Last week, the Massachusetts House of Representatives and State Senate passed a final $40.202 billion state budget for Fiscal Year 2018. I voted for the budget because it increased funding for K-12 public education, affordable housing vouchers, and a salary reserve for early education and care workers. It also included other policies that I care deeply about, such as expansion of the housing court, flexibility of the EITC for victims of domestic violence, research on gun crimes, a requirement for data on solitary confinement in our prisons, and bulk purchasing for EpiPens.
Due to revised revenue forecasts, however, the budget also included cuts of over $700 million, including to the Department of Environmental Protection, homeless individual assistance, higher education, and public housing.
I’m troubled by the impact these cuts will have on people across Massachusetts, and I believe we could have done more to offset our budget shortfall. As a long-time advocate of closing corporate tax loopholes, I was extremely disappointed that the Conference Committee failed to include revenue-generating measures proposed by the Senate.
During the Senate budget debate in May, we successfully passed measures to tax short-term rentals (AirBnB), double the state Community Preservation Act (CPA) match, reform the film tax credit, reduce the life sciences tax break, and divert money from the Racehorse Development Fund. Additionally, the Senate budget would have established a commission to evaluate the fiscal impact of all corporate tax breaks, which could change the way we view corporate welfare in Massachusetts.
While these revenue proposals would not have made up the $700 million shortfall, they would have averted some harsh cuts. The Senate-proposed reforms were also an opportunity for the Democratic-led legislature to affirm that Massachusetts residents are more important than big corporations.
We lose hundreds of millions of dollars annually in the form of business tax breaks that largely flow to big corporations. At the same time, investments in human services, environmental protection, and affordable housing are either cut or barely maintained in our state budget due to lack of revenue. This has been a recurring theme for more than 20 years in Massachusetts.
We have to ask ourselves: what are we saying to our constituents when we can’t even make a modest attempt to avoid painful budget cuts? How can the party that produced the New Deal and the Great Society justify hits to the disabled, the poor, and working families, while bowing to corporate lobbyists and socially irresponsible big businesses?
A budget is a statement of values, and it’s time for the Democratic-led legislature to make responsible decisions on tax policy that meet the needs of all Massachusetts residents, not just the wealthiest among us.
The issue of the “tax expenditure budget” is huge, and not one that I think most people, even on this site, understand. A brief primer would likely help some understand what you wrote about. In fact, choices made to not collect taxes or give credits are “tax expenditures” and tax expenditures enacted in the 1990s, to my understanding, reduce the funds available for governance by over three billion a year. Those are “tax expenditures” because the choice to not collect or not tax is an “expenditure” that is mostly invisible. Interestingly, the so-called “tax expenditure budget”, the “negative” behind the investments you detailed [and investments foregone] is online every year, see http://www.mass.gov/dor/tax-professionals/news-and-reports/state-budget-documents/tax-expenditure-budget/
Thank you AmberPaw! I certainly do not understand the “tax expenditure budget.” I was reading some of your helpful link and one interesting thing I noticed is that under Fiscal Year 2018 Tax Expenditure Budget – Corporate and Other Business Excise : The rates have declined since January 2010,,,,and I wonder why that is exactly? You have given me something to study however, not being all that finance savvy, not sure I will gain a thorough understanding.
This is a great list. Something that I think is lost on people is that these “tax expenditures” are benefits that certain people accrue, but others do not. Many of them go to non-poor people. One that stands out is the $705 million annually given to people who do not have to pay capital gains taxes on investments transferred to someone else when they die.
I’m sure a lot of that is transferred to a surviving spouse, but I think you can make a very reasonable argument that this is not fair. Let’s say that both your father and mine bought shares of Widget Inc 50 years ago. The appreciation on the stock is $1 million. Your father gives you his stock and you sell it, and you pay taxes on that $1 million. My father dies and leaves me his stock; I sell it on the very same day and I pay no taxes. Fair? I don’t think so.