State tax break not dead yet
$2.5B error won’t eat away plan: Spilka
Despite the obvious similarities, there will not be a repeat of last year’s failed effort to provide tax relief, the state Senate president said Monday when asked if reports Massachusetts owes billions to the feds might somehow mirror last year’s unexpected $3 billion tax rebate requirement.
State Sen. President Karen Spilka, speaking to reporters after meeting with both Gov. Maura Healey and House Speaker Ron Mariano for one of the trio’s somewhat regular “leadership meetings,” said last summer’s sudden shelving of a unanimously accepted economic development bill, brought about after lawmakers learned they had taken too much from taxpayers and would need to send billions back under a rarely invoked 1986 law, will not serve as a precedent for a second slow-walk on tax relief.
“We are proceeding with a tax relief package — as I’ve said for many months — we will do a tax relief package,” she said.
On Friday, a yearly audit revealed Baker Administration officials apparently used $2.5 billion in federal pandemic-era relief funds to cover the cost of state-provided unemployment benefits, a tab which is supposed to be picked up by the commonwealth, not the feds.
It is unclear when the federal government will be paid back or how the error was made. On Monday lawmakers said they were still in a “fact-finding” phase.
The state’s Executive Office of Labor and Workforce
Development said the discrepancy occurred in 2020 and was “only recently identified” by the Healey administration.
According to the senate president, despite that unexpected unemployment bill arriving — which she contends isn’t even necessarily reflective of what the state may owe back — the upper chamber will proceed with the sort of progressive tax cuts she has been championing all session. The Senate’s about $56 billion fiscal 2024 budget, unanimously passed at the end of May, already includes a carveout for $575 million in tax relief. That’s about what was approved last year but abandoned and yet still hundreds of millions less than the economic reform plans offered by the state House and governor.
What will be in the plan is still up in the air. Senate
Ways and Means Chair Michael Rodrigues said a bill would be released in “the next two weeks.”
“We are in regular communication with our colleagues, putting together a package as we speak,” he told the State House News Service.
According to Spilka, residents will learn the specifics of the Senate’s tax cut plan “soon.”
“So, stay tuned,” she said.