The House unveiled its Fiscal Year 2024 budget proposal today. While this proposal includes some important investments and policies, both it and the Governor’s proposal are limited by a set of proposed regressive tax cuts that will exacerbate racial and economic inequality and undermine our ability to invest in our communities.
The House and Governor’s budget and tax proposals share multiple important elements. These include, among other things, protecting the voter-approved Fair Share Amendment surtax by depositing it in a separate fund and excluding this money from the 62F revenue limitation law, Child and Family Tax Credit expansions that support racial and economic equity, universal free school meals, funding year three of the Student Opportunity Act, support for C3 grants that provide operational support for early childcare providers, and a means-tested fare pilot for the MBTA.
We applaud the House and the Governor for supporting a robust Child and Family Tax Credit, which will enable more families to afford the cost of living in Massachusetts. The House took their support for low and middle income families a step further by proposing an expansion of the state Earned Income Tax Credit (EITC), from 30% to 40% of the Federal EITC.
There are notable differences between the Governor and House budget proposals. The House would use Fair Share Amendment revenue to fund a different mix of forward-looking spending than the Governor’s budget. For example, the House removed a tuition freeze and capital projects for state colleges and universities. Minimizing tax cuts could allow us to make fewer sacrifices of this type.
On a more positive note, the House proposes making a pandemic-era provision permanent, which pauses eviction notices while individuals are applying for housing assistance. The House also provided additional funding for the Housing Assistance for Reentry Transition program, providing housing resources to those who are often excluded from housing services for having been incarcerated. Both of these housing policy changes are steps toward correcting a legacy of racism and discrimination in housing.
The House tax package’s $440 million in regressive tax cuts for the wealthy cast a shadow on this budget. Tax cuts for the wealthiest are not effective economic development policy, nor are they fiscally responsible. Cuts that make our tax system more regressive are inconsistent with voter’s intent in passing the Fair Share Amendment and weaken our ability to invest in greater affordability and competitiveness in the Commonwealth. Every dollar of revenue we cut is a dollar we can’t invest in making Massachusetts a great place to live.
MassBudget will update our Budget Browser in the coming days to include numbers from the House’s budget proposal for all spending items. The Browser allows the user to see the effect of anticipated inflation on each item. This is important because any spending item that does not keep up with inflation is effectively a cut in support.