Democratic Governor Maura Healey unveiled her almost $750 million tax relief plan in February.
Promoting the plan in Springfield, she said the package would help restore competitiveness and affordability to the state’s economy.
“Our tax plan- And those are the parts that I just wanted to lift up, because it really does go to the issue of affordability that every region of the state is struggling with now,” said Healey.
Berkshire legislators and progressive groups alike expressed concern that it would undermine the Fair Share Amendment approved by voters in 2022. Also known as the Millionaire’s Tax, it added a new 4% surtax on income above $1 million a year to be used for investments in public infrastructure, transportation, and education.
Democratic State Representative Tricia Farley-Bouvier of the 2nd Berkshire District – who has served as the co-chair of the Massachusetts House Progressive Caucus – spoke to WAMC about tax relief in March.
“What we don't want to do is after all the work of getting the Fair Share Amendment through, then to undo that work," she said. "And I'm concerned that putting together all the provisions of her tax package is doing just that.”
Democratic State Senator Paul Mark of the Berkshire, Franklin, Hampden, and Hampshire district – a union member who has advocated for organized labor throughout his career – also spoke with WAMC about the plan that month.
“I think if there's going to be tax cuts and tax rebates and tax credits that you want to make sure that if it's happening, it's going to be focused on the people that need the tax benefits the most," he said. "So, people with lower income, people that are maybe facing unexpected expenses.”
Raise Up Massachusetts is a coalition of labor unions, faith-based organizations, and community groups that worked to pass the Fair Share Amendment. Spokesperson Andrew Farnitano told WAMC the group’s hackles were raised by Healey’s plan.
“We're very concerned that the governor's proposal to cut state taxes by a billion dollars each year would undermine the Fair Share Amendment’s goals of a fairer tax system and more revenue for investment in critical public goods," he said. "Specifically, we're very concerned that the governor's proposals to cut the estate tax and the short-term capital gains tax would amount to enormous windfall to the richest 1% in our state.”
When the dust settled and the legislature overwhelming approved the tax relief plan in September – weeks after the $56 billion fiscal year 2024 budget was passed – criticism from organized labor and progressive organizations was swift and harsh.
Max Page is president of the Massachusetts Teachers Association, which represents 115,000 education workers in the commonwealth.
“The Massachusetts Teachers Association put an enormous amount of human and financial energy into passing the Fair Share Amendment, which asks the very wealthiest people in the commonwealth, to pay a little bit more in order to invest in public schools and colleges and transportation systems," he told WAMC. "That was just last November, and we passed a budget a month ago that really did begin those major reinvestments. So, we find it rather stunning to see the legislature now give back several hundred million dollars to some of the wealthiest people and largest corporations in the commonwealth. So that is very, very disappointing. There are certainly elements of this tax package that will help working people, and we did manage to convince the legislature to close a loophole that would have allowed the wealthy to get away with even more. But I would say we're very, very disappointed that this is what a Democratic governor and Democratic legislature would do, which is give back hundreds of millions of dollars when we just, not even a year ago, the voters voted to really ask the very wealthiest to pay a bit more so we can have the investments in schools and transportation that we need.”
WAMC returned to Farley-Bouvier and Mark to hear their explanations for ultimately accepting the compromise version of the bill- a titanic $1 billion tax relief plan.
“One thing that we did do this year is increased the child dependent tax credit," said Farley-Bouvier. "And so before, you would get a credit of $180 per child or dependent, and it was capped at two kids. Now, we've raised it from $180 to $440. But we do not cap the number of children and the number of dependents that you have. And I think that is, that's money in people's pockets. The other thing we were able to do was increase what's called the Earned Income Tax Credit from 30% of what is what you get in your federal taxes to 40%. And so, we're really working, and when we work on something like Earned Income Tax Credit, those are people who are who are really hurting. And then we have to look at our seniors. Seniors are hurting, right? And we have raised the Senior Circuit Breaker from $750 to $1,500. So that's doubled, and it's automatically in there to adjust for inflation, so we don't have to wait for another vote to be able to do it.”
The state rep noted that the legislature had approved a lower estate tax raise than the $3 million Healey had originally proposed.
“We were able to move that down to $2 million," Farley-Bouvier told WAMC. "It's currently $1 million now, and so, we were able to find a middle ground. And while the Fair Share Amendment is something that happens year after year, when somebody has an estate like that, gets a big income because of the sale of a house, we are able to- That's going to be a onetime thing instead of the year after year of the Fair Share Agreement. And you know, we have to work together with all people in in the legislature, and this compromise we were able to make.”
Mark also offered his explanation for why he backed the plan.
“The Senate version that was initially passed was much more in line than the House version, no disrespect to my friends in the House, was certainly more in line with my philosophy and what I think is effective in terms of tax breaks- That we're talking about tax credits for people that are working and starting businesses and trying to stay afloat, that we're targeting these people that are going to put them right to work, and that's going to actually have an economic impact that is positive because it's going to be money that is right in the hands of people,” he said.
Mark maintains the final package represents a compromise, and noted that Healey’s Republican predecessor had been unable to convince the Democrat-dominated legislature to approve any tax cuts over his eight years in office.
“It was something Governor Baker certainly wanted, and Governor Healey, I think, really wanted to follow through and show that, no, Democrats believe in tax savings and targeted tax cuts as well, it's not just a Republican issue, and that was one of her priorities for sure," said the state senator. "And I think the final package, yeah, largely balanced it. When you get nine out of 10 things you want, in the end, you have to swallow that tenth thing or else you never get anything done.”
The Massachusetts House and Senate reconvene on January 3rd.
