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Ben Downing: Toward A Fair Tax Policy In Massachusetts

30 years ago, Healthcare accounted for 16 percent of the $20 billion Massachusetts state budget. 10 years ago, it accounted for 30 percent of a $28 billion budget. In 2018, it was 40 percent of a $39.4B budget. You don’t have to be a policy wonk to realize that’s an unsustainable trend.

If you care about the state budget, and you should, you automatically have to care about two issues. The first one, clearly, is healthcare and the second is taxes. Running in parallel to the rising cost of healthcare in the state budget has been a series of tax policy changes which have furthered the pinch on every non-healthcare service and program the state supports or provides.

At the height of the late 1990s tech boom, Massachusetts, through legislation and at the ballot box, cut taxes significantly. In particular, cuts to the Personal Income Tax and Dividends & Interest continue to have an impact on the state’s ability to keep up investments in public higher education, state parks, human services, among others. Additionally, these cuts disproportionately benefited upper income earners. The overall impact of these cuts dwarf any attempt to make up for their lost revenue through increases to the Sales Tax or other smaller steps taken since.

The effect of rising healthcare costs and declining tax revenues has tied legislators’ hands when it comes to addressing many of the key issues the state faces. The overall budget pie is shrinking, while the slice healthcare is taking is growing larger and larger. This dynamic has led to a transportation system that's crumbling and carrying more debt than any other. It’s led to a public higher education system forced to rely increasingly on out of state students to subsidize campus operations. It’s lead to far fewer beds and services than what is needed to respond to the opioid epidemic.

For the entire 10 years I served in the State Senate, we struggled with these dynamics. At times they were exacerbated by the economic recession or aided by slower healthcare cost increases, but they were always there. Our attempts to solve them were piecemeal, too small or did not win the political support necessary to be enacted into law. In all ways, they fell short.

As Governor Baker and the legislature debate the FY 2019 budget, realize they are doing it within a framework that holds Massachusetts back. If you care about libraries, anti-poverty programs, infrastructure, housing, human services, local government or education and you are wondering why, yet again, you are being told it’s a tough budget or a tight budget, know it’s about taxes and healthcare. Don’t fall for the nice sounding $2 million initiative, when there’s a $1 billion structural imbalance every year.

If Massachusetts is going to reverse the trend of rising inequality, within regions and between Greater Boston and everywhere else, sustained public investment is key. The path to unlock that investment is reducing healthcare costs and a fair tax policy. Neither of those have been achieved for the last 20 years. Either we find a way to crack the code or every budget for the foreseeable future will be a tight one.

Ben Downing Represented the westernmost district in the Massachusetts Senate from 2006 to 2016. He is currently a vice president at Nexamp, a Massachusetts-based solar energy company, and an adjunct faculty member at Tufts University.

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management. 

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