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April 22, 2022
As debate proceeds regarding the Commonwealth’s FY23 budget, the Chamber offers feedback on proposed amendments.
Taxes and Revenue
SUPPORT Amendments #468, #469, #470: Tax Relief
The Chamber supports the entirety of H.4361, An Act to improve Massachusetts’ competitiveness and reduce the cost of living. The above amendments would incorporate aspects of that legislation into the state budget to support a competitive business climate while also providing much needed tax relief to some of our most vulnerable residents. Amendment #468 would reform a punitive estate tax that has the lowest threshold level in the country, where only 12 other states impose an estate tax at all. Amendment #469 would ensure short-term capital gains is taxed as ordinary income, similarly to federal treatment. Finally, Amendment #470 provides increased property tax relief to our seniors, providing much needed support in a state where the typical home value more than doubled in the last 20 years, far outpacing general inflation.
OPPOSE Amendments #467, #1039, #1474: Gas Tax Suspension
The Chamber opposes suspending the Commonwealth’s gasoline tax. While recognizing elevated gas prices put further economic strain on residents and businesses alike, the gasoline tax is unique in that it directly funds our transportation infrastructure and supports the Commonwealth’s ability to raise bond funds for desperately needed capital improvements to the transportation system. With deficits projected for the MBTA, changing behaviors altering our transportation needs, and necessary efforts to reduce emissions from the transportation sector ongoing, the Chamber believes alternative tax relief, such as outlined in H.4361, is a more appropriate avenue to provide direct financial support to taxpayers.
SUPPORT Amendment #1231: Child Care Tax Credit
The Chamber supports the proposed child care services expenses tax credit to ease the cost burden of child care for working parents. Massachusetts cannot remain competitive in attracting workforce talent if child care costs are unaffordable for families. With the second highest child care costs in the nation, the proposed $7,500 per child tax credit can defray the costs of child care and provide long-term payoffs for both individual families and the economy.
OPPOSE Amendment #1490: Conformity
The Chamber opposes this amendment that would strike sections offered in the House Ways and Means budget to update our state’s personal tax code to conform with the federal tax code in effect January 1, 2022, instead of January 1, 2005. The outdated 17-year gap in conformity creates unneeded complexity to tax administration in Massachusetts and puts taxpayers at a disadvantage.
For example, employer-paid tuition reimbursement is treated as taxable income for individuals in the Commonwealth despite it being excluded from federal income; conformity would correct this. Furthermore, conformity will simplify our tax code, facilitate accurate tax administration, and ensure that other federal tax code changes are reflected in our state code. The Legislature, of course, retains the ability to decouple from federal tax policy.
SUPPORT Redrafted Amendment #425: Business Interest Deduction
While the Chamber supports conformity between our state and federal tax codes generally, one instance where Massachusetts is negatively impacted by federal tax policy are limits imposed by the Tax Cuts and Jobs Act of 2017 (TCJA) on the deduction of interest that corporate taxpayers pay on their debt. Debt is regularly used to invest in new equipment, technology, capital improvements, and to assist in cash flow by corporations, and these new limits discourage such investments in Massachusetts. As states increasingly compete to attract employers and talent, this disadvantage hurts our business climate. This amendment should be redrafted, however, to reflect changes proposed by House Ways and Means in section 24 relative to the personal income tax code.
OPPOSE Amendment #176: Tax-Exempt Property Assessment
The Chamber opposes this amendment that directs all municipalities in the Commonwealth to assess the value of all tax-exempt property in the Commonwealth. The represents an unnecessary intrusion into municipal affairs and likely imposes an unfunded mandate on municipalities without compensation from the state.
Business Climate
SUPPORT Amendment #1052: Regional Tourism Councils
The Chamber supports providing $2 million in funding for the state’s regional tourism councils. The hospitality and tourism industries endured extremely difficult challenges during the pandemic. This funding can be put to immediate use as people return to leisure travel.
OPPOSE Amendment #694: Third-Party Online Sellers
This amendment imposes a series of complicated data use, collection, and verification requirements on online marketplaces and third-party sellers. H.138, An Act relative to state marketplace transparency consumers, containing similar language was recently sent to study by the Advanced Information Technology, the Internet and Cybersecurity Committee. The language contains ambiguous provisions and unclear requirements that likely need further technical review in the normal legislative process outside of the budget debate.
OPPOSE Amendment #718: PFML Changes
The Chamber opposes any changes to the Paid Family and Medical Leave Program at this time. This program was carefully crafted after months of deliberations among employer and worker stakeholders convened by leaders in the House and Senate and is part of a larger package of reforms. Adopting this change would undermine the good-faith negotiations that occurred during the development of this program.
Higher Education
OPPOSE Amendment #525: Scholarship Funding
The Chamber opposes amendment #525 because limiting the number of colleges and universities that are eligible for the use of state scholarship funding will reduce choices for students. Limiting scholarships only hurts students, not the institutions they wish to attend.
Climate & Energy
SUPPORT Amendment #277: EV Incentives
The Chamber supports extending the existing authorization to use RGGI funds for electric and zero emissions vehicle incentives by two years. In order to meet the state’s climate goals, the state must continue to incentivize the transition to electric vehicles in part by defraying the higher costs to consumers through rebates and other means. This use of funds furthers our climate goals and is consistent with the RGGI programs design to lower emissions in the Commonwealth.
OPPOSE Amendment #1257 and #1261: Building Codes
The Chamber opposes amendments #1257 and #1261 because they undermine the ongoing regulatory process already underway by the Department of Energy Resources to update the state’s stretch energy code and create a specialized municipal opt-in code. The ongoing efforts by the Department involve substantial stakeholder feedback and represent nuanced policy development recognizing different built environments will achieve emission reductions in different ways. In addition, amendment #1257 is based off H. 3850, An Act establishing a pathway to net zero buildings, which was sent to study this session by the Joint Committee on Telecommunications, Utilities, and Energy.
Transportation
SUPPORT Amendment #1398: MBTA Board Change
The Chamber supports the establishment of a seat on the Massachusetts bay Transportation Authority board of directors (MBTA Board) appointed by the Mayor of Boston. Given the significant portion of the T that runs through the City of Boston, in addition to the city’s large financial contribution to the system, Boston should have a designated seat on the MBTA board.
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