Tax tutorial by Sen. Adam Hinds

The state is flush with cash right now, but Sen. Adam Hinds of Pittsfield said he doesn’t think that will stop the Legislature this week from passing and sending along to voters a constitutional amendment placing a 4 percent surtax on incomes over $1 million.

Hinds, a leader on Beacon Hill on tax and revenue issues, said on The Codcast that state tax revenues are surging beyond anyone’s expectation and Massachusetts is sitting on $5.3 billion from the federal government. But he said he intends to vote for the so-called millionaire tax this week and he believes most of his colleagues will as well. 

“For most of us, I don’t think this unique moment of the revenue picture is changing how we’re looking at that vote,” said the Democratic lawmaker.

Hinds said the federal money is one-time assistance that should only be used for one-time investments; he said the state needs the millionaire tax to provide sustainable sources of revenue for education and transportation. The senator said polling suggests the public strongly supports the idea of taxing incomes over $1 million. “People see the value of this,” he said.

As for the $5.3 billion in federal funds, Hinds said he supports efforts by the Legislature to gain greater control over how it is spent. That responsibility initially rested with Gov. Charlie Baker, but lawmakers are moving legislation to take control of the money. Hinds said it made sense to give Baker more authority during the pandemic, but with society slowly returning to normal it makes sense for the Legislature to assert its authority. “At a certain point we need to right the balance,” he said. 

Hinds said he expects the Legislature will take testimony over how the money should be spent and then allocate it in some form of budget-like process. He said his priorities would be using the money to capitalize a public bank, to close the digital divide, and to expand child care. 

A public bank would be owned by the state of Massachusetts and prioritize access to the banking system (loans, checking accounts, etc.) and public policy (affordable housing, renewable energy) over profits. North Dakota has had a public bank for more than 100 years, but few other states or municipalities have followed its lead, although the idea has gained steam in recent years.

Hinds also wants to prioritize closing the digital divide, but not for the reasons one might expect from a lawmaker representing rural western Massachusetts.  “I’ve personally always viewed this as a rural versus urban dynamic,” he said. “But we’ve really found that 21 percent of Massachusetts [residents don’t] have a hard line into their home and 93 percent of those are in our downtowns and urban areas. It’s not an infrastructure problem; it’s a poverty issue.”

Hind is also a member of the state’s Tax Expenditure Review Commission, established by the Legislature to periodically review the state’s 200 or so tax breaks and determine whether their cost in terms of foregone tax revenue justifies their cost. He won approval during the Senate’s budget debate of language eliminating three obscure tax credits that have rarely been used. He also supported a more controversial Senate provision paring back the cost of the film tax credit. 

The House and Senate budgets take very different approaches to the film tax credit. The House voted unanimously to eliminate the sunset date and make permanent the existing film tax credit, which offers those shooting movies, TV series, and commercials tax credits equal to 25 percent of what they spend in Massachusetts. The Senate extended the sunset date of the film tax credit another four years, required productions to spend more money in Massachusetts, and capped salaries eligible for the tax credit at $1 million. The two approaches must now be reconciled by a small conference committee of House and Senate lawmakers.

Backers of the House position say the Senate proposal would kill the emerging film industry in Massachusetts, while Hinds stakes out middle ground on the issue. While the Tax Expenditure Review Commission said the estimated cost per job of $100,000 was too high, Hinds said that cost estimate from the Department of Revenue is outdated and doesn’t take into account the growth of streaming series that stay in the state longer and spend a lot more money. 

Hinds said he saw the economic benefits firsthand when the series Dexter filmed in his district, but he said it makes sense to promote more spending in Massachusetts while capping spending on big-name film stars and directors. 

“We all agree that what is happening in the Massachusetts film industry is exciting. No one wants to curtail that development,” he said. But he also thinks some of the Senate measures make sense. “I think there are some elements of this that should stick,” he said.

BRUCE MOHL

 

FROM COMMONWEALTH

Changing circumstances: When advocates began pushing for a millionaire’s tax in 2015, the income tax rate was 5.15 percent, the T was reeling in the wake of snowmageddon, and there were about 15,000 people in the state earning more than $1 million a year. As the Legislature this week prepares to take a second vote on the constitutional amendment, which would put the measure on the ballot next year, a lot has changed:

— The income tax rate is down — to 5 percent.

— The number of millionaires is up — to 18,000.

— The state is awash in much higher-than-expected tax revenues and $5.3 billion in federal aid.

With the post-COVID economy fragile, does it make sense to pass a new tax at a time when it is very easy for the wealthy to move themselves and their businesses to other states imposing less of a tax burden on them? Read more.

COVID and children: As more and more people are vaccinated for COVID-19, parents are struggling with how much effort they should put in to protecting their younger children (those too young to get shots) from the coronavirus. Experts say the risks of COVID-19 for youngsters is very low, but they aren’t zero. Read more.

