BOSTON (WWLP) – Massachusetts representatives are expected to debate the budget next week and one item up for review is decreasing the state income tax rate.
One state representative has filed an amendment to lower the income tax rate from 5.1% to 5% to give tax payers a break. If passed, the state could surrender an estimated $850-million.
With the proposed budget just above $40-billion for next fiscal year, some lawmakers don’t want to restrict revenue the state takes in. State Representative Kenneth Gordon, (D) Bedford, said, “It’s a tough budget time so to restrict the amount of revenue that we have in order to take these into account is a tough time to do that.”
As lawmakers craft next year’s budget, the state is about $220-million below benchmark in tax revenues with just three months left in the fiscal year. Income tax is one of the largest sources of tax revenue for the state.
Senate President Stan Rosenberg said legislators could consider imposing a tax on professional services to boost revenues, but state lawmakers are weighing tax changes with caution. “It’s okay to have a discussion about things but we have to be careful,” said State Representative Paul Tucker, (D) Salem. “We also don’t want to send the wrong message to our constituents and we don’t want to send the wrong message to the business community.”
Voters passed a ballot measure in 2000 to drop the state income tax rate from nearly 6% to 5% by 2003, but lawmakers chose to more gradually decrease the tax rate overtime, which is now at 5.1%.
House Speaker Robert DeLeo said earlier this year that he doesn’t plan on increasing or imposing new broad-based taxes.
The House is expected to debate amendments to the budget next week.