Administration officials defended Gov. Maura Healey’s approach to mitigating state revenue impacts of recent federal tax code changes as one that strikes an appropriate balance, but that equilibrium came under attack from various sides at a Revenue Committee hearing Thursday.
A committee co-chair began Thursday’s hearing by asking advocates to submit any testimony on the bill as soon as possible. Top lawmakers need to make a decision on Healey’s bill soon since the resolution will have a bearing on both the current state budget and the one being prepared for the fiscal year that starts July 1.
The situation offers a unique opportunity for Democrats on Beacon Hill to weigh in on some of the federal tax law shifts that have riled the national political discourse recently, and potentially to postpone some tax law impacts until after this year’s elections.
The One Big Beautiful Bill Act (OB3) that President Donald Trump signed July 4 made more than 100 changes to the federal tax code, about 30 of which trigger an impact to Massachusetts tax collections based on the way Massachusetts automatically conforms to some elements of the federal code.
MassBudget Reference:
Phineas Baxandall, director of research and policy analysis at the Massachusetts Budget and Policy Center, said the state “can and should do more.”
“With the federal administration aggressively implementing its own fiscal priorities, states like Massachusetts have an opportunity to protect our own laws from being reshaped by ineffective and inequitable policies from the federal level. We propose that the state opt out entirely from these five most expensive federal corporate tax changes,” Baxandall said. “By completely opting out of the five changes, rather than just delaying them, Massachusetts can preserve the entire $278 million that the Department of Revenue has said would be lost by them in fiscal year 2027, whereas the governor’s bill would preserve less than half of that revenue.”
Read the full article here on 22 WWLP and here on State House News Service.
