Source: State House News Service
Author(s): Sam Drysdale, Alison Kuznitz (State House News Service)
The two top Democrats in the Legislature hesitated Monday to get behind proposals from Gov. Maura Healey regarding raising local taxes and draining one-time funds to pay for emergency shelter.
Beacon Hill’s “Big Three,” Gov. Maura Healey, House Speaker Ron Mariano and Senate President Karen Spilka, met in-person Monday for the first time in over two months, for what used to be a semi-regular leadership meeting. Healey later this week plans to unveil her fiscal year 2025 budget, and the busiest stretch of the legislative calendar is underway as lawmakers face a July 31 deadline to get their big priorities done this year.
Healey unveiled a proposal to give municipalities the ability to raise certain taxes on Friday, a day after she said she would not raise broad-based state taxes. The announcement was met with a mixed reception.
Some local leaders are excited about the prospect of another tool in their toolkit to raise revenue, while Republicans and right-leaning nonprofit groups have criticized the move as a “backdoor method” to raise taxes.
The so-called Municipal Empowerment Act would enable cities and towns to raise the maximum local option tax on hotels, motels and other rentals from 6 percent to 7 percent of the price of a room, and to 7.5 percent in Boston. The local option meals tax could increase from 0.75 percent to 1 percent, and a new local option vehicle surcharge plan would give town officials the option to add an additional 5 percent fee onto vehicles registered in their communities.
“Massachusetts is an expensive place as it is and this will make the Bay State less competitive. This action, if passed through the legislature, will result in companies looking at less expensive options to host their conventions and conferences. Tax increases hurt our communities and make our state less affordable,” GOP Chairwoman Amy Carnevale said in a statement Friday.
Healey pushed back Monday against the idea that introducing the bill went against her word to not seek a state tax hike, as well as her plan to make the state more affordable.
“We are not raising taxes. What we did with the municipal bill, I think it’s being filed right now, is simply convened a series of meetings with local officials from around the state over the last several months. And it was based on those conversations, what we’re hearing from local officials about what they needed to do, what they want to do in their communities,” Healey said.
She emphasized that her bill would not universally raise taxes, but it just creates an opt-in for communities.
“We’re not imposing this. This is just an example of giving local communities the option to do what they think is in the best interest of their community, and for some of your Cape Cod communities, we heard that raising a meals tax, raising a hotel tax that will be primarily paid by tourists is something that they may want to consider and do. Other towns may feel differently,” Healey said.
Easthampton Mayor Nicole LaChapelle, incoming president of the Massachusetts Mayors Association, was one among many local officials who commended the move.
“We must be nimble and flexible, but most importantly, we must be efficient because municipal budgets are small and tight. The efforts here by the Healey-Driscoll Administration help us enhance and balance the needs of our residents and the changing financial landscape municipalities experience,” LaChappelle said in a statement.
Mariano and Spilka, however, gave the proposal a lukewarm reception Monday.
Mariano, who last week strongly rejected the idea of raising state taxes to pay for increased spending, said he had not yet read the governor’s new bill. Healey filed the bill later Monday afternoon.
“A lot depends. A lot depends,” he said. “I haven’t read the bill. Some of them, there may be a need. There may have been a long time before anyone has looked at them. So we’ll evaluate them as they come in,” Mariano said.
He continued, “They will be evaluated to see what they have, what impact they have on our competitiveness, which is one of the reasons why we don’t want to raise taxes.”
Spilka also said the Senate would be taking “a good look at it.”
She said she heard “mixed feelings” about the bill at the Massachusetts Municipal Association’s annual meeting, where Healey and Lt. Gov. Kim Driscoll unveiled the proposal, and would “certainly want to hear from different stakeholders, as well as other senators.”
The municipal tax option bill was not the only Healey proposal that legislative leaders held back on giving an opinion on.
Both Mariano and Spilka said they would need to see the details of a plan the administration floated last month to drain a $700 million account of one-time money to pay for the ongoing family shelter crisis.
In a report to lawmakers in December, the Healey administration proposed covering funding deficiencies for a projected $932 million in emergency shelter funding by tapping into the Transitional Escrow Fund that former Gov. Charlie Baker and the Legislature set up in 2021 to stash surplus revenue.
Lawmakers and Healey appropriated $325 million to the shelter system when they completed the fiscal 2024 budget late last summer. Just a few months later, as an influx of immigrants has strained the system and brought its occupancy to record highs, the administration is now estimating the tab will approach $1 billion both this fiscal year and in fiscal 2025.
The administration suggested spending down the one-time transitional escrow fund in December, but Mariano said he is waiting for an official legislative proposal out of the governor’s office to consider it. In mid-December the governor said her team would be filing a supplemental budget seeking more funding for the shelter system “in the coming weeks.” That bill has not yet been filed.
“I’m going to wait to see what’s put in front of me as far as the request goes before I start figuring out how to pay for it. We want to see what the bill is,” Mariano said.
He added, “We’re a long way from making a decision.”
Also asked about using the $700 million reserve to pay for the family shelters, Spilka called on help from Washington, D.C., saying if Congress “comes through and gives us some funding, there may not be the need for that.”
As Massachusetts continues to grapple with the flood of new arrivals straining the state’s emergency shelter system, both Healey and Spilka again called for federal immigration reform and funding.
Healey acknowledged that migrants sleeping at Logan Airport are a consequence of the system hitting capacity, even as the administration has also opened up overflow sites to accommodate eligible families on the waitlist. The governor praised airport staff and State Police dealing with migrants there.
“While we’ve seen numbers there, we haven’t had incidents,” Healey said. “We continue to place people in overflow sites and other housing scenarios around the state thanks to the work of many community partners, including what we opened up through United Way.”
Healey had sharpened her rhetoric on the migrant crisis during her State of the Commonwealth address last week, as she called on Congress to fix the border. The governor on Monday noted President Joe Biden’s supplemental budget request, filed in October, contains financial support and border reform policies.
“I can tell you that the governors are working bipartisan on this. We need D.C. to act – we need Congress to act,” Healey said. “The path is there in terms of what needs to be done to fix the border situation, to change some of the asylum processes and get much-needed funding to interior states who have had to shoulder the burden for our problem that is geopolitical and is not the state’s making.”
Healey added, “And that’s going to be my continued demand to Congress and to the federal government, that we need help here.”
Spilka said that immigration is a federal problem that Congress needs to address. Asked whether she recommended that Congress tighten the border or if she was looking for only more funding, Spilka told reporters, “I think primarily funding.”
“Finally getting federal immigration reform, that will help not only Massachusetts but all states experiencing this,” Spilka said. “It’s up to Congress to figure out what kind of reform, what kind of immigration policy the country should have. That is a specific policy that is left to the federal government and it’s time that they take some action on it.”