Zoning reforms that the chamber supports can make a small dent, but we also need to invest more money in affordable housing and to strengthen tenant protections. Boston has proposals to do both, with home rule petitions to create a real estate transfer fee to fund affordable housing and stabilize rents. Other municipalities do so as well, and the governor’s housing bond bill has language around the former. I’d welcome the chamber’s support for such clear solutions to an urgent problem facing the region.
That’s the argument coming from some on the left as Healey makes hundreds of millions of dollars in midyear budget cuts, just a few months after she signed off on the state’s first big tax-break package in two decades. But not everyone thinks the state’s current fiscal duress means the cuts were a bad idea.
Adam Reilly is joined by Mass. Taxpayers Foundation president Doug Howgate and Progressive Mass policy director Jonathan Cohn, who discuss the impact of the cuts and what they might portend for the future of budget-making in the state.
Throughout 2023, we constantly heard elected officials talk about the need for tax cuts to make Massachusetts more “competitive,” pushing a debunked myth that we were about to see an exodus of the well-off due to the Fair Share Amendment and the overall tax landscape. The risk we really face is that our graduates won’t be able to stay here, that young couples won’t be able to make a family here, and that working people will be displaced from one neighborhood to the next before being driven out of the state entirely. All of this is avoidable with good policy.
So let’s hope – and pressure – our elected officials to embrace those policies. And to not give up on a New Year’s Resolution too soon.
The child and dependent credit, described by Healey as the “most generous” in the country, was the largest single piece of the bill, representing $307 million in cuts. It is expected to provide around 565,000 families with a $440 annual tax credit per dependent, who can include children under 12 years old, seniors, and people with disabilities.
“I’m sure they can use it and welcome it, but we’re talking about a $440 tax credit like it’s somehow revolutionary for people when that’s not making a dent,” said Jonathan Cohn, policy director for Progressive Mass. “This state could be doing so much more by pooling money and investing in infrastructure to support parents rather than just giving people a check.”
….
The bill also raised the threshold at which the estate tax kicks in from inheritances of $1 million to $2 million.
“They’re throwing money at people,” said Cohn. “Many people in this state will die in debt, and the idea of putting that much focus on cutting the taxes on multi-million dollar estates is crazy.”
Cohn said he was disappointed in the Healey administration’s “misleading” characterization of the cuts as a way to address affordability. “The cost of living is at a crisis point for so many people,” he said. “The tax bill does not meaningfully address that.”
If Massachusetts wants to be an affordable state—attractive for people to move to, a place where people can thrive—that’s where our focus should be. And I hope that’s where our Legislature turns its attention for the rest of the session—and that legislators don’t have the audacity to say they don’t have the money to help make living here more affordable.
“Voices on the left were also less enthused about the final product. The Progressive Massachusetts group contrasted the $1 billion in relief with the roughly similar amount of revenue the state expects to generate this year from a new surtax on high earners, revenue from which will be earmarked for education and transportation investments.
“It is simply not acceptable for legislators to say ‘We don’t have the money’ when it comes to meeting basic needs, when they are willing to spend hundreds of millions of dollars on unnecessary and regressive tax cuts for the rich and large corporations,” the group said in an unsigned statement. “Our commonwealth has the resources we need to solve the great challenges we face; the question is whether our elected officials have the will to do so.” “
Last year, voters showed up in November and sent a clear message by passing the Fair Share Amendment: we need greater investment in public education and transportation in the Commonwealth, and the wealthy should pay their fair share.
Because of the new revenue raised by the Fair Share Amendment, more kids will have access to pre-K, students will have access to free school meals, our schools will be greener, and fewer graduates of our public colleges and universities will be burdened with debt. Even more, we will see better hours for our Regional Transit Authorities, better upkeep for roads and bridges, and much-needed additional funding for the MBTA. All of this just in the first year of new revenue.
And that is why it is so disappointing to see the Governor and Legislature focus so much energy this year on cutting taxes, particularly for the ultra-rich and large corporations. Almost 40% of the tax package — passed nearly unanimously by the Legislature and supported by the Governor — consisted of regressive tax giveaways, disproportionately benefiting the Commonwealth’s richest residents, corporations, and estates. Multi-million-dollar estates will be getting a tax break of almost $100,000 each. Day traders, speculators, and multinational corporations also come out well ahead.
More progressive components of the bill, such as the child tax credit ($200 per child) and renters deduction (a paltry $50), can help families struggling to make ends meet but miss the mark when it comes to actually addressing the problems of affordability in Massachusetts. We need to be investing in our child care infrastructure and in preserving and expanding affordable housing, and the regressive tax cuts in the bill siphon away vital funding for doing so. That said, the fact that the Legislature closed a loophole that could have enabled tax avoidance of the Fair Share tax is both welcome and necessary.
It is simply not acceptable for legislators to say “We don’t have the money” when it comes to meeting basic needs, when they are willing to spend hundreds of millions of dollars on unnecessary and regressive tax cuts for the rich and large corporations.
Our commonwealth has the resources we need to solve the great challenges we face; the question is whether our elected officials have the will to do so.
Last year, voters like you showed up in November to vote for the Fair Share Amendment because you understood the importance of a fairer tax code and greater investment in public education and transportation. And you didn’t just show up to vote — you canvassed, phone-banked, text-banked, tabled, spoke to neighbors, and much more.
Now that Governor Maura Healey has signed the FY 2024 budget, we can see how much the Fair Share Amendment has delivered in its first year. Let’s take a look.
$229 million for public colleges and universities
$224 million for K-12 public schools
$70.5 million for early education and care
$175 million for roads and bridges
$95.7 million for regional public transit
$205.8 million for the MBTA
For early education and K-12 public education, that means….
