Buckle up, friend.
It’s a bleak Scoop today.
Removing any shred of doubt, the Massachusetts Legislature made it clear this week who they are most accountable to: wealthy donors and corporate lobbyists.
The Legislature just passed their long-anticipated tax cut bill, and it’s even worse than I expected. And I’m cynical about the Massachusetts Legislature for a living.
The package totals over $1 billion in permanent tax cuts. Does that number sound familiar? It should — that’s how much new revenue will be generated by the Fair Share Amendment that voters passed last year.
That’s right: voters opted to put a tax on millionaires to raise revenue for public goods, and less than a year later their lawmakers voted to cut the same amount in revenue, essentially undoing it.
And naturally, these tax cuts disproportionately benefit the ultra-wealthy and corporations.
Oh, and our lawmakers passed this bill nearly unanimously.
Let’s get into it.
State House Scoop
How we got here: democracy play-pretend
If you’ve been reading the Scoop for a while, by now you’re intimately familiar with the fact that much of Beacon Hill’s legislating happens behind closed doors. This bill is no exception. Let’s take a look at how the sausage got made:
- November 2022: Fair Share Amendment is passed by the majority of Bay Staters, mandating we raise taxes on the wealthiest residents to invest the $1 billion in new revenue in public education and transportation.
- March 2023: Governor Healey files her proposal for the FY24 budget, including $1 billion in permanent tax cuts, about 50% of which would exclusively benefit the state’s wealthiest residents. There was a public hearing held for the Governor’s FY24 budget – this would be the only time the public was granted input on these tax cuts.
- April 2023: The House files their version of the tax cut package, decoupling it from the budget, and adding in a new corporate tax break for multi-state corporations. The total cost of the permanent tax cuts is $1.1 billion. There was no public hearing held. It passes the House 150-3.
- June 2023: The Senate files their version of the tax cut package with a total of $590 million in permanent tax cuts. There was no public hearing held. It passes the Senate unanimously.
- June-September 2023: Leadership appoints six legislators to a conference committee to negotiate a compromise version, entirely behind closed doors. Conference reports are unable to be amended once they are released, meaning these six legislators had the ultimate say on the contents of the bill.
- September 2023: The conference report is made public. 24 hours later, the House votes on the package, passing it 155-1. The next day, the Senate voted on the package, passing it 38-1.
This is all to say: this tax cut package, which is being marketed by leadership as the biggest in over a generation, never received direct public input. While the public is restricted to a single hearing to voice their views (if that), lobbyists and special interest groups have ample seats at the table, and it shows. Even most legislators aren't in the room where decisions are being made. Heck, they end up seeing the text of the bill for the first time 24 hours before a vote like the rest of us.
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What’s in the bill
Let’s dive into what our lawmakers actually passed into law this week, who it affects, and how. Or as Alec Baldwin says in the iconic Boston-set film The Departed: cui bono? Our friends at WBUR crunched the numbers. Here’s how much different taxpayers stand to save under the new bill:
- Renters: $50 per year
- Parents: $200 per child per year
- Seniors burdened by housing costs: $1,200 per year
- Single low-income residents with no children: $56 per year
- People with estates worth over $2 million: $99,000
One of these things is not like the other.
When legislative leaders congratulate themselves on passing tax “relief” for families and working people in Massachusetts, they are hoping you don’t look much closer. Because if you do, you see that average people are receiving pennies compared to the giant tax giveaway to the wealthiest people in the state. Beacon Hill is giving parents and renters the equivalent of one trip to Market Basket, and giving wealthy families enough for a down payment on a new house. Or two.
It gets worse. The bill also cuts the short term capital gains tax from 12% to 8.5%. This cut benefits people who regularly play the stock market. Perhaps it’s not surprising then, that the top 1% richest Bay Staters would receive 77% of the benefit from this cut, according to MassBudget. The bottom 80% would only receive 3% of the benefit.
Still not done. The last tax cut in the bill is a corporate tax cut specifically for multi-state businesses. So, cui bono from this one? Let’s take a look at the groups who successfully lobbied for this cut: BNY Mellon, Santander US, Dunkin, and more.
Oh, how I wish I were done. This bill also raises the cap on the Housing Development Incentive Program, or “HDIP.” While it sounds good, only 2% of HDIP-funded housing has been affordable. Consequently, it tends to act more as a catalyst for gentrification and displacement than lowering housing costs for people who need it most.
