$3.8 BILLION SUPPLEMENTAL BUDGET AND ECONOMIC DEVELOPMENT PACKAGE (H 5374)

By Bob Katzen

The House and Senate approved different versions of a $3 billion plus economic development bill in July. The funds are from the state’s surplus of money. The two versions went to a conference committee to hammer out a compromise version. Finally last week, the House and Senate crafted the compromise version and sent to Gov. Charlie Baker a $3.8 billion spending bill to fund an economic development package and a supplemental budget to close out the state’s books on fiscal 2022.

There was no roll call on the bill because it was approved at informal sessions of each branch at which roll calls are not allowed. Under legislative rules, each one of the state’s 192 legislators had the power to stall the bill indefinitely but no one did.
Absent from the package is millions of dollars in tax relief that was part of the original conflicting versions approved by each branch including $500 million one-time tax rebates to an estimated 2 million eligible people. A $250 rebate would go to individual taxpayers and a $500 rebate to married taxpayers. Eligibility would be determined by annual income reported in 2021, with the minimum income required to be $38,000, and the maximum $100,000 for individual filers and $150,000 for joint filers. Beginning in 2023, several permanent tax reductions would take effect including increasing the Child and Dependent Care Credit from $180 per child to $310 per child, as well as eliminating the current cap of $360 for two or more children; increasing the Earned Income Tax Credit from 30 percent to 40 percent of the federal credit; increasing the senior circuit breaker tax credit cap from $1,170 to $2,340; increasing the rental deduction cap from $3,000 to $4,000; and increasing the estate tax threshold from $1 million to $2 million.
“With many economic experts predicting financial uncertainty in the year ahead, our agreed upon package is limited to one-time investments,” said House Speaker Ron Mariano, Senate President Karen Spilka, House Ways and Means Chair Aaron Michlewitz and Senate Ways and Means Chair Michael Rodrigues in a joint statement. “House and Senate leaders are committed to revisiting the issue of broader, more permanent tax relief next session. This will help to ensure that our discussion of permanent tax relief can and will be informed by the views of a newly elected Legislature and governor, while considering the looming challenges facing the commonwealth.”
Senate Minority Leader Sen. Bruce Tarr (R-Gloucester) explained why the GOP decided not to hold up the bill despite the fact that it did not include the tax cuts. “At this important point, when one member could stop this process from moving forward, we will not jeopardize those important priorities,” said Tarr. “Too often, we see sometimes obstruction of someone else’s agenda because someone isn’t able to get all of their agenda. This is a time that requires statespersonship on behalf of all of us, so we will not stand in the way of helping all of those that need our help that will be the beneficiaries of some of the important appropriations in this bill. But what we will do is insist on a commitment to this IOU.”
Former representative and current GOP Party chair Jim Lyons disagreed with Tarr and criticized the Democratic leadership. “They removed the tax cuts from the original package, and the reason they did that, according to their own words, is that they’re uncertain about economic conditions moving forward,” Lyons said. “Yet somehow that isn’t stopping them from spending a whopping $3.7 billion of the taxpayers’ money. This is exactly why Massachusetts taxpayers are absolutely fed up with the status quo on Beacon Hill,” continued Lyons. “The Democrats are using an informal session to pass this progressive grab bag stuffed with handouts because they’re afraid of having to go on the record and actually vote for it.”

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