By Bob Katzen
Repeals a current state law that sets a tax revenue growth limit for each fiscal year that is calculated based on the growth in total wages and salaries of the state’s residents.
Replaces that law with a new one that would establish a state expenditure growth limit for each fiscal year that would be calculated based on the growth in inflation under the Consumer Price Index and the percentage change in Massachusetts’ population. If tax revenues exceed expenditures, the excess revenue would be put in a temporary holding fund and any balance remaining in the fund at the end of the fiscal year would be refunded to taxpayers. If expenditures exceed tax revenues, the excess expenditures would be reduced until they no longer exceed the revenue.
Republican Minority Leader Brad Jones (R-North Reading) told Beacon Hill Roll Call he intends to refile his bill in the 2021 session. “[This] is a taxpayer-friendly bill that would establish fiscally sound parameters for state expenditure growth to help ensure the commonwealth is spending tax dollars responsibly,” said Jones. “While I’m disappointed the bill was placed in a study order, I understand why the committee might be reluctant to move forward with the proposed changes at this time, given the continued fiscal uncertainty created by the COVID-19 global pandemic.”