The Massachusetts state budget will be the primary concern this week. Tax revenues are exceeding expectations, gas taxes are dwindling, and some cities may be putting the screws to local cannabis operators. The tourism and hospitality sector is battered and bruised, while heads are spinning at real estate development concerns along coastal Massachusetts due to last week’s blockbuster ruling on harbor front development.
Meanwhile, Ben Downing, candidate for governor, wants to put the pedal to the metal on the state’s emissions reduction goals.
Politics
Lawmakers To Unveil Fiscal 2021 Budget as Tax Collections Exceed Expectations
Excitement is mounting for the unveiling of the budget proposal for the upcoming fiscal year because 2020-2021 has been full of big surprises. The most recent surprise is that Massachusetts tax collections have once again exceeded the state’s expectations and this month’s debate in House of Representatives may center around how the Commonwealth can emerge fully funded from the COVID19 pandemic.
Here are some tax numbers being crunched on Beacon Hill:
The Department of Revenue reported over $3 billion in tax revenue for March. That’s $402 million or 15.1% higher than the previous month.
The state collected nearly $22.6 billion this fiscal year. That’s about $1.5 billion or 7.2% higher than in fiscal 2020.
Corporate and business tax collections in March exceeded $1 billion. That’s $274 million above the state’s projections.
The state collected $562 million in sales and use tax revenue. That’s about $95 million more than expected.
The state collected $66 million in meals tax revenue. That’s nearly one-quarter more than expected.
Income tax collections were $1.26 billion. That’s about $178 million above projections.
Income tax returns and bills totaled $152 million in March. That’s $63 million above benchmark but 4.6% below the state’s expectations.
The state reported $399 million in refunds (so far this tax season). That’s $19 million less than expected.
Unknown at this time is how $4.5 billion in federal funds will figure into future spending as the revenue is not accounted for in the budget plans. This is because the U.S. treasury has yet to develop full guidelines on how the money should be spent. More details are expected within the next month.
Lawmakers will be unveiling the new budget on Wednesday, April 14.
MassLive.com has more details on the budget.
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Business
Tourism and Hospitality Sectors Plead For Pain Relief
No other sector of the Bay State economy has been so brutally beaten down by the pandemic than the state’s tourism and hospitality sector. And the beatings will continue until morale improves — as they say. Experts are predicting a slow and painful recovery. That is unless the state can provide some measure of relief by inoculating the sector with additional funds.
At a recent hearing by the Tourism, Arts and Cultural Development Committee, lawmakers heard from groups representing restaurants, hotels and motels, cultural organizations, event venues and tourism promotion. Each told stories of widespread losses as stay-at-home, the gathering limits, and the massive drop in customer spending forced closings and employee furloughs of biblical proportion.
Martha Sheridan, president of the Greater Boston Convention and Visitors Bureau had this to say:
"We're not going to be able to wish, pray and hope our way out of this pandemic. The only way we're going to get out of it is if we remain competitive and invest strategically in tourism promotion."
So far the state has awarded more than $650 million in relief grants to about 14,400 businesses. And cultural nonprofits received almost $10 million through a separate grant program in January.
Also, according to NBC Boston, another $16 billion grant program was announced on Thursday. The fund is earmarked to “assist live venue operators, theatrical producers, live performing arts organization operators, museum operators, movie theater operators and talent representatives affected by mandatory closures.”
Furthermore, bill (SD 2105) would divert at least $200 million from the coming federal stimulus package to help cultural organizations recover.
Industry leaders say it’s not enough and are asking lawmakers to dig deeper. They also asked the state to develop a clearer timeline for lifting of business restrictions.
Some soothing news: Overall, Mass. business confidence has returned to pre-pandemic levels.
Learn more about this issue at NBC Boston.
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Energy
Gubernatorial Hopeful Downing Offers Suped-Up Climate Plan
Ben Downing, who has been working in the renewable energy sector in 2017, has announced his plan to combat climate change.
