Gov. Charlie Baker, flanked by tax relief allies at the Massachusetts State House, honed in on the economic plight of older Bay Staters as he refined his pitch to Beacon Hill Democrats to pass his massive $700 million tax break proposal before the end of the legislative session next month.
The Republican governor’s tax package is crafted to help low-income residents, seniors, families and other vulnerable groups disproportionately impacted by the financial woes of the COVID-19 pandemic — though it’s been met with little urgency so far from House Speaker Ron Mariano or Senate President Karen Spilka.
Still, tax cuts are “extremely affordable” and provide “relief for seniors and working families at a time when they could really use the help,” Baker told reporters.
“We know the Legislature is interested in this,” Baker said. “We’ve had lots of conversations on and off the record with our colleagues in the House and Senate, and we urge them to make sure that this issue doesn’t get lost between now and the end of the session — and they make this part of what happens by July 31.”
Proponents of Baker’s policy measures — including the senior circuit breaker that would double the tax credit from $1,170 to $2,340, impacting roughly 100,000 Bay Staters ages 65 and older — say they are crucial to tackling inflation and helping seniors stay in their homes.
Baker also wants to raise the rent deduction cap from $3,000 to $5,000, double tax credits for dependent and child care, and align the state’s no-tax threshold with the federal threshold for low-income earners.
Six out of 10 seniors over age 60 are economically insecure, said Mike Festa, state director of AARP of Massachusetts.
“The real impact on seniors, frankly, is there’s a lot of suffering in silence,” Festa said at the State House. “There’s a lot of desperation economically ... Many of the folks who have worked hard all their lives to hold on to (their) home are in that fixed-income situation, and the struggle to stay at home is a combination of that cost of paying the bill, the cost associated with other standard of living that impacts living in our house.”
Financial burdens can be absorbed by caregivers, including adult children who struggle to afford keeping their parents at home, Festa said. Those caregivers also need tax relief, Festa said, as he pointed to negative ripple effects, like an overburdened long-term care system if seniors must leave their homes.
“The governor needs to be applauded for the simple truth that he recognizes, as all of us do who are involved with dealing with seniors, that the lower-income seniors — that economically, those folks are under a lot of pressure — they need this kind of practical relief because, sooner or later, those internal familial systems will start falling apart,” Festa said.
Betsy Connell, interim executive director at the Massachusetts Councils on Aging, also stressed seniors on fixed incomes are finding it increasingly harder to contend with skyrocketing property values. As Connell sees it, Baker’s tax cuts would provide seniors with “greater economic security and wellbeing.”
“With so many of our seniors facing daily challenges in these very difficult and tough economic times, with inflation and the rising cost of food, medications and services, relief is truly needed,” Connell said at the State House. “Passing these measures will allow many seniors to remain in their homes and maintain the essential — and in many cases, lifelong — connections they have built in their communities.”
Baker also made an impassioned plea on his tax relief package last week, hours after President Joe Biden called on Congress to approve a three-month gas tax holiday. With Massachusetts awash in surplus tax revenues, Baker has repeatedly emphasized the affordability of his plan.
“There is more than enough funding available to suspend the gas tax, pass our tax relief plan and invest in Massachusetts’ future. It’s time to act and cut taxes for the people of Massachusetts,” Baker and Lt. Gov. Karyn Polito said in a joint statement on Twitter last Wednesday.
Most Beacon Hill Democrats still aren’t sold on the idea, arguing temporarily waiving the gas tax could harm the commonwealth’s bond rating and not deliver tangible relief to Bay Staters.
Yet with just weeks remaining in the legislative session, Mariano and Spilka have so far refrained from divulging their own tax relief measures.
In his relief package, Baker also wants to overhaul the state’s short-term capital gains and estate taxes to ensure Massachusetts retains a competitive advantage, as people now have more flexibility over where they live and work due to the coronavirus pandemic.
The commonwealth’s financial position is “extremely strong,” Secretary of Administration and Finance Michael Heffernan reiterated Monday. Targeted investments are needed for residents who “continue to face the steepest climb to regaining stability, like our seniors,” he said.
“We can afford to provide this tax relief now and on an ongoing basis,” Heffernan said. “We have a great opportunity before us, and we are focused on continuing the great work we’ve done with the Legislature throughout the pandemic to get another fiscally prudent initiative over the finish line and make these tax policy changes a reality.”
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