. But
it's one of those things, it's just part of the year-end
wrap-up with respect to how we go about figuring out what we
can put into a final deficiency, that kind of stuff. So it's
fairly recent. But we think the number's probably north of
$2.5 billion that would be in tax rebates to the people of
Massachusetts."
April tax collections added up to $6.941 billion, $3.076
billion or nearly 80 percent more than what was collected in
April 2021 and $2.057 billion or just over 42 percent more
than DOR's own monthly benchmark, the News Service reported
in April.
On Friday, Mariano described the tax relief trigger as a
"one-time event" that "popped up."
"We knew it existed, but we didn't know how close we were,"
Mariano said.
On Wednesday, after a public event in Medford, Baker said
last year's annual report from the state auditor on the 62F
law, which he noted is a public report and is sent to the
administration and the Legislature, "made very clear that
tax revenue last year got the commonwealth very close to
triggering this tax cap."
"You don't know where you are on this process until you
actually get to the end of the year," Baker said. "Once we
got to the end of the year, and we figured out all the puts
and takes associated with the bills that hadn't been paid
yet, the bills we expected would be paid, the revenue that
hadn't been collected, that we expected would be collected,
and once we settled the dust on all that stuff and came to
an agreement of what we thought tax revenue came in at, what
expenditures looked like, people did the math to try to
figure out, because last year in the auditor's report was
close, if we could predict where we thought this thing would
land. And we came up with a range and when we came up with
the range on that we talked to the Legislature about it and
went from there."
A Baker spokesman said the talk with lawmakers about the
possibility of hitting the 62F revenue cap occurred in July.
Senate Ways and Means Chairman Rodrigues was asked about
DOR's regulatory repeal effort during a 5:20 a.m. media
avail on Monday.
"It's interesting. I just heard of that this afternoon. So
again, I've been what I say 'in the now' for the last, you
know, 72 hours, so focused on what's right before me,"
Rodrigues said. "So we'll have time to delve into all that.
And I'm sure we'll have many more conversations about that."
Just after Rodrigues spoke, at his own sunrise scrum on
Monday, Mariano said "getting a $3 billion bill dropped on
you the week before you are about to finalize the year-end
finances doesn't lead to good decision-making."
Mariano called 62F "the law of the land and it's going to
happen" but also said he hasn't given up hope of moving some
form of the economic development bill out of conference
committee and forward during informal sessions, when bills
can only advance if there is unanimous support and no one
objects.
"There's a lot of time and there's a lot of things in there
that are really important so there'll be discussions as we
still continue to meet through the rest of the year and
things can move," he said. "It's possible that we can pick
away at this as we get more information on the financial
state of the economy."
Aid to hospitals was one area of spending that Mariano
flagged for potential consideration in an economic
development bill that could surface during the informal
sessions that will run for the rest of the year, although
Michlewitz said "I don't think we can get into the
particulars tonight."
Auditor candidate Sen. Diana DiZoglio on Wednesday said
quarterly revenue reports should be discussed by the
Comptroller Advisory Board, a panel with a seat for the
auditor, who each September makes the determination of
whether tax relief is warranted under Chapter 62F, which
triggers income tax credits only when tax collections exceed
an annual limit that is based in part on the three-year
average growth in state wages and salaries.
"If they were made part of the regular agenda for all of
those meetings, this 62F issue may not have caught folks by
surprise the way that it did -- putting an entire economic
development and tax relief bill in jeopardy," DiZoglio said.
State House News
Service
Wednesday, August 3, 2022
Some Dems Have Harsh Words For Tax Relief Law
Changing Voter Law Shaping Up As Uphill Battle
By Colin A. Young
When it comes to the 1986 tax relief voter law that
paralyzed the House and Senate during critical hours last
weekend, is holding back significant economic development
spending around the state and could return nearly $3 billion
in excess state tax revenue back to taxpayers, Democrats on
Beacon Hill have their knives -- or sledgehammers -- out.
