The state’s highest court sided with the state Senate in its inter-chamber tax dispute with the House, declaring it had the legal authority to pass tax-changing measures in its budget, including freezing the state’s income tax.
The Senate, in a move to help pay for a $140 million program to expand the state’s earned income tax and other personal tax exemptions, earlier this year approved a measure freezing the income tax at 5.15 percent. That runs counter to a current law, approved by voters in 2000, that would eventually bump the tax down to 5 percent.
In an advisory opinion released today, the Supreme Judicial Court concluded that changes the House made in its own budget bill effectively opened the door for the Senate to make its tax reforms.
“We appreciate the prompt and clear answers from the Justices of the Supreme Judicial Court in their response to the request for an advisory opinion,” a spokesman for Senate President Stanley Rosenberg said in a statement. “This opinion allows the budget conference committee to continue to work together and deliver an on-time budget to the Governor.”
At issue in the case was whether the House’s version of the budget was a so-called “money bill.” Despite hiking the tax credit available for donations of conservation land and delaying another tax deduction, DeLeo and the House argued that its budget didn’t classify as one, meaning the Senate couldn’t make tax changes in its own version of the spending plan.
The SJC disagreed, noting in its 27-page opinion that delaying the tax deduction “effectively increases the amount of tax revenue” the state will take in from certain corporations next fiscal year. That measure, the SJC said, fits the necessary description of a money bill as it “transfer(s) money or property from the people to the State.”
“We are of the view that the House bill was a money bill, and that the Senate did not improperly originate a money bill,” the SJC wrote on its opinion.
Speaker of the House Robert A. DeLeo, moving just hours after the Senate passed its version of the $38.1 billion budget, had requested in late May for the Supreme Judicial Court to weigh whether the upper chamber’s spending plan — and its decision to freeze the state income tax — was constitutional.
While a victory for the Senate, it remains to be seen if the tax changes — which also included a Senate-proposed tax on flavored cigars and smoking tobacco — will actually survive. House and Senate leaders are currently hashing out differences in their budgets behind closed doors, and both DeLeo and Gov. Charlie Baker have indicated they don’t support the tax freeze.
In a statement released this morning, DeLeo thanked the SJC for its work, but he did not specifically address its decision.
“Work between members of the Conference Committee will proceed as we reconcile the House and Senate budgets,” DeLeo said.