 |
Post Office Box 1147
▪
Marblehead, Massachusetts 01945
▪ (781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
48 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
|
CLT UPDATE
Monday, September 5, 2022
— Labor Day —
"The
Check May Actually Be Coming In The Mail"
Jump directly
to CLT's Commentary on the News
|
Most Relevant News
Excerpts
(Full news reports follow Commentary)
|
|
$2.9
BILLION IN TAX RELIEF PENDING (H 5260) – Gov.
Charlie Baker filed a $1.6 billion supplemental
budget to close out the books on fiscal year 2022. A
key section sets aside $2.9 billion of the state’s
projected surplus to be returned to taxpayers based
on 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 $2.9 billion in fiscal
year 2022 revenue to Massachusetts taxpayers.
Last week,
the Department of Revenue informed Auditor Suzanne
Bump that it believes that $2.9 billion is required
to be returned to taxpayers. If the auditor
certifies that figure by a Sept. 20 deadline, the
money will be returned to taxpayers. Baker's office
said that even with the money being returned to
taxpayers, the state will still have a fiscal year
2022 surplus of $2.3 billion....
“In 1986,
Citizens for Limited Taxation (CLT) put forth
this ballot question with the expectation that
Massachusetts taxpayers would one day need this
law,” said Chip Ford, executive director of
Citizens for Limited Taxation. “Any required credit
should not be delayed as a refund next year, as the
original intent when CLT drafted it was to get the
money back to the taxpayers expeditiously. With
inflation still surging, delay will only devalue the
amount returned to the taxpayers.”
Beacon
Hill Roll Call
August 29-September 2, 2022
By Bob Katzen
Taxpayers
want their money back, according to a new poll
conducted by the Fiscal Alliance Foundation.
“It’s not
very often that any one policy can unite Republican
and Democratic primary voters, but support for the
1986 voter-approved tax rebate law seems to bring
them together,” Paul Craney, a spokesperson for the
Fiscal Alliance Foundation, said Thursday.
According
to the poll 63% of Republicans and 65% of Democrats
want the state to honor a law passed in 1986
designed to send excess tax takings back to
taxpayers.
The law
was only used once, in 1987, when taxpayers received
a 14 cent credit on their tax returns. This year,
Gov. Charlie Baker’s administration has estimated
taxpayers are looking at around $3 billion in excess
payments and potentially hundreds of dollars to be
returned to each payer.
“Republican and Democratic primary voters are united
in supporting the 1986 voter approved tax law set to
rebate $3 billion back to the taxpayers,” Mass
Fiscal said in a release.
The
Boston Herald
Friday, August 25, 2022
New poll shows bipartisan
support for 1986 law,
voters want their $3 billion back
Is there
such a thing as too much money?
That’s the
paralysis analysis that’s gripping Beacon Hill.
A third
year into a pandemic, the Commonwealth finds itself
yet again with overflowing coffers. That’s even if
an obscure law called 62F gets triggered and returns
close to $3 billion to taxpayers.
There’s so
much excess money – in the billions! – it can be
hard to keep track of it all. For those keeping
score at home, here’s a breakdown from the state:
● Budget
surplus: $4.9 billion
● Rainy day
fund: $6.9 billion
● Federal
relief money: $2.3 billion
The
surplus and rainy day funds are at record levels.
According to a forthcoming analysis by The Pew
Charitable Trusts, the Massachusetts “rainy day
fund,” designed to help the state through bad
economic times, has been growing significantly in
recent years and now can cover about two months of
state government spending, which is about two weeks
more than the national average.
Money for
62F – which is triggered when revenue growth exceeds
a recent rise in wages and salaries – would come out
of the surplus fund, leaving it with about $1.9
billion.
That would
still be bigger than last year’s surplus, which was
nearly $1.8 billion!
All this
excess money comes as voters in November decide
whether to raise taxes on the wealthy by imposing an
income tax surcharge for all individual earnings
more than $1 million. If the ballot initiative
passes, the measure is expected to generate about $1
billion annually, money that is to go towards
education and transportation.
The timing
is peculiar, considering that the state is awash in
money. Yes, the economy is expected to slow, but as
the Massachusetts Taxpayers Foundation reminded me,
the state budget forecast anticipates that another
$1.4 billion will be deposited in the rainy day fund
in the coming year.
That would
leave a balance of roughly $8.4 billion — and
perhaps trigger another little-known measure that
caps rainy day fund at 15 percent of budgeted
revenues. The overage goes into a tax reduction
fund, which the Legislature controls.
All of
this makes me wonder: Is our problem really not
having enough money, or that Beacon Hill can’t
decide how to allocate it all in a timely fashion?
...
Timothy
Vermeer, senior state policy analyst at Tax
Foundation, said it doesn’t surprise him that
Massachusetts lawmakers are still wrestling over
what to do with extra cash.
“Historically, the Massachusetts Legislature would
rather spend it on programs than enact broad tax
reforms or even rebates,” said Vermeer.
What’s
also has been on the table is whether the
Legislature can make an end run on 62F and prevent
it from kicking in. 62F, which was passed by ballot
initiative in 1986, has only been triggered one
other time.
There is
an argument to be made that 62F is deeply flawed,
and it’s one the Massachusetts Budget and Policy
Center plans to make vociferously in the coming
weeks. The progressive research group believes tax
caps are poor policy and do not reflect today’s
economy and budget, which funds education and health
care programs at greater levels compared with the
‘80s.
62F also
would offer credits to everyone who pays taxes in
2022, which means higher-income households would be
in line for bigger breaks because they pay more in
taxes, rather than restrict rebates to lower income
households that really need the money....
The
Legislature should revisit 62F and could reasonably
make the case that the size of rebate should be
adjusted to reflect the unusual economic
circumstances. But to completely ignore 62F doesn’t
seem right. The law is the law.
And we
already know various groups — including Citizens
for Limited Taxation, Massachusetts Fiscal
Alliance, the New England Legal Foundation, and
Republican auditor candidate Anthony Amore — are
ready to sue the state if there is an attempt to
stop 62F.
I leave
readers with one more food for fiscal thought, as TV
ad campaigns for and against the Fair Share
Amendment (aka the millionaire’s tax) heat up this
fall: According to the Tax Foundation, Massachusetts
is the only state in the country this year that is
looking to raise income taxes.
So the
central question becomes: Does Massachusetts have
too much money or not enough?
The
Boston Globe
Tuesday, August 30, 2022
Beacon Hill has a money problem:
too much of it
The state’s budget surplus and ‘rainy day fund’ are
at record levels,
but the Legislature has failed to take action.
By Shirley Leung
Gov.
Charlie Baker on Wednesday filed a $1.6 billion
supplemental budget to close the books on fiscal
year 2022, proposing another $200 million in aid for
the MBTA and setting aside more than $2.9 billion of
the state's surplus to be returned to taxpayers.
The bill
(HD 5364) would still leave the Legislature with
$1.5 billion of last budget year's surplus to
potentially put towards their own agreed-to tax
relief efforts and other spending initiatives that
remain bottled up in the stalled economic
development bill talks, Baker said.
In its
announcement of the supp budget, Baker's office also
said that the Department of Revenue on Wednesday had
informed Auditor Suzanne Bump that it believes that
$2.941 billion is required to be returned to
taxpayers under Chapter 62F, the 1986 voter law that
requires excess state tax collections be refunded.
If the auditor certifies that amount by her Sept. 20
deadline, Baker's office said the state will still
have a fiscal year 2022 surplus of $2.3 billion --
up from the administration estimate of $1.9 billion
earlier this month....