"This made up 1986 Reaganomics 'tax break' is derailing tax
relief and permanent taxation changes. DYK some members of
our state legislature weren't even alive then? SLEDGEHAMMER
by Peter Gabriel was the #1 song 37 yrs ago tonight,"
Topsfield Rep. Jamie Belsito tweeted during the marathon
session that stretched for nearly 24 hours in large part due
to the late-breaking realization about Chapter 62F. "Now
let's sledgehammer this 1986 law."
All the way to the top of the House leadership chart, public
comments about 62F have at times been dismissive of the law
and leaders have openly floated the idea that they could
either undo or change what voters put into place 36 years
ago.
"This is a stunt that was triggered by a law made in 1986
that gives people a one-time opportunity to get money,"
House Speaker Ron Mariano said Friday on Bloomberg BayState
Business a few hours after he said that, with the
possibility that Chapter 62F could require more direct tax
relief than the Legislature was prepared to fund,
"Everything's on the table. We could undo the law, we could
change it, we could postpone."
Changing or repealing Chapter 62F before it is officially
triggered for fiscal year 2022 would be practically
impossible -- the objection of any one representative or
senator can derail any legislation now that formal sessions
have ended and Gov. Charlie Baker has made clear that he's
ready to make the 62F tax relief a reality.
And even altering the law at a late date could also pose
some tricky political questions for Beacon Hill Democrats,
who face re-election this fall, if they hope to stay in
office.
"It was voted by the voters? So that's a big philosophical
question," Rep. Erika Uyterhoeven of Somerville said early
Monday morning when asked about the possibility of altering
or repealing Chapter 62F. "Also, which voters are still
alive who voted for that? I haven't done the math on that."
Indeed, more than 1.5 million Massachusetts voters weighed
in on the 1986 ballot question, 863,130 (almost 55 percent)
of them in favor of establishing a revenue cap and a credit
system for excess state revenues to be returned to
taxpayers.
People who could have voted on the question are at least 54
years old in 2022, and Massachusetts has an estimated
2,113,910 residents who are 55 years old or older, according
to the U.S. Census Bureau's 2019 American Community Survey.
Any efforts to change Chapter 62F could face headwinds from
the Corner Office, no matter who is elected to succeed Baker
in January. Legislators have not been shy about looking
forward to what they might do with a fellow Democrat in
office next year, confident in Maura Healey's chances of
being elected this fall, but the attorney general is not on
board with changing Chapter 62F.
"Maura believes taxpayers are entitled to the 62F rebates if
the law is triggered and certified by the Auditor," Healey
campaign press secretary Karissa Hand said. Asked if Healey
would support any efforts to repeal or amend Chapter 62F as
governor, Hand replied, "No, she would not."
Republican gubernatorial Candidate Chris Doughty said that
"the excess money should go back to the hard working
taxpayers and the faster the better during these tough
inflationary times."
If he is elected governor, Doughty said that he is
"committed to respecting the will of the people."
"They voted for this measure and it should be honored," he
said.
The campaign of Republican Geoff Diehl did not respond to
News Service questions about whether he would support or
oppose efforts to repeal or amend Chapter 62F, but his camp
told MASSterList that he support the 1986 voter law.
As they ran out of time and their weekend talks were not
able to find a way to advance their own tax relief plans in
tandem with 62F, Beacon Hill Democrats seemed to accept
their fate and acknowledged there is little they could do to
prevent the law that voters installed in the 1980s from
kicking in.
"We have 62F. That's the law of the land and it's gonna
happen," Mariano said as the sun rose Monday.
State House News
Service
Wednesday, August 3, 2022
MASSterList: Guv Candidates Line Up Behind Ch. 62F
Healey, Doughty and Diehl Favor 62F Relief
By Matt Murphy
Finally something all the candidates for governor can agree
on.
Democrat Maura Healey and Republicans Chris Doughty and
Geoff Diehl all said Tuesday that they support refunding
state tax revenue in excess of a cap established in 1986,
even while top Democrats on Beacon Hill continue to suggest
an openness to repealing or tinkering with the law.
