The House’s finances chief says the Baker Administration’s assertion the state took billions an excessive amount of in taxes final 12 months is correct and that lawmakers will work to verify taxpayers get their a reimbursement whereas transferring ahead on a stalled financial improvement invoice.
“It seems like that is the correct figure,” state Rep. Aaron Michlewitz, chairman of the House Ways and Means committee mentioned in a Sunday look on WCVB’s On the Record with Ed Harding and Janet Wu.
“We didn’t know what the correct figure was at the end of July when we were trying to make our determinations on how to go forward with the economic development bill, which is one of the reasons why we were a little hesitant on moving that forward, but now that we do have that number the Auditor will certify that and we will move forward,” the Boston Democrat mentioned.
Last week Gov. Charlie Baker’s administration notified the State Auditor that the federal government had claimed $2.94 billion an excessive amount of revenue tax and a regulation handed in 1986 can be triggered, requiring the surplus to be despatched again.
Michlewitz mentioned the Department of Revenue’s math is sort of actually appropriate — the auditor has till September 20 to verify — and that the federal government will now want to determine how one can get the cash again to taxpayers, as a credit score or a direct rebate.
“The way the law is written it’s supposed to be a tax credit,” he mentioned. “I think the administration is discussing exactly what that term could mean, could it mean a direct check to someone.”
Lawmakers appeared shocked when the Baker Administration introduced in July they anticipated practically $3 billion in extra income. Michlewitz mentioned it wasn’t the regulation that shocked them, however the quantity. The final and solely time the regulation went into impact it was triggered by an overage of simply $27 million.
“I don’t know if we saw to that degree, of the multi billion dollars, that was going to happen,” he mentioned.
The Boston consultant additionally sits on the joint legislative committee making an attempt to iron out the variations between a pair of $4 billion financial improvement payments which cleared each chamber’s unanimously however have been immediately stymied by the information the 1986 regulation, Chapter 62F, can be triggered.
Baker thinks Massachusetts can afford that the necessary tax rebates and financial improvement invoice, and mentioned as a lot final week when he introduced a $1.6 billion supplemental finances, noting he state took in a lot cash final 12 months — his administration mentioned it beat 2021 by 20.5% — that the commonwealth’s wet day fund now sits at an all time excessive of $6.9 billion.
“With tax revenues coming in far above budgeted amounts this year, the Commonwealth is well-positioned to deliver relief to taxpayers,” Baker mentioned final week.