Baker's
bill includes a section "setting aside the necessary
amount of FY22 surplus to ensure that it is easily
available as our administration implements the law
and returns the exceeded allowable revenues to
Commonwealth taxpayers as required by statute," he
told lawmakers in his filing letter. The section of
the bill instructs the state comptroller to exclude
"$2,941,499,730, or more or less as necessary" when
calculating the consolidated net surplus and
declares that the money "shall be treated as a
reserved balance in the General Fund at the close of
fiscal year 2022."
Now that
DOR has reported to Bump, the auditor has until the
third Tuesday of September -- Sept. 20 this year --
to "independently determine" whether tax collections
exceeded the allowable amount and then notify the
executive branch, House and Senate of the amount of
the overage. Republican candidate for auditor
Anthony Amore on Wednesday called on Bump's office
to certify DOR's figures sooner than that.
"There's
really no reason that it should take three weeks. I
think she should certify it right away and I think
that the Legislature should get to work immediately
on returning this money directly to people," he
said. Amore added, "The reason to act quickly and
send the money back is to ensure taxpayers receive
the money they need to deal with inflation and the
rising cost of just about everything."
"We are
also sending a signal that we are watching, the
taxpayers are watching too. The entrenched powers on
Beacon Hill need to know that they're being watched,
and we will shine a light on any attempt to
circumvent the will of the voters," he said.
Bump's
office told the News Service on Wednesday that it is
currently analyzing fiscal year 2022 data and hopes
to release its report and determination before Sept.
20.
Before the
report is complete, the auditor's team will take a
number of steps including an assessment of DOR's
internal controls, a review of DOR's accounting and
reporting system to determine if transactions were
accurately reported into the state's broader
accounting and reporting system, and running the
calculations to determine Chapter 62F's allowable
state tax growth.
There
remains an open question around how the nearly $3
billion in excess tax collections would be returned
to taxpayers. The law itself says that excess
revenue should be returned as "a credit equal to the
total amount of such excess ... applied to the then
current personal income tax liability of all
taxpayers on a proportional basis to the personal
income tax liability incurred by all taxpayers in
the immediately preceding taxable year." That's how
it worked the only other time that Chapter 62F was
triggered, in 1987.
But the
Baker administration has been quietly working behind
the scenes to change the regulations around Chapter
62F since this spring and the governor has
repeatedly referred to the relief as refunds that
people could expect "sometime between the end of
November and the beginning of December," which would
line up with his final weeks in office but not line
up with a credit applied to personal income tax
liability.
State
House News Service
Wednesday, August 31, 2022
Baker’s $1.6
Bil Budget Bill Accounts For $2.94 Billion In Tax
Refunds
Guv: There's Room For More Spending And Tax Relief
The check
may actually be coming in the mail.
Gov.
Charlie Baker sent the Legislature a plan to spend
an extra $1.6 billion Wednesday just as the
Department of Revenue notified the state’s auditor
it had taken $2.94 billion too much in taxes and
would need to send it back to taxpayers.
“The
proposal includes approximately $1.622 billion gross
— $840 million net — spending and is supported by an
FY22 state revenue surplus of $2.3 billion, up from
a preliminary surplus figure shared in early August
of $1.9 billion. This surplus figure accounts for
$2.941 billion in refunds that will be returned to
taxpayers under Chapter 62F,” the Baker
administration said in a release.
Auditor
Suzanne Bump will have until Sept. 20 to determine
if Chapter 62F, the 1986 law which requires excess
revenue be sent back to taxpayers, has been
triggered, though the Baker administration and the
Legislature have been operating since July as if the
law will go into effect for just the second time
since its passage.
A
spokesperson for the auditor told the Herald that
“yes, Auditor Bump received the estimate from DOR of
the $2.94 billion to be sent back to taxpayers under
62F.” ...
The state
took in so much money last year — Baker’s
administration said it beat 2021 by 20.5% — that the
state’s rainy day fund now sits at an all time high
of $6.9 billion.
The
Boston Herald
Wednesday, August 31, 2022
The numbers don’t
lie: DOR says the state took $2.94B too much in
taxes
The
Massachusetts Department of Revenue released their
numbers, which was required by September 1, which
will be used to determine the full credit amount to
be returned to Massachusetts taxpayers through
Chapter 62F. The amount is approximately $2.9
billion dollars. The next step forward is for the
State Auditor to certify the Department of Revenue’s
numbers by the statutory deadline of September 20.
Nearly a
month before the September 20 deadline, the
Massachusetts Fiscal Alliance, the Fiscal Alliance
Foundation, and Citizens for Limited Taxation
announced that they have partnered with the New
England Legal Foundation and the Goldwater Institute
to prepare to bring suit to enforce Chapter 62F of
Massachusetts law, should such action be necessary.
Jon Riches is the lead attorney at the Goldwater
Institute and his co-counsel in Massachusetts are
Dan Winslow and Ben Robbins of the New England Legal
Foundation....
The
revenue growth limit was spearheaded by Citizens
for Limited Taxation and the Massachusetts High
Technology Council [in 1986]. Chapter 62F permits 24
named taxpayers in the Commonwealth to bring an
action to the Supreme Judicial Court or Superior
Court to enforce the provisions of that law. If
necessary, the potential lawsuit will be filed at
9:00 a.m. on September 21 with plaintiffs from every
Massachusetts county and taxpayer plaintiffs from
many taxpayer organizations....
“The
countdown has now officially started. The State
Auditor must comply with the law and if she doesn’t,
we are fully prepared to address the matter in
court. The best thing the Auditor can do is quickly
act and verify the Department of Revenue numbers
which will then allow the state to begin the process
of rebating every Massachusetts taxpayer back their
hard-earned money,” said Daniel B. Winslow,
President of the New England Legal Foundation.
“The more
time the Auditor allows for the certification
process, the more time she allows for outside
influence by those who do not want credits sent back
to the taxpayers. There is also a very strong
argument to be made that since the Speaker and
Senate President failed to pass their tax relief
package, taxpayers need this money as soon as
possible to help with the rising cost of inflation.
Back to school shopping is well underway and soon
enough families across the state will be thinking
about rising home heating costs. They need this
money more than ever,” stated Paul Diego Craney,
spokesperson for Massachusetts Fiscal Alliance.
“In 1986,
Citizens for Limited Taxation put forth this
ballot question with the expectation that
Massachusetts taxpayers would one day need this law.
Any required credit should not be delayed as a
refund next year, as the original intent when CLT
drafted it was to get the money back to the
taxpayers expeditiously. With inflation still
surging, delay will only devalue the amount returned
to the taxpayers,” added Chip Ford, Executive
Director of Citizens for Limited Taxation.
Massachusetts Fiscal Alliance
Thursday, September 1, 2022
News Release
Taxpayers Credit Amount of
$2.9 Billion Announced –
Auditor’s September 20th Deadline Next Step
Do you
know where the nearest structurally deficient bridge
is? As of two years ago, the average Massachusetts
resident didn't have to travel far to find a span
that, while not inherently unsafe, was at a greater
risk of structural failure -- just 1.7 miles,
according to a new report released in coordination
with the campaign to pass a new income surtax this
November.
The
Massachusetts Budget & Policy Center report released
on Wednesday looked at the 644 bridges that were
listed in a Mass. Department of Transportation
database as structurally deficient as of June 2020
and determined that one in every 12 bridges in
Massachusetts fit the label, meaning that at least
one major component had serious problems and was in
need of repair or replacement....