The announcement last week from Gov. Charlie Baker that
surging revenues could trigger the forgotten tax cap law
from the 80s, known as 62F, upended negotiations over tax
cuts in the Legislature, and the House and Senate adjourned
their formal sessions for the year without a deal on relief.
"Maura believes taxpayers are entitled to the 62F rebates if
the law is triggered and certified by the Auditor," campaign
spokeswoman Karissa Hand told MASSterList. Bump said Tuesday
that determination would be made on the third Tuesday in
September.
Hand said Healey also "urges the Legislature to return to
pass targeted tax relief for Massachusetts residents and
make the long term investments needed to lower the cost of
living in our state."
The statement from Healey puts the Democratic frontrunner
for governor at odds with legislative leadership,
particularly House Speaker Ron Mariano, who endorsed her
campaign when she still faced a primary opponent.
Mariano has cast doubt on Gov. Charlie Baker's insistence
that the state can afford to both refund up to $3 billion in
excess tax revenue under 62F and pay for the economic
development investments and $1 billion in targeted tax cuts
pursued by lawmakers up until the final day of the session.
Mariano and Senate President Karen Spilka have also
criticized the law as outdated and one that would not
deliver relief to those who need it the most, though any
changes or repeal would likely have to wait until next year.
Doughty held a press conference outside the State House on
Tuesday where he pledged to veto any attempt by Legislative
Democrats to repeal the 1986 ballot law.
"Massachusetts residents have been suffering for months due
to high inflation," Doughty said in a statement. "The
legislature has refused to suspend the gas tax and they have
been dragging their feet on providing any form of relief.
The needs of hard working taxpayers have been ignored. It
appears the 1986 law and Governor Baker are the only ones
trying to help."
Doughty and running mate Kate Campanale also slammed the
Legislature for procrastinating on economic development and
allowing the late revelation of 62F to derail needed
investments.
"A recession is looming and the legislature did not finish
their work. They should come back into session and get the
economic bill passed," Campanale said.
Diehl also supports the 1986 law, but still took a shot at
Doughty over the Wrentham manufacturer's acceptance of a
$2.79 million PPP loan he received during the COVID-19
pandemic, as well as a $277,000 economic development grant
from the state in 2015.
"It is hypocritical and ironic that Chris Doughty is calling
on the Legislature to give back taxpayer money based on his
experience as a CEO," Diehl said. "During his time as a CEO,
Chris Doughty fleeced federal, state, and local taxpayers
for more than $3 million to help run his company. If Doughty
thinks that experience qualifies him for office, maybe he
should run for the Legislature instead – they love to take
money from taxpayers to fund their own priorities!"
Diehl's campaign suggested Doughty might not have needed the
PPP loan.
Doughty campaign advisor Holly Robichaud said Doughty shut
down Capstan Atlantic for a "short period of time" during
the pandemic, but reopened at a diminished capacity to meet
the needs of customers, including those who manufacture
emergency vehicles.
"Geoff Diehl has never created one job or ever worried about
meeting a payroll. His attack on Chris is an attack on all
business owners who suffered during COVID including his
wife's business that also took PPP money. It should be
disturbing to every voter that he doesn't understand that
PPP was awarded on actual declining payroll differences.
Clearly he is not equipped to be governor," Robichaud said.
CommonWealth Magazine
Friday, August 5, 2022
Could tax cap influence fight over millionaire tax?
By Bruce Mohl, CommonWealth editor
The resurfacing of the long-dormant tax cap after 35 years
was enough to kill the Legislature’s $1 billion tax relief
initiative. Now some are wondering whether the cap can also
put a dent in the momentum behind a constitutional amendment
appearing on the November ballot to create a millionaire
tax.
The tax cap limits how much tax revenue Massachusetts can
collect and requires the state to return to taxpayers any
amount collected above the cap.
The cap is being triggered this year for the first time
since 1987, and some analysts say a millionaire tax, which
could boost tax revenues by as much as $2 billion a year,
could help trigger it again in the coming years.
