By Bob Katzen
Senate 31-8 approved an amendment that would change the conditions under which a current law (known as 62F), approved by voters on the 1986 ballot, is triggered. That law requires that annual tax revenue above a certain amount collected by the state go back to the taxpayers. The amendment would only allow the law to be triggered if “the net state tax revenues in the fiscal year are less than 7.5 per cent of the total statewide personal income for the calendar year ending in the fiscal year as determined by the Bureau of Economic Analysis in the United States Department of Commerce.”
“Our modern-day economy is completely different from what it was back in 1986 when Chapter 62F was enacted,” said amendment sponsor Sen. Jason Lewis (D-Winchester). “Unfortunately, Chapter 62F uses a flawed method of calculating allowable revenue and economic growth from year to year that only considers income from wages and salaries, instead of a more comprehensive model that includes other income from gig economy work and passive income sources such as capital gains, which are both growing sources of income for residents. Currently, wages and salaries only make up just over 50% of total personal income in Massachusetts—a significant decline since 1986 which hasn’t been accounted for.”
Lewis continued, “With this major shift in the state’s economy, we need to update our tax policies to stay in line with it. [My] amendment respects the will of the voters who implemented Chapter 62F by keeping its central cap and formula in place while adding a simple update to take total personal income into account as well when triggering refunds to more accurately reflect the state of the modern economy. Refunds could only go into effect if net state tax revenues in the fiscal year are 7.5% or more of the total statewide personal income for the calendar year as determined by the Bureau of Economic Analysis in the U.S. Department of Commerce.”
“This amendment would undermine that same voter-approved policy by treating those excess revenues as government funds rather than taxpayer funds,” said Sen. Ryan Fattman (R-Sutton) who opposed the amendment. “That contradicts the will of the voters, who already decided this issue. Reversing that outcome would represent a significant breach of public trust. It also does not promote economic development or make Massachusetts more affordable, which are the stated goals of this bill.”
“The voters of Massachusetts made themselves explicitly clear when 62F was first established that excess tax revenue collected by the state should be returned to the taxpayers,” said Sen. John Velis (D-Westfield) who also opposed the amendment. “Dramatic changes like these to our state’s only tax rebate law should again be decided by the voters themselves, which is why I opposed the amendment.”
(A “Yes” vote is for the amendment that only allows the law to be triggered if the net state tax revenues in the fiscal year are less than 7.5 per cent of the total statewide personal income. A “No” vote is against the amendment.)
Sen. Patricia Jehlen Yes