"The
Orange Line isn't Massachusetts' only infrastructure
with serious problems of deferred maintenance,"
Phineas Baxandall, senior analyst at MassBudget and
co-author of the report, said. "This report shines a
light on 644 bridges in need of repair or
replacement. Every one of these bridges is
important. They should remain safe, open to traffic,
and well maintained. Increased investment will be
required to realize that vision."
The report
was released at midnight and at 10 a.m. Baxandall
was a featured speaker at a press conference hosted
by supporters of the Yes on 1 campaign working to
convince voters this November to support a
Constitutional amendment that would add a 4 percent
surtax on annual household income above $1
million....
The surtax
proposal would shift the state away from the flat
income tax rate structure enshrined in the
Massachusetts Constitution. If the amendment is
approved by voters, the first $1 million of
household income would still be taxed at the current
5 percent tax rate and household income above that
first $1 million would be taxed at an effective rate
of 9 percent.
It would
add an estimated $1.3 billion in annual revenue for
the state, according to a report published this year
by the Center for State Policy Analysis at Tufts
University.
The text
of the amendment calls for the revenue to go towards
transportation and education, but the Legislature
retains the ultimate decision-making power over
state spending and theoretically could use money
that the surtax brings in to supplant existing state
funding for transportation and education.
"Question
1 is deceptive," the Coalition to Stop the Tax Hike
Amendment said on its website. "The ballot
question's text plainly states that its funds are
'subject to appropriation.' And make no mistake --
this language was intentional. In 2019, Beacon Hill
politicians rejected two amendments that would have
required the new tax revenues to be used to increase
funding for education and transportation. Instead,
under this language, politicians could legally use
the appropriations process to divert existing
dollars away from education and transportation --
and use them instead for pet projects -- while
funding for education and transportation could
remain the same or even decrease."
Surtax
supporters have said they feel confident that the
Legislature would use the proceeds to provide more
money for transportation and education.
State
House News Service
Wednesday, August 31, 2022
Surtax Backers Point To
Poor Bridge Conditions |
Chip Ford's CLT
Commentary |
The first step has been
taken along the way to CLT's Tax Cap refund of $3 Billion in excess
tax revenue, only the second time it'll be triggered since our
ballot question was adopted as law by voters in 1986.
"The check may actually be
coming in the mail," The Boston Herald reported on Wednesday ("The
numbers don’t lie: DOR says the state took $2.94B too much in taxes"):
Gov. Charlie Baker sent the Legislature a plan to spend an extra
$1.6 billion Wednesday just as the Department of Revenue
notified the state’s auditor it had taken $2.94 billion too much
in taxes and would need to send it back to taxpayers.
“The proposal includes approximately $1.622 billion gross — $840
million net — spending and is supported by an FY22 state revenue
surplus of $2.3 billion, up from a preliminary surplus figure
shared in early August of $1.9 billion. This surplus figure
accounts for $2.941 billion in refunds that will be returned to
taxpayers under Chapter 62F,” the Baker administration said in a
release.
Auditor Suzanne Bump will have until Sept. 20 to determine if
Chapter 62F, the 1986 law which requires excess revenue be sent
back to taxpayers, has been triggered, though the Baker
administration and the Legislature have been operating since
July as if the law will go into effect for just the second time
since its passage.
A
spokesperson for the auditor told the Herald that “yes, Auditor
Bump received the estimate from DOR of the $2.94 billion to be
sent back to taxpayers under 62F.” ...
The state took in so much money last year — Baker’s
administration said it beat 2021 by 20.5% — that the state’s
rainy day fund now sits at an all time high of $6.9 billion.
The State House News
Service reported also on last Wednesday ("Baker’s
$1.6 Bil Budget Bill Accounts For $2.94 Billion In Tax Refunds—Guv:
There's Room For More Spending And Tax Relief"):
Gov. Charlie Baker on Wednesday filed a $1.6 billion
supplemental budget to close the books on fiscal year 2022,
proposing another $200 million in aid for the MBTA and setting
aside more than $2.9 billion of the state's surplus to be
returned to taxpayers.
The bill (HD 5364) would still leave the Legislature with $1.5
billion of last budget year's surplus to potentially put towards
their own agreed-to tax relief efforts and other spending
initiatives that remain bottled up in the stalled economic
development bill talks, Baker said.
In its announcement of the supp budget, Baker's office also said
that the Department of Revenue on Wednesday had informed Auditor
Suzanne Bump that it believes that $2.941 billion is required to
be returned to taxpayers under Chapter 62F, the 1986 voter law
that requires excess state tax collections be refunded. If the
auditor certifies that amount by her Sept. 20 deadline, Baker's
office said the state will still have a fiscal year 2022 surplus
of $2.3 billion -- up from the administration estimate of $1.9
billion earlier this month....
Baker's bill includes a section "setting aside the necessary
amount of FY22 surplus to ensure that it is easily available as
our administration implements the law and returns the exceeded
allowable revenues to Commonwealth taxpayers as required by
statute," he told lawmakers in his filing letter. The section of
the bill instructs the state comptroller to exclude
"$2,941,499,730, or more or less as necessary" when calculating
the consolidated net surplus and declares that the money "shall
be treated as a reserved balance in the General Fund at the
close of fiscal year 2022."
Now that DOR has reported to Bump, the auditor has until the
third Tuesday of September -- Sept. 20 this year -- to
"independently determine" whether tax collections exceeded the
allowable amount and then notify the executive branch, House and
Senate of the amount of the overage. Republican candidate for
auditor Anthony Amore on Wednesday called on Bump's office to
certify DOR's figures sooner than that.
"There's really no reason that it should take three weeks. I
think she should certify it right away and I think that the
Legislature should get to work immediately on returning this
money directly to people," he said. Amore added, "The reason to
act quickly and send the money back is to ensure taxpayers
receive the money they need to deal with inflation and the
rising cost of just about everything."
"We are also sending a signal that we are watching, the
taxpayers are watching too. The entrenched powers on Beacon Hill
need to know that they're being watched, and we will shine a
light on any attempt to circumvent the will of the voters," he
said.
Bump's office told the News Service on Wednesday that it is
currently analyzing fiscal year 2022 data and hopes to release
its report and determination before Sept. 20.
Before the report is complete, the auditor's team will take a
number of steps including an assessment of DOR's internal
controls, a review of DOR's accounting and reporting system to
determine if transactions were accurately reported into the
state's broader accounting and reporting system, and running the
calculations to determine Chapter 62F's allowable state tax
growth.
There remains an open question around how the nearly $3 billion
in excess tax collections would be returned to taxpayers. The
law itself says that excess revenue should be returned as "a
credit equal to the total amount of such excess ... applied to
the then current personal income tax liability of all taxpayers
on a proportional basis to the personal income tax liability
incurred by all taxpayers in the immediately preceding taxable
year." That's how it worked the only other time that Chapter 62F
was triggered, in 1987.
But the Baker administration has been quietly working behind the
scenes to change the regulations around Chapter 62F since this
spring and the governor has repeatedly referred to the relief as
refunds that people could expect "sometime between the end of
November and the beginning of December," which would line up
with his final weeks in office but not line up with a credit
applied to personal income tax liability.
In case you missed it,
apparently there will be two separate lawsuits filed to enforce
CLT's Tax Cap should Democrat State Auditor Suzanne Bump get dodgy
with her certification of the revenue excess by the September 20
deadline: Ours, and another being prepared by Republican
candidate for State Auditor Anthony Amore. We welcome his
support of our law.
