By Bob Katzen
The House 25-129, rejected a Republican amendment to a section of the Democrats’ tax relief bill that would change a current law that provides when the state’s Stabilization Fund, also known as the Rainy Day Fund, exceeds 15 percent of budgeted revenues, the excess is transferred to the Tax Reduction Fund which eventually is returned to taxpayers. The Democrats’ tax relief bill would raise that percent to 25.5 percent.
The Republican amendment would eliminate that change and revert to the current 15 percent formula.
“When excess funding is transferred to the Tax Reduction Fund, that helps provide for some modest tax relief to the commonwealth’s residents by allowing for an increase in their personal exemption when filing their taxes,” said amendment sponsor Rep. Brad Jones. “The whole purpose of this bill is to make Massachusetts more competitive, affordable and equitable, but raising the threshold makes it less likely that taxpayers will actually get a break, which runs contrary to the stated goals of the legislation.”
Opponents said that raising the cap will allow more money to remain in the Rainy Day Fund so that when it does “rain” and state revenues decline, the Legislature will not have to cut important programs or raise taxes. They noted hiking the cap is not without precedent, noting that the Legislature previously raised the cap from 7.5 percent to 10 percent in 2001 and from 10 percent to the current 15 percent in 2004.
Rep. John Cusack (D-Braintree), chair of the Revenue Committee, did not respond to repeated requests by Beacon Hill Roll Call to comment on why he supports raising the cap.
(A “Yes” vote is for the amendment making the cap 15 percent. A “No” vote is against the 15 percent cap and favors the 25.5 percent cap).
Rep. Christine Barber No Rep. Mike Connolly No Rep. Erika Uyterhoeven No