Gov. Maura Healey defended a $1 billion-a-year bundle of tax cuts signed into regulation final 12 months after her administration mentioned this week that Massachusetts is predicted to gather $1 billion much less in fiscal 12 months 2024 revenues than initially anticipated.
Some critics of the tax regulation expressed skepticism towards Healey’s resolution Monday to slash $375 million from the state finances to make up for the deficit whereas additionally calling tax reform enacted final 12 months a boon to the “very rich.”
But Healey, a Democrat, mentioned the tax bundle was “absolutely essential.”
“These were all efforts to make life more affordable for folks in the state,” Healey mentioned on the State House Tuesday. “We accomplished that with the tax package, 70% of that tax package going to lower- and middle-income families across Massachusetts. That’s real savings. That’s really important, and it’s a delivery on a promise that we made.”
Reforms signed into regulation final fall lowered the tax on income from short-term investments from 12% to eight.5%, a business-backed transfer that created a flurry of blowback from progressive teams that argued it gave a break to the rich.
Beacon Hill lawmakers and Healey additionally labored in boosts to the rental deduction cap, a tax credit score for a dependent little one, disabled grownup, or senior, and the statewide cap for a housing manufacturing program. The regulation additionally excluded estates valued as much as $2 million from the property tax by permitting for a uniform credit score of $99,600.
Massachusetts Teachers Association President Max Page and Vice President Deb McCarthy mentioned they warned the cuts had “consequences” when discussions have been first had about “providing tax cuts to the very rich.”
“We are seeing the fall out: cuts in funding — similar in size to the tax cuts given to the very wealthy — for education, transportation, childcare and housing, which will impact regular, working people,” Page and McCarthy mentioned in a press release.
Progressive Massachusetts, a coverage group, mentioned 2023 was “not the time for permanent regressive tax cuts.”
“We remain disappointed that so many legislators chose not to listen,” the group mentioned on social media in response to the monetary headwinds.
Budget cuts introduced Monday got here as Administration and Finance Secretary Matthew Gerkowicz mentioned Massachusetts is predicted to see $1 billion much less in tax revenues than finances writers first projected for fiscal 12 months 2024.
Healey made $375 million in unilateral finances cuts — largely affecting social packages all through Massachusetts and MassHealth — and turned to $625 million in “non-tax revenues,” most of which comes from elevated funding earnings, to make up the outlet on the stability sheet.
No layoffs nor future cuts are anticipated however Gerkowicz informed reporters officers count on 12 to 18 months “where we have to do some belt tightening.”
“But overall, we don’t see this as being in a recessionary environment, and we believe the economy will continue to grow in (fiscal year 2025),” he mentioned.
Still, Page and McCarthy mentioned the voters who accredited a 4% surtax on incomes above $1 million — typically dubbed the Fair Share Amendment or Millionaires Tax — “are no doubt stunned by (Monday’s) announcement about state budget cuts.”
Healey likened the finances cuts to little greater than when somebody rebalances their very own private finances sheet, and referred to as the $375 million slash to fiscal 12 months 2024 “fiscally responsible and appropriate.”
“You’re probably going through this at home, too. It’s the end of the year, the start of the new year, we all take a look at our bank statement and we see how we did and where we’re spending money,” Healey mentioned. “And as you know, this year, it turned out that we saw a little bit less in revenue than we’d seen in years past where we’ve seen really record revenues.”
Source: www.bostonherald.com”