I was invited to be a
party to Amore's lawsuit but declined (as noted in the News
Service's report of August 22 ("Legal
Teams Ready To Defend Tax Relief Law"):
Chip Ford,
executive director of Citizens for Limited Taxation, said
Monday that the difference between Amore's effort and the one he
is involved with "is [that] ours is comprised of the original
supporters, the original organizations who went to the ballot in
1986, put it on the ballot, ran a campaign, and won the surtax
repeal and the tax cap. And that's Citizens for Limited
Taxation, my organization, and the Mass. High Tech Council."
While the more the
merrier, and if both need to be and are filed, the court will likely
join them as one, but I am far more confident in our going forward
with our own because — as I stated above —
after all the blood, sweat, and tears CLT and the Massachusetts High
Technology Council (signed on as one of our plaintiffs) poured into
putting it on the 1986 ballot then campaigning for its passage, I am
absolutely certain we and our partners and allies at
MassFiscal will see it through to the end without wavering or
compromise.
In
the MassFiscal news release on Thursday ("Taxpayers
Credit Amount of $2.9 Billion Announced – Auditor’s September 20th
Deadline Next Step"), and picked up by Beacon Hill Roll Call in
its weekly report, I noted:
“In 1986,
Citizens for Limited Taxation put forth this ballot question
with the expectation that Massachusetts taxpayers would one day
need this law. Any required credit should not be delayed
as a refund next year, as the original intent when CLT drafted
it was to get the money back to the taxpayers expeditiously.
With inflation still surging, delay will only devalue the amount
returned to the taxpayers,” added Chip Ford, Executive
Director of Citizens for Limited Taxation.
CLT's Tax Cap is as
popular today as it was when voters passed it in 1986, even more so!
The Boston Herald reported the results of a new poll that shows
universal bipartisan support across the board for the refund of
over-taxation excess revenue, in fact the required refund is
supported by slightly more Democrats than Republicans. ("New
poll shows bipartisan support for 1986 law, voters want their $3
billion back"):
Taxpayers want their money back, according to a new poll
conducted by the Fiscal Alliance Foundation.
“It’s not very often that any one policy can unite Republican
and Democratic primary voters, but support for the 1986
voter-approved tax rebate law seems to bring them together,”
Paul Craney, a spokesperson for the Fiscal Alliance Foundation,
said Thursday.
According to the poll 63% of Republicans and 65% of Democrats
want the state to honor a law passed in 1986 designed to send
excess tax takings back to taxpayers.
The law was only used once, in 1987, when taxpayers received a
14 cent credit on their tax returns. This year, Gov. Charlie
Baker’s administration has estimated taxpayers are looking at
around $3 billion in excess payments and potentially hundreds of
dollars to be returned to each payer.
“Republican and Democratic primary voters are united in
supporting the 1986 voter approved tax law set to rebate $3
billion back to the taxpayers,” Mass Fiscal said in a release.
Even The Boston Globe's
business reporter Shirley Leung asked the correct question in her
column on Tuesday ("Beacon Hill has a money
problem: too much of it"): "Does Massachusetts have too much
money or not enough?"
Is there such a thing as too much money?
That’s the paralysis analysis that’s gripping Beacon Hill.
A
third year into a pandemic, the Commonwealth finds itself yet
again with overflowing coffers. That’s even if an obscure law
called 62F gets triggered and returns close to $3 billion to
taxpayers.
There’s so much excess money – in the billions! – it can be hard
to keep track of it all. For those keeping score at home, here’s
a breakdown from the state:
● Budget surplus: $4.9 billion
● Rainy day fund: $6.9 billion
● Federal relief money: $2.3 billion
The surplus and rainy day funds are at record levels. According
to a forthcoming analysis by The Pew Charitable Trusts, the
Massachusetts “rainy day fund,” designed to help the state
through bad economic times, has been growing significantly in
recent years and now can cover about two months of state
government spending, which is about two weeks more than the
national average.
Money for 62F – which is triggered when revenue growth exceeds a
recent rise in wages and salaries – would come out of the
surplus fund, leaving it with about $1.9 billion.
That would still be bigger than last year’s surplus, which was
nearly $1.8 billion!
All this excess money comes as voters in November decide whether
to raise taxes on the wealthy by imposing an income tax
surcharge for all individual earnings more than $1 million. If
the ballot initiative passes, the measure is expected to
generate about $1 billion annually, money that is to go towards
education and transportation.
The timing is peculiar, considering that the state is awash in
money. Yes, the economy is expected to slow, but as the
Massachusetts Taxpayers Foundation reminded me, the state budget
forecast anticipates that another $1.4 billion will be deposited
in the rainy day fund in the coming year.
That would leave a balance of roughly $8.4 billion — and perhaps
trigger another little-known measure that caps rainy day fund at
15 percent of budgeted revenues. The overage goes into a tax
reduction fund, which the Legislature controls.
All of this makes me wonder: Is our problem really not having
enough money, or that Beacon Hill can’t decide how to allocate
it all in a timely fashion? ...
Timothy Vermeer, senior state policy analyst at Tax Foundation,
said it doesn’t surprise him that Massachusetts lawmakers are
still wrestling over what to do with extra cash.
“Historically, the Massachusetts Legislature would rather spend
it on programs than enact broad tax reforms or even rebates,”
said Vermeer.
What’s also has been on the table is whether the Legislature can
make an end run on 62F and prevent it from kicking in. 62F,
which was passed by ballot initiative in 1986, has only been
triggered one other time.
There is an argument to be made that 62F is deeply flawed, and
it’s one the Massachusetts Budget and Policy Center plans to
make vociferously in the coming weeks. The progressive research
group believes tax caps are poor policy and do not reflect
today’s economy and budget, which funds education and health
care programs at greater levels compared with the ‘80s.
62F also would offer credits to everyone who pays taxes in 2022,
which means higher-income households would be in line for bigger
breaks because they pay more in taxes, rather than restrict
rebates to lower income households that really need the
money....
The Legislature should revisit 62F and could reasonably make the
case that the size of rebate should be adjusted to reflect the
unusual economic circumstances. But to completely ignore 62F
doesn’t seem right. The law is the law.
And we already know various groups — including Citizens for
Limited Taxation, Massachusetts Fiscal Alliance, the New
England Legal Foundation, and Republican auditor candidate
Anthony Amore — are ready to sue the state if there is an
attempt to stop 62F.
I
leave readers with one more food for fiscal thought, as TV ad
campaigns for and against the Fair Share Amendment (aka the
millionaire’s tax) heat up this fall: According to the Tax
Foundation, Massachusetts is the only state in the country this
year that is looking to raise income taxes.
So the central question becomes: Does Massachusetts have too
much money or not enough?
Note Leung's caveat toward
the end of her column: "The Legislature should revisit 62F and
could reasonably make the case that the size of rebate should be
adjusted to reflect the unusual economic circumstances." No
Shirley, the Legislature shouldn't. The Legislature
should do as it was told by the voters.
So predictable, while
hoping to stop our Tax Cap refund, The Takers cabal continues
to lust for more, more, relentlessly more from productive
taxpayers. In the News Service's report on Wednesday ("Surtax
Backers Point To Poor Bridge Conditions") the cabal rolled out
its "The Sky Is Falling" Chicken Little campaign to support their
sixth shot at a Graduated Income Tax, aka, "The Millionaires
Tax" or "Fair Share Amendment" on the November ballot:
Do you know where the nearest structurally deficient bridge is?