Let’s end on a high note, shall we? Or at least a less low one. This bad bill does do some good things:
- First, it reforms 62f, the Reagan-era tax rebate law that was triggered last year. According to 62f, any tax revenue collected by the state over a certain amount must be returned to the taxpayers in the proportion they paid in. In other words, while middle and low-income folks got $20-$200 checks in the mail around this time last year, wealthy Bay Staters got back $20,000+. The bill passed this week would make those rebates an equal amount for everybody. This is a marked improvement over the status quo, but the Legislature should be getting rid of 62f altogether.
- Second, it closes a loophole that would have allowed married couples to evade the new surtax put in place by the Fair Share Amendment. I’m all for closing a loophole and protecting revenue, but you know what else our Legislature could do to protect Fair Share revenue? Not spend exactly as much in permanent tax cuts one year after it was passed.
The stakes of cutting revenue
Cutting taxes seems all well and good until you consider the countless programs, public goods, and basic needs that our state is currently underfunding because they claim we don’t have enough money. Public higher education has been defunded by 30% in the last two decades. Governor Healey is asking for funds from the federal government to secure emergency shelter for the thousands of unhoused migrants arriving in Massachusetts, claiming we can’t afford it on our own. Much of our public housing stock is dangerously dilapidated and in need of immediate repairs to make it habitable.
Our Legislature will say we can't afford it, only to turn around and eliminate $1 billion in annual revenue, disproportionately benefiting the wealthy, one year after voters decided they wanted to raise revenue on the wealthy. I don’t have a quippy way of ending this, I’m just really, really mad.
Why the bill sailed through: leadership’s concentration of power
So, the question of the hour: why did our Democratic supermajority trifecta just line up behind a GOP-friendly trickle-down tax cut package, with only two “no” votes in the entire Legislature? The answer: legislative leaders have incredible power over the membership. Through a system of rewards (good committee assignments, more staff, stipend positions) and punishments (none of those things, plus no funding for your district), members are heavily incentivized to vote in line with the Speaker and President. Some democracy, huh?
Plus, in order to generate unanimity, legislative leaders will strategically bundle a large number of policies, good and bad, together into a single bill. When these mega-bills come to the floor, legislators are forced into an all-or-nothing vote. Progressive lawmakers who voted for the tax cut this past week will likely justify their vote by pointing to the small positive elements of the bill. But by doing so, they play right into leadership’s hand; by voting yes on this bill, progressive legislators are showing leadership that, as long as you sprinkle a few good elements in an otherwise heinous bill, “progressives” will vote for just about anything. Only two legislators out of the entire 200-person body — Rep. Mike Connolly and Sen. Jamie Eldridge — were brave enough to vote against this package. If these are your legislators (or heck, even if they aren't), please take a moment to thank them: Mike.Connolly@mahouse.gov, James.Eldridge@masenate.gov.
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Take Action
You’re invited! Spooktacular Costume Party Fall Fundraiser
The Annual Act on Mass Fall Fundraiser is upon us! And it’s spookier than ever. Join us on October 29th in Concord for a festive halloween costume party to show off both your scary side and your support for our movement:
- When: Sunday October 29, 2:30-4:30 pm
- Where: Harvey Wheeler Community Center, Concord, MA
While the party is still a few weeks away, the fundraiser begins today. And I have incredible news: through the generosity of a number of individual donors, all donations up to $6250 will be MATCHED. Help us reach our goal of $6250 (=12,500 for Act on Mass!) by making a donation today:
HAVE YOUR GIFT MATCHED TODAY >>
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Canvass for the Legislature Audit ballot question with Auditor Diana DiZoglio!
Act on Mass is proud to be co-hosting an event with Auditor Diana DiZoglio in her hometown of Methuen to collect signatures in support of her critical ballot initiative!
- When: Saturday 10/7, 1:00PM
- Where: Downtown Methuen, Methuen Day Festival
Speaker Mariano and President Spilka have refused to comply with Auditor Diana DiZoglio’s audit of the Legislature. In response, the Auditor and her team have launched a campaign to collect signatures for a ballot question to affirm that the Legislature must comply with an audit – and lord knows they could use it. As stalwart supporters of transparency and accountability for Beacon Hill, it’s critical that we do everything we can to get this vital question on the ballot!
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Tough week. So tough, in fact, that it took us an extra day to write the Scoop. (In my defense, there was a lot to say.) But when the going gets tough, the tough get going. And we're a scappy, progressive, grassroots movement – we're as tough as it gets.
So let's get going.
Yours in solidarity,
Erin Leahy
Executive Director, Act on Mass