Cambridge progressive seeks to tweak the tax cap

Rep. Mike Connolly is fighting a lonely battle to tweak the state’s tax cap so some of the nearly $3 billion due to go back to Massachusetts taxpayers can be redirected to benefit low-income people.

“That’s just good policy,” said the Cambridge uber-progressive.

The tax cap was put on the ballot in 1986 by the Massachusetts High Technology Council and Citizens for Limited Taxation. Approved by 54 percent of voters, the idea was to cap how much tax revenue the state could take in, with the cap tied to the growth in wages and salaries. 

The tax cap was triggered in 1987, but only barely. And then for 35 years it lay dormant, largely forgotten, until an unusual set of economic circumstances produced a huge influx of tax revenues this year that ended up exceeding the cap by $2.94 billion.

Connolly, who was six when the tax cap passed, says he doesn’t mind returning excess state cash to taxpayers, but he believes in spreading some of the money to those less fortunate. As calculated by the Department of Revenue, the tax cap would return 13 percent of a taxpayer’s income tax liability to the state in 2021, which means those who paid the most in taxes would get the most back.  

The Cambridge Democrat wants to tweak the tax cap to limit how much the state’s wealthiest taxpayers would get back, and steer the freed-up money to those receiving little money back or none at all.  

It’s a Robin Hood philosophy that appeals to Connolly, whose campaign website says he was raised in public housing by a single mother, spent time in foster care, and benefited from a Head Start program and other social services. He attended Duke University on a football scholarship and put himself through Boston College Law School. 

Connolly said wealthy Massachusetts residents like Bob Kraft, the owner of the New England Patriots, don’t need all of the extra money they would get back under the tax cap. “There’s something obscene about it,” he said.

The tax cap was triggered in part because of a tax break geared toward wealthier residents. State Auditor Suzanne Bump took note of the tax break in certifying the $2.94 billion figure.  

“I would underscore for the Legislature and the public one key element in the FY22 revenue increase,” Bump said. “The change in the taxation of so-called pass-through business entities, which just took effect last year, generated $2.25 billion in revenue, much of which has yet to be claimed in the form of personal income tax credits and deductions by the business owners.” 

What Bump means is that some wealthy residents will benefit twice – once under the tax cap by getting back a portion of the income taxes they paid in 2021, and again by claiming credits and deductions using the tax break for pass-through business entities, which is a workaround to a federal law limiting tax deductions for state and local taxes to $10,000. 

Time is running short for Connolly, in part because Gov. Charlie Baker has done some tweaking of the tax cap law himself. The original drafters of the tax cap were careful in crafting the law to return excess tax collections in the form of credits to be applied to future tax payments. That way the law wouldn’t be confused with an appropriation, which is not permitted with a referendum question. 

Baker, however, has turned the credits into refund checks due to go out to taxpayers in November or early December. He says he wants to get the checks in the hands of Massachusetts residents as soon as possible to help them deal with the financial impacts of inflation.

While there was some talk in July among House leaders of tinkering with the tax cap law, Connolly is the only lawmaker publicly raising the cry now. He wants the Legislature to return to formal session to address the tax cap, which is known as 62F in legislative parlance. He has asked for a meeting of the House Progressive Caucus to discuss the issue and hopes progressives in the Senate will do the same. 

“Everyone should be paying attention to what’s happening with 62F,” he said. “It should really be about good policy.”

BRUCE MOHL 

 

FROM COMMONWEALTH

Getting help: A new program funded with $6 million from the US Department of Justice is helping people caught up in the Massachusetts court system find addiction services. The program, called Project NORTH, deploys navigators to help people find and access the services they need and hopefully stay out of trouble. Read more.

Barrier use increasing: The hurricane barrier at the mouth of New Bedford harbor is being closed more often and could be shut one to two times a day by 2050 because of rising sea levels, according to a new report by the Trustees for Reservations. That type of activity would make it difficult for the fishing/offshore wind port to function, so officials are exploring ways to live with more water in the harbor. Read more.

Spending tallies: The Center for Health Information and Analysis runs the numbers on how much the state is spending on primary and behavioral health care and reports the two categories accounted for 16.2 percent of all health care spending in 2020. Gov. Charlie Baker sought unsuccessfully to mandate sharp increases in the two categories. Read more.

