By Bob Katzen
The House 155-1, Senate 38-1, approved and sent to Gov. Maura Healey the conference committee version of a tax relief package. It was drafted as a compromise to the different versions approved by the House and Senate.
Supporters say this 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 rente
“This is the most significant tax relief package in a generation,” said Senate President Karen Spilka (D-Ashland). “This legislation is going to put real dollars into the pockets of the people who need it most, including parents, seniors, young people and middle class families who are struggling to keep up with rising costs. This bill includes a historic expansion of housing programs that will ignite affordable housing development and ease the housing crunch, as well as significant relief for families with young children. It will also make Massachusetts a more competitive place to live and work and encourages businesses to continue investing in our region.”
“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.”
“Back in April, I stood at the rostrum for about 13 minutes and expressed a mix of support for the many elements of this bill that will help working families and people experiencing poverty — while at the same time criticizing the elements of this bill that will benefit large corporations and the super-rich,” said Rep. Mike Connolly (D-Cambridge), the only House member to vote against the package.
“From my vantage point, this bill was significantly improved through the conference committee process, and there are several elements of the bill I enthusiastically support,” continued Connolly. “And yet, as I stand here today, I still cannot bring myself to support the total price tag of $1.1 billion once fully implemented. Not after we just spent a decade working to pass the Fair Share Amendment to gain desperately needed new revenue … A lot more needs to be done, including bigger public investments in programs, services and infrastructure — investments that could be significantly constrained by the overall cost of today’s tax cut bill.”
The measure also includes two provisions which the Mass Fiscal Alliance says 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 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 provides that each taxpayer will receive a flat rate refund, unrelated to what they earned or paid in taxes.
“Never before have so many waited so long for so little,” said Paul Craney, a spokesman for the Mass Fiscal Alliance. “Leave it up to two career politicians to not only deliver a two-year late tax relief package while almost every other state saw immediate relief but include tax hikes in their relief package. The speaker and Senate president’s proposal includes a marriage penalty, applying the new income surtax to married couples who have a combined income of over a million dollars.”
Craney further explained that changing how Chapter 62F surplus money is distributed to taxpayers actually hijacks the system and turns it into a socialist wealth redistribution scheme.
(A “Yes” vote is for the tax relief package. A “No” vote is against it.)
Rep. Christine Barber Yes Rep. Mike Connolly No Rep. Paul Donato Yes Rep. Erika Uyterhoeven Yes Sen. Patricia Jehlen Yes