As of two years ago, the average Massachusetts resident didn't
have to travel far to find a span that, while not inherently
unsafe, was at a greater risk of structural failure -- just 1.7
miles, according to a new report released in coordination with
the campaign to pass a new income surtax this November.
The Massachusetts Budget & Policy Center report released on
Wednesday looked at the 644 bridges that were listed in a Mass.
Department of Transportation database as structurally deficient
as of June 2020 and determined that one in every 12 bridges in
Massachusetts fit the label, meaning that at least one major
component had serious problems and was in need of repair or
replacement....
"The Orange Line isn't Massachusetts' only infrastructure with
serious problems of deferred maintenance," Phineas Baxandall,
senior analyst at MassBudget and co-author of the report, said.
"This report shines a light on 644 bridges in need of repair or
replacement. Every one of these bridges is important. They
should remain safe, open to traffic, and well maintained.
Increased investment will be required to realize that vision."
The report was released at midnight and at 10 a.m. Baxandall was
a featured speaker at a press conference hosted by supporters of
the Yes on 1 campaign working to convince voters this November
to support a Constitutional amendment that would add a 4 percent
surtax on annual household income above $1 million....
The surtax proposal would shift the state away from the flat
income tax rate structure enshrined in the Massachusetts
Constitution. If the amendment is approved by voters, the first
$1 million of household income would still be taxed at the
current 5 percent tax rate and household income above that first
$1 million would be taxed at an effective rate of 9 percent.
It would add an estimated $1.3 billion in annual revenue for the
state, according to a report published this year by the Center
for State Policy Analysis at Tufts University.
The text of the amendment calls for the revenue to go towards
transportation and education, but the Legislature retains the
ultimate decision-making power over state spending and
theoretically could use money that the surtax brings in to
supplant existing state funding for transportation and
education.
"Question 1 is deceptive," the Coalition to Stop the Tax Hike
Amendment said on its website. "The ballot question's text
plainly states that its funds are 'subject to appropriation.'
And make no mistake -- this language was intentional. In 2019,
Beacon Hill politicians rejected two amendments that would have
required the new tax revenues to be used to increase funding for
education and transportation. Instead, under this language,
politicians could legally use the appropriations process to
divert existing dollars away from education and transportation
-- and use them instead for pet projects -- while funding for
education and transportation could remain the same or even
decrease."
Surtax supporters have said they feel confident that the
Legislature would use the proceeds to provide more money for
transportation and education.
But one battle at a time,
folks — and the one directly in
front of us right now is enforcement of CLT's Tax Cap refund.
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
Beacon Hill Roll
Call
Volume 47 - Report No. 35
August 29-September 2, 2022
By Bob Katzen
ALSO UP ON BEACON HILL
$2.9 BILLION IN TAX RELIEF PENDING (H 5260) – Gov. Charlie
Baker filed a $1.6 billion supplemental budget to close out
the books on fiscal year 2022. A key section sets aside $2.9
billion of the state’s projected surplus to be returned to
taxpayers based on 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
$2.9 billion in fiscal year 2022 revenue to Massachusetts
taxpayers.
Last week, the Department of Revenue informed Auditor
Suzanne Bump that it believes that $2.9 billion is required
to be returned to taxpayers. If the auditor certifies that
figure by a Sept. 20 deadline, the money will be returned to
taxpayers. Baker's office said that even with the money
being returned to taxpayers, the state will still have a
fiscal year 2022 surplus of $2.3 billion.
“The more time the auditor allows for the certification
process, the more time she allows for outside influence by
those who do not want credits sent back to the taxpayers,”
said Paul Craney, spokesperson for Massachusetts Fiscal
Alliance. “There is also a very strong argument to be made
that since the speaker and Senate president failed to pass
their tax relief package, taxpayers need this money as soon
as possible to help with the rising cost of inflation. Back
to school shopping is well underway and soon enough families
across the state will be thinking about rising home heating
costs. They need this money more than ever.”
“In 1986, Citizens for Limited Taxation (CLT) put
forth this ballot question with the expectation that
Massachusetts taxpayers would one day need this law,” said
Chip Ford, executive director of Citizens for Limited
Taxation. “Any required credit should not be delayed as a
refund next year, as the original intent when CLT drafted it
was to get the money back to the taxpayers expeditiously.
With inflation still surging, delay will only devalue the
amount returned to the taxpayers.”
The Boston
Herald
Friday, August 25, 2022
New poll shows bipartisan support for 1986 law,
voters want their $3 billion back
By Matthew Medsger
Taxpayers want their money back, according to a new poll
conducted by the Fiscal Alliance Foundation.
“It’s not very often that any one policy can unite
Republican and Democratic primary voters, but support for
the 1986 voter-approved tax rebate law seems to bring them
together,” Paul Craney, a spokesperson for the Fiscal
Alliance Foundation, said Thursday.
According to the poll 63% of Republicans and 65% of
Democrats want the state to honor a law passed in 1986
designed to send excess tax takings back to taxpayers.
The law was only used once, in 1987, when taxpayers received
a 14 cent credit on their tax returns. This year, Gov.
Charlie Baker’s administration has estimated taxpayers are
looking at around $3 billion in excess payments and
potentially hundreds of dollars to be returned to each
payer.
“Republican and Democratic primary voters are united in
supporting the 1986 voter approved tax law set to rebate $3
billion back to the taxpayers,” Mass Fiscal said in a
release.
The poll surveyed 750 primary voters ahead of the September
contest and carries a margin of error of 3.6 points and a
95% confidence level, according to pollsters.
The poll also asked voters how they regarded a November
ballot question which will add a 4% surtax to incomes over
$1 million. That question showed higher support among
Democrats than Republicans, but the alliance says most
voters, 46%, disapprove, with only 35% in support. The
question was worded in such a way so as to claim the tax
represented as a raise in the “income tax” when in fact is
it is a raise only on specific incomes and only on income
over $1 million.
Democratic voters don’t have much choice to make when it
comes to the governor’s race, where Attorney General Maura
Healey is running all but unopposed. Voters aren’t sure
about who the lieutenant governor should be, though Salem
Mayor Kim Driscoll leads 13% to state Sen. Eric Lesser’s 9%
and state Rep. Tami Gouveia’s 6%, with the vast majority of
voters — 72% — still undecided.
Republicans, according to the poll, prefer former State Rep.
Geoff Diehl 42% against his primary opponent, Wrentham
businessman Chris Doughty, who shows 27% support, though 31%
of voters haven’t decided.
“With early voting starting in a few days, Geoff Diehl
continues to maintain his frontrunner status among
Republican primary voters. Chris Doughty seems to have a
limitless supply of personal funds to interject into the
Republican primary but right now he’s only at 27 percent,
which is not too far off his 29 percent showing at the
MassGOP convention in May,” Craney said.
Secretary of State William Galvin leads his primary
opponent, NAACP Boston President Tanisha Sullivan, 55% to
14%, with 31% undecided.
“With nearly two out of three Democratic primary votes still
undecided in several races, anything is possible. The only
notable strength among the candidates is from Secretary
Galvin. He is the only candidate to show a majority of
support,” Craney said.
The Boston
Globe
Tuesday, August 30, 2022
Beacon Hill has a money problem: too much of it
The state’s budget surplus and ‘rainy day fund’ are at
record levels,
but the Legislature has failed to take action.
By Shirley Leung
Is there such a thing as too much money?
That’s the paralysis analysis that’s gripping Beacon Hill.
