Mariano Says Gig Economy Getting “Free Pass”

Speaker Exploring New Revenues, On Top Of Tax Relief

BOSTON, MAY 26, 2022…..House Speaker Ronald Mariano said the House is working to assemble a tax relief package by the end of July and that he has a willing dance partner in the Senate, but he also indicated Thursday that relief is not where the tax talk is likely to end.

“We’re gonna try and put some things together. There’s still two or three things that I’d like to do that I’m having the numbers run through Revenue [Committee]. I want a more equitable dispersal of the benefits and tax benefits,” Mariano told reporters Thursday after addressing the Greater Boston Chamber of Commerce.

The speaker, who has said for months that he is open to the idea of tax relief without having advanced Gov. Charlie Baker’s proposals or outlined his own, said the idea of changing the threshold at which the estate tax kicks in “was something that jumped out at us right away,” but otherwise did not get into the details of what a House relief package might look like.

Senate President Karen Spilka has also said that she wants to get a tax relief bill through her chamber and said she will turn her attention to the issue after the Senate budget debate is over. Mariano said his conversations with Spilka give him “the impression that she does want to do something.”

But while tax relief may dominate the tax-related talks between now and the end of formal lawmaking in July, Mariano said in his remarks to business groups Thursday that “it’s absolutely critical for the Legislature to continue to look for new, smart ways to generate more revenue for the commonwealth.” He spoke specifically about sports betting and the money that could bring in for the state, but he told reporters after his speech that he has his eyes on other new revenue sources.

“Well, yeah. I don’t know if I should tell you right now what they are,” he joked when asked if he’s eying any other sources of state revenue. “There’s a whole gig economy issue and how we deal with some of those things, I think that’s ripe for some examination. I think we’d be silly to just give them a free pass without looking at it.”

Asked by a reporter if he has given any consideration to a tax on services, the speaker said he had not “per se.”

“But it’s an interesting avenue to look at though and I will take a look at that. I don’t know exactly how you would structure that and how we would identify these services, but there may be something there,” Mariano said.

Five years ago, when state tax revenues were falling short of expectations and budget writers resorted to one-time revenues to balance the budget, then-Senate President Stanley Rosenberg floated the idea of a sales tax on services to better capture what is happening in a state economy that’s largely driven by services. Since then, the idea that’s deeply unpopular with the business sector has seldom surfaced on Beacon Hill.

“As you may remember, we had a service tax in Massachusetts and it didn’t last long,” Rosenberg said in 2017, alluding to a state sales tax on business and professional services that was passed in late 1990 in the waning days of the Dukakis administration but repealed by the incoming Weld administration before it ever took effect. “So it’s very controversial, but our economy is even more reliant now than it was then on services and it is certainly worth looking at.”

The last attempt in Massachusetts at establishing a sales tax on services was the Legislature’s short-lived 2013 law subjecting certain computer services to the sales tax. Lawmakers wound up repealing their so-called tech tax amid an outcry from businesses.

Though the Legislature’s involvement with it is complete, a major tax policy proposal is in line to go before voters on November’s ballot. The proposed 4 percent surtax on annual household income above $1 million is projected to bring in about $1.3 billion a year that the proposal calls to be spent on transportation and education.