Eileen McAnneny, the president of the Massachusetts
Taxpayers Foundation, said she thinks it’s possible. And she
questioned whether it made sense to impose what she
considers a politically risky tax on millionaires when the
cap is simply going to return a large portion of the revenue
the tax will yield back to taxpayers.
“If the state is in a position to give back billions of
dollars, then it probably has sufficient revenue,” she said.
“Is the millionaire tax really necessary?”
Andrew Farnitano, a spokesman for the Fair Share coalition
working to pass the millionaire tax, said the group has been
looking at the issue. “We are trying to figure out exactly
what this means,” he said.
But Farnitano said the tax cap is not a major concern
because the millionaire tax is a long-term initiative. He
said it’s about providing more revenue for education and
transportation in the state and making the tax system more
progressive by assessing a 4 percent surtax on income over
$1 million.
“The Fair Share Amendment is not about one budget or one
economic cycle. It’s for the long term,” he said.
Budget analysts are uncertain whether the tax cap is going
to become a recurring phenomenon, but the cap’s formula
provides some clues.
The tax cap is calculated by multiplying the average of the
growth in wages and salaries over the previous three years
by the “allowable revenue” from the previous year. If actual
tax revenues exceed that amount, the excess must be returned
to taxpayers on a proportional basis, meaning those who pay
more in taxes get more back.
The tax cap was triggered this year because capital gains
and business taxes soared while wage and salary growth
lagged, largely because of COVID impacts in 2020. With
inflation surging and a recession looming, it’s difficult to
calculate how tax revenues will respond.
Phineas Baxandall, senior policy analyst and advocacy
director at the Massachusetts Budget and Policy Center, said
he thinks the tax cap is unlikely to be triggered again
quickly.
“By FY 2024, the first year where most of the Fair Share
revenue will be first showing up, the allowable revenue
calculation will be reflecting much of the inflation
experienced in 2021 and 2022, as well as people returning to
work, and capital gains revenues are likely to be somewhat
lower due to the correction in the stock market,” he said in
an email. “All this is pretty speculative, but some provide
reasons not to expect the cap to have as much bite by 2024.”
Evan Horowitz, executive director of the Center for State
Policy Analysis at Tufts University, is of the same mind.
“I actually did some quick modeling of this and I think
that, even with the millionaires tax, it's much more likely
that we return to the world where this law (almost) never
matters,” he said.
State House News
Service
Friday, August 5, 2022
Weekly Roundup - Sunrise, Sunset
It didn't have to be like this....
By Chris Lisinski
It didn't have to be like this.
Historic 23-hour sessions in a desperate attempt to wrap up
important work, deals struck by sleep-deprived lawmakers to
advance major bills that had been in play for a year and a
half, and the subsequent collapse of ideas that had broad,
veto-proof support -- none of that actually needed to happen
the way it did.
Yes, legislative rules have for more than two decades called
for House and Senate formal sessions to end on July 31 in
even-numbered years. Unlike rules that require fair notice
to review substantive bills or that aim to prevent overnight
sessions, the July 31 rule is one that the Legislature has
obeyed over the years.
But this year, with Speaker Ron Mariano and Senate President
Karen Spilka managing their first end-of-July affair
together, they had a rough go of it. The deadlines that were
supposed to trigger deals simply didn't.
So the Democrats chose to extend their stop-start session
into the equivalent of quadruple overtime.
In the extended periods, some got some winks in while others
got to compromises on bills to legalize sports betting,
expand mental health care access and overhaul regulations in
the recreational marijuana industry.
It's likely that Gov. Charlie Baker will be on board with
those three bills, but his response to a reworked, sweeping
clean energy bill is more of a question mark. Lawmakers
embraced some of his changes to the original legislation,
such as eliminating the offshore wind price cap, but left
others on the cutting room floor.
