What critics of Baker's proposed tax cuts are saying

In his State of the Commonwealth address last week, Massachusetts Governor Charlie Baker unveiled his plan to cut taxes for lower, middle and upper class residents. The tax cuts are part of Baker's budget plan for this year, which is drawing praise as well as criticism on Beacon Hill. Mike Deehan, GBH State House reporter, joined host Henry Santoro on Morning Edition to discuss what people are saying about the proposal. This interview has been edited for clarity and length.

Henry Santoro: Baker's tax break idea touches the poorest and some of the richest residents of our fine commonwealth. What kind of criticism has this plan received on the Hill, if any?

Mike Deehan: I think a lot of the criticism is coming [because] he's including the rich as well as the lower and middle class in these tax breaks. It's not across the board in that he's just changing numbers for everybody. He's really targeting different sections. So, if you're going to take, for instance, the lower class, he's eliminating the income tax essentially for nearly a quarter million of the poorest people in Massachusetts. They'll just no longer have to pay income taxes to the state, the way that they don't have to pay income tax to the federal government — that's about $41 million worth.

And then comes the middle class — a lot of different, targeted things, [like] increasing deductions for seniors who own their own home, for renter's assistance, how much they can take out as a deduction, things like that, and for families. But then you get to the tricky part, which is for the rich, and that's the estate tax. Baker essentially wants to rewrite this estate tax and let the richest folks go from $1 million to $2 million before that estate tax take kicks in, and there are some other details there that will save them money, once in a lifetime, so to speak. So it's not annually.

The criticism, to get back to your point, is that he's including those richer people in this tax plan. Now, liberals and progressives up here on Beacon Hill say, "we really like part one and part two, it's part three we have some trouble with," to save these richer people all this money when we're in a pandemic, when we're still using a ton of federal assistance to inflate a lot of the spending we're doing to get out of this pandemic. And we don't know who's going to win this debate.

Santoro: Well, is he just trying to please all the people all the time, in his last term?

Deehan: It definitely seems like the most Republican kind of move that Baker is going to make. The man has not proposed tax breaks for the rich in the last seven years. And here it is. But to his credit, it has a lot to do with competitiveness. It's about keeping those families in Massachusetts so that, for instance, they die and pass on their estates in Cape Cod rather than Florida, where they wouldn't have to pay nearly this kind of tax. So there is a functional utility to it. Again, for progressives, though, it's going to be a very hard sell.

Santoro: What about some of the heavy hitting Democrats on the Hill, like the Senate president, the speaker of the House? What did they think of this plan?

Deehan: They like pretty much anything that comes out of the governor's budget plan. They kind of politely nod and say that they'll take a look at it. And this is what happens every year. The Legislature writes their own budget. They'll use Baker's plan as a guideline. They will certainly acknowledge that he wants to cut these taxes and they're not opposed to it. Neither Spilka nor Mariano said absolutely not. They said, "we'll take a look and we'll see it." They don't have to take the whole plan. They could take some of it. They could take the stuff for the poor and the stuff for the middle class and leave out the ultra-rich estate tax stuff. Or they could do the opposite. They could take none of it, or their own plan. So, the ball's really in their court because of course, the Legislature has the purse strings. We're talking about budgets and taxes. They are the absolute final authority.

Santoro: It is a $48.5 billion dollar budget plan, and it's going to have a lot of moving parts. Are there any complaints about Baker's plan not related to the tax cuts?

Deehan: There are some here. The Massachusetts Public Health Association, they represent boards of health in municipalities, they did not like what they're calling a 33% cut to a program that gives grants to cities and towns to regionalize their services. They say that is not the kind of program to cut during a pandemic when boards of health are becoming so important to the way we fight this thing. They say it defies logic. But here's a really good example of where Baker might be trying to save a little money, but the Legislature will probably come in, override him completely. And that line item will be just as fat as it has been over the years.

Santoro: Are there any other areas that saw increases in budget money during the pandemic that may not get as much in this upcoming budget?

Deehan: Yeah, legal aid is one that's coming up. SJC Chief Justice Kimberly Budd has been asking for increases in this, legal representation for poor people, essentially. Now, that line item has gone up a ton over the course of the pandemic as people struggle with legal issues. But this year it got flat-funded. People are saying on the left, we need to do more for this; Baker's saying it's good where it is, it's essentially doubled over the last decade or so, as is. So that's another debate they're going have to have.

Santoro: Always a pleasure to see you, my friend. Stay warm and stay healthy.