Massachusetts Lawmakers Delay 2000 Statewide Vote On Charitable Tax Deductions Yet Again

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The voters of the Commonwealth of Massachusetts overwhelmingly went for it in 2000.

It still hasn’t been enacted.

And the Democratic supermajority on Beacon Hill just delayed it once again.

Question 7 on the 2000 general election ballot in Massachusetts asked voters if they wanted to allow taxpayers who give to charity a state personal income tax deduction for their charitable contributions. The ballot question said:  “A taxpayer could take a deduction from any Part B income, including wages and salaries, of an amount equal to his or her charitable contributions for the year. The taxpayer would take the deduction whether or not the taxpayer itemized deductions on his or her federal income tax return.”

The measure passed with 72 percent voting in favor of it while just 28 percent opposed.

On Wednesday and Thursday this past week, however, the Massachusetts House of Representatives and the Massachusetts Senate quashed it, taking votes to override Governor Charlie Baker’s support for the measure.

On July 19, Governor Baker vetoed a portion of the state budget bill for fiscal year 2022 (which began July 1)  on the grounds that the budget should include a deduction for taxpayers for charitable contributions. Massachusetts is getting significant funds from the federal government in coronavirus stimulus, and the governor noted that the state budget is well in the black with no need to tap its rainy day fund.

“I am vetoing this section because it is unnecessary to further delay the charitable tax deduction where the Commonwealth’s fiscal situation has improved materially in recent months, and the Commonwealth is on track to close Fiscal Year 2021 with no transfer out of the Stabilization Fund,” Baker wrote in his veto message of July 19.

However, on Wednesday, July 27, the House voted 124-35 to override Baker in favor of postponing the measure. All 30 Republicans voted against the measure while nearly every Democrat supported it. Meanwhile, the Senate voted 34-6 to override the veto. (It takes a two-to-one supermajority in each chamber to override a governor’s veto. The votes were not close.)

Three Senate Democrats joined their three Republican colleagues in opposing the delay:  state senators Marc Pacheco (D-Taunton), Walter Timilty (D-Milton), and Diana DiZoglio (D-Methuen).

In the House, state representatives Nika Elugardo (D-Jamaica Plain), Christopher Markey (D-Dartmouth), Joan Meschino (D-Hull), and David Robertson (D-Tewksbury) voted against the delay, as did Susannah Whipps (U-Athol), an independent who caucuses with the Democrats.

Of the 42 U.S. states that have a state income tax, 11 don’t allow for a charitable deduction, according to U.S. Charitable Gift Trust.

Massachusetts Republican Party chairman Jim Lyons expressed frustration with the state Legislature’s override vote in a press release on Thursday afternoon.

“There are few things that Massachusetts Democrats love more than spending other people’s money and flouting the will of the taxpaying voter,” Lyons said in the written statement. “Their actions not only hurt Massachusetts taxpayers, but also the local charities that stood over the years to receive their donations. More than two decades ago, voters approved charitable tax deductions, but the Democrats will use any maneuver they can to nullify the outcome of that vote.”

Lyons noted the delay is now in its third decade.

“The Democrats’ stubborn 21-year refusal to recognize and accept the results of an election is a stain on the commonwealth,” Lyons said.

Paul Craney, a spokesman for the Massachusetts Fiscal Alliance, also criticized state legislators.

“In 2000, 75% of the voters of Massachusetts overwhelmingly voted in support of a ballot question that allows taxpayers to save a little money when they make charitable contributions. 21 years later, and the MA legislature has refused to enact the will of the voters,” Craney told NewBostonPost in an email message Thursday. “Yesterday and today, Speaker Ron Mariano and Senate President Karen Spilka voted to once again reject the will of the voters, which would only save taxpayers a little extra money and help struggling charities. These legislative leaders are so removed from reality, they think they can do whatever they want.”

The Massachusetts Taxpayers Foundation projects that the measure would decrease Bay Staters’ tax burden by $64 million per year if it were enacted.

It’s that loss in revenue that concerns some lawmakers on Beacon Hill.

“While it is true that our fiscal situation has recently improved, we are not out of the woods yet, and the charitable deduction as currently designed may not be the best use of our resources going forward,” said state Senator Michael Rodrigues (D-Westport), chairman of the Senate Ways and Means Committee, during Thursday’s session, according to State House News Service.

While Lyons and Craney want the charity deduction now, they have an ally on the other side of the aisle:  The Boston Globe‘s left-leaning editorial board.

“Many programs run by nonprofits that deal with domestic violence, mental health, and substance abuse also found greater support in this year’s budget,” the Globe editorial board wrote on Thursday, July 22, about a week before the override votes. “But nonprofits have always depended on a combination of resources, and reinstating the charitable deduction would help keep the private tap flowing. The Legislature can do its part by letting the governor’s well-timed veto of yet another year-long delay stand.”

The charitable deduction is not the only tax cut that Massachusetts state legislators have delayed for a long time.

In 2000, the same year Massachusetts voters approved the charitable deduction, state voters also approved a decrease in the state income tax to 5 percent. (It was 5.9 percent at the time.) Some 59 percent supported while 41 percent opposed.

But lawmakers decided that instead of an immediate cut that the state income tax would drop gradually by tiny increments — 0.05 percentage points per year — if certain conditions were met. As a result, the income tax didn’t fall to 5 percent until January 1, 2020 — or a little more than 19 years after voters approved it.

The original bill stretching out the periodic income tax reductions called for implementing the charitable deduction after the income tax hit 5 percent. That means the charitable deduction was on schedule to take effect on January 1, 2021, as the Globe editorial points out. However, lawmakers postponed the charitable deduction in the state’s fiscal year 2021 budget and have now done so once again for fiscal year 2022.

If it’s not delayed again, the charitable deduction will take effect on January 1, 2023.


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