Democrats gambled that Baker, in his final year in office,
would rather sign into law another landmark climate change
bill than veto it over amendments he did not secure. If that
blows up in their faces, it could be a repeat of the last
session, when Baker spiked an eleventh-hour bill committing
to net-zero emissions by 2050 and then worked with lawmakers
on a compromise at the start of the 2021-2022 term.
The list of casualties from the overnight session is topped
by one of the most surprising outcomes in modern legislative
history: Democrats tossed a $4 billion bill with featuring
$1 billion in tax relief, which had cleared both branches
unanimously and was just awaiting final compromise, back
onto the shelf with a shrug.
Legislative leaders decided they could not figure out what
to do with the entire package in the final days, after they
were apparently blindsided late last week by Baker
announcing that Massachusetts is on track to trigger a 1986
tax cap law requiring close to $3 billion to be returned to
taxpayers.
"We thought it was the wisest choice to make to make sure
that we do this properly," a bleary-eyed House Speaker Ron
Mariano said shortly after 5:30 a.m. Monday. "Getting a $3
billion bill dropped on you the week before you're about to
finalize the year-end finances doesn't lead to good
decision-making."
Mariano and other top Democrats said they could still return
to sections of the economic development bill during their
informal sessions, but its demise spills a jar of
complications all over other government work.
Left in a suspended state is an injection of millions of
dollars into the unemployment insurance trust fund,
legislative mechanics designed to fund the clean energy
bill, and hundreds of millions of dollars of spending on
housing production, human service providers and offshore
wind port development.
"It's going to fund our hospitals who are just crashing
right now. It's going to fund nursing homes who don't have
staff. It's going to fund home health aides to take care of
all of our vulnerable elderly and children. It's got
incredible workforce development in it. It's got priorities
for municipalities and regional priorities," Sen. Cindy
Friedman said around 11:15 p.m. Sunday, making what would
prove to be an unsuccessful case to advance the bill's
spending quickly and circle back to tax relief.
The voter-approved tax cap law sometimes referred to as
Chapter 62F continued to rankle lawmakers even after they
hit pause on their own tax relief package. Mariano called it
a "stunt" and seemed aggrieved that the Baker administration
had not alerted House and Senate leaders about the potential
trigger earlier and more explicitly. Baker fired back that
publicly available reports "made very clear that tax revenue
last year got the commonwealth very close to triggering this
tax cap."
Other legislative priorities fell by the wayside during the
comedown from the weekend, too.
Lawmakers voted to order a statewide pause on all
construction or expansion of prisons and jails for the next
five years, but Baker on Thursday struck that measure from a
general government bond bill.
The branches also sought in their annual state budget to
eliminate any costs incarcerated people and their families
face to make phone calls or other forms of communication,
and that fell into a legislative black hole when the Senate
agreed to attach some Baker-sought reforms to the criminal
dangerousness hearing process to the free calls measure.
That put the branches at a late-session impasse on the
pre-trial detention policy, and the phone calls measure
bogged out in that dispute.
On both fronts, Democrats did not prioritize their policy
goals enough to accomplish them at a time when they still
had the option to override a veto, letting them fall victim,
at least for now, to a skeptical governor and their own
procrastination.
Working up to the last minute has been a hallmark of the
Legislature for years, but the Sunday-into-Monday affair
went beyond at least two decades of tradition. Since 2002,
the latest either branch gaveled out of an even-year July 31
formal session was 2:08 a.m.
Even last session, when business was upended by the COVID-19
pandemic and lawmakers agreed to meet in formal sessions for
the duration of the term, the closing effort on Jan. 5, 2021
stretched until only -- "only" -- 4:41 a.m. in the Senate
the next day, about five and a half hours earlier than the
chamber adjourned Monday.
The lawmakers who remained in and around the House and
Senate chambers were clearly taking whatever steps they
could to stay awake. Senators congregated on the balcony to
watch the sun rise, and representatives waiting in line at
the just-opened Capitol Coffee Shop commiserated about why
it was taking so long to get the final bills to the floor.