A third year into a pandemic, the Commonwealth finds itself
yet again with overflowing coffers. That’s even if an
obscure law called 62F gets triggered and returns close to
$3 billion to taxpayers.
There’s so much excess money – in the billions! – it can be
hard to keep track of it all. For those keeping score at
home, here’s a breakdown from the state:
●
Budget surplus: $4.9 billion
● Rainy day fund:
$6.9 billion
● Federal relief
money: $2.3 billion
The surplus and rainy day funds
are at record levels. According to a forthcoming analysis by
The Pew Charitable Trusts, the Massachusetts “rainy day
fund,” designed to help the state through bad economic
times, has been growing significantly in recent years and
now can cover about two months of state government spending,
which is about two weeks more than the national average.
Money for 62F – which is triggered when revenue growth
exceeds a recent rise in wages and salaries – would come out
of the surplus fund, leaving it with about $1.9 billion.
That would still be bigger than last year’s surplus, which
was nearly $1.8 billion!
All this excess money comes as voters in November decide
whether to raise taxes on the wealthy by imposing an income
tax surcharge for all individual earnings more than $1
million. If the ballot initiative passes, the measure is
expected to generate about $1 billion annually, money that
is to go towards education and transportation.
The timing is peculiar, considering that the state is awash
in money. Yes, the economy is expected to slow, but as the
Massachusetts Taxpayers Foundation reminded me, the state
budget forecast anticipates that another $1.4 billion will
be deposited in the rainy day fund in the coming year.
That would leave a balance of roughly $8.4 billion — and
perhaps trigger another little-known measure that caps rainy
day fund at 15 percent of budgeted revenues. The overage
goes into a tax reduction fund, which the Legislature
controls.
All of this makes me wonder: Is our problem really not
having enough money, or that Beacon Hill can’t decide how to
allocate it all in a timely fashion?
Let’s get back to how we got here, and how Massachusetts is
hardly alone. Nearly every state has been reporting a budget
surplus for the past two years, according to the National
Association of State Budget Officers. Beating budget
forecasts is a result of federal stimulus, wage growth, a
strong stock market performance in 2021, and rising
inflation.
If that last reason is a head scratcher, here’s why: Sales
tax collections are up because prices are up.
In late July, the Legislature was close to agreeing on an
economic development package that would have offered $1
billion in rebates and tax breaks to residents, as well as a
slew of other investments and initiatives, but those talks
collapsed when it realized 62F might kick in.
Now lawmakers are waiting on State Auditor Suzanne Bump,
whose office is charged with producing an annual report in
September certifying whether 62F has been triggered. Since
the Legislature likes to procrastinate, members don’t seem
any closer to figuring out what they might do. It doesn’t
help they’re on a five-month break after adjourning the
formal session at the end of July.
Yet other state houses have forged ahead decisively.
According to the Tax Foundation, a nonpartisan research
group, 11 states this year have enacted individual income
tax rate reductions, six have passed corporate income tax
rate reductions, five suspended their tax on gasoline, and
11 are returning surplus revenue to taxpayers through
rebates.
Timothy Vermeer, senior state policy analyst at Tax
Foundation, said it doesn’t surprise him that Massachusetts
lawmakers are still wrestling over what to do with extra
cash.
“Historically, the Massachusetts Legislature would rather
spend it on programs than enact broad tax reforms or even
rebates,” said Vermeer.
What’s also has been on the table is whether the Legislature
can make an end run on 62F and prevent it from kicking in.
62F, which was passed by ballot initiative in 1986, has only
been triggered one other time.
There is an argument to be made that 62F is deeply flawed,
and it’s one the Massachusetts Budget and Policy Center
plans to make vociferously in the coming weeks. The
progressive research group believes tax caps are poor policy
and do not reflect today’s economy and budget, which funds
education and health care programs at greater levels
compared with the ‘80s.
62F also would offer credits to everyone who pays taxes in
2022, which means higher-income households would be in line
for bigger breaks because they pay more in taxes, rather
than restrict rebates to lower income households that really
need the money.
But perhaps what irks Mass Budget the most is that 62F was
most likely set off by accounting quirks related to the
pandemic and a new business tax-credit program, according to
Phineas Baxandall, Mass Budget’s senior policy analyst and
advocacy director. For example, wages looked smaller and tax
revenue looked bigger because billions in employment
benefits did not count as income, while a new program made
revenue look higher because business credits weren’t claimed
the same year they were issued.
62F is “terribly designed,” said Baxandall. “If the tax cap
gets triggered, it would be a weird confluence of
circumstances, which has nothing to do with excess taxes ...
It’s ironic that the tax relief package was derailed by tax
relief.”
The Legislature should revisit 62F and could reasonably make
the case that the size of rebate should be adjusted to
reflect the unusual economic circumstances. But to
completely ignore 62F doesn’t seem right. The law is the
law.
And we already know various groups — including Citizens
for Limited Taxation, Massachusetts Fiscal Alliance, the
New England Legal Foundation, and Republican auditor
candidate Anthony Amore — are ready to sue the state if
there is an attempt to stop 62F.
I leave readers with one more food for fiscal thought, as TV
ad campaigns for and against the Fair Share Amendment (aka
the millionaire’s tax) heat up this fall: According to the
Tax Foundation, Massachusetts is the only state in the
country this year that is looking to raise income taxes.
So the central question becomes: Does Massachusetts have too
much money or not enough?
State House News
Service
Wednesday, August 31, 2022
Baker’s $1.6 Bil Budget Bill Accounts For $2.94 Billion In
Tax Refunds
Guv: There's Room For More Spending And Tax Relief
By Colin A. Young
Gov. Charlie Baker on Wednesday filed a $1.6 billion
supplemental budget to close the books on fiscal year 2022,
proposing another $200 million in aid for the MBTA and
setting aside more than $2.9 billion of the state's surplus
to be returned to taxpayers.
The bill (HD 5364) would still leave the Legislature with
$1.5 billion of last budget year's surplus to potentially
put towards their own agreed-to tax relief efforts and other
spending initiatives that remain bottled up in the stalled
economic development bill talks, Baker said.
In its announcement of the supp budget, Baker's office also
said that the Department of Revenue on Wednesday had
informed Auditor Suzanne Bump that it believes that $2.941
billion is required to be returned to taxpayers under
Chapter 62F, the 1986 voter law that requires excess state
tax collections be refunded. If the auditor certifies that
amount by her Sept. 20 deadline, Baker's office said the
state will still have a fiscal year 2022 surplus of $2.3
billion -- up from the administration estimate of $1.9
billion earlier this month.
"With tax revenues coming in far above budgeted amounts this
year, the Commonwealth is well-positioned to deliver relief
to taxpayers, while still making investments in key areas,
like transportation, as we close the fiscal year," Baker
said. "Our administration is confident that with these high
surplus revenues, there remains more than enough funding to
support the tax relief, economic development and climate
infrastructure proposals that are under consideration in the
Legislature."
Baker's bill includes a section "setting aside the necessary
amount of FY22 surplus to ensure that it is easily available
as our administration implements the law and returns the
exceeded allowable revenues to Commonwealth taxpayers as
required by statute," he told lawmakers in his filing
letter. The section of the bill instructs the state
comptroller to exclude "$2,941,499,730, or more or less as
necessary" when calculating the consolidated net surplus and
declares that the money "shall be treated as a reserved
balance in the General Fund at the close of fiscal year
2022."
