A decrease in tax revenues in April 2023 shouldn’t stop tax cuts in Massachusetts, Governor Maura Healey said Friday.
“We’re talking about a tax relief package that is absolutely essential to lowering the cost of living, making life more affordable for people in Massachusetts, and also making Massachusetts more competitive so that we’re able to keep our residents here,” Healey said during an interview with several reporters Friday, May 5 at the Massachusetts State House, according to State House News Service.
The state government took in $4.782 billion in April 2023, which is 31.2 percent less than what the state collected in April 2022, and 23.1 percent less than the amount state revenue officials set as a benchmark for the month, the Massachusetts Department of Revenue announced Wednesday, May 3.
“We put together our budget and our tax relief package — we did so knowing that there was likely to be some drop in revenue. We’ve seen a drop. And you know, I just want folks to know we’ve accounted for that. And it remains the case that our tax relief package that we propose we stand by, we think it’s really important,” Healey said Friday, according to State House News Service.
Healey, a Democrat, has proposed a tax relief package that includes decreasing the short-term capital gains tax rate from 12 percent to 5 percent; increasing the threshold for estate tax to $3 million from the current $1 million and eliminating the so-called “cliff effect” that taxes the full value of estates that barely meet the threshold; and offering taxpayers a $600-per-year tax credit for children under 13, disabled adults, and senior citizens.
The Massachusetts House of Representatives on April 13 passed a similar though somewhat less generous tax relief bill. Massachusetts Senate Democrats have not said whether they plan to support cutting taxes; they plan to introduce their own version of the state budget for the coming fiscal year on Tuesday, May 9.
On the left, the Raise Up Massachusetts coalition, which spearheaded a referendum that voters passed in November 2022 imposing a 4 percent surtax on individual incomes exceeding $1 million, said the state revenue dip in April should serve “as a red light” for state senators, who should avoid “cutting taxes for the wealthy” and instead “should focus on making sustainable investments in affordability for working families.”
“If we give away hundreds of millions of dollars each year in new tax breaks for the ultra-rich and large corporations, we won’t be able to make the investments in housing, childcare, and transportation that are needed to make MA truly affordable, equitable, and competitive,” the coalition said on Twitter.
On the right, the Massachusetts Fiscal Alliance said the state government is awash with cash and that tax cuts are vital for the state’s economy. The organization blamed the so-called Millionaires’ Tax for the decrease in state revenue, saying “the state is hemorrhaging taxpayers” to New Hampshire and Florida, which have no state income tax.
“While April’s DOR numbers are showing signs of an economic downturn, don’t let legislative leaders fool you into thinking the minor tax relief bill they are working on should be the first on the chopping block,” said Paul Craney, spokesman for the Massachusetts Fiscal Alliance, in a written statement. “The House just passed a bloated $56.2B budget full of earmarks and pet projects. There are some people on Beacon Hill that will try to use this data to tell Massachusetts taxpayers that they just don’t have the money for tax relief now, but it’s only through significant tax cuts and eliminations that will keep people here.”
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