For public higher education, that means….
For roads, bridges, and regional transit, that means….
The new revenue raised by the Fair Share Amendment could be at risk this fall if the Legislature passes major tax giveaways for the ultra-rich and large corporations.
Massachusetts needs to prioritize spending on what will make our state truly affordable, equitable, and competitive: programs that support working people and ensure a labor force adequate to our economy’s needs. That, in turn, requires that families have affordable housing, childcare, educational opportunities, and reliable transportation to make it possible for them to work, gain skills, and earn a good living.
We need to act NOW to protect the Fair Share Amendment from tax avoidance, and ensure that Massachusetts can invest more in our schools, colleges, roads, bridges, and public transit systems. At the same time, we need to make sure our legislators don’t give away billions of dollars to the ultra-rich.
On Monday (a month past the deadline), the MA House and Senate came to an agreement on the budget for the next fiscal year.
We wanted to highlight some of the important victories in it:
Tuition equity for all students regardless of immigration status
Permanent funding for universal school meals
No Cost Calls, keeping incarcerated individuals and their families connected
These victories came because of people like you reaching out to your legislators (and then reaching out to friends to do so too) and keeping the momentum going.
The budget also contained transformative new investments because of the Fair Share amendment, which you voted for and organized for last year.
But the fight is not over yet…..
Call Gov. Healey to urge her to sign the budget
The budget doesn’t become law until Gov. Healey signs it.
Can you call her office at (617) 725-4005 to urge her to support Tuition Equity, Permanent Universal School Meals, and No Cost Calls without changes?
The call can be short and sweet: it just needs that simple message.
Urge Your State Legislators to Reject Tax Cuts for the Ultra-Rich and Large Corporations
Although the Legislature came to an agreement on the budget, they are still in negotiations about a tax reform package.
Massachusetts needs to prioritize spending on what will make our state truly affordable, equitable, and competitive: programs that support working people and ensure a labor force adequate to our economy’s needs. That, in turn, requires that families have affordable housing, childcare, educational opportunities, and reliable transportation to make it possible for them to work, gain skills, and earn a good living.
We need to act NOW to protect the Fair Share Amendment from tax avoidance, and ensure that Massachusetts can invest more in our schools, colleges, roads, bridges, and public transit systems. At the same time, we need to make sure our legislators don’t give away billions of dollars to the ultra-rich.
Earlier tonight, the MA Senate passed a $586 million tax reform package. As I noted earlier today, the MA Senate’s tax reform package was a much better proposal than the House’s:
The Senate bill rejects the proposed $117 million tax cut for day traders and speculators proposed by Gov. Healey and passed by the MA House in April. Notably, both chambers rejected this idea last year when Governor Baker proposed it.
The Senate bill rejected a $79 million corporate tax giveaway that the House back in April with no public debate.
The Senate bill offers a less expensive and less regressive cut to the estate tax than either Governor Healey or the MA House. Unfortunately, every estate tax proposal includes tax cuts for the largest estates rather than limiting them to more modest estates subject to the tax.
During the debate, the Senate voted to protect the Fair Share victory from last year by closing tax loopholes and defeating attempts to give more tax cuts to the rich; however, the Senate unfortunately also rejected an attempt to improve our state’s response to the affordable housing crisis.
THE GOOD
The Senate voted 33 to 5 for an amendment from Sen. Jason Lewis to close a joint filing loophole that could have led to the loss of $200 million of Fair Share revenue each year. It would have required couples that jointly file their federal taxes to do so in Massachusetts as well. Without this technical change, Massachusetts would remain the only state with an additional tax code for higher incomes without either an incentive for couples to file jointly or a prohibition against their filing separately. Such a loophole would encourage tax avoidance through the illegal misattribution of income.
Two Democrats–Sen. Barry Finegold of Andover and Sen. Michael Moore of Millbury–joined the 3 Republicans in voting no.
The Senate defeated, by a vote of 32 to 5, a proposed Republican tax giveaway to day traders and speculators. Only Barry Finegold (D-Andover), Walter Timilty (D-Milton), and the three Republicans voted for it.
The Senate defeated, by a vote of 33 to 5, a regressive and fiscally irresponsible Republican attempt to raise the estate tax threshold to $5 million, which would have given hundreds of thousands of dollars to such multi-million-dollar estates. Only Nick Collins (D-South Boston) and Walter Timilty (D-Milton), and the three Republicans voted for it.
The Senate defeated, by a vote of 32 to 6, a second Republican effort to erode the revenue raised by the estate tax. Only Nick Collins (D-South Boston), Walter Timilty (D-Milton), John Velis (D-Westfield), and the three Republicans voted for it.
THE BAD
The Senate’s tax package expands the Housing Development Incentive Program, which provides millions in state tax credits and local tax breaks for developers of market-rate housing in Gateway cities. However, the units built through these incentives can be shockingly expensive, and incentives often go to areas that are already attractive to developers.
According to an analysis from the Mass Law Reform Institute, more than half of HDIP funds go to only five of the 26 Gateway cities, only 2% of HDIP units are affordable, and rents routinely exceed prevailing wages and prices. We need to build more housing, but our public dollars should be going toward affordable housing if we want to meaningfully address our housing crisis.
In response, Sen. Jamie Eldridge (D-Acton) offered an amendment to create basic affordability standards for HDIP projects: a requirement that at least 20% of the units created in any HDIP-funded project be permanently affordable.
Despite our large Democratic supermajority, the commonsense amendment was defeated 30 to 9.
If your senator was one of the 9 who stood up to Senate Leadership to vote yes, make sure to thank them.
