Tax rebates, cuts, included in $4.2B House spending plan | Boston |

2022-09-24 00:46:21 By : Mr. Bond Lin

Clear to partly cloudy. Low 43F. Winds NW at 10 to 20 mph..

Clear to partly cloudy. Low 43F. Winds NW at 10 to 20 mph.

BOSTON — The state House of Representatives on Thursday passed a $4.2 billion spending bill that includes a buffet of tax rebates and cuts, along with new spending on economic development, environmental protection, health care and housing.

The proposal, which was approved by a 154-0 vote in the Democratic-controlled House with bipartisan support, calls for tapping into $500 million in federal pandemic funds and state surplus to expand existing tax credit programs for low-income workers, seniors and families and overhaul the estate or “death” tax.

A centerpiece of the legislation calls for spending another $500 million on one-time $250 rebates for an estimated two million Massachusetts taxpayers.

“There’s a lot in this bill and plenty to bring back to our constituents in terms of wins for our economic growth and continued recovery from a once in a generation pandemic,” House Ways and Means Committee Chairman Aaron Michlewitz, D-Boston, said in remarks ahead of the bill’s passage.

“It will help support major sectors of our economy and make us more competitive with other states,” he added.

On economic development, the bill calls for spending $350 million to help financially strained hospitals, $165 million for nursing home workforce development and $80 million to support community health centers. It also includes $500 million for water and sewer projects and other environmental infrastructure.

Additionally, there’s $100 million for affordable housing, $75 million for minority-owned developments and $25 million to address food insecurity.

Rep. Jerry Parisella, D-Beverly, chairman of the Legislature’s Committee on Economic Development and Emerging Technologies, said the plan “puts the Commonwealth in a strong position to continue its growth and rebound from the global pandemic.”

During two days of debate, House lawmakers pushed for additional funding or changes to state policy through nearly 900 amendments to the spending package. Many were rejected or withdrawn, while others were packaged in large bundles that were approved or rejected on a single voice vote.

Decisions about which amendments made it into the final bill were made in closed door meetings with legislative leaders while the chamber temporarily recessed.

Overall, House lawmakers tacked on nearly $500 million in new spending onto the bill before passing it.

Much of the new spending was local earmarks, including $8 million for Haverhill’s downtown redevelopment, $100,000 for the Open Door in Gloucester, $50,000 for the Ateneo Dominicano Del Merrimack Valley in Lawrence to “maintain Dominican culture in the Merrimack Valley” and $25,000 for the North Andover Merchants Association.

One amendment, filed by Michlewitz, calls for spending $25 million to build a new community center in his North End legislative district.

Under the rebate plan, which is also part of the tax relief package, individual taxpayers would receive a $250 check, while married couples who file joint returns would get $500. The payments will be distributed by the end of September.

Eligibility for the payments will be based by income in 2021, under the proposal, capped at $100,000 for individual filers and $150,000 for joint filers.

Taxpayers with taxable income of $38,000 or less in 2021 won’t qualify for the relief payments. Legislative leaders say that’s because that subset of low-income workers previously received relief in the form of one-time $500 relief checks.

Several Democrats pushed to eliminate the $38,000 floor, arguing low-income residents need more relief, but the amendments were rejected.

Beacon Hill has been under pressure to provide relief amid rising costs, 40-year high inflation, supply chain issues and the impact of sanctions against Russia over its war in Ukraine, which have driven up consumer costs for everything from gas to groceries.

To be sure, Massachusetts is sitting on a pile of surplus revenue from excess tax collections — estimated at more than $3.6 billion this year — and money from the state’s $5 billion share of federal American Rescue Plan Act funding.

A key proposal in the tax cuts portion of the bill would overhaul the estate tax, which is charged to a decedent’s estate when their assets pass on to beneficiaries. It would double the threshold triggering the tax to assets valued at more than $2 million.

Massachusetts is one of only a dozen states to charge the tax, which currently applies to an estate worth more than $1 million in value. Assets include stocks, life insurance policies, boats, vehicles and other earthly possessions.

Lawmakers said doubling that threshold would save an estimated 2,500 taxpayers more than $207 million.

The House proposal would also increase the state’s child and dependent tax credit from $180 to $310 per child and eliminate a cap on the number of dependents. The plan would cost about $130 million in benefits to 700,000 families.

It would also increase the earned income tax credit to 40% of the federal credit, which would benefit about 400,000 taxpayers with income less than $57,000 a year, costing the state $91.5 million.

The plan also calls for increasing the senior circuit breaker tax credit from $750 to $1,755, which would affect about 100,000 elderly taxpayers.

Another provision would raise the annual rental deduction cap from $3,000 to $4,000, which would benefit about 881,000 residents at a cost of $35 million.

Several of those proposals were included in a $700 million package of tax breaks proposed by Republican Gov. Charlie Baker, but lawmakers didn’t take up the governor’s plan to cut the tax rate on short-term capital gains from 12% to 5%. Democrats complained that plan was tilted toward the wealthy.

The House bill now moves to the state Senate, which must approve the plan before sending it to Baker’s desk for consideration. Lawmakers must agree on a final bill before July 31, when formal legislative sessions end.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at

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