Boston's Morning Newsletter
How Gov. Maura Healey's new tax plan compares to Baker's previous proposal
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Our first plowable snowstorm of the year isn’t looking super plowable quite yet. (Sorry kids, no snow day for Boston Public Schools.)
But meteorologist Danielle Noyes writes that the continued mix of snow and rain throughout the day could make travel tricky. Western and central Massachusetts, where the heaviest snow is falling, may even see scattered power outages and school closures. The storm should eventually wind down by 9 p.m.
To the news:
Second time’s a charm? Gov. Maura Healey unveiled the details of her administration’s upcoming tax plan yesterday, promising to relieve residents from rising costs and redress a few ways in which the Massachusetts tax code is an “outlier among other states.” If those goals sound familiar, it’s because the Democratic governor’s plan pulls largely from the one proposed over a year ago by her Republican predecessor, former Gov. Charlie Baker. In some ways, it goes bigger. In other ways, it doesn’t. Lets compare and contrast:
What’s pretty similar:
- The biggest chunk of Healey’s plan goes toward a new tax credit giving residents a $600 credit for each child under 13, senior or each disabled adult they claim as a dependent. (The current credits range from $180 to $240 each.) Her proposal is more than the increase Baker originally proposed and has no cap on how many dependents one can claim for the credit.
- Massachusetts renters can currently deduct 50% of rent costs up to $3,000 a year. Healey wants to bump that up to $4,000. That’s $1,000 less than what Baker originally floated, but the same as what the House and Senate settled on last year.
- Healey’s plan would also raise the threshold at which the state’s estate tax kicks in from $1 million up to $3 million. It also includes a credit of $182,000 to address the current estate tax‘s “cliff effect.” Otherwise, it still taxes the full value of the affected inheritances. (Baker proposed raising the threshold to $2 million and only taxing the portion of the estate’s value that is over that amount.)
- Baker pushed to give low-income residents a break by raising the state’s “no tax status” threshold for income taxes by about 50%. Healey’s plan doesn’t touch that idea.
- Healey’s plan also includes a bevy of smaller tax benefits aimed at everyone, from dairy farmers to bike commuters to housing developers to apprentice programs to hard cider brewers. (Read the full list here.)
What’s the same:
- Healey’s plan would double the maximum tax credit that lower-income seniors can claim on their property taxes from $1,200 to $2,400, which Baker also proposed.
- It would also cut the state’s short-term capital gains tax the same rate as taxes on income and long-term capital gains — from 12% to 5%. (Baker wanted this, too.)
Big picture: Don’t start budgeting these tax changes quite yet. Ultimately, the fate of Healey’s proposal lies in the hands of the State House, where it very well may be tweaked or put off (just as Baker’s was). House Speaker Ron Mariano and Karen Spilka both praised parts of Healey’s plan Monday — but also suggested they still need time to review other aspects.
Potential sticking points: Spilka was a big fan of Baker's proposal to raise the "no tax status" threshold, which she called "one of the best ways to get money in the pockets of low-income people." Mariano, meanwhile, reiterated his view that a lot will depend on how the larger economy does this year.
Outside the State House: The $742 million plan was applauded by the local business community as a good step toward making Massachusetts more affordable and competitive. However, some left-leaning groups expressed concern over what they called a mixed bag of progressive policies and big breaks for the state's wealthiest families (via the estate and capital gains tax changes).
What’s next: Healey will officially kick off what’s likely be a months-long legislative process Wednesday by filling her tax bill, along with her administration’s first budget proposal.
Boston will host not one but two special elections this spring — albeit in different neighborhoods. West Roxbury state Rep. Ed Coppinger is resigning today to take a job leading the Mass Biotechnology Council’s lobbying efforts (a job held by one ex-state lawmaker after another). Coppinger joins fellow Boston state Rep. Jon Santiago on the way out the State House doors, as the South End Democrat prepares to start as Healey’s new veterans’ services secretary on Wednesday.
- Save the date: As a result, special primaries for both seats will be held on May 2 — followed by general elections on May 30. (March 21 is the deadline for candidates to get into the races.)
Speaking of special elections, the wintry weather isn’t stopping Attleboro from holding one today to pick a new mayor, after former mayor Paul Heroux stepped down to become Bristol County sheriff.
- WPRI has a look as the four candidates here.
P.S. — While it’s a busy week at the State House, Boston Mayor Michelle Wu was on Radio Boston yesterday to give an update on what’s going on at City Hall. You can listen to the full, hourlong interview here.