With tax holiday, sound thinking takes a vacation

Beacon Hill’s top legislative leaders are potent politicians with an ability to shape the direction of state policy or law with a nod of the head. Except when they’re completely powerless to change something, even when they think it’s wrong.

That’s how the state’s top politicos come off in the debate over a sales tax holiday, which has become an annual rite of summer, but is coming in for unusually tough questioning this time. The sales tax break, first instituted in 2004 and then adopted every year since, except for recession-wracked 2009, has become a popular gift to Massachusetts consumers, who save the 6.25 percent sales tax on most items up to $2,500.

But the holiday cost the state about $25 million in tax revenue last year, money that some say is desperately needed for a whole raft of things people count on, from road and bridge repair to aid to schools. What’s more, examinations of the full impact of tax holidays, including a 2014 study cited by today’s Globe from the Washington-based Tax Foundation, have provided little support for the practice, saying it does little to promote economic growth or spur purchases that wouldn’t be made otherwise. The foundation said 17 states had tax holidays last year.

The Retailers Association of Massachusetts commissioned a study by the Beacon Hill Institute at Suffolk University, which reported that the tax holiday would increase retail sales by $168 million.

Though more voices on Beacon Hill are beginning to question the practice, the betting right now seems to be that the Legislature will nonetheless sign off on this year’s tax giveaway, which is proposed for August 15 and 16. That is all the more surprising because neither of the Legislature’s two most powerful members seems all that enthused about the practice.

“I’ve always been cool to it, but I’ve lined up every year and voted for it,” Senate President Stan Rosenberg tells the Globe. House Speaker Robert DeLeo says he’s concerned about its effect on state coffers, but adds that it’s become so popular with both consumers and retailers that “it’s somewhat difficult to try to put the brakes on it.”

In other words, it may be bad policy, but it’s hard to pull back on it a decade after the tax-holiday horse left the barn. There are some parallels with the state’s film tax credit, which lots of analyses suggest is a net loser for the state, but which now has a strong constituency that has made it hard to get Beacon Hill to consider tossing it overboard.

The lesson for lawmakers may be to be much more deliberate before making such moves in the future. Unlike the situation with the flat screen TVs that people will be loading into their trunks on August 15 and 16, when these tax tricks don’t work as advertised, it proves very hard for lawmakers to say I want my money back.

–MICHAEL JONAS

 

BEACON HILL

Gov. Charlie Baker’s veto of $162 million in budget spending is stirring opposition on Beacon Hill. (Associated Press) The Berkshire Eagle argues that the Legislature should override “harmful vetoes.”

The Massachusetts Caucus of Women Legislators discusses how to break into the old boys’ club and pave the way for more women lawmakers. (Herald Times)

The MetroWest Daily News calls for public Internet discussions.

MUNICIPAL MATTERS/LOCAL AFFAIRS

Many Dracut landowners are receiving a tax break designed to support farmers even though they don’t appear to be farming their land. (Lowell Sun)

The Item, in an editorial, says bar hours should not be extended in Lynn.

Tensions between Dominicans and Haitians are roiling the local waters, with some area Dominicans, including Pulitzer Prize-winning novelist Junot Diaz, coming under attack by countrymen for saying there are problems with racism in their country.

OLYMPICS

The immovable object and the irresistible force: A US Olympic Committee member says she wants to hear definitively from Gov. Charlie Baker today whether he’s fully behind the Boston 2024 bid; the governor says he’s making no commitments until he has a consultant’s report, due next month. (Boston Herald) Meanwhile, Boston Magazine sums up the USOC’s conundrum.

CASINOS

Supporters of a casino in Brockton are calling on the state Gaming Commission to stay with the schedule for awarding a license in the Southeast region even as members of the panel have expressed concerns about having only one choice. (The Enterprise)

New Bedford Mayor Jon Mitchell says his city will move forward in the wake of a developer’s decision to abandon plans for a casino on the waterfront. “We will not wallow in self-pity,” he said. (State House News)

BUSINESS/ECONOMY

Vivien Li talks with Keller@Large about the past mistakes and the future of the city’s waterfront as she leaves as head of the Boston Harbor Association to take a similar job in Pittsburgh.

Some of manufacturing jobs that were offshored to distant lands are being onshored back to the US, including some to Massachusetts. (Boston Globe)

EDUCATION

The heads of New England prep schools are paid lavishly, with a median salary of nearly $450,000, a figure that has shot up 23 percent just since 2009. (Boston Globe)

Newly-installed UMass president Marty Meehan is flexing his political muscle and pushing for a legislative override of Gov. Charlie Baker‘s veto of $5.2 million for the system. (Boston Globe)

ENERGY/ENVIRONMENT

A rarely seen beaked whale, whose habitat is hundreds of miles off the coast in the deep Atlantic, was found washed-up on-shore in Plymouth over the weekend. (Patriot Ledger)

Hillary Clinton promises to have more than 500 million solar panels installed by the end of her first term as president. (Reuters)

Jack Clarke of Mass Audubon says Massachusetts needs to develop a plan to cope with climate change. (Salem News)

Local farmers want more public education on the use of pesticides which have contributed to declining honeybee populations. (MetroWest Daily News)

Even though the towns won their appeals of the federal flood zone maps, residents in Scituate and Marshfield are worried about what the new maps will look like and whether they will still pay higher insurance premiums. (Patriot Ledger)

CRIMINAL JUSTICE

Last Week Tonight’s John Oliver offers his take on mandatory minimum sentences. (Time)

Whitey Bulger‘s lawyers will be in federal court in Boston today to argue their appeal that he did not get a fair trial and his conviction should be overturned. (Boston Globe)

A Hull man was indicted in federal court for stealing more than $40,000 from the Veterans Administration between 2008 and 2011. (Patriot Ledger)

PASSINGS

Bobbi Kristina Brown, daughter of the late singer Whitney Houston and Boston native and R&B singer Bobby Brown, died Sunday, after being in a coma for six months after she was found face down and unresponsive in a hotel bathtub. (New York Times)