State House News – With crunch time for difficult and potentially painful budget decisions drawing nearer each day, advocates for greater state spending are touting survey results that they say show “overwhelming support” among Massachusetts voters for increasing taxes levied against corporations, annual household income over $1 million and investment profits.
Raise Up Massachusetts, which is working to add a proposed 4 percent surtax on income over $1 million to the state Constitution, said the results of the survey showed that most people in Massachusetts want the state to maintain or increase spending on public education and health care, and they want businesses and the wealthy to chip in more to offset the devastating financial impact of the COVID-19 pandemic.
“It’s undeniable that this recession and public health crisis is hitting low-income communities and communities of color the hardest, and state budget cuts threaten to make things even worse. Without action, damaging budget cuts to schools and colleges, hospitals, safety net programs, and other public services will worsen the economic pain, send us deeper into a recession, and intensify racial inequities,” Marie-Frances Rivera, president of the Massachusetts Budget and Policy Center said in a Raise Up press release.
The three strategies that Raise Up said the survey, conducted online among 600 Massachusetts voters in late July, showed the most support for were hiking the corporate tax rate from 8 percent to 9.5 percent (41 percent strongly favor, 33 percent somewhat favor), increasing capital gains taxes by 2 percent (41 percent strongly favor, 31 percent somewhat favor), and closing a loophole to allow taxation of corporate profits shifted overseas (63 percent strongly favor, 21 percent somewhat favor). The results carry a margin of error of plus or minus 4 percent
The survey, which was conducted by Echo Cove Research & Consulting for the Massachusetts Teachers Association, also found that 64 percent of voters either somewhat (32 percent) or strongly oppose (32 percent) increasing the state’s general income tax from 5 percent to 5.5 percent.
Taxes could be a hot topic of conversation on Beacon Hill this fall. With spending plans for two fiscal years upended, lawmakers are on the lookout for ways to close potentially massive state budget gaps.
The business shutdowns ordered by the government to deal with the pandemic punched a gap in the state’s revenue base and officials have yet to say whether the drop was severe enough that they will need to dip into the state’s $3.5 billion rainy day account to cover fiscal year 2020 spending.
The outlook for fiscal 2021, which started July 1, has been unclear for months. The state is operating through next month on a temporary budget and tax collections have shown some recent promising signs, but the state’s unemployment rate stands at a worst-in-the-nation 16.1 percent. State officials, citing projections offered earlier in the pandemic, have estimated that fiscal 2021 tax collections could fall from $2 billion to $8 billion below fiscal 2020 levels.
Lawmakers and administration budget officials have said they need to know what, if any, relief the federal government is going to provide to states before they can craft a budget for the rest of fiscal year 2021.