Legislature approves 2-month amnesty for tax scofflaws

October 30, 2008 05:19 PM Email| Comments (0)| Text size – +

By John C. Drake, Globe Staff

As part of an emergency budget package, state lawmakers today approved a measure that would establish a two-month amnesty period for tax scofflaws to encourage them to pay up.

The state Department of Revenue estimated that amnesty would bring in $10 million to $20 million in new revenue. That's significantly less than the $174 million raised by a similar measure in 2002, which had been the first such break for late taxpayers since 1984.

The amnesty was one new wrinkle in a budget package that included much of what Governor Deval Patrick proposed earlier this month to stave off a financial crisis. The Legislature did not, however, include Patrick's controversial plan to have higher-paid state employees pay higher health insurance premiums.

First the House then the Senate approved the package and Patrick administration officials said the governor was reviewing it.

The bill calls for a transfer of $200 million from the state's rainy-day fund, slowed down payments to the state pensions fund for a savings of $100 million, and slashed more than $73.6 million in state spending.

The state has estimated revenue shortfalls created by the global economic crisis will leave a $1.4 billion budget gap, a dire economic forecast that prompted Patrick to announce earlier this month that he would slash as many as 1,000 state jobs and trim more than $1 billion in spending.

In addition to the cuts under his authority, Patrick asked the Legislature to approve tightening the tax code for telecommunications companies, a move expected to bring in $13 million in additional revenue, and establishing salary-based health insurance premiums, which Patrick estimated would bring an additional $28.5 million in revenue. Those proposals were also not included in the package approved today by the Legislature.

In addition to the two months of amnesty, lawmakers added a measure that would give cities and towns more time to opt into the state's Group Insurance Commission, with the goal of reducing healthcare costs for municipalities.