The legal issue that the Supreme Judicial Court resolved today (PDF) is one that only a state constitutional law geek could love. But the upshot is quite substantial, and it gives the Senate the advantage in ongoing budget negotiations with the House.
Here’s what happened. As happens pretty much every year, the Governor filed his proposed budget; the House substantially changed it and passed its version; and then the Senate substantially changed what the House did and passed its own version. The House and Senate versions are now being reconciled in a conference committee.
In the course of all of this arose the question whether the Senate had broken the constitutional rule that requires that all “money bills” must originate in the House of Representatives. The Senate’s budget technically “amends” the House version, but the amendment is drastic: it takes the House bill, strikes out everything after the “be it enacted” clause, and then inserts its own version. And the Senate budget includes some tax changes that normally would have to originate in the House. Foul, cried the House! You can’t originate a money bill, so your tax changes are invalid.
Not so fast, replied the Senate. Because the House bill contained a tax provision of its own – namely, a semi-obscure provision having to do with the implementation of “combined reporting” (“This section delays until tax year 2017 the start of the deduction allowed to certain publicly-traded companies to offset increases in their net deferred tax liability that resulted from the commonwealth’s implementation of combined reporting”) – and that provision will increase the amount of tax revenue available to the Commonwealth next year, the House bill was a “money bill,” and the fact that the Senate drastically changed the House bill (by adding a bunch of new tax rules, among other things) doesn’t mean that the Senate “originated” a money bill.
Unable to agree, the House asked the Supreme Judicial Court for a ruling. And, in short, the House lost. The SJC ruled that the inclusion of the “combined reporting” provision in the House budget did indeed make that budget a “money bill,” and it further ruled that the Senate’s amending that bill by including a bunch of stuff that the House didn’t want did not constitute impermissibly “originating” a new money bill in the Senate. That is exactly the ruling that the Senate sought (PDF).
So, this round goes to the Senate. This issue is certainly more process- than outcome-oriented, but it should marginally strengthen the Senate’s hand in the ongoing budget negotiations.