2-17-2024 9:22pm

Beacon Hill Roll Call

Alan Earls Editor

If you have any questions about this week's report, e-mail us at bob@beaconhillrollcall.com or call us at (617) 720-1562.

Volume 49 -Report No. 7

February 12-16, 2024

By Bob Katzen

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THE HOUSE AND SENATE: There were no roll calls in the House or Senate last week. This week, Beacon Hill Roll Call reviews local senators’ votes in the 2023-2024 on several proposals to raise or lower taxes. Included are comments from legislators and others at the time the measures were voted upon.

TAX RELIEF PACKAGE (H 4104)

Senate 38-1, approved a tax relief package that supporters said will provide $561.3 million in tax relief in fiscal year 2024 and $1.02 billion per year in subsequent years.

Provisions include increasing the rental deduction cap from $3,000 to $4,000; reducing the estate tax for all taxpayers and eliminating the tax for all estates under $2 million by allowing a uniform credit of $99,600; increasing the refundable tax credit for a dependent child, disabled adult or senior from $180 to $310 per dependent in taxable year 2023, and then to $440 in subsequent years while eliminating the child/dependent cap; doubling the refundable senior circuit breaker tax credit from $1,200 to $2,400; increasing the refundable Earned Income Tax Credit from 30 percent to 40 percent of the federal credit; and reducing the short-term capital gains tax rate from 12 percent to 8.5 percent.

Other provisions double the lead paint tax credit to $3,000 for full abatement and $1,000 for partial abatement; ensure that employer student loan payments are not treated as taxable compensation; make public transit fares, as well as ferry and regional transit passes and bike commuter expenses, eligible for the commuter expense tax deduction; increase from $1,500 to $2,000 the maximum that municipalities may pay seniors to do volunteer work to reduce their property taxes; raise the annual authorization for the low income housing tax credit from $40 million to $60 million; and allow cities and towns to adopt a local property tax exemption for affordable real estate that is rented by a person whose income is less than a certain level set by the municipality.

“We are thrilled to deliver on our promise to pass tax cuts that will result in real savings for the people of Massachusetts, including the country’s largest child and family tax credit that will go back in the pockets of parents and caregivers,” said Gov. Healey. “Everywhere we go, we hear about how people are struggling to keep up with the rising cost of living. This tax package delivers savings for those who need it most, while making long overdue changes that will better allow Massachusetts to compete with other states.”

“This tax relief package strikes the critically important balance of providing permanent financial relief to residents and businesses across Massachusetts, without compromising the long-term financial security of the commonwealth,” said House Speaker Ron Mariano (D-Quincy). “I’m confident that this tax reform legislation will help to make Massachusetts more affordable for all residents, while also helping to make the commonwealth more competitive with other states.”

The measure also includes two provisions which the opponents said will result in tax hikes. One would require Massachusetts married couples who file income tax returns jointly at the federal level to do the same at the state level. The other changes are the system under Chapter 62F that requires that annual tax revenue above a certain amount collected by the state go back to the taxpayers. Under current law, the money is returned to taxpayers based on what he or she earned and paid in taxes. The new tax package changed that and provided that each taxpayer will receive a flat rate refund, unrelated to what they earned or paid in taxes.

“The High Tech Council appreciates the effort Gov. Healey and the Legislature put into this first step towards addressing the state’s tax outlier status,” said High Tech Council President Chris Anderson. “Unfortunately, the final tax ‘relief’ legislation falls short of delivering the meaningful change needed, as it includes both an expansion of the voter-approved income surtax and an unconstitutional redistribution of income through changes to the voter-approved Chapter 62F rebate formula.”

Anderson concluded, “The High Tech Council looks forward to collaborating with Gov. Healey, her cabinet and legislators across the commonwealth who are committed to defending and strengthening our business climate and the associated high quality of life it brings to Massachusetts residents."

(A “Yes” vote is for the tax relief package. A “No” vote is against it.)

Sen. Rebecca Rausch Yes Sen. Karen Spilka Yes

FILE TAXES JOINTLY (S 2387)

Senate 33-5, approved an amendment that would require Massachusetts couples who file income tax returns jointly at the federal level do the same at the state level.

Supporters said this amendment will close a loophole that allows some married couples to file individually – an action that could be used to minimize or avoid the person’s state tax obligations under the recent 4 percent surtax which is in addition to the current flat 5 percent one, on taxpayers’ earnings of more than $1 million annually.

