A year ago, as Massachusetts’ economy was hit hard by the coronavirus pandemic, state lawmakers believed they should close a budget gap of 5 to 8 billion dollars.
State Senator Adam Hinds, D-Pittsfield, chairs the Senate Revenue Task Force, and has been asked to move the work of that group to focus on ways for the state to collect additional taxes, he told The Eagle.
“Everything,” he said, was on the table so that the state could avoid spending cuts.
A year later, the House and Senate passed budgets for fiscal years 2021 and 2022 that avoided significant revenue proposals. Better-than-expected tax collections, a withdrawal from the “rainy days” fund and a new round of federal aid, lawmakers said, have helped close the loopholes.
Now, Hinds says the improved income situation has allowed the income task force to return to its original mission – reducing the focus on proposals to generate new income.
“It’s interesting because we had this period where we thought we were looking for additional income to cover a budget gap,” Hinds said. “Now we come back to the original goal, which is to make sure the Massachusetts system is functional, modern and fair for all of us and… to create.”
The group has a draft report but no date set to finalize its recommendations, although Hinds expects the work to be done “very soon, certainly this summer,” he said.
In 2019, some members of the revenue task force suggested that its recommendations would be almost revenue neutral, meaning increases in revenue in some areas would be offset by decreases in others. Hinds said Tuesday, however, that revenue neutrality was not necessarily a goal for the group.
Some left-wing observers have identified increasing revenues as a priority for the Legislature in the coming years. While the nearly $ 5.3 billion the state receives from US federal bailout law may enable “transformative” change, it will be necessary to generate new revenue to support these investments in the future. , said Phineas Baxandall, senior analyst and advocacy director for Massachusetts. Center for Budget and Policy.
“It’s great that we have federal money to help us scale up, but we need something that is sustainable,” Baxandall said. “The wrong way to interpret the current situation is to look at the big bucket of federal money and think there is less need for long-term income.”
Baxandall cited education and child care as areas where new income would help fund increased investments that meet the needs of residents. the Student Opportunities Act, a landmark education reform bill passed in 2019, is expected to increase annual school spending by $ 1.5 billion when fully funded. Make childcare services accessible to all, MassBudget estimated, would cost the state 5 billion dollars.
The revenue task force was on track to release recommendations by the end of the 2019-20 legislative session before the coronavirus pandemic hit Massachusetts in March 2020, when “like everything else in the world, we turned away, ”said Hinds.
During the fiscal year 2021 budget debate, Hinds said the revenue task force plans to release recommendations ahead of the 2022 budget. But, due to pandemic uncertainty and constant changes In the state’s revenue situation, the group decided to wait until the end of the budget process to finalize the recommendations, Hinds said.
“We kind of wanted to understand the trajectory of the pandemic and the state of our recovery before we put any ideas on the table, so it looks like we are now reaching the point where we can usefully come together and finalize the work,” did he declare. .
To fund the 2022 budget, the House and Senate have proposed making a withdrawal from the stabilization fund of $ 3.5 billion, or on rainy days. While the House chose to draw up to $ 1.87 billion, the Senate offered to take a maximum of $ 1.55 billion.
The legislature had agreed to take $ 1.7 billion from the fund for the 2021 budget, but revenue collections have far exceeded expectations, and it is unclear how much, if any, the state will have to levy to cover budgetary expenses, House Ways and Means said President Aaron Michewitz in April.
Hinds does not expect there will be a need to dip into the rainy days fund for future budgets, as tax revenues remain “strong, although possibly spotty,” he said. .
” Have the [rainy day fund] the cash available to draw on has been critical, but I think all the data points to a much more stable and robust income picture, thanks in large part to federal assistance, ”said Hinds. “It strikes me that we will be able to cover this in the future.”
Meanwhile, leftist groups led by Raise Massachusetts intensify a push to pass the Modification of the fair share, a ballot initiative that would levy an additional tax of 4 percentage points on the portion of annual income in excess of $ 1 million. By raising up to $ 2 billion a year for the state, the constitutional amendment would help fund public education and transportation, supporters say.
The legislature voted 147-48 to move the amendment forward into 2019, but the amendment must once again receive at least 50% approval to appear on the 2022 ballot. The legislature will vote on Wednesday, and it is generally expected that the amendment advances to the 2022 ballot.