Oath Keepers: Ron Beaty, a candidate for commissioner in Barnstable County, minimizes his ties to the right-wing Oath Keepers group, saying he gave it a small donation in 2014 and nothing since. Read more

OPINION

Getting on same page: Ira Jackson of the Civic Action Project and Corey Thomas of Rapid7 report on a new program to get business and government officials on the same page. Read more.

 

FROM AROUND THE WEB

 

BEACON HILL

Sen. Adam Hinds of Pittsfield is stepping down before his term expires to take the job of CEO and executive director of the Edward M. Kennedy Institute for the United States Senate in Boston. (Daily Hampshire Gazette)

The House advances a Boston real estate transfer tax. (State House News Service)

MUNICIPAL MATTERS  

There are growing calls for the resignation of the Greenfield police chief after a jury found him guilty of discrimination. (MassLive)

Boston Mayor Michelle Wu wants the state to remove some restrictions on development on parcels along the East Boston waterfront. (Boston Globe

HEALTH/HEALTH CARE

The Division of Insurance requires insurers to cover more mental health services, to comply with a newly passed mental health law. (Eagle-Tribune)

Washington Post columnist Leane Wen says President Biden was right, the pandemic is over.

WASHINGTON/NATIONAL/INTERNATIONAL

Puerto Rico remains in the dark and 70 percent of the island’s residents are without potable water following the devastation from Hurricane Fiona. (New York Times

ELECTIONS

After causing a stir when his campaign replied “no comment” to a New York Times survey of candidates asking whether they will accept the results of the November election, Republican nominee Geoff Diehl says he will accept the outcome of the race for Massachusetts governor – once he has exhausted any legal challenge to the election’s conduct, if he thinks there are grounds for such appeal. (Boston Globe

Marty Walsh for vice president? Don’t laugh, says Joan Vennochi. (Boston Globe

A Danvers write-in candidate running for the state House sues to get on the ballot after missing a key deadline. (Salem News)

IMMIGRATION

Lawyers call for a criminal probe of whether Florida Gov. Ron DeSantis violated any laws by shipping migrants to Martha’s Vineyard under false pretenses. (Salem News) A Texas county sheriff whose jurisdiction includes San Antonio, where the migrants departed from, says he has opened such an investigation. (New York Times

US authorities made a record 2 million immigration arrests along the southern border over the last 11 months. Migrants from Venezuela, Nicaragua, and Cuba account for a large chunk of the arrests. (Texas Tribune)

The one problem with DeSantis’s claim that immigrants will be better off if sent to “sanctuary states” like Massachusetts? Massachusetts is not such a sanctuary state. (Boston Herald) ICYMI, here is a CommonWealth explainer on the background to the charter flights of migrants sent last week to Martha’s Vineyard. 

ARTS/CULTURE

The long-shuttered Harvard Square Theatre in Cambridge is showing some signs of life. (GBH)

TRANSPORTATION

The MBTA announces plans to demolish a long-closed staircase at a Milton T station, after the local select board threatened to sue to get it repaired. (Patriot Ledger)

Massachusetts residents born in Puerto Rico are having trouble getting their driver’s licenses renewed due to a 2010 Puerto Rican law that canceled all birth certificates from pre-2010 and required people to get new ones reissued. (MassLive)

ENERGY/ENVIRONMENT

Gov. Charlie Baker touts Massachusetts’ climate change resiliency efforts at the Clinton Global Initiatives’ 2022 meeting in New York. (MassLive)

Eversource pitches plans to construct a 1 megawatt solar array in Lawrence. (Eagle-Tribune)

The USA Today Network runs a series of stories about how climate change is affecting cities along the East Coast.

In case you were wondering, there are an awful lot of ants in the world – about 20,000,000,000,000,000, or 20,000 trillion, according to a new scientific paper that tries to estimate their population. (Washington Post

CRIMINAL JUSTICE/COURTS

Adnan Sayed walks out of prison for the first time in 23 years. His case was featured in the first season of the hit podcast “Serial.” (New York Times)