Saturday, July 30, 2022

Senate Republicans: Honor The Voter Approved 1986 Law Requiring A Tax Credit Rebate And Promised Legislative Tax Cuts

Governor Baker announced that a tax law adopted by voters in 1986 has triggered what could be more than $2.5 billion in money returned to taxpayers this fall. In addition to that, the House and Senate have each approved their own tax cut plans that would represent $1 billion more in tax cuts. Here is my press release on all of this:
Senate Republicans: Honor The Voter Approved 1986 Law
Requiring A Tax Credit Rebate And Promised Legislative Tax Cuts
Sufficient Fiscal Resources Available For Pending 2022 Tax Cuts And MGL 62F Tax Credit Mandate
Boston- State Senate Republicans today reiterated their call for meaningful tax relief in the economic development bill before the legislative session ends on Sunday. They also say the will of voters should be honored by defending the provisions of a 1986 ballot question (MGL Chapter 62F) which will yield additional tax credits without sacrificing the tax cuts now pending before a legislative conference committee.
Following months of efforts by Republicans to advance substantial tax reforms, the House and Senate gave unanimous preliminary approval of at least $500 million worth of changes to the tax code and $500 million more in one-time rebates. Prior to that approval, Democrat leaders hailed the plan as giving “immediate financial relief directly to residents of the Commonwealth” those tax cuts still await final legislative approval in an economic development bill, A Bill Relating to Economic Growth and Relief for the Commonwealth, pending in the legislature.
"While perhaps none of us would have predicted the astonishing amounts of revenue being collected by state government, this is exactly the type of situation that voters addressed clearly in 1986, and we need to honor their directive,” said Senate Minority Leader Bruce Tarr (R- Gloucester). “Moreover, the very levels of tax collection that trigger the 1986 law also give us the capacity and the obligation to provide the additional relief approved by the House and Senate in the Bill Relating to Economic Growth and Relief for the Commonwealth. The circumstances of ballooning state surpluses and the enormous pressure on household budgets due to inflation and other costs demand no less, and we must proceed on both fronts.”
According to Governor Charlie Baker’s Executive Office of Administration and Finance (A and F) the Massachusetts Department of Revenue estimates that state tax revenues exceed allowable state revenues limits, as defined by the 1986 law MGL 62F, thus automatically triggering more than $2.5 billion to be returned to taxpayers. In addition, the agencies concluded there is sufficient funding available to also enact the $1 billion tax cut package now pending in the legislature. The Massachusetts Taxpayers Foundation (MTF) has similarly determined that there are sufficient funds available to support the tax credit rebates as prescribed under existing law as well as the new proposals to make structural long-term changes to the tax code.
The July 29 MTF report stated, “even if $2.9 billion is credited to taxpayers, sufficient resources remain for either version of the House or Senate economic development/tax bills.”
In the waning days of the legislative session calls from the public have intensified as Massachusetts residents face what Democratic leaders called in their tax cut plan rollout “the crippling impact of rising prices, inflation, and economic uncertainty” as well as the recent official determination of a nation-wide economic recession.
The $1 billion in tax relief was initially approved in separate versions of an economic development bill, however, a final version of that bill has not yet materialized prompting Republican senators to warn that taxpayers, banking on the commitments made by legislative leaders, are at further financial risk if the tax cut bill fails to be delivered.
In addition to, and separate from, the tax proposals pending in the House and Senate, the voter-approved state law adopted at the ballot in 1986 will likely mandate the rebate of tax revenue surpluses collected that exceed fiscal year thresholds established in the statute. According to A and F, the state tax credit rebate owed, under the provisions of MGL 62F, to taxpayers this year could trigger more than $2.5 billion to be returned this fall.
“Recently we learned about the impact of a law that was passed by 54% of the vote in 1986 that will dramatically help taxpayers across the Commonwealth. The law will provide relief from rising prices on just about everything as we enter an economic recession. Some estimates have this tax relief as great as $3.2 billion or nearly six times greater than the tax relief package," said State Senator Ryan Fattman (R-Sutton). "However, The Massachusetts legislature has a long history of overturning the will of the people at the ballot. An attempt by Democrats to change this law will undermine the will of the people, and therefore prevent the millions of people we represent from getting this significant tax relief. It will also likely undermine the General Court’s ability to get anything done on further tax relief after August 1st when we enter unanimous consent operations.”
“Time is of the essence to deliver tax cuts for the people of Massachusetts,” said Senator Patrick O’Connor (R-Weymouth). “With rising costs in every area of our economy, we need serious structural changes to ensure people can continue to stay in their homes, put food on the table, and make ends meet. The state remains flush with cash and state law originally enacted in 1986 dictates that the state return upwards of $2.5 billion to the taxpayers. It is imperative that we follow existing law and send a multi-billion dollar tax break package to Governor Baker’s desk.”
“The 1986 voter-approved law was adopted as a fundamental protection and last-moment attempts to gut or change it without public input would be a disservice to those paying our government’s bills,” said Senator Tarr. “We all need to remain steadfastly committed to delivering the tax relief we have promised and the 1986 law dictates.”
Lawmaker's rules proscribe that the formal sessions of the legislature must conclude Sunday at midnight.