Tricia Farley-Bouvier (D-3rd Berkshire) & Jack Patrick Lewis (D-7th Middlesex) | Opinion, The Boston Globe | July 21, 2020
Tricia Farley-Bouvier represents the Third Berkshire District and Jack Patrick Lewis represents the Seventh Middlesex District in the Massachusetts House of Representatives.
COVID-19 has presented us with an unparalleled global crisis whose total effect on Massachusetts has yet to be fully felt. The state revenue shortfall is about $6 billion, and local and state leaders have been told to prepare for the worst as they develop budgets for the new fiscal year. Mayors and superintendents are faced with unfathomable decisions over what they are going to cut in order to help their cities, towns, and schools survive the current economic crisis. On the state level, we have been forewarned of the tough budgetary choices and program cuts to come.
There is a better way. Rather than myopically cutting our way out of this dilemma, we must instead make significant investments in our residents and our communities. We call on our colleagues in the Legislature, the Baker administration, and in Congress to commit to these four concrete actions to limit the damage of the current fiscal crisis and equip us for a faster, stronger, and more equitable economic recovery:
- We call on our federal delegation to focus, with all urgency, the next federal relief package squarely on bailing out states so that we can fulfill our obligations to education, local aid, and protecting our children, seniors, and our environment.
- The Massachusetts Legislature needs to use no less than $1.5 billion of the Massachusetts Rainy Day Fund.
- The Legislature needs to raise new revenue through targeted, progressive means, including taxes.
- If necessary, the state should borrow to fill state budget gaps.
While it may seem counterintuitive to talk about new revenue in the midst of an economic crisis, we must recognize that it would be unprecedented not to. Massachusetts has raised new revenue following every recession of the last few decades. As outlined in an open letter to Massachusetts leaders supported by dozens of well-regarded Massachusetts economists, “Economic theory and historical experience show that spending cuts are more harmful than tax increases during recessions.” And finally, not everyone has been hurt by the coronavirus pandemic. Billionaires across the country have seen their wealth grow by over $584 billion since March alone, and a number of corporations have seen record profits during this time.
We call not for broad-based taxes but, rather, for progressive revenue that targets existing loopholes and those corporations who have profited handsomely in these last few months. These targeted reforms include recapturing taxes from those who move their income offshore by recoupling with the federal Global Intangible Low Tax Income (GILTI) provision, eliminating the single-sales factor for mutual fund companies, delaying implementation of the state charitable tax deduction, and raising and tiering the Corporate Income Tax. Taken together, these actions will generate an estimated $1.3 billion in revenue for Massachusetts, without economically harming our middle and working-class residents or our small businesses.
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