Budget watchdog: Mass. needs, can afford, tax relief
Warns of talent issues without Baker’s proposals
If Gov. Charlie Baker’s tax cut proposals aren’t passed, there’s a real danger the state could fail to attract the talent it is going to need for continued growth, according to the head of a nonpartisan tax policy group.
“I think that the proposal is balanced. It provides a lot of help to folks at the lower end of the income spectrum that have been most impacted by the pandemic,” Eileen McAnneny, president of the Massachusetts Taxpayers Foundation, said during an appearance with John Keller on WBZ Sunday.
According to McAnneny, in addition to helping seniors and those with very little income, Baker’s proposal would help Massachusetts continue to attract and keep the sort of residents required for the state’s economy to continue growing.
“Massachusetts’ economy is based in entrepreneurship and investment in innovation and so we don’t want to make our tax burden so high that we drive people away from Massachusetts, particularly in this era when people can live and move and be anywhere,” she said.
Baker’s proposal, submitted to the legislature in January alongside his $48.5 billion budget plan for fiscal 2023, would amount to over $700 million in tax relief for commonwealth residents, according to his administration. The plan includes tax relief for renters, adoption of federal standards for no-tax status for low-income residents, an adjustment of the “low income circuit breaker” on property tax relief for older residents, and a proposal to lower the estate and shortterm capital gains taxes.
Despite the nonpartisan foundation’s endorsement of the proposal, McAnneny acknowledged it has to clear a legislature that just last month declined to provide tax relief to motorists via suspension of the gas tax. But she said the governor’s proposal has an advantage ahead of the legislature’s planned July 31 adjournment.
“It is an election year and people like tax relief,” she pointed out to Keller.
That may matter to legislators hoping to keep their jobs, but Baker and Lt. Gov. Karyn Polito have announced they will not seek re-election to a third term.
The House Ways and Means Committee is due to release its version of the budget Wednesday, providing the first insight into whether Baker’s tax plan has any hope of surviving. Lawmakers are under no obligation to move forward with Baker’s proposal.
The tax relief plan comes at a time when the state’s rainy day fund, in part due to COVID-19 relief funds from the federal government but also following record state tax revenue, is currently sitting at an alltime high of $4.6 billion.
March tax revenues were up by nearly 14% over last year, according to the Department of Revenue. That department reports year-to-date revenues are up by nearly 15%.