FY 2023 Budget: the Good, the Bad, and the Need for New, Sustainable Revenue

Statement from MassBudget President Marie-Frances Rivera in response to the Baker Administration’s Fiscal Year (FY) 2023 Budget Proposal

For Immediate Release: January 26, 2022

“As one of the wealthiest states in the nation, Massachusetts has an opportunity to use our state budget to target spending to help support our neighbors who are most in need. However, this budget is not taking advantage of that opportunity.

“In today’s FY 2023 state budget proposal, the Baker-Polito Administration recommends tax code changes that give breaks to higher-income Massachusetts residents. These include changes to the estate tax and capital gains tax rates that would cost the state $348M in revenue annually. These measures would cut revenue at a time when we need it to sustain the state beyond the pandemic.

“On a more positive note, the budget also includes tax changes that will put more money into the pockets of people who need it more. There are four significant changes to our tax code resulting in $345M in tax breaks, many of which benefit lower-income residents. These tax breaks include doubling the value of the refundable dependent tax credit for families caring for dependents such as children or elders, increasing the cap on the rental deduction, $67M to help seniors with high housing costs, and aligning with federal standards by raising the thresholds at which lower-income individuals and families must start paying taxes.

Over the course of the pandemic, funding from the federal government has been critical for meeting the state’s unmet needs. This has been true in health care, education, housing, transportation, and more. However, these one-time federal funds will not continue indefinitely, and we will need to rely on ongoing revenues to meet our ongoing needs.

“The wealthiest individuals in our state shouldn’t be able to enjoy huge windfalls during the pandemic while students, teachers, small business owners, renters, and small landlords wait for relief from this crisis. Unprecedented times call for unprecedented responses and the resources to back them up.”

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Contact:
Reginauld Williams, Communications Director
rwilliams@massbudget.org

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