More Taxes on the Way??

STATE HOUSE, BOSTON, JUNE 7, 2019.....Taxes and benefits are front of mind over the next week. Lawmakers on Wednesday plan to take a critical vote to advance a constitutional amendment designed to raise $2 billion in new taxes from the state's wealthiest residents. The expected vote during a Constitutional Convention coincides with an effort to delay for three months the state's new paid family and medical leave program, which entails about $1 billion in new taxes and benefits. Business and labor groups, in a rare alliance, urged Beacon Hill on May 20 to pass a delay bill, which they say will facilitate a smoother rollout. Their request has received serious consideration but Gov. Charlie Baker and Democratic legislative leaders have so far been unable to agree on what to do, although Baker hoped for a final decision this week due to the logistics involved with implementing a law that affects so many workers and employers.

Baker has gone along with the leave program's new payroll tax and also hopes his proposed taxes on vaping products and opioid manufacturers will be adopted by the conference committee that formally began work this week on a state budget that's due by July 1. But Baker remains the only one among those deciding the fate of the income surtax or millionaires tax who has not staked out a position on the important matter. Two days before the joint meeting of the House and Senate, Baker is scheduled to speak Monday at the annual meeting of the Massachusetts High Technology Council, which is leading the charge against the proposed tax and would surely like to see Baker join the many other elected Republicans in their corner. An amendment to the measure filed by Rep. Alice Peisch would permit the legislature to establish a progressive income tax structure under which tax rates would increase along with income.

While Baker has supported tax increases, he's also portrayed himself as someone who wants to hold the line against tax hikes and who believes the state should be able to get by on its existing revenues. That's a line of thinking that's holding up in fiscal 2019. May tax collections of about $2 billion kept the state on pace for a revenue surplus of about $950 million. With just one month left in the fiscal year, tax receipts are running 7.6 percent over the same 11-month period in fiscal 2018, far surpassing the growth rate that lawmakers and Baker used to build this year's state budget. That budget has needed padding throughout the year and a time-sensitive supplemental budget (H 3819) that was approved by the House on May 29 and remains pending before the Senate Ways and Means Committee. Baker this week signed a $1.9 billion transportation bond bill that included $200 million for local road repairs. Other loose ends on the hill include reaching agreement on a final bill limiting drivers to using only hands-free devices while behind the wheel and a Senate decision on how it plans to address Sen. Mike Brady's drunk driving case plea agreement.