Top House Democrats plan to unveil and debate a "comprehensive" tax relief package in the next few weeks designed to make Massachusetts more affordable for its residents and "more competitive with other states," according to Speaker Ronald Mariano, who pledged Thursday to deliver relief to people across the income spectrum.
Mariano, who in recent months sounded a more cautious tone about whether the state could afford tax relief, said he expects the forthcoming bill to revive several measures lawmakers embraced and then spiked last term as well as some kind of increase to the estate tax threshold.
He forecast the House's tax relief proposal will emerge "just before" the House Ways and Means Committee in April releases its fiscal year 2024 budget bill, which will also feature funding for universal school meals and a free community college program.
The speaker's announcement, delivered in a speech to business leaders at a Greater Boston Chamber of Commerce event, tees up a new round of legislative debate on a topic from which lawmakers retreated last year.
"The House will soon release a comprehensive tax reform package aimed at providing responsible, permanent financial relief to all residents of the commonwealth, regardless of income status," Mariano told a crowd of business leaders.
Several of the tax code changes in the pending legislation would be phased in over a multi-year period to ensure that they do not "jeopardize the long-term financial security of the commonwealth," Mariano said, offering few details about what will be in the bill.
Mariano said after his speech that all of the measures lawmakers initially approved last year "will be considered again." In a question-and-answer session with chamber president Jim Rooney, Mariano said of reforms to the estate tax, "It's pretty much assumed you're going to see that in the package." And asked by reporters if the House's bill would propose slashing the short-term capital gains tax — a Gov. Maura Healey-endorsed measure that both branches left out of last session's ultimately doomed bill — Mariano replied, "Everything's on the table."
The Quincy Democrat said he wants the bottom line to "come in at a meaningful number," but added that discussions are still taking place about both the overall package size and the scope of each individual form of relief.
"We're still putting all the pieces together. This is, you know, four or five or six moving pieces, so we're trying to get something that's fair and balanced," he said.
After Democrats pushed through a new surtax on wealthier residents expected to general more than a billion dollars a year in new revenue, tax increases do not appear likely to feature in the bill.
"After riding the [American Rescue Plan Act] high, I don't want to be talking about raising taxes. It's not something that any of us, especially sitting at table 11, are interested in," Mariano said, referring to the table where his core leadership team was seated for the Chamber event.
Mariano also gave a glimpse at two highlights of the upcoming House budget bill: it will include funding to make permanent a pandemic-era universal school meals program originally launched with federal dollars, and it will embrace a Healey proposal to make community college free for Bay Staters older than 25 who do not have a college degree.
He told reporters the price tag for the community college measure, which Healey dubbed "MassReconnect," might be more than the $20 million the governor sought for the program. Pressed by Rep. Natalie Higgins at a hearing this month, Healey administration officials did not have an estimate of the unmet financial need of Bay Staters eligible for the proposed program.
Debate about permanent tax relief featured prominently last session, and both branches approved a set of changes to the rental deduction, senior circuit breaker, child and dependent tax credit, estate tax and earned income tax credit (EITC) collectively worth more than $500 million per year.
But after learning in the summer that state government owed taxpayers nearly $3 billion in rebates under a decades-old law, House and Senate Democrats put their proposal on ice and then ultimately backed away entirely.
Mariano said Thursday that "countless informative conversations" and the annual consensus revenue process led to his decision to make another pass. At one point, he joked that House Ways and Means Committee Chair Rep. Aaron Michlewitz and Revenue Committee Co-chair Rep. Mark Cusack deserved "hazardous pay" for wading through public input about tax relief.
"I think Chairman Cusack had about five hours of public input the other day," Mariano said, referencing Tuesday's Revenue Committee hearing about Healey's nearly $1 billion tax relief bill and many others.
Healey's bill calls for a new $600-per-dependent tax credit for parents and caregivers, expansions to the rental deduction and senior circuit breaker credit, a threefold increase in the estate tax threshold to $3 million, and a reduction of the short-term capital gains tax rate from 12 percent to 5 percent.
"The balance is just based on the numbers. If I can get the numbers where I want them, then that's the balance," Mariano said. "You gotta remember, I have to get the votes, so that's a concern. I have progressive members and I have conservative members, so it has to be something I can get passed."
Some Democrats have also pushed to change the voter-approved tax cap law, known as Chapter 62F, that prompted last year's rebates, which were paid out in proportion to the amount each taxpayer owed during the year. Mariano said Thursday he is "considering" action to overhaul the measure, but hinted that it might not feature in the on-deck tax package.
"I don't know if this is the vehicle to do it, but I think that what happened — I didn't like the dispersal of the money. I think there were some equity issues involved around that that should be looked at," he said. "But I think it's going to take a little bit of concentrated effort to get it right. I don't want to just do it on the fly and create new, different problems that still have some of the same issues. But it is something I'm going to take a look at."
