Legislature may send residents $250 checks

Leaders say payments would help cushion impact of inflation on low- and middle-income workers

THE MASSACHUSETTS LEGISLATURE intends to take up a bill that would send $250 checks to more than 2 million low and middle-income Massachusetts residents. 

As many residents struggle with inflation and the high price of gas and other products, the Democratic-led Legislature still has not proposed any form of tax relief, despite the urging of state Republicans and Republican Gov. Charlie Baker. But on Thursday, House Speaker Ron Mariano, Senate President Karen Spilka, and Ways and Means chairs Rep. Aaron Michlewitz and Sen. Michael Rodrigues proposed the one-time rebates as a way to provide some immediate relief to residents. 

Whether it is the rising price of gas, groceries, or summer clothes for kids, the Massachusetts Legislature has heard loud and clear that increased costs due to inflation have cut into family budgets,” the Democratic legislative leaders said in a joint statement. “That is why we are proud to announce that the Massachusetts Legislature will act to establish the Taxpayer Energy and Economic Relief Fund, through which economic relief rebates for individuals and families will be issued.” 

The rebates would be $250 for an individual or $500 for a married couple who file a joint tax return. They will go to residents who reported an income of at least $38,000 on their 2021 taxes and no more than $100,000 for an individual or $150,000 for a couple filing jointly. The rebates would be issued by September 30. 

The total cost to the state is estimated at $500 million 

The minimum threshold was chosen because the Legislature previously authorized a $500 million premium pay program, which distributed $500 checks to people earning less than $38,000. This rebate program would capture people who earned too much to be eligible for the earlier payments.  

In their statement, the leaders rejected calls that state Republican leaders – as well as Democratic President Joe Biden – have been making to temporarily suspend the gas tax. “These rebates represent the Legislature’s commitment to delivering immediate financial relief directly to residents of the Commonwealth, rather than to large oil companies that continue to profit off economic uncertainty and international conflict,” the statement said. 

The Democratic lawmakers said they are still working on a broader tax package, and all options remain on the table. “As we recognize the need for structural change as well, we continue to work on potential changes to the tax code with the goal of providing additional relief to residents,” the statement said. 

Mariano said his goal in advancing the rebate program is to “put money into the pockets of the folks who were adversely impacted by the inflation rate.” 

Rodrigues said the rebates will provide immediate relief, since any money gained through tax breaks would not be realized until after people file their taxes next year.  

The money for the rebates will likely come from a surplus in state funds left over from fiscal 2022, which ended in June. The Massachusetts Taxpayers Foundation pegged the surplus at around $3.6 billion, spurred by much higher than expected tax revenues.  

Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University, said he thinks a rebate makes sense as a way to provide relief to families now, without creating a new policy that will cost more money down the line. “A one-time rebate is a very sensible thing to do if you have a lot of money and are looking to return it to taxpayers but aren’t sure you’re going have excess money every year forever,” Horowitz said. 

But Paul Craney, a spokesperson for the conservative-leaning Massachusetts Fiscal Alliance, argued that lawmakers should focus on broad-based tax relief rather than what he called “a poorly thought-out gimmick being done right before the election simply to score points with voters.”  

“Picking winners and losers through arbitrary brackets, as well as penalizing married couples more likely to have families depending on them, is a poor way for our out of touch Legislature to show solidarity with the privations their ill-conceived economic policies are currently forcing Massachusetts families to contend with,” Craney said in a statement.  

House Minority Leader Brad Jones, a North Reading Republican, made clear that Republican leaders had not been consulted on the plan, saying he only learned of it from the media. He urged Democrats to continue working on more permanent tax relief. “I appreciate this first step towards providing modest one-time relief in recognition of the difficult financial times high inflation is causing far too many of our state’s citizens,” Jones said in a statement. “I hope we can also find ways of providing permanent and meaningful tax relief to taxpayers in the days ahead as we race towards the end of our formal sessions.”  

Senate Minority Leader Bruce Tarr, a Gloucester Republican, said the Democratic initiative acknowledges what Republicans have been saying for months: taxpayers are experiencing financial pain, state government has more money than it needs to operate, and taxpayers will be better prepared to weather the fiscal storm with tax relief. But, Tarr said he still wants to see structural and lasting tax relief. “This proposal is not insignificant, but ultimately we need tax relief that doesn’t come only once, we need sustainable and reliable reforms like those championed by Governor Baker and members of the Republican Caucus,” Tarr said.

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Shira Schoenberg

Reporter, CommonWealth

About Shira Schoenberg

Shira Schoenberg is a reporter at CommonWealth magazine. Shira previously worked for more than seven years at the Springfield Republican/MassLive.com where she covered state politics and elections, covering topics as diverse as the launch of the legal marijuana industry, problems with the state's foster care system and the elections of U.S. Sen. Elizabeth Warren and Gov. Charlie Baker. Shira won the Massachusetts Bar Association's 2018 award for Excellence in Legal Journalism and has had several stories win awards from the New England Newspaper and Press Association. Shira covered the 2012 New Hampshire presidential primary for the Boston Globe. Before that, she worked for the Concord (N.H.) Monitor, where she wrote about state government, City Hall and Barack Obama's 2008 New Hampshire primary campaign. Shira holds a master's degree from Columbia University's Graduate School of Journalism.

About Shira Schoenberg

Shira Schoenberg is a reporter at CommonWealth magazine. Shira previously worked for more than seven years at the Springfield Republican/MassLive.com where she covered state politics and elections, covering topics as diverse as the launch of the legal marijuana industry, problems with the state's foster care system and the elections of U.S. Sen. Elizabeth Warren and Gov. Charlie Baker. Shira won the Massachusetts Bar Association's 2018 award for Excellence in Legal Journalism and has had several stories win awards from the New England Newspaper and Press Association. Shira covered the 2012 New Hampshire presidential primary for the Boston Globe. Before that, she worked for the Concord (N.H.) Monitor, where she wrote about state government, City Hall and Barack Obama's 2008 New Hampshire primary campaign. Shira holds a master's degree from Columbia University's Graduate School of Journalism.

The bill setting up the rebates has not yet been released. It will have to be taken up first by the House, then the Senate, before formal sessions end July 31. Mariano said the House has numerous bills under consideration that the proposal can be attached to. “It’s the last few weeks of the session, we can use any one of a number of vehicles to move things very quickly,” Mariano said. 

Baker has made his own proposal for a $700 million tax break package. Baker spokesperson Anisha Chakrabarti said the governor will carefully review any tax relief proposal the Legislature sends to the governor’s desk. But she said Baker stands by his initial proposal. “Governor Baker and Lt. Governor [Karyn] Polito filed a $700 million tax relief plan in January to give the people of Massachusetts a break from rising costs but more importantly, the governor’s plan makes these tax cuts permanent,” Chakrabarti said. “Cutting these taxes is the only way to deliver a real break to the seniors, renters, low income workers and parents who more than deserve it.”