House rejects tax amendment as budget debate opens

AS THE HOUSE began its first day of debate on the state budget on Tuesday, progressives were defeated in their attempt to add new revenue.

But some progressives remain hopeful about another amendment, to create emergency sick time for workers, that has gotten more widespread support.

The House is debating its $46 billion fiscal 2021 budget proposal this week – a debate that typically occurs in April but got postponed due to the COVID-19 pandemic as the state continued operating on a series of temporary budgets. In a nod to the tight time frame – Gov. Charlie Baker has urged lawmakers to send him a budget by Thanksgiving – the Senate Ways and Means Committee plans to roll out its version of the budget this Thursday, before the House debate is finished.

As is typical in the House, much of the conversation throughout the day happened behind closed doors. Discussions about individual amendments, which traditionally occur in Room 348 of the State House, were instead occurring in a private online “Room 348 Zoom.”

Lawmakers did emerge onto the House floor – and calling in remotely – to hold a brief revenue debate. Rep. Mike Connolly, a progressive Democrat from Cambridge, introduced an amendment to raise the tax rate on unearned income – capital gains, interest, and dividends – from 5 percent to 9 percent.

Connolly said his amendment would raise $1.7 billion annually, with the tax falling primarily on wealthier, white taxpayers, who tend to be the ones with more savings. The amendment would include exemptions for seniors and people with disabilities. Connolly said it is “inequitable” and “incompatible with racial justice” that wages are taxed at the same rate as savings. He said the state needs the money to replenish the rainy day fund while preserving programs and services that help needy families.

Rep. Tricia Farley-Bouvier, a Pittsfield Democrat, said lawmakers have raised taxes following every other major recession. “Failing to do so now would be the unprecedented thing,” she said. She said progressives want taxes raised on corporations and wealthy individuals.

But Revenue chair Mark Cusack, a Braintree Democrat, responded that the proposed fiscal 2021 budget is balanced with no major cuts. He said the House already passed tax increases, in the form of a transportation revenue package in March, which the Senate has not acted on.  “In order to pass revenue, we need a dance partner, and we don’t have one,” Cusack said.

While Senate President Karen Spilka is generally supportive of raising new revenue, key senators said after the pandemic broke out that they wanted to have the revenue conversation in the context of the state budget, rather than as a transportation bill.

Connolly’s amendment failed, 30-127.

Now, progressives are turning attention to another priority: emergency sick leave. Raise Up Massachusetts, a coalition of unions, clergy, and liberal organizing groups, has been pushing lawmakers to adopt emergency paid sick time during the pandemic. While Massachusetts already requires most companies to offer paid sick leave, and Congress passed a pandemic-related leave bill, there are various exemptions to these laws.

The Raise Up Massachusetts proposal would provide 10 days of paid sick leave to workers not covered by the federal leave bill – health care workers, workers at residential homes, and employees of companies with more than 500 people. The 80 hours is double the amount required by Massachusetts’ sick leave law.

The proposal would set up a $55 million fund, from which the state would reimburse employers who provide COVID-related sick leave to their workers. A worker could take leave if they or a family member were sick with COVID-19 or quarantined.

Second assistant majority leader Paul Donato, a Medford Democrat, introduced emergency paid sick leave as a budget amendment. It has 105 cosponsors, including several committee chairs, members of the Progressive Caucus, and five Republicans. Advocates expect it to be discussed when the House resumes deliberations Thursday, after Veterans Day.

As of 5 p.m. Tuesday, lawmakers also had not yet taken up an abortion-related amendment similar to the ROE Act, which has support from House Speaker Robert DeLeo.

A group of more than 300 Christian pastors wrote to Baker Tuesday urging him to veto the amendment.

“In 2019 alone, there were 18,593 abortions performed in the Bay State,” the pastors wrote. “How much more ‘accessible’ does the murder of unborn children need to be? Abortion ends the life of a human child and puts the physical, mental, and emotional health of women, most especially young women, at risk.”

Baker, a Republican who supports abortion rights, has said previously that he is concerned about provisions in the ROE Act related to parental consent for minors and allowing abortion after 24 weeks in certain circumstances. The new amendment includes compromise language in those areas, and Baker has not yet weighed in on it.

DeLeo previously said he hoped to keep policy issues out of the budget and keep it narrowly focused – a statement he appeared to walk back when he came out in support of the abortion amendment.

At the start of the budget debate, Rep. Todd Smola of Warren, a ranking Republican on the House Ways and Means Committee,  urged lawmakers to pass “as narrow a budget as we possibly can.”

By Tuesday evening, the House also had not considered an amendment sponsored by Republican Rep. Randy Hunt, of Sandwich, to incorporate Baker’s proposal to require businesses to remit sales taxes to the state daily beginning in 2024.

The House adopted Baker’s proposal to require large businesses to remit sales taxes to the state on a faster timeline, in the final week of each month instead of the 20^th day of the following month. But House leaders declined to adopt the more controversial part of Baker’s proposal imposing a daily remittance requirement in the future.

The business-backed Massachusetts Taxpayers Foundation came out with a position paper Tuesday backing a version of the accelerated sales tax collection – but strongly opposing requiring daily collections, which it called “bad public policy” that adds complexity and costs for businesses.