BOSTON (SHNS) – There’s not a “sense of urgency” to pass a tax relief package in the Senate, where members are focused on advancing an annual budget bill and finding out why April tax collections took such a precipitous nosedive, according to a ranking Ways and Means Committee member.
Sen. Patrick O’Connor, the committee’s ranking Republican, said Thursday that senators are grappling with the “very concerning news” about April’s state revenue collections. The Department of Revenue released data Wednesday showing a plummet of $2.163 billion from the same month last year, a development that suddenly put the state at risk of confronting a fiscal 2023 budget deficit.
“In conversations that I’ve had with legislative leadership, there’s obviously going to have to be briefings and explanations as far as what happened here,” O’Connor told reporters at the State House, expressing hope that the latest numbers could be an outlier. “April’s our biggest tax month, and to have our biggest tax month show that big of a loss — that literally took us from almost a billion dollars up to almost a billion dollars down — we need to be well aware of what happened and adjust policy as need be moving forward, whether it be the budget, whether it be the tax package.”
He added, “I don’t think that there’s a sense of urgency to get that tax [relief] package done.”
The House in April passed its tax relief package and then built its impacts into its fiscal 2024 budget. Senate Democrats won’t say if they plan to follow the same process, and O’Connor suggested Thursday that consideration of tax relief in the Senate may occur after late-May state budget deliberations.
O’Connor, of Weymouth, said that for now senators are “all in” on fiscal 2024 budget development.
“I think that sometime after that, we potentially do the tax package just because there’s a lot of looming things that are going on right now, in general,” O’Connor said. “There’s a huge uncertainty out there, right now, with the April numbers. Let’s take our time. Let’s make sure we get this right.”
Still, O’Connor balked at the “premature” prospect of pursuing a tax package of less than $1 billion, after the House and Gov. Maura Healey backed plans to expand the child and family tax credit, rental deduction cap and senior circuit breaker while overhauling the short-term capital gains and estate taxes.
“I wouldn’t consider this as an immediate cause of concern to change the policy or sort of plan that we have in place for the tax structure,” O’Connor said of April revenue numbers. “So I’d still like to have everything on the table. As we go through briefings and talk with economists and figure out what happened in April, I want to then sort of reassess at that point in time.”
To bolster Massachusetts’ competitive edge, O’Connor said the state must raise the estate tax threshold above $1 million, cut the capital gains tax rate and provide tax breaks to families who are paying for the “outrageous cost of childcare.”