According to Downing, the state should be aiming at 100% clean electricity by 2030 with the rest of the state’s energy needs to be 100% clean by 2040. And, of course, the recent omnibus climate bill calls for net-zero emissions by 2050.
For one thing, Downing is calling for a doubling of the Mass Clean Energy Center budget. According to Downing:
“MassCEC has been sort of the hub of new technologies in Massachusetts, going back to the earlier days of solar, more recently, around energy storage and business models there. We know we're going to have to not only deploy more renewables, but continue to think about new ways to ensure access to renewables across the economic spectrum and to come up with new innovative models for making the overall system work more efficiently, more effectively. Supporting MassCEC is the simplest way to do that. But we need to continue to think about other ways to do it as well.”
Read and listen to the full interview with WAMC.org. Or check out this report at MassLive.com.
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Transportation
The Problem With More Energy Efficient Autos: A Dwindling Gas Tax
According to the American Society of Civil Engineers the average driver in Massachusetts at 42 cents a gallon spends $620 a year in gas taxes. That money goes toward road maintenance. This has been going on since the 1950s. The problem is, while expenses for maintenance are on the rise, gas tax revenue is slowly dwindling as autos become more and more efficient. What to do?
According to a report by Boston 25 News, Mary Maguire of AAA Northeast says this isn’t sustainable. And Steve Pociask of the American Consumer Institute thinks we need to come up with a new fee system.
One of the potential solutions being bandied about is a tax rate based on the type of vehicle and the miles driven. Trucks would pay more. Economy cars would pay less.
Matt Casale of MassPirg, who specializes in transportation and climate issues, says:
“The beautiful thing about a vehicle mileage travelled fee is you can structure it anyway you want. If used properly, a VMT or some other user-based system for driving, could make it easier to get where you need to go by fast bus or train, or it could improve the condition of the roads and bridges so you you’re not hitting as many potholes and you don’t need to spend as much on vehicle maintenance.”
The rates could also be structured in such a way as to create disincentives to drive gas guzzlers and offer incentives to trade in your old stink tank for a zero-emissions vehicle.
Read all about it at Boston 25 News.
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Real Estate
Recent Ruling on Boston Harbor Tower Will Have Far-Reaching Consequences
Last week we told you about the developers of a 600-foot tower on Boston Harbor looking over the New England Aquarium out to the Boston Harbor. We told you how their hopes and dreams were dashed by Suffolk County Superior Court Judge Brian Davis who ruled in favor of The Conservation Law Foundation and Harbor Towers apartment residents in a lawsuit seeking to block the proposed redevelopment. In a strange twist, the judge ruled that the zoning laws under which the plan was approved were themselves approved by the wrong state official in 2018. This has now sent a shockwave through the real estate development community.
The problem is that the ruling could very well affect other developments approved under similar zoning plans — and not just in Boston, but from Gloucester to New Bedford to Provincetown.
This is a fascinating story with far-reaching consequences that we won’t even begin to try to unpack here. But there’s a deep dive on recent developments at Boston.com.
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Cannabis
Mass Grower Advisory Council Says Some Cities Are Too Greedy
In the five years since recreational marijuana became legal in Massachusetts 122 dispensaries have opened in the state. Sales have grossed $1.45 billion since Nov. 2018. And more than $90 million in sales tax has been collected.
However, a recent report by the Massachusetts Cannabis Reform Coalition and the Massachusetts Grower Advisory Council claims that 79% of the state’s host community agreements require excessive fees and “voluntary” donations for third-party charities.
To the Massachusetts Grower Advisory Council, that’s a problem. It could result in excessively high barriers to entry for the little guys. It also helps keep black market pot prices competitive.
MGAC has petitioned the courts, asking that the Cannabis Control Commission be given authority over municipal agreements, instead of cities and towns.
For in-depth coverage of this story visit BizJournals.com.
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