After April revenue showers, May tax-relief talk sours

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WARNING $IGNS — Another year, another revenue surprise that could change the trajectory of tax-relief talks.

But instead of swimming in surplus, lawmakers are staring at a shortfall.

April tax revenues came in nearly $2.2 billion lower than what the state collected in the same month last year and $1.4 billion below the state’s benchmark projection. With just two months left in the fiscal year, collections are now running behind forecast.

Lawmakers and budget analysts who had been steeling for a slowdown were quick to issue reassuring statements. Gov. Maura Healey’s budget officials, for instance, “remain confident” in the state’s ability to balance the books this fiscal year without emergency spending cuts. They’re also standing by her tax-relief package.

“This is not a calamitous collapse in tax revenue. It’s a one-month shortfall. It was a big one month shortfall, but we’re still on track for the year,” Evan Horowitz, executive director of the Center for State Policy Analysis at Tufts University, told Playbook.

But, he added, “I do think that seeing the revenue coming this far below expectations is going to shift the discussion around the tax packages and probably reduce the appetite for a billion-plus-dollar package.”

The downturn sent a jolt of uncertainty through Beacon Hill just as Senate leaders are putting the finishing touches on their budget proposal. Ways and Means Chair Michael Rodrigues sought to allay concerns in a statement that said senators have “deliberately been cautious in our spending and revenue projections” in anticipation of declining revenues.

Yet even as Rodrigues pledged a “balanced and strong” fiscal 2024 budget, he notably said nothing about the Senate’s tax-relief plans.

Progressive lawmakers and groups say slumping revenues strengthen their argument against elements of Healey and the House’s proposals — like slashing the short-term capital gains tax rate to 5 percent from 12 percent — that they see as giveaways to the wealthy. Raise Up Massachusetts, the coalition that pushed to pass the so-called millionaires tax, said April’s revenue numbers should be a “red light” for lawmakers.

Some key senators have also expressed opposition to cutting the short-term capital gains tax rate, according to one member granted anonymity to discuss private conversations. Several senators indicated yesterday that they would prefer a tax-relief package that looks closer to what lawmakers had largely settled on last year before Chapter 62F disrupted their plans — one that didn’t tinker with the tax on short-term capital gains.

“The Senate and the House passed, last year, around half a billion [dollars] in tax cuts. And those were, in my view, more focused on people who need relief or need economic help,” state Sen. Pat Jehlen told Playbook.

GOOD THURSDAY MORNING, MASSACHUSETTS. May the 4th be with you.

TODAY — Lt. Gov. Kim Driscoll and Boston Mayor Michelle Wu speak at the Associated Industries of Massachusetts annual meeting starting at 7:30 a.m. at Boston’s Seaport Hotel. Driscoll co-hosts a STEM summit at 9 a.m. Wu announces funding for “permanent housing and supportive services” for the unsheltered at 10:30 a.m. at Cathedral of Saint Paul, awards the fastest Bostonians from the marathon at 2 p.m. at City Hall, celebrates the opening of a new performance venue on the Common at 5:15 p.m. and speaks at El Mundo Boston’s annual mixer at 6 p.m.

Rep. Bill Keating addresses the New England Council at 8:30 a.m. at Boston’s Hampshire House. Rep. Lori Trahan hosts a roundtable on the CHIPS and Science Act at 10 a.m. at Middlesex Community College. Rep. Stephen Lynch hosts a press conference on SVB’s failure at 12:15 p.m. at Brockton City Hall. Rep. Jim McGovern announces federal funding at 2 p.m. at Anna Maria College. Rep. Jake Auchincloss attends the welcome ceremony for a Ukrainian immigrant arriving under the Uniting for Ukraine Job Sponsorship Pathway program at 2 p.m. at Logan Airport.

Tips? Scoops? Senate budget intel? Email us: [email protected], [email protected] and [email protected].

DATELINE BEACON HILL

— “In Mass. race to shelter homeless families, some local governments balk. The state is moving to change that,” by Samantha J. Gross, Boston Globe: “Facing pushback from some communities, the Healey administration is adopting a new housing code that explicitly exempts emergency shelters from local zoning restrictions that prevent hotels, motels and other properties from being used to accommodate the swelling tide of homeless and migrant families.”

— “As public education push heats up on Beacon Hill, advocates eye ‘adequate’ funding,” by Chris Van Buskirk, Boston Herald: “Gov. Maura Healey proposed in her fiscal 2023 state budget a plan that would allow adults 25 and older who do not already have a degree or industry certificate to get one for free. The House included a similar proposal in their rewrite of the next fiscal budget. And lawmakers believe this is the session where higher education bills can take the forefront because of new funding from a voter-approved surtax known as the ‘Millionaire’s Tax’ or ‘Fair Share Amendment.’”

— “Assisted suicide is widely supported by Mass. voters, new poll shows,” by Matthew Medsger, Boston Herald: “A proposal before the state Legislature to legalize medically assisted suicide sees wide support among most voters, even those from traditionally conservative backgrounds, according to a new poll.”

— “Retail energy suppliers fleecing consumers, AG says,” by Christian M. Wade, The Eagle-Tribune: “Energy consumers who buy electricity on the competitive supply market have overpaid by $525 million, says Attorney General Andrea Campbell, who is reviving a push to ban the companies from doing business in the state.”

— “Funding secured, a 10-college consortium will study coordinated response to mental health,” by Kinga Borondy, Telegram & Gazette: “It’s a program that has been working for colleges and universities in New York, and now Massachusetts lawmakers have agreed to fund a study to determine whether the project that consolidates mental health crisis response for students in one place will work as well in Massachusetts.”

