Stats, expectations fueling decision on sales tax holiday

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By Matt Murphy

STATE HOUSE-With just about three weeks until August and the anticipated summer recess, the clock is ticking on lawmakers to decide if and when shoppers will get a day- or weekend-long reprieve from the state’s sales tax.

“I would expect that we’ll be having it this year. We’re talking about having some legislation relatively soon,” House Speaker Robert DeLeo said on Monday about the sales tax holiday, which typically occurs over a weekend in August and allows consumers to avoid the state’s 6.25 percent sales tax on most purchases.

Passage of the sales tax holiday legislation was the lone priority that DeLeo specifically mentioned as a must-do before the August break after he took an MBTA reform bill off the near-term agenda given the volume of MBTA-related management changes that were included in the state budget on Baker’s desk.

DeLeo said House lawmakers were also considering “other legislation,” but he declined to get into specifics because he said he was unsure whether it would move forward.

Asked whether he is supportive of the sales tax holiday that has become a nearly annual tradition, DeLeo said, “Ummm, I think that I have been, but having said that I think there also has to be consideration relative to some of the statistics which I have seen in terms of the money we are not getting into the Commonwealth as a result of that.”

Lawmakers and Gov. Charlie Baker are only months removed from making $768 million in midyear budget fixes and the spending bill on Baker’s desk calls for a modest 3.5 percent increase in state spending.

Senate President Stanley Rosenberg said he intends to open discussion this week with senators about the prospects of another sales tax holiday, but noted that it has become “very popular with the public.”

“We’ve only not done it once in I think eight or nine years, so people come to expect it but we have to review every year and see where we are,” he said.

Gov. Charlie Baker concurred, describing how he sometimes gets stopped on the streets by people interested in knowing when the holiday will be so they can plan their shopping. “You’re right, it’s something that people expect,” the governor told Rosenberg.

Rosenberg said the Legislature might also end up dealing with a supplemental budget bill expected from the administration to close out spending for the fiscal year that end on July 1, as well as any budget veto overrides they may want to consider.

“I would suspect there won’t be many vetoes, if any,” DeLeo said, teaming up on Baker with his Senate counterpart after Baker called the budget “terrific.” “The budget, as he said was so good, there’s not any reason for vetoes,” Rosenberg teased the governor.

Baker said he anticipated making “some adjustments” to the $38.1 billion spending bill for fiscal 2016 that he has until Saturday to review, but said, “They’re going to be relatively modest given the size of the problem we started with.”

“The budget we got sent by the Legislature did a terrific job of dealing with what was a very significant fiscal problem at the start of this process,” Baker said.

Baker wouldn’t say directly whether he planned to sign off on the Legislature’s plan to pay for an increase in the earned income tax credit for low-income families by repealing and never-implemented corporate tax deduction known as FAS-109.

Since Baker signaled support for the proposal last week, business groups have expressed concern about sending the wrong signals to the business community who were pleased during the campaign last fall to hear Baker preach tax code stability and predictability.

“We’re certainly engaged in a conversation with a lot of people about a lot of things that are in the budget. That’s what this week is all about and that’s certainly one of those as well, but as I said before I’m looking forward to supporting an increase in the ETIC for the 400,000 low-income working families who will benefit from that,” Baker said.