Healey: Tax Package Coming with Budget on March 1

Discusses Competitiveness, Affordability in Radio Interview

FEB. 15, 2023…..The Healey administration is “putting the final touches” on tax legislation with a plan to roll it out alongside the annual state budget bill due March 1, Gov. Maura Healey said Wednesday.

In a live radio interview that also touched on the nascent campaign for a minimum wage increase, local resistance to housing production efforts, and competition for federal funding, Healey said the timing of her “tax package” will line up with her first state budget.

“Massachusetts is a great place as long as you can afford to live here, and right now, with the cost of housing, the cost of childcare, and then some of what we’ve seen in terms of inflationary pressures, it’s tough,” Healey told WBUR’s “Radio Boston.“ “You will see that I will be filing, at the same time as my budget on March 1, a tax package. It’s a tax package directed at making life more affordable for folks, and we are busy putting the final touches on that proposal right now.”

Healey made tax relief a central theme of her campaign for governor, but other than calling for an overhauled child tax credit and supporting former Gov. Charlie Baker’s push for a range of measures, she has been sparse with details about her approach or timing.

When WBUR host Tiziana Dearing asked Healey to outline “key themes” of her legislation, the governor replied, “I think it really does involve a package.”

“We’ve talked about progressive tax relief, so thinking about how we can target those most vulnerable, our seniors, renters,” Healey said. “Also, what are the things we can offer for families when you talk about child tax credits and the like.”

“The goal here is to make Massachusetts more affordable. It’s necessary for our families, and also, Tiziana, it’s really important for our competitiveness, right?” she added. “So whether you’re talking about child tax credit proposals that I’ve talked about before or other forms of relief, this goes to us showing and making clear to people, look, Massachusetts is a place where you can come here, you can come here to learn and study, you can come here to grow a business, you can come here to work and afford to stay here. And if you’re from here, born here, this is the place where we want you to stay. We want you to grow families and we want you to grow careers.”

Baker, a Republican, pushed last year to reform the estate tax and create new breaks for renters, seniors and caregivers. Top House and Senate Democrats initially approved a package with those rough parameters, but they backed away from the plan after learning the state owed nearly $3 billion to taxpayers in mandatory relief.

With a combination of sharp inflation and a suffocating housing market stifling workers and employers still struggling to fill open positions, business leaders and analysts have been warning that Massachusetts is at risk of losing its competitive edge.

Healey said Wednesday she wants the Bay State to take advantage of available federal funding opportunities to stay ahead of the pack, a step she targeted by including $200 million in state matching funds toward CHIPS Act grants as part of a bond bill she filed last month.

That proposed allocation, she said, “show[s] that the state has skin in the game and is willing also to put up investment dollars.”

“I don’t want us to just be competitive. I want us to win. I want us to win these federal funds,” Healey said. “We’ve led the nation for so long in technology and innovation, life sciences. We just have a history here, and I want us to continue to lead by winning. So it’s not just about competing, it’s actually winning.”

Accomplishing that, Healey argued, will require steps “that we haven’t done before.” She called in particular for greater alignment between industry leaders, academic and research institutions, workforce programs and government agencies to make a cohesive pitch for federal dollars.

“Think about what China is doing right now. We have the capability to disrupt China’s attempt to dominate in certain spaces,” Healey said. “I want Massachusetts to be the semiconductor capital of the world.”

A key pressure point in the debate about Massachusetts as a competitive destination is housing, where short supply and sluggish development has pushed prices to blistering levels in recent years.

Under a law Baker signed in January 2021, every MBTA city and town must have one zoning district near transit that allows multi-family housing by right. While Healey said Wednesday the compliance rate among the 175 affected communities is “97 percent,” a handful blew past the Jan. 31 deadline to submit action plans.

Middleborough officials in fact voted to ignore the zoning requirement in the law and plan not to comply because they believe it could lead to overdevelopment, the Boston Globe reported on Tuesday.

Asked about her administration’s approach to cities and towns that oppose or resist the zoning reform law, Healey said her team will deploy “carrots and sticks” and try to build understanding about the necessity of new development.

“Opting out is not an option,” Healey said. “But what we need to do is work with these communities and figure out a way to get there. You know, we’re a commonwealth. We’ve got to do this across the state. Every community is different, every community is unique, but this administration, this team, is really going to lean in here and figure out our way through this.”

“We have to,” she added. “If we don’t drive down housing costs by creating more housing, we are going to lose as a state. We’re going to see more people leave and go other places.”

The Lawyers for Civil Rights group on Monday criticized communities that missed the deadline and called out other “predominantly white towns” for submitting action plans with “listed characteristics that evince thinly veiled racism.” Examples the organization cited include Bellingham, which wrote it wants to maintain “existing neighborhood character,” and Ashland, which described “respect for traditional housing patterns.”

“These statements are exclusionary and problematic. Experts have noted that concerns about ‘neighborhood character’ may be racially coded and a federal court in New York has recognized that a community’s stated ‘interest in maintaining the character of a neighborhood [is] a veil for race-based animus,’ ” the group wrote in a press release. “All of this raises the specter that covered communities don’t intend to meaningfully comply with the Law.”

LCR said it “stands ready to compel compliance through legal action.”

Another affordability issue that labor activists and some lawmakers have targeted is the minimum wage.

Just weeks after the statewide minimum wage hit $15 per hour to complete several years of increases laid out in a 2018 law, the Raise Up Coalition — whose initiative petition campaign was a key factor in the agreement five years ago — said it supported legislation charting a path to a $20 wage by 2027.

Healey, who could be pressed into action to broker a deal to avert another ballot question fight, did not take a definitive supportive or oppositional stance when asked Wednesday about another minimum wage increase.

“Right now, I am very much focused on what we have in terms of revenue, what we have in anticipated revenue, and what I can do in support through my proposed budget,” Healey responded. “There’s a piece of this that’s really going to be focused on, when we file our tax proposal, driving the affordability point. So, you know, I think we can get there … When you talk about affordability, certainly wage and minimum wage is important, but it’s also important to look at what are we doing around food security, what are we doing around housing, what are we doing to drive down the cost of childcare.”