Now that DOR has reported to Bump, the auditor has until the
third Tuesday of September -- Sept. 20 this year -- to
"independently determine" whether tax collections exceeded
the allowable amount and then notify the executive branch,
House and Senate of the amount of the overage. Republican
candidate for auditor Anthony Amore on Wednesday called on
Bump's office to certify DOR's figures sooner than that.
"There's really no reason that it should take three weeks. I
think she should certify it right away and I think that the
Legislature should get to work immediately on returning this
money directly to people," he said. Amore added, "The reason
to act quickly and send the money back is to ensure
taxpayers receive the money they need to deal with inflation
and the rising cost of just about everything."
"We are also sending a signal that we are watching, the
taxpayers are watching too. The entrenched powers on Beacon
Hill need to know that they're being watched, and we will
shine a light on any attempt to circumvent the will of the
voters," he said.
Bump's office told the News Service on Wednesday that it is
currently analyzing fiscal year 2022 data and hopes to
release its report and determination before Sept. 20.
Before the report is complete, the auditor's team will take
a number of steps including an assessment of DOR's internal
controls, a review of DOR's accounting and reporting system
to determine if transactions were accurately reported into
the state's broader accounting and reporting system, and
running the calculations to determine Chapter 62F's
allowable state tax growth.
There remains an open question around how the nearly $3
billion in excess tax collections would be returned to
taxpayers. The law itself says that excess revenue should be
returned as "a credit equal to the total amount of such
excess ... applied to the then current personal income tax
liability of all taxpayers on a proportional basis to the
personal income tax liability incurred by all taxpayers in
the immediately preceding taxable year." That's how it
worked the only other time that Chapter 62F was triggered,
in 1987.
But the Baker administration has been quietly working behind
the scenes to change the regulations around Chapter 62F
since this spring and the governor has repeatedly referred
to the relief as refunds that people could expect "sometime
between the end of November and the beginning of December,"
which would line up with his final weeks in office but not
line up with a credit applied to personal income tax
liability.
Amore said Wednesday that the $2.941 billion figure DOR
reported would work out to about $250 per taxpayer and that
the credit method might have worked better in 1987 when the
excess to be returned was just $29.22 million.
"I am adamant that the money should be returned directly as
cash payments to the taxpayer," he said.
The supp budget that Baker plans to file will include $1.622
billion in spending (at a net cost to the state of $840
million), and will include $200 million to help the T
address the Federal Transit Administration's safety
directives and $10 million for the agency to establish a
training academy. The almost $40 million school safety plan
that Baker announced last week will also be included, as
will $108 million for a COVID-19 cost reserve account and an
outside section mandating the appointment of a guardian ad
litem in every Juvenile Court proceeding in which a child is
alleged to have been abused or neglected.
"The supplemental budget proposal will fund many important
priorities including strengthening school infrastructure,
making significant investments in transportation and
providing more resources for individuals dealing with
substance misuse issues," Lt. Gov. Karyn Polito said.
Among the bill's other policy sections is a "correction" to
allow DOR to intercept sports wagering winnings for
outstanding child support and tax debts as the agency
already does with Lottery and casino winnings, authorization
for the Department of Veterans' Services to access the FBI
national criminal database prior to hiring employees for the
soldiers' homes in Chelsea and Holyoke, and the creation of
a trust fund to support the construction, development and
capacity of new provider-operated community housing for
people discharged from skilled nursing facilities and
psychiatric, chronic and rehabilitation hospitals.
The governor's office said that the closeout supp budget
would not spend down the entire fiscal 2022 surplus and
preserves $1.5 billion of it, "which in combination with
$2.2 billion remaining in American Rescue Plan Act Funds, is
sufficient to support the tax relief measures and other
critical investments in the FORWARD/economic development
bill pending with the Legislature."
The Legislature will need to act on Baker's budget bill
during informal sessions, when opposition from any single
member can slow a bill down or stop its progress entirely.
The supplemental budget is nearly certain to go first to the
House Committee on Ways and Means. Chairman Aaron
Michlewitz's office said he was not available Wednesday to
talk about Baker's closeout supp and his proposal to set
aside more than $2.9 billion for Chapter 62F, a law that
House leadership has floated changing. Michlewitz's office
did not respond to a message asking about the chairman's
availability on Thursday.
The Boston
Herald
Wednesday, August 31, 2022
The numbers don’t lie: DOR says the state took $2.94B too
much in taxes
By Matthew Medsger
The check may actually be coming in the mail.
Gov. Charlie Baker sent the Legislature a plan to spend an
extra $1.6 billion Wednesday just as the Department of
Revenue notified the state’s auditor it had taken $2.94
billion too much in taxes and would need to send it back to
taxpayers.
“The proposal includes approximately $1.622 billion gross —
$840 million net — spending and is supported by an FY22
state revenue surplus of $2.3 billion, up from a preliminary
surplus figure shared in early August of $1.9 billion. This
surplus figure accounts for $2.941 billion in refunds that
will be returned to taxpayers under Chapter 62F,” the Baker
administration said in a release.
Auditor Suzanne Bump will have until Sept. 20 to determine
if Chapter 62F, the 1986 law which requires excess revenue
be sent back to taxpayers, has been triggered, though the
Baker administration and the Legislature have been operating
since July as if the law will go into effect for just the
second time since its passage.
A spokesperson for the auditor told the Herald that “yes,
Auditor Bump received the estimate from DOR of the $2.94
billion to be sent back to taxpayers under 62F.”
News of the law’s existence seemed to take Beacon Hill by
complete surprise in July and led to their last-minute slow
walking of a $4 billion economic development bill, which
cleared both chambers unanimously but hasn’t yet left final
negotiations.
“The conference committee tasked with negotiating an
economic development package is actively working,” a
spokesperson for House Speaker Ron Mariano’s office told the
Herald Monday.
The figure offered by Baker’s administration Wednesday
closely matches what they had guessed would need to be sent
back to taxpayers when the law’s existence resurfaced.
According to estimates provided then, a person making
$75,000 could see $250 sent back.
The state took in so much money last year — Baker’s
administration said it beat 2021 by 20.5% — that the state’s
rainy day fund now sits at an all time high of $6.9 billion.
“With tax revenues coming in far above budgeted amounts this
year, the Commonwealth is well-positioned to deliver relief
to taxpayers, while still making investments in key areas,
like transportation, as we close the fiscal year,” Baker
said. “Our administration is confident that with these high
surplus revenues, there remains more than enough funding to
support the tax relief, economic development and climate
infrastructure proposals that are under consideration in the
Legislature.”
Baker’s supplemental budget calls for $840 in new spending,
which still leaves almost $1.5 billion in surplus revenue
not accounted for. That, along with $2.2 billion in unspent
American Rescue Plan Act money, almost covers the cost of
the stalled economic development bill.
The supplemental budget will send $200 million to the MBTA
to address safety concerns identified by the Federal Transit
Administration, $108 million to continue support for
COVID-19 related concerns and prepare for future pandemic
recovery, $50 million for community housing, over $37
million for school safety initiatives.
“Outside policy sections propose necessary corrections that
will allow for the successful implementation of various new
statutes that became law earlier this month, including
related to new offshore wind development tax credits, the
employment of Massachusetts National Guard personnel, and
the 1% allocation of the retail sales price of marijuana
based on social equity businesses,” Baker’s administration
said.
