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Tax breaks add up to big money

Posted in: Taxes   State budget   Massachusetts Legislature
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“Too complicated, too big.”

Those were the words the Tax Expenditure Commission used to describe the tangle of tax breaks that amount to over $26 billion, or more in foregone tax revenue than the state takes in each year, according to the State House News Service. The commission was convened to study the financial impact of the credits and exemptions, and is expected to release a final report next month.

The State House News also reported that the commission would recommend a reduction in the number of tax breaks the state offers, but would likely decline to specify which credits should go, citing the complexity of the current system. The commission may recommend that lawmakers consider them one by one.

The recommendation would set the stage for a series of battles with those industries that benefit from the credits and exemptions. In 2010, when lawmakers were considering whether to alter the state’s film tax credit, a hearing on the matter played out in a predictably dramatic fashion, complete with industry activists dressed in costume. Similar revision efforts were blocked by the state’s aviation industry.

An editorial in the Lowell Sun and Fitchburg Sentinel and Enterprise yesterday voiced support for the commission’s forthcoming recommendation, while cautioning that lawmakers should focus on reforms that would both promote equity and produce a large benefit to the state.

Tax breaks were traditionally a good way for bipartisan “spending” on projects and issues important to state leaders: Republicans could get behind a reduction in taxes, while Democrats could steer cash towards industries without a subsidy. They became controversial, however, when large tax breaks for companies like Evergreen Solar failed to produce promised benefits to the state.

Interestingly, the most controversial tax credits make up a small fraction of the so-called tax expenditure budget. The majority of credits represent long-established tax exemptions, such as sales tax exemptions on food, clothing, and services.

State House News reports that previous efforts at simplifying the tax code have failed, but with Gov. Deval Patrick lately clamoring to extract new revenue from an unwilling Legislature, closing tax breaks could be an issue that gains steam. 

                                                                                                                            --CHRISTINA PRIGNANO

BEACON HILL

A sick-time leave bill advances which, if passed, may provide relief to the nearly 1 million people who do not have access to paid time off for illness.

Eugene O’Flaherty, the House chairman of the Judiciary Committee, says he’ll step down from the post at the end of the year, citing the blistering he took in this piece by Globe columnist Kevin Cullen.

Rep. Alice Wolf, the long-time darling of Cambridge liberals, won’t seek reelection. No word as to whether Kevin Cullen is to blame.

With attempts at finding a legislative solution receding, the automobile right-to-repair issue appears poised for a ballot initiative.

David Bernstein wishes a happy anniversary to Senate President Therese Murray, and notes it’s been five years since Murray last spoke to him.

The Herald’s Joe Battenfeld pays a visit to the empty Worcester airport. Massport still has to staff the abandoned, money-losing facility, per FAA regulations. Meanwhile, a charter airline that flies out of the Worcester airport has gone bankrupt and owes Massport more than $80,000, reports the Worcester Telegram and Gazette.

MUNICIPAL MATTERS

At least 10 people in Bridgewater say they were duped into signing a recall petition to remove two town councilors.

The Swansea Recreation Commission, which has had more than its share of problems of infighting and attempts at reorganization, is facing more turmoil with one member facing a disciplinary hearing and revelations that an unopposed candidate for a seat has a recent felony conviction from Pennsylvania.

A Lynn mother organized a playground cleanup after her one-year-old son picked up a syringe while playing in the Strawberry Avenue park.

Districts in Rockport and Gloucester are among the first officially designated “cultural districts” in the state. Three others were designated in Boston, Lynn, and Pittsfield, the Gloucester Times reports. An editorial in the paper outlines the potential benefits to Gloucester and elsewhere.

Wilfredo Laboy, the former Lawrence school superintendent on trial for fraud and embezzlement, yesterday testified in his own defense, the Lawrence Eagle Tribune reports.

A bid to roll back the closing hours of Lawrence bars by an hour on Friday nights was defeated after a vote by the two-member Licensing Board ended in a tie.

NATIONAL POLITICS/WASHINGTON

The Weekly Standard has a behind-the-doors look at the battle by the Koch brothers to gain control of the libertarian Cato Institute think tank.

Gail Collins is worried that the National Rifle Association is running out of things to lobby for.

The Atlantic visualizes what Rep. Paul Ryan’s budget means, and, if Ryan’s numbers are correct, it involves putting most of the federal government out of business.

ELECTION 2012

Hub Kid Steps in Doo: Eric Fehrnstorm’s “Etch-a-Sketchgaffe, and the sentiment behind it, won’t come as any surprise here in the Bay State. Now Rick Santorum and Newt Gingrich are toting the toys around on the campaign trail and the Democratic National Committee has its own video. Good work, Eric!

U.S. News & World Report gathers its “Debate Club” to ponder if Mitt Romney’s foes can force a brokered convention despite his commanding delegate lead. The tally is 5-1 they can’t, though the one “yes” claims Romney is a liberal. Nate Silver does a whole bunch of math and all but calls the GOP nomination for Romney.

The Wall Street Journal spotlights the Texas billionaire who’s pumping huge sums of money into anti-Obama super PACs. And speaking of super PACs, the one supporting Newt Gingrich is almost broke.

FISHING

About 1,000 commercial fishermen from around the country rallied in Washington to call attention to the plight of the industry sinking under increased regulations and quotas.

BUSINESS/ECONOMY

The CEO of OneUnited Bank, Kevin Cohee, is hard to find as the very public showdown between his bank at Roxbury’s Charles Street AME Church continues.

The country’s remaining subprime lender races against insolvency.

NPR’s Morning Edition examines why US demand for gasoline has been slowing since 2007.

EDUCATION

The state inspector general for the past 15 months has been quietly investigating the handling of contract awards by the Brockton school system dating back to 2004.

The Lowell School Committee is considering ending the practice of ranking high school students due to concern that colleges place too much emphasis on a student’s performance relative to his or her classmates.

HEALTH CARE

The state Public Health Council is mounting a campaign to convince the Legislature to ban the sale of tobacco products at pharmacies.  

TRANSPORTATION

A station wagon slammed into a school bus in Marshfield seriously injuring the two women in the car, but police say the 11 preschool children on the bus were unharmed because it was equipped with seat belts and harnesses, a rarity on school buses.

ENERGY/ENVIRONMENT

A snowless winter has put fire officials across the state on high alert over the threat of forest fires.

CRIMINAL JUSTICE

The Cambridge Chronicle dives into the uncertainty surrounding the Middlesex County Jail. The state is shutting the facility down and selling the Cambridge building, but still doesn’t have a replacement facility lined up.

Catherine Greig’s twin sister allegedly liquidated bank accounts belonging to the mob boss’s girlfriend, and now nearly $20,000 is missing, according to federal prosecutors.

MEDIA

The Nieman Journalism Lab analyzes Gawker’s strategy of mixing thoughtful content with pieces written primarily to chase pageviews.

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