Shortly after 7:30 a.m., Sen. William Brownsberger nodded to
Senate Clerk Michael Hurley, and the two crouched down on
the rostrum for a set of push-ups.
Unprecedented steps were not limited to the Legislature this
week, either.
After federal overseers launched the second-ever probe of
its kind, and a passenger jumped into the Mystic River to
escape a rush hour train that burst into flames, and
officials slashed service because dispatchers were working
20-hour shifts, the MBTA continued its expedition into
uncharted territory by announcing plans to close the entire
Orange Line from Malden to Jamaica Plain for 30 days.
The shutdown set to begin Aug. 19 marks the first time the T
has ever taken down a full subway line for maintenance, and
MBTA officials followed it up by announcing two days later
they would also scrap train service for a similar period
between Government Center and Union Square on the Green
Line.
The derailed train of Damocles here hanging over the T is a
Federal Transit Administration investigation, the second of
its kind, that already flagged delayed maintenance as a
prominent safety issue among other persistent safety
failures. Federal officials expect to produce a final
report, whose scope could broaden and call for even more
urgent action, this month.
STORY OF THE WEEK: Democrats who control the Legislature
offered their own crash-course in philosophy: do the ends
they accomplished justify the means of the extraordinary
ways they accomplished them?
State House News
Service
Friday, August 5, 2022
Advances - Week of Aug. 7, 2022
By Thursday, Gov. Charlie Baker will for the last time have
cleared his desk of the deluge of bills that lawmakers sent
him before wrapping up formal sessions, which they did for
2022 on the morning of Aug. 1.
The governor signs the vast majority of bills sent his way,
but drops vetoes and amendments here and there, and they can
be impactful. Democratic legislative leaders misplayed their
hands in the way they chose to wrap up formal session
business.
They were seemingly blindsided by a tax policy already on
the books, which caused them to derail their own carefully
crafted and sweeping tax relief and economic development
spending plans.
House Speaker Ron Mariano and Senate President Karen Spilka
got their respective sports betting and mental health bills
to the governor, but dragged their feet on a host of other
issues -- no-cost prison phone calls, a moratorium on new
prison construction, and an effort to stop prescription drug
policies that lawmakers say hurt patients -- that remain in
legislative limbo.
Now, the Legislature is in what Republican Sen. Ryan Fattman
recently described as "unanimous consent operations," when
an objection from any lawmaker can sideline any proposal for
the rest of the session. By waiting until the eleventh hour
to pass bills and once again approving a new annual budget
weeks after their July 1 deadline, Democrats have
effectively ceded some of their power to the Republican
super-minority on Beacon Hill, and now have no way of
dealing with any vetoes handed down by Baker or taking up
his budget amendments if they are controversial in any way.
As Baker makes his final calls on the bills they sent him,
lawmakers are mostly away from Beacon Hill doing summer
things and checking their phones to find out the final
outcome of their work.
Monday, Aug. 8, 2022
HOUSE AND SENATE: Both branches start the week with 11 a.m.
sessions. The House and Senate are restricted by their own
rules from holding formal sessions for the remainder of the
year. Noncontroversial matters, or unfinished business from
July's formal sessions, can spill over into these quieter
times but it requires unanimous consent from all the members
present in the chamber. (Monday, 11 a.m., House and Senate
chambers)
Saturday, Aug. 13, 2022
SALES TAX HOLIDAY STARTS:
Saturday is the first day of the annual sales tax holiday,
when shoppers can buy most items under $2,500 in value
without having to pay the state's 6.25 percent sales tax.
The annual sales-tax-free weekend was made permanent by a
2018 law and was set by the Legislature for Aug. 13 and 14
this year. The tax holiday does not apply to the purchase of
motor vehicles, motorboats, meals, alcoholic beverages,
tobacco products, marijuana products, telecommunications
services like prepaid calls, natural gas, steam, or
electricity. Sales tax will not be due on items purchased
online during the two-day holiday, even if the items are
delivered after the weekend is over. |
NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to:
http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ (781) 639-9709
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