New surtax exempt from state tax cap

  • The Massachusetts State House in Boston

State House News Service
Published: 4/24/2023 4:15:36 PM
Modified: 4/24/2023 4:18:53 PM

Massachusetts representatives voted Monday to prevent new surtax revenues from counting toward an annual limit on the state’s tax collections, rejecting a Republican push to leave untouched the voter-approved tax cap law.

Kicking off what will be several days of deliberations on its $56.2 billion fiscal 2024 state budget plan, the House’s Democrat supermajority shot down an amendment from Minority Leader Brad Jones, 25-130, that would have spiked any proposed changes to the yearly calculation of how much state government is allowed to collect in taxes.

The FY24 budget that top House Democrats rolled out (H 3900) would omit all surtax revenue – projected to be $1 billion next year – from pushing the state’s tax haul closer to the threshold that automatically triggers mandatory taxpayer rebates under a law known as Chapter 62F.

Rep. Kimberly Ferguson, a Holden Republican, argued that preventing the new and sizable revenue stream from counting toward the annual tax collection limit would “upend” the will of the voters, who in 1986 approved a ballot question creating the tax cap law.

“The proposed exclusion follows no justification as all other taxes, including taxes constitutionally designated toward specific uses like the gas tax, are included in the current calculations,” Ferguson said on the House floor.

Revenue Committee Co-chair Rep. Mark Cusack replied that the move would “protect” revenue from the 4 percent surtax on household income above $1 million, which itself was enacted by voters in November and is designed to go toward education and transportation investments. He also said lawmakers stepping in to adjust ballot question laws after their passage is a common occurrence.

“I appreciate my friend from Holden’s comments about protecting the will of the voters and respecting their will,” the Braintree Democrat said. “As chair of [the] Marijuana Policy [Committee] in 2017, I heard no such urgency and complaints around changing the will of the voters when we rewrote the entire Question 4 law.”

The vote broke down along party lines, with all House Republicans in support of their leader’s amendment and Democrats opposed. Independent Rep. Susannah Whipps of Athol joined Democrats in voting no. Democrat Reps. Marjorie Decker of Cambridge, Patrick Kearney of Scituate and Tommy Vitolo of Brookline did not cast a vote during the roll call.

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