Opponents said if filers are forced to file jointly at the state level, the 4 percent surtax will apply to many more filers, which is not what the voters approved on the November 2022 ballot question imposing the 4 percent surtax.

(A “Yes” vote is for the amendment requiring joint filing. A “No” vote is against the amendment.)

Sen. Rebecca Rausch Yes Sen. Karen Spilka President rarely votes

REDUCE SHORT TERM CAPITAL GAINS TAX (S 2397)

Senate 5-32, rejected an amendment that would reduce the short-term capital gains tax from 12 percent to 5 percent.

Amendment supporters said that there are 26 states that currently tax short-term capital gains at a rate of 5 percent or lower, including all of the Bay State’s surrounding states. They asked why the capital gains tax or any tax imposed should be charged at a higher rate than earned income.

Amendment opponents said the state cannot afford the $117 million loss in revenue that this tax cut would cost this year. They argued the cut would do nothing to help the costs of housing and living.

(A “Yes” vote is for the reduction to 5 percent. A “No” vote is against the reduction.)

Sen. Rebecca Rausch No Sen. Karen Spilka President rarely votes

INCREASE ESTATE/DEATH TAX EXEMPTION (S 2397)

Senate 5-33, rejected an amendment that would increase from $1 million to $5 million the amount of money that is tax exempt from the value of a person’s estate when calculating the state’s estate/death tax that a person is required to pay following their death before distribution to any beneficiary. The increase to $5 million would be implemented over ten years.

Most Republicans are against any such tax and coined the name “death tax” to imply that the government taxes you even after you die. Most Democrats support the tax and call it an “estate tax” to imply that this tax is mostly paid by the wealthy.

Amendment supporters said that Massachusetts is one of only 12 states that have an estate/death tax and that the Bay State’s is the most aggressive of the 12. They said that in light of the high value of houses, with the average home price more than $500,000, the $1 million threshold of this “unfair and regressive” tax is too low and noted the federal tax exempts the first $12 million. They noted that Massachusetts is losing many residents, who move to Florida and other states where this tax does not even exist.

Amendment opponents said the proposed bill already raises the exemption from $1 million to $2 million and noted that will cost $185 million. They said a hike to $5 million is excessive and unaffordable and will cost hundreds of millions of dollars more. They noted that lowering the estate tax is not the only way to help seniors and their families and noted there are many other initiatives in the bill that help seniors.

(A “Yes” vote is for increasing the exemption to $5 million. A “No” vote is against increasing it.)

Sen. Rebecca Rausch No Sen. Karen Spilka President rarely votes

TAX REVENUE FROM MILLIONAIRE’S TAX (S 3)

Senate 5-34, rejected an amendment that would remove a section in the budget that exempts tax revenue generated from the recently voter-approved Millionaire Tax from counting toward the allowable state tax revenue limitations, under Chapter 62F, which provides that whenever revenue collections in a fiscal year exceed an annual cap tied to wage and salary growth, the excess is returned to taxpayers.

Last year, $3 billion in refunds were returned to taxpayers when the law was triggered for just the second time since its passage in 1986. The revenue from the Millionaire Tax is deposited into the new Education and Transportation Stabilization Fund.

“It’s refreshing to see some lawmakers put the interests of the taxpayers at the forefront,” said Paul Craney, a spokesperson for the Mass Fiscal Alliance which supported the amendment to remove the section. “Senate Republicans came to today’s debate well prepared. They passionately spoke out in favor of their ideas to protect the taxpayers and preserve the very popular taxpayer protection voter approved law known as 62F. Senate Democrats want to break the will of the voters by excluding the new millionaire’s tax revenue from the total calculation for rebates back to the taxpayers from 62F. That goes against the will of the voters as the law is written and today’s debate by Senate Republicans made that point very clearly.”

Amendment opponents said the amendment will put the new revenue in jeopardy and argued this new revenue is earmarked for education and transportation and must be protected and treated differently than other tax revenue.

(Please note what a “Yes” and “No” vote mean. The amendment was on striking the section that exempts tax revenue generated from the recently voter-approved Millionaire Tax from counting toward the allowable state tax revenue limitations. Therefore, a “Yes” vote is for the amendment that favors tax revenue generated from the recently voter-approved Millionaire Tax counting toward the allowable state tax revenue limitations. A “No” vote is against the amendment and supports exempting the revenue from the allowable state tax revenue limitations.)