Massachusetts Fiscal
Alliance
Thursday, September 1, 2022
News Release
Taxpayers Credit Amount of $2.9 Billion Announced –
Auditor’s September 20th Deadline Next Step
BOSTON - The Massachusetts Department of Revenue released
their numbers, which was required by September 1, which will
be used to determine the full credit amount to be returned
to Massachusetts taxpayers through Chapter 62F. The amount
is approximately $2.9 billion dollars. The next step forward
is for the State Auditor to certify the Department of
Revenue’s numbers by the statutory deadline of September 20.
Nearly a month before the September 20 deadline, the
Massachusetts Fiscal Alliance, the Fiscal Alliance
Foundation, and Citizens for Limited Taxation
announced that they have partnered with the New England
Legal Foundation and the Goldwater Institute to prepare to
bring suit to enforce Chapter 62F of Massachusetts law,
should such action be necessary. Jon Riches is the lead
attorney at the Goldwater Institute and his co-counsel in
Massachusetts are Dan Winslow and Ben Robbins of the New
England Legal Foundation. The voters of the Commonwealth
enacted Chapter 62F in 1986 to implement hard limits on the
amount Massachusetts can tax its residents and on government
spending. If revenues exceed the imposed limit, the state
“shall” issue “tax credits equal to the total amount of such
excess” to all Massachusetts taxpayers. The revenue growth
limit was spearheaded by Citizens for Limited Taxation
and the Massachusetts High Technology Council. Chapter 62F
permits 24 named taxpayers in the Commonwealth to bring an
action to the Supreme Judicial Court or Superior Court to
enforce the provisions of that law. If necessary, the
potential lawsuit will be filed at 9:00 a.m. on September 21
with plaintiffs from every Massachusetts county and taxpayer
plaintiffs from many taxpayer organizations.
“The countdown has now officially started. The State Auditor
must comply with the law and if she doesn’t, we are fully
prepared to address the matter in court. The best thing the
Auditor can do is quickly act and verify the Department of
Revenue numbers which will then allow the state to begin the
process of rebating every Massachusetts taxpayer back their
hard-earned money,” said Daniel B. Winslow, President
of the New England Legal Foundation.
“The more time the Auditor allows for the certification
process, the more time she allows for outside influence by
those who do not want credits sent back to the taxpayers.
There is also a very strong argument to be made that since
the Speaker and Senate President failed to pass their tax
relief package, taxpayers need this money as soon as
possible to help with the rising cost of inflation. Back to
school shopping is well underway and soon enough families
across the state will be thinking about rising home heating
costs. They need this money more than ever,” stated Paul
Diego Craney, spokesperson for Massachusetts Fiscal
Alliance.
“In 1986, Citizens for Limited Taxation put forth this
ballot question with the expectation that Massachusetts
taxpayers would one day need this law. Any required credit
should not be delayed as a refund next year, as the original
intent when CLT drafted it was to get the money back to the
taxpayers expeditiously. With inflation still surging, delay
will only devalue the amount returned to the taxpayers,”
added Chip Ford, Executive Director of Citizens for
Limited Taxation.
“The State Auditor has a duty to comply with the law and
certify these numbers so that hardworking Massachusetts
taxpayers receive the full rebate amount to which they are
entitled through Chapter 62F. This law protects working
families and individuals from runaway tax-and-spend
practices that lead to financial turmoil, and if the
Massachusetts government refuses to follow it, we won’t
hesitate to bring immediate and necessary action to protect
Massachusetts taxpayers,” said Jon Riches, Vice
President for Litigation at the Goldwater Institute.
# # #
State House News
Service
Wednesday, August 31, 2022
Surtax Backers Point To Poor Bridge Conditions
Locals Zoom In With Views From Bridges Across State
By Colin A. Young
Do you know where the nearest structurally deficient bridge
is? As of two years ago, the average Massachusetts resident
didn't have to travel far to find a span that, while not
inherently unsafe, was at a greater risk of structural
failure -- just 1.7 miles, according to a new report
released in coordination with the campaign to pass a new
income surtax this November.
The Massachusetts Budget & Policy Center report released on
Wednesday looked at the 644 bridges that were listed in a
Mass. Department of Transportation database as structurally
deficient as of June 2020 and determined that one in every
12 bridges in Massachusetts fit the label, meaning that at
least one major component had serious problems and was in
need of repair or replacement. An average of 11 percent of
the daily vehicle bridge crossings in Massachusetts are over
structurally deficient bridges, according to the report,
which used the most recent official state data on bridge
conditions.
"The Orange Line isn't Massachusetts' only infrastructure
with serious problems of deferred maintenance," Phineas
Baxandall, senior analyst at MassBudget and co-author of the
report, said. "This report shines a light on 644 bridges in
need of repair or replacement. Every one of these bridges is
important. They should remain safe, open to traffic, and
well maintained. Increased investment will be required to
realize that vision."
The report was released at midnight and at 10 a.m. Baxandall
was a featured speaker at a press conference hosted by
supporters of the Yes on 1 campaign working to convince
voters this November to support a Constitutional amendment
that would add a 4 percent surtax on annual household income
above $1 million. The virtual press event featured advocates
Zooming in from structurally deficient bridges in
Springfield, Hyde Park, Worcester and other communities to
describe how those bridges impact their day-to-day lives.
"Every day I pass over this bridge to drop my grandkids off
to school and to do home visits for my job as a social
worker for the Department of Children and Families. It's one
of the only throughpoints connecting two of the busiest
neighborhoods in the city and thousands of people have to
drive over this bridge everyday to drop kids off," Ethel
Everett of Springfield said from the St. James Avenue bridge
in her city. She added, "It also connects people to one of
the only grocery stores close to these neighborhoods. If
this bridge were to deteriorate at a point in closure, it
would seriously impede the community and force residents to
go well out of their way to reach grocery stores, to reach
their houses of worship, to reach schools, to reach other
retail stores that are not in the neighborhood."
The surtax proposal would shift the state away from the flat
income tax rate structure enshrined in the Massachusetts
Constitution. If the amendment is approved by voters, the
first $1 million of household income would still be taxed at
the current 5 percent tax rate and household income above
that first $1 million would be taxed at an effective rate of
9 percent.
It would add an estimated $1.3 billion in annual revenue for
the state, according to a report published this year by the
Center for State Policy Analysis at Tufts University.
The text of the amendment calls for the revenue to go
towards transportation and education, but the Legislature
retains the ultimate decision-making power over state
spending and theoretically could use money that the surtax
brings in to supplant existing state funding for
transportation and education.
"Question 1 is deceptive," the Coalition to Stop the Tax
Hike Amendment said on its website. "The ballot question's
text plainly states that its funds are 'subject to
appropriation.' And make no mistake -- this language was
intentional. In 2019, Beacon Hill politicians rejected two
amendments that would have required the new tax revenues to
be used to increase funding for education and
transportation. Instead, under this language, politicians
could legally use the appropriations process to divert
existing dollars away from education and transportation --
and use them instead for pet projects -- while funding for
education and transportation could remain the same or even
decrease."
Surtax supporters have said they feel confident that the
Legislature would use the proceeds to provide more money for
transportation and education.
In the MassBudget report, Baxandall makes the case that
increased public investment "has a clear track record in
making a difference to improve the condition of bridges." He
pointed to $3 billion spent through the Accelerated Bridge
Project as an effort that "paid off with major improvements
to the overall condition of bridges across the
Commonwealth."
"No similar commitment has been made since. Bond bills that
could provide resources to fix large numbers of bridges
would still need funds put aside to pay back these borrowed
funds and might not even be enough to keep up with the aging
and wear of bridges across the state," the report states. |
NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to:
http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ (781) 639-9709
BACK TO CLT
HOMEPAGE
|