Four communities get $109m: The wrangling between Gov. Charlie Baker and legislative leaders over control of $5.3 billion in federal aid was resolved amicably, as Baker released the funds to Chelsea, Methuen, Everett, and Randolph and the fracas over who should do what when was resolved. Lawmakers are still planning to pass legislation giving them — not Baker — control over how the larger sum of money is spent. Read more.

OPINION

Normal is not desired: James Aloisi acknowledges everyone wants to return to normalcy after the coronavirus pandemic, but he says that’s the last thing Massachusetts needs when it comes to transportation. Congestion is already returning, he warns in the first of a two-part series. “There can be no growth, no improvement, no innovation if one is wedded to normalcy,” he says. He calls for road pricing, more money for the MBTA, and a fee on every vehicle entering Logan International Airport. Read more.

Make it in Massachusetts: Rep. Patricia Haddad of Somerset says the state needs to start developing a supply chain for offshore wind, and suggests concrete turbine foundations should be a priority for economic and environmental reasons. Read more.

Solar gone wrong: Margaret Sheehan of Save the Pine Barrens Inc. says the push for ground-mounted solar arrays is eradicating large swaths of the state’s forested land. Read more.

FROM AROUND THE WEB

 

BEACON HILL

Twenty-nine of the 30 Republicans in the Massachusetts House sign a letter saying state party chairman Jim Lyons should resign if he won’t call on a Ludlow state committee member to resign for her comments calling the adoption of two children by a same-sex couple “sickening.” One member of the couple, Jeffrey Sossa-Paquette, is a Republican planning to challenge US Rep. Jim McGovern next year. (Boston Herald)

MUNICIPAL MATTERS  

Boston Police Commissioner Dennis White’s former wife, who broke her silence last week in an interview with WBUR, also gives an interview to the Globe insisting her husband was the abuser in their relationship. The legal wrangling over White’s plight could go on for years, say analysts, if he decides to challenge his expected firing, potentially dogging former mayor Marty Walsh, who appointed him shortly before leaving office. (Boston Globe) Walsh maintains he knew nothing about past allegations of domestic abuse against White, telling WBZ’s Jon Keller, “I had no knowledge of Dennis White’s past in the police department.” White said he had numerous personal conversations with Walsh about personal issues and shared with him what he called the false allegations by his then-wife. (Boston Herald

Nantucket voters shoot down a bid to limit short-term rentals. (WBUR)

Soaring construction costs are making municipalities rethink their building projects. (Patriot-Ledger)

HEALTH/HEALTH CARE

Lots of people are struggling with different mental health issues as the pandemic abates. (Standard-Times)

WASHINGTON/NATIONAL/INTERNATIONAL

Democratic Sen. Joe Manchin said he won’t support a sweeping voting-rights bill, effectively derailing his party’s efforts to push back at state-level efforts by Republicans to restrict voting access. (Washington Post

ELECTIONS

A review of the 2020 election by a group of prominent Democratic advocacy groups says the party needs to rethink its approach to avoid losing ground with black, Hispanic, and Asian voters. (New York Times

State Rep. Tami Gouveia announces a run for lieutenant governor in a YouTube video.

BUSINESS/ECONOMY

Several states are preparing to cancel a $300 supplemental unemployment insurance check months before the scheduled September cutoff date in a bid to forces people back to work. (NPR)

A Mass Fiscal Alliance poll finds businesses support the reopening, but have concerns about tax relief and unemployment insurance costs. (Eagle-Tribune)

EDUCATION

The Springfield School Committee narrowly votes to give the police real-time access to school security camera footage, despite concerns that it will let the police conduct more surveillance of minority students. (MassLive)

A Holyoke man describes in detail the abusive relationship he suffered from at the hands of a Holyoke Catholic teacher when the man was a teenager in the 1970s. The teacher was recently added to a list of clergy credibly accused of sexual abuse. (MassLive)

TRANSPORTATION

The MBTA Advisory Board is urging state leaders to move quickly to form a new governing body to oversee the agency as the Management and Fiscal Control Board that was established in 2015 sunsets on June 30. (Boston Globe)  

ENERGY/ENVIRONMENT

Connecticut bailed out of the Transportation Climate Initiative, leaving only Massachusetts, Rhode Island, and Washington, DC, remaining in the compact of Northeastern governments aimed at reducing carbon emissions. (Boston Herald)

CRIMINAL JUSTICE/COURTS

Court records of the man accused in teenager Molly Bish’s murder paint a picture of a violent man who raped a young woman and harassed his ex-wife. (Telegram & Gazette)

One of two police officers injured in a shooting in Braintree on Friday is released from the hospital. (Patriot-Ledger)

MEDIA

The Justice Department says it will no longer secretly obtain reporters’ records during leak investigations. (Associated Press)

PASSINGS

Worcester police officer Manny Familia, who died Friday while trying to save a drowning teenager, is remembered as a man dedicated to his family and his job. (Telegram & Gazette)

Betty Taymor, a mentor and inspiration to women in politics, died at age 100. (Boston Globe)