Sen. Rebecca Rausch No Sen. Karen Spilka President rarely votes

SEND 90 PERCENT OF CAPITAL GAINS TAX REVENUE ABOVE $1 BILLION TO THE RAINY DAY FUND (S 3)

Senate 3-36, rejected an amendment that would maintain the current 90/5/5 law under which 90 percent of the capital gains tax collections exceeding $1 billion goes to the Rainy Day Fund, 5 percent to the State Retiree Benefits Trust Fund and 5 percent to the State Pension Liability Fund. The amendment would replace a pending 60/20/20 proposal that would send, in fiscal 2024 only, 60 percent of the $1 billion excess to the Rainy Day Fund while sending 20 percent to the State Retiree Benefits Trust Fund and 20 percent to the State Pension Liability Fund.

Amendment supporters said it is essential to provide 90 percent to the Rainy Day Fund which helps bail out the state during slow economic times when tax revenues shrink.

Amendment opponents said the Rainy Day Fund is flush with $7 billion and argued these retiree and pension funds are currently underfunded and need some additional money for just one year.

(A “Yes” vote is for maintaining the current 90/5/5 formula. A “No” vote is for the 60/20/20 formula.)

Sen. Rebecca Rausch No Sen. Karen Spilka President rarely votes

ALSO UP ON BEACON HILL

ONLINE CAR SALES (H 351) – The House gave initial approval to a bill that makes online sales of cars subject to the same law as if the sales were executed at the dealership's physical place of business.

Supporters said the bill aims to modernize the law regarding online car buying by not forcing dealers to provide a three-day return policy for online auto purchases. The measure would make it so the businesses selling these cars would have the choice to make all purchases final as long as that fact is clearly disclosed to the customer, instead of making the dealer pay for the sometimes significant transportation costs associated with a customer changing their mind. They noted that people shopping for a car online have the benefit of a lot of information to make this important decision, as well as the luxury to shop for many cars at once located over a great distance.

"Due to the increasing reliance on online automotive purchases and the changing landscape of the modern economy, this legislation would modernize the motor vehicle purchase process by bringing online automotive purchases into the 21st century,” said co-sponsor Rep. Jack Lewis (D-Framingham). “This legislation does not have any impact on current consumer protections such as inspections or lemon laws."

“I’m proud to join auto dealers in Framingham and across the commonwealth in keeping up with how car buying takes place in 2024,” said co-sponsor Rep. Priscila Sousa (D-Framingham). “I believe if shoppers are given the proper information to make an informed decision, auto dealers should not be forced to adhere to antiquated policies that ultimately hurt our businesses. The passing of this bill would make the benefits of online car buying more evenly shared between the dealer and customer while still protecting both.”

FORTUNE TELLERS (H 3893) – The House gave initial approval to legislation that would eliminate the current state law requiring that all fortune telling applicants must have lived in the city or town in which they are seeking their license to practice for at least one continuous year prior to filing their application.

“This law was brought to my attention by one of my municipalities as they were doing research on entertainment,” said sponsor Rep. Susannah Whipps (U-Athol). “The bill [was] filed on their behalf and in the interest of removing old laws that have become antiquated.”

BAN ALL PRODUCTS MADE IN RUSSIA (H 343) – A bill before the Consumer Protection and Professional Licensure Committee would ban the purchase and/or consumption by all Massachusetts consumers and entities of any product made in Russia.

The bill’s co-sponsors, Reps. Patrick Kearney (D-Scituate) and Michelle DuBois (D-Brockton) did not respond to repeated requests by Beacon Hill Roll Call asking why they filed the bill and why it would be good for the Bay State.

Mark Marget from Needham Massachusetts, a student who attends Bentley College, was the only person who has testified on the measure. He told the committee there are many moral, ethical, strategic, practical and safety reasons to pass an imports ban. “Russian products simply are not safe because of the current regime,” said Marget who describes himself as a “well-informed historian and geopolitician who has conducted academic research on the war in Ukraine.”

