That great whooshing noise you heard Friday was the sound of millions of Bay Staters trying to dig out their 2021 tax return to calculate just how much money the state could be sending them later this fall.
The prospect of tax relief under an obscure and largely-forgotten voter law called Chapter 62F first emerged in late July like a mirage in the inflation desert, but two significant announcements this week have it looking like it’s actually a real oasis.
First, Auditor Suzanne Bump certified that state tax collections last budget year surpassed the limit established by 62F by more than $2.94 billion, confirming that the state is required to return that amount in proportion to what each taxpayer paid in income tax. Within about 24 hours, Gov. Charlie Baker’s office announced that about 3.6 million Bay State taxpayers can expect to get “a credit in the form of a refund” worth roughly 13% of their income tax liability last year. The credit/refunds will start going out in November either by mail or via direct deposit.
The median income for Massachusetts households from 2016 through 2020 was $84,385, according to the U.S. Census Bureau. That amount of income (not factoring in credits or deductions and filed as the head of the household) would result in a state income tax liability of $3,999, according to a Forbes income tax calculator. Thirteen percent of the tax liability for the median household income — in other words, the credit that the median household could expect — would be about $520.
Or think of it this way: For every $1,000 paid in state income tax, about $130 will be refunded. (You can also use the state’s own refund calculator.)
With the fate of the Chapter 62F tax relief mostly settled — some Democrats are miffed that Baker plan to issue refunds rather than credits on next year’s taxes and others are still talking about trying to alter the law to make the distribution of the excess tax revenue more equitable — the big question now is what will become of the $1 billion in tax refunds and reforms that legislative Democrats had already agreed to before they realized that 62F would come into play.
“With the certification of 62F, it is my hope that we may now expeditiously pass an economic development bill that provides additional and equitable tax relief to residents and that invests in communities, small businesses, human service workers and industries,” Senate President Karen Spilka said this week.
Problem is, House Speaker Ron Mariano doesn’t seem to see things the same way. While Baker and Spilka have repeatedly said they think there is enough left over from the fiscal year 2022 surplus (about $2.3 billion after the 62F money is returned) to move ahead with the tax relief and investments in the economic development bill that’s been stalled since late July, Mariano still has not been convinced.
“Now that the Auditor has officially certified the final revenue numbers, and with the knowledge of the exact amount that will be given back to taxpayers under 62F, conferees currently negotiating an economic development package will continue their ongoing talks,” Mariano said without explicitly voicing the same kind of support for additional tax relief as Spilka.
If anything is going to get done before the legislative session officially ends the first week of January, coordination between Spilka and Mariano will have to sync up. Now that formal sessions have ended under the House and Senate rules, the objection of any one representative or senator can grind all work to a halt. So both leaders will have to work to get their members on board with whatever plan they come up with.
The House and Senate leaders of the Transportation Committee were on the same page Wednesday as they grilled the head of the Department of Public Utilities and others about the MBTA’s flunking grade for safety. The DPU is supposed to be responsible for oversight of the T and has been chastised by the Federal Transit Administration for not overseeing the system “adequately.”
“We have a series of events I outlined in my opening remarks, really a five-alarm fire here, yet you never rang the alarm,” co-chair state Sen. Brendan Crighton said to DPU Chair Matthew Nelson during Wednesday’s oversight hearing. “You have not been there when safety incidents have occurred, and I need to know why, frankly.”
Nelson, a former Eversource executive tapped by Baker for the DPU job, said that his agency had done the bare minimum, but also acknowledged that more is required of it given the persistent — and in at least one case, fatal — safety problems at the T.
“MBTA is still the primary and first line of defense on all safety activities. We’re an auditing department,” he said. Nelson added, “I’m trying to say we’ve met our requirements, but given the circumstances, more needs to be done.”
As Nelson and then MBTA Board Chair Betsy Taylor testified, workers along the Orange Line continued to address the kind of safety and infrastructure problems that the FTA called out after its nearly unprecedented safety investigation of the MBTA.
The T is preparing to reactivate the subway line Monday after a 30-day shutdown that, by most accounts, has gone as well as anyone could have hoped and better than almost everyone expected. Sure, the attempt to do five years worth of work in one month made commutes longer and disrupted routines, but none of the most dire predictions from a month ago came to fruition.
Remember the red cloud of doom that Department of Transportation officials overlaid on a map of the Greater Boston region to illustrate the traffic impacts of the subway line’s closure? “It will be chaos,” Boston Mayor Michelle Wu predicted in August. MassDOT similarly thought it was going to be pretty bad and suggested that people just avoid the Boston region all together.
Well, the traffic apocalypse didn’t quite pan out and Wu said this week that the Orange Line shutdown actually turned out to be a valuable learning experience for her administration, the T and riders.
“The shuttle bus and all the alternatives, the diversions, have been going so well, relatively speaking,” she said Tuesday on GBH Radio.
The work seems to have been going well, too. As of Friday, the MBTA said it had completed 96% of the work that it set out to get done during the shutdown. T officials are confident the subway line will reopen by Monday as planned.
Some of the Orange Line diversion’s success can surely be attributed to the expectation-setting prowess of MassDOT and the MBTA. Remember the Commonwealth Avenue Bridge replacement project in 2017 and 2018? MassDOT carpeted Red Sox game broadcasts with info about Mass. Turnpike closures and Green Line diversions, and warnings of traffic nightmares.
The whole thing was inconvenient, but it never was as bad as it was made out to be and the Pike even fully reopened 24 hours ahead of schedule. When you’re expecting to take a haymaker to the mouth, a slap across the face doesn’t seem that bad after all.
So what can riders expect Monday morning when they get back on the Orange Line?
“When Orange Line riders return to the line on Sept. 19, they will arrive at deep-cleaned stations and experience a ride that is significantly better than the one that they left,” MBTA General Manager Steve Poftak promised when the shutdown was announced last month.
STORY OF THE WEEK: National politics made two high-profile visits to Massachusetts this week, arriving by airplane in both instances. First, President Joe Biden flew into Logan on Monday to talk infrastructure and his administration’s goal to dramatically reduce cancer deaths. On Wednesday, the national debate over immigration policy landed here when about 50 Venezuelan migrants sent as part of Florida Gov. Ron DeSantis’ “relocation program to transport illegal immigrants to sanctuary destinations” arrived in Martha’s Vineyard unexpectedly.
SONG OF THE WEEK: State government is a far cry from heaven, but millions of Bay Staters could be singing and scatting like Louis Prima when their “pennies” arrive later this fall. (Prima’s one-time drummer, Jimmy Vincent, ran copy between the State House and Newspaper Row as a messenger for the News Service in the 1930s.)