— “Former AG Bellotti celebrates 100th birthday in Quincy: ‘An outstanding leader’,” by Mary Whitfill, Patriot Ledger.

VAX-ACHUSETTS

— “Boston drops COVID vaccine mandate for city employees,” by Gayla Cawley, Boston Herald: “Mayor Michelle Wu’s administration will lift the COVID vaccine mandate for all city employees on May 11, a decision that comes about a month after the state’s top court ruled in favor of Boston having this pandemic-era policy in place. Administration officials said this mandate, implemented by Wu in December 2021, is no longer needed — as cases are low and most people have developed immunity to the virus, through either vaccination or infection.”

FROM THE HUB

— “Report: Boston’s child care capacity remains below pre-pandemic levels,” by Carrie Jung, WBUR: “According to a new report out Wednesday, much of the industry’s struggles can be linked to a lingering early educator shortage. Statewide, there were 5,000 fewer early-childhood educators in 2021 than in 2019. And as of spring 2022, 35% of center-based child care programs reported being unable to operate at full capacity.”

PLANES, TRAINS AND AUTOMOBILES

— “‘No one saw it as their responsibility': Recent incidents raise questions about MBTA station safety,” by Bob Seay, GBH News: “While the MBTA has been under intense scrutiny over mishaps and accidents involving its trains and tracks, two recent incidents involving objects falling on platforms have raised questions over the conditions of the stations themselves — and who is responsible for inspecting them to ensure safety.”

— “Bus drivers in three districts plan to strike amid stalled contract negotiations,” by Adria Watson, Boston Globe: “The union representing bus drivers in three Massachusetts school districts recently warned that roughly 150 drivers could go on strike Monday if a contract agreement with the districts’ transportation company is not reached this week. A strike could disrupt transportation for thousands of students in Westborough, Marlborough, and Framingham, which rely on private vendor North Reading Transportation [NRT] Bus Inc. for transportation services.”

DAY IN COURT

— “High court hears Galvin’s appeal in Robinhood brokerage case,” by Christian M. Wade, Eagle-Tribune: “Secretary of State Bill Galvin overstepped his authority when he created a fiduciary duty rule targeting broker-dealers who operate in the state, lawyers for a California-based brokerage told the state’s highest court Tuesday. The case before the Supreme Judicial Court stems from Galvin’s decision in 2020 to revoke a state trading license for Robinhood, a popular online brokerage, under a new securities rule his office adopted that raised the investment-advice standard for brokers. A lower court sided with Robinhood in a ruling last year that invalidated the fiduciary rule, but the high court agreed to take up Galvin’s appeal and heard oral arguments Tuesday from both sides of the lawsuit.”

— “Daughter of Representative Katherine Clark sentenced to probation for assault on Boston police officer,” by Tonya Alanez, Boston Globe: “The daughter of US Representative Katherine Clark will see her assault and vandalism case dismissed after she writes a letter of apology to the Boston police officer she is accused of hitting in the face during a protest on Boston Common earlier this year, and meets other conditions set by a Boston Municipal Court judge on Wednesday. Riley Dowell already has written the letter of apology.”

FROM THE DELEGATION

— “Rep. Ayanna Pressley says Feinstein should resign,” by Saraya Wintersmith, GBH News: “U.S. Rep. Ayanna Pressley Tuesday night added her voice to the chorus of lawmakers calling on U.S. Sen. Dianne Feinstein of California to resign. Feinstein, 89, who has held her seat since 1992 and was the first woman elected to the Senate from the Golden State, has been on extended leave since February, when she was reportedly hospitalized with shingles.”

— “Sen. Markey battles Tesla, Ford over decision to stop putting AM radio in all cars,” by Ted Nesi, WPRI: “For almost 100 years, Americans have been able to pass the time behind the wheel listening to AM radio. But the next car you buy may not have it. Massachusetts U.S. Sen. Ed Markey is speaking out against the decision by a growing number of auto manufacturers, including Tesla and Ford, to stop including AM radio in all new vehicles.”

— “U.S. Rep. Richard E. Neal sees ‘amicable’ end to debt ceiling standoff, suggests eliminating ceiling altogether,” by Jim Kinney, Springfield Republican.

FROM THE 413

— “Chicopee City councilors considering granting raises for themselves, School Committee,” by Jeanette DeForge, Springfield Republican: “City councilors and school committee members could see pay raises for the first time in more than a decade, but the catch is they will have to be reelected first.”

— “In surprise, Belchertown picks ‘stealth candidate’ as town administrator,” by James Pentland, Daily Hampshire Gazette: “In a move that caught at least two of its members off guard, the Select Board chose a 25-year department head to be town administrator after members deemed the three finalists recommended by a search panel were not a good fit for the town.”

HEARD ‘ROUND THE BUBBLAH

HAPPY BIRTHDAY — to Springfield Mayor Domenic Sarno, Erin Mershon of Stat News, the Boston Globe’s Shira Center, James Hannon, Natalie Akers, Ryan Evans and former Lexington state Rep. Jay Kaufman.

NEW HORSE RACE ALERT: ONE-HORSE STATE — Hosts Steve Koczela, Jennifer Smith and Lisa Kashinsky dig into why so many elections are uncontested in Massachusetts, what BPS parents are worrying about and the bills on Beacon Hill that would boost supports for immigrants. Subscribe and listen on iTunes and Sound Cloud.

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