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CLT UPDATE
Sunday, August 7, 2022

CLT's $3B Tax Cap Rebate: What's Ahead?


Jump directly to CLT's Commentary on the News


Most Relevant News Excerpts
(Full news reports follow Commentary)

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 Lawchanging 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


Full News Reports
(excerpted above)

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


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