Politics

Those $250 rebates? Mass. lawmakers have put them on the shelf (for now).

“We wanted to make sure to be fiscally prudent that we know what we’re getting into."

By Christopher Gavin

August 2, 2022

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Massachusetts residents hoping their state lawmakers could give them a bit of respite from the ballooning cost of living will have to wait a bit longer — that is, if relief comes at all.

As state lawmakers wrapped their legislative session early Monday morning, they shelved a plan announced only last month aimed at giving middle class taxpayers $250 rebates to help offset the high costs of nearly everything these days, from gas to groceries.

While just weeks ago State House leaders seemed optimistic and confident the rebates would roll out by the end of next month, lawmakers are apparently now trying to factor how affordable such a payout could be thanks to an obscure, decades-old law.

Senate Ways and Means Chairman Sen. Michael Rodrigues said Monday legislators need to more time to figure out how to approach an 1986 voter-approved law that requires the state to pay taxpayers credits if revenues pass the grow of total wages and salaries across Massachusetts, MassLive reports.

The state appears on track to meet that threshold.

Gov. Charlie Baker’s administration raised the prospect last week, noting it believes the excess revenue probably exceeds $2.5 billion and likely stands near $2.97 billion, although one estimate put the surplus as high as $3.6 billion, according to The Boston Globe.

At nearly $3 billion though, over 3 million taxpayers could get back about 7 percent of income taxes they paid last year, the administration said.

In other words, a taxpayer who earned $75,000 last year would get a credit of about $250.

The rebates under scrutiny were included in a larger, $1 billion tax relief and economic development package that Rodrigues and other leading lawmakers are concerned may not be feasible if revenues trigger the tax cap. The cap has only been triggered once before, in 1987.

Therefore, the package — which also touts hundreds of millions of dollars for economic development, housing, environmental infrastructure, and more — is remaining in conference committee. (About $500 million would go toward the rebates.)

House Speaker Ron Mariano told reporters that hitting pause was the “wisest choice,” according to MassLive.

“We wanted to make sure to be fiscally prudent that we know what we’re getting into,” Mariano said. “The economy is going through some strange things with big inflation rate, oil and gas fluctuations that may lead to a recession.”

But still the unknown variable is what exactly the cap will be. State Auditor Suzanne Bump will determine the cap in mid-September when her office figures out if the state has exceeded a yet-to-be-determined threshold, the outlet reports.

“We need more time to really figure out do we need to address 62F,” Rodrigues told reporters, referring to the tax cap law. “We don’t even know exactly what the impact is going to be … It’s a lot of money.”

Rodrigues said lawmakers “are committed to getting some real, long-term permanent tax relief done, and 62F is going to provide about $3 billion in that neighborhood of tax relief in the short-term.

“But we really want to enact real balanced, commonsense permanent tax relief like we did in the package that the House and Senate had agreed upon,” Rodrigues said.

Under the rebate proposal, qualifying individuals who made between $38,000 and $100,000 in 2021 would receive a $250 rebate, while married couples who reported earning between $38,000 and $150,000 would receive $500.

The package would have increased the child and dependent care credit, the earned income tax credit, and the maximum senior circuit breaker tax credit as well.

The plan received some initial criticism for excluding the state’s lowest-income residents from rebates.

But lawmakers, defending the decision, pointed to recent stimulus payments, more robust unemployment benefits, and a temporary extension of the federal child tax credit as beneficial ways the government has already provided relief to those taxpayers.

Baker had said last week he believed the state could absorb the cost of both the tax relief and economic development package and the possible tax credits. He cited the state’s robust savings, with a savings account expected to grow to $8.4 billion under the new budget, according to the Globe.