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$4 billion economic development bill, tax rebate plan on hold in Massachusetts Legislature

Tax rebate still a possibility in Massachusetts
Tax rebate still a possibility in Massachusetts 02:55

BOSTON - A major economic development bill is on hold as lawmakers assess an obscure law that could send billions back to Massachusetts taxpayers.

The State House News Service reports that the $4 billion bill, which includes $500 million in one-time tax rebates and $500 million in permanent tax cuts, will be kept in conference committee as the legislative session came to an end Monday morning. 

Massachusetts residents who were hoping to hear they'd be getting a big tax rebate check woke up to a lot of uncertainty.

"I think it would be great for people to have the money, but I think that it's also about making sure there's enough public funding," said Lindsay McCluskey, from Malden.

Meanwhile, the Legislature will continue to analyze the fiscal impact of Chapter 62F, which is triggered when the state budget has a significant surplus. The law approved by voters in 1986 could send about $3 billion back to taxpayers this year, depending on a ruling from the state auditor in September.

"That would have a put a little bit more money back into the pockets of middle class taxpayers, and that was punted," said Paul Craney of the Massachusetts Fiscal Alliance.

He says the state got record-breaking tax collections that amount to a surplus, and he's disappointed state legislators didn't do more. "I'm a little skeptical that in the future they're going to find in their heart to want to give us back money, but anything is possible," he said.

In addition to the rebates and tax cuts, the economic development bill had hundreds of millions of dollars for health and human services, environmental spending, housing and other investments to areas hit hard by the pandemic. 

"I think members are disappointed. You know, we're all disappointed because we all had projects and investments in that piece of legislation. We had investments that are necessary for our hospitals, for our human service workforce, for early education," Sen. Michael Rodrigues told the State House News Service. "So we're disappointed, but we want to make sure we get it right."  

Gov. Charlie Baker has said the state should be able to afford both the rebates and tax cuts it planned, as well as the "windfall" from 62F. For taxpayers, 62F would mean about 7% of their 2021 income taxes being returned, depending on which credits they already used.

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"This is really unprecedented increases in tax revenue which is really what this thing was designed to do to make sure the people of Massachusetts participated in that windfall," Baker said last week.  

MA Rep. Michael Connolly from Cambridge said there's still a chance. "Frankly, I often say rule number one: you have to know all the rules. Rule number two: there are no rules," he said. 

Parts of the Economic Development Bill could be brought up in the informal legislative session between now and January of 2023. There would be no formal vote, but whoever shows up on that day, would have to agree unanimously. "There are some decent chances that at least pieces of it will survive," said Connolly. 

The pause on the economic development bill means that other proposals that were being considered for the package - including reviving "Happy Hour" in Massachusetts and bringing the lottery online - won't be happening in the immediate future. 

The News Service reports it's possible that the Legislature could pass a slimmed-down economic development bill during informal sessions, as long as there's unanimous consent. 

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