“Authoritarian dictatorships fundamentally have no legal accountability to their own citizens and as such a regime like Putin's would have no reason to make his people accountable towards international laws,” continued Marget. “And unlike China, Russia is not swayed by economic consequences for political gain. In fact, part of Putin's own regime security policy involves depoliticizing the masses through cheap and easy access to alcohol. Therefore, there is nothing deterring the Russian State from striking our own citizens with harmful consumer goods and as such, an imports ban needs to be considered for the safety of the commonwealth.”

QUOTABLE QUOTES

"Massachusetts has the opportunity to be a global leader in Applied AI – but it’s going to take us bringing together the brightest minds in tech, business, education, health care and government. That’s exactly what this task force will do. Members of the task force will collaborate on strategies that keep us ahead of the curve by leveraging AI and GenAI technology, which will bring significant benefit [to] our economy and communities across the state.”

---Gov. Maura Healey upon signing an Executive Order establishing the Artificial Intelligence Strategic Task Force to study AI and Generative Artificial Intelligence (GenAI) technology and its impact on the state, private businesses, higher education institutions and constituents.

“This latest report proves that Massachusetts is not immune from 21st century anti-abortion attacks—this data privacy crisis is right here in our backyard. If these extremists are able to use our location data to target abortion seekers with digital advertising, they can also use it to harass, threaten or litigate against patients and providers in our state. Massachusetts has a responsibility to protect our location data and ensure that this personal information cannot be sold to hostile, out-of-state actors.”

---Rebecca Hart Holder, president of Reproductive Equity Now, on reports that a data broker company allegedly tracked people’s visits to nearly 600 Planned Parenthood locations across 48 states, including Massachusetts, and provided that data to inform one of the nation’s largest anti-abortion ad campaigns.

“These programs will put Massachusetts further on the path to greater food security and economic prosperity and achieving our climate goals. The more food grown here, the less reliance we will have on importing from other parts of the country and world, ultimately decreasing our carbon footprint.”

---Energy and Environmental Affairs Secretary Rebecca Tepper announcing $8.2 million to support greater food access to residents in underserved Massachusetts communities in order to help strengthen the local food system and address food insecurity.

"Given that candidates are already able to draw nomination papers for the regularly scheduled state election for the 6th Plymouth House District, the House will not call a special election, as doing so would burden communities with the added costs associated with holding a special election, only to hold another election a few months later for that same seat.”

---House Speaker Ron Mariano (D-Quincy) telling the State House News Service why he will not call for a special election for the South Shore House seat vacated by former Rep. Josh Cutler (D-Plymouth) who resigned from the House to become Gov. Maura Healey’s Undersecretary of Apprenticeship, Work-based Learning and Policy in the Executive Office of Labor and Workforce Development.

“Amidst the legislative session's peak, Speaker Mariano apparently prioritizes politics over delivering tangible legislative outcomes for the residents of Pembroke, Duxbury, Marshfield, Hanson and Halifax. Should a constituent raise concerns regarding bills or community issues, Speaker Mariano and the Beacon Hill leadership bear full responsibility as those phone calls and e-mails are met with a limited response from staff or go unanswered all together.”

---MassGOP Chairwoman Amy Carnevale on Marian’s decision not to hold a special election.

HOW LONG WAS LAST WEEK’S SESSION?

Beacon Hill Roll Call tracks the length of time that the House and Senate were in session each week. Many legislators say that legislative sessions are only one aspect of the Legislature’s job and that a lot of important work is done outside of the House and Senate chambers. They note that their jobs also involve committee work, research, constituent work and other matters that are important to their districts. Critics say that the Legislature does not meet regularly or long enough to debate and vote in public view on the thousands of pieces of legislation that have been filed. They note that the infrequency and brief length of sessions are misguided and lead to irresponsible late-night sessions and a mad rush to act on dozens of bills in the days immediately preceding the end of an annual session.

During the week of February 12-16, the House met for a total of 28 minutes and the Senate met for a total of 23 minutes.

Mon. Feb. 12 House 11:01 a.m. to 11:17 a.m.

Senate 11:30 a.m. to 11:45 a.m.

Tues. Feb. 14 No House session

No Senate session

Wed. Feb. 15 No House session

No Senate session

Thurs. Feb. 16 House 11:01 a.m. to 11:13 a.m.

Senate 11:29 a.m. to 11:37 a.m.

Fri. Feb. 9 No House session

No Senate session

Bob Katzen welcomes feedback at bob@beaconhillrollcall.com