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Date: 8/23/2022
SOUTHAMPTON – State Sen. John Velis believes Massachusetts has the resources to pass the long-debated economic development bill and provide refunds to local taxpayers.
Velis made his position known while delivering a legislative update to the Southampton Select Board at its Aug. 16 meeting. Velis represents Southampton as part of the Second Hampden and Hampshire District.
The state senator explained the Legislature had hoped to pass the bill as part of what he described the “contentious, blockbuster” stretch at the end of the formal legislative session that also included on reform measures for the state’s Soldiers’ Home, mental health, legalized sports betting, the Military Spouse Licensure Portability, Education and Enrollment of Dependents (SPEED) Act, and a bond bill that featured $275 million for East-West rail.
However, Gov. Charlie Baker’s assertion that a referendum passed in the 1980s known as Chapter 62F would trigger tax refunds to millions of residents threw a wrench into the discussion as the July 31 deadline for the end of the formal session approached. As a result, the bill now remains in a state of limbo. Under an agreed-upon compromise, the state will wait for the report from the state auditor to determine how much could be returned to taxpayers before revisiting the economic development bill. The auditor’s report is due in September. Velis said that Michael Rodrigues, chair of the state Senate Committee on Ways and Means, told him before the meeting discussions were also continuing during informal sessions.
“What we’re trying to do is develop a consensus. If we can get this [economic development] bill out – and this is where I diverge a little bit and find myself agreeing a bit with Gov. Baker – I do think we have the ability to afford both,” Velis said.
Velis described the high-profile legislation debated by the House of Representatives and Senate was “for all intents and purposes was a mini-budget” that included funding for small and rural communities, distressed hospitals and health care workers.
Complicating matters, he said, was Baker’s public discussion of Chapter 62F, which states that if revenues exceed salaries and growth, the excess was to be returned to the public in the form of a tax credit. The State House News Service reported at the time that the state had a “historic surplus” following fiscal year 2022 and the governor suggested a 1986 voter law that set a cap on state tax revenue growth would require the state to issue more than $2.97 billion in refunds to 3.8 million residents who paid income tax. For example, those earning $75,000 would theoretically receive a $250 payment.
Baker’s statements on this came with the conference committee on the economic development bill closing on the announcement of a settlement, according to Velis. The complication, Velis opined, arose from the House’s uncertainty over the affordability of the refunds, given the goals of the bill.
“Everyone acknowledged that this is a legit thing, everyone has acknowledged that it’s constitutional, we just don’t know how many billions of dollars are going to have to go back,” Velis said of his recollection of the discussion, further explaining the economic development bill contained substantial “across the board” tax relief. “The Legislature’s position, but more the House or Representatives’ position, was that we don’t know if we can afford all of this at once. Many people, certainly, with an economic background that far exceeds mine would point out we could be on the verge of a recession.”
Velis admitted the Legislature’s habit of procrastination hamstrung the House of Representatives and Senate in their committee discussions as they tried to get the work done under the wire as the formal session expired – actually ending on Aug. 1 at 10 a.m.
“We have an awful tendency of waiting till the end of the legislative session to get the really, really important stuff done and I’ve tried everything in my power as an individual lawmaker to really kind of move beyond that,” he said. “There are things that I have learned are just a product of the institution and I don’t know if that’s going to change ever, to be very candid with you.”
With that said, Velis pointed to the sheer volume of tax revenues and the influx of federal money as reason enough to be optimistic that the bill and refunds could be possible.
“If you look at revenues right now, in many respects, we are in uncharted territory. We’ve got a $5 billion surplus right now that’s up 21 percent from last year – very significant revenue. A lot of the gloom and doom predictions that we thought from COVID[-19] didn’t come to fruition.”
He said while some industries were “decimated” by the coronavirus pandemic and related restrictions, others and their accompanying tax revenues remained stable, even increasing.
“If you couple that with a lot of the federal funds – [American Recovery Plan Act], the [Coronavirus Aid, Relief, and Economic Security] Act – there’s a lot of money going out there right now for a lot of different projects,” Velis explained. “My belief – and again, this is where there is less uniformity in terms of opinion is that whether or not we can afford it right now or not, we’ve got a very solvent rainy day fund, we’ve got revenue that exceeds in many respects on a monthly basis anything that we’ve had, and my persuasion is that we can, in fact, afford to do both.”
In addition to having the ability to pass the legislation and provide tax refunds, Velis further stressed his belief that the state had an obligation to do so.
“In my entire time as an elected official, I have never been approached by more constituents explaining to me and talking to me about the financial pain that they are going through right now. I mean, there is no respite from going to the grocery store – prices are up – going to a gas station – prices are up – going out to eat at a restaurant – prices are up,” he said. “So if there was ever a time – and this is where I’m speaking for Sen. John Velis as opposed to the body – if there was ever a time to err on the side of giving money back, let’s be honest, to the people whose money it is, taxpayer money, it’s right now because we have that revenue to do it.”
Velis is running for reelection to a second term in the Senate. He will not face opposition in the Sept. 6 primary election, but is opposed by Republican challenger Cecelia Calabrese, the vice president of the Agawam City Council.
Due to redistricting, the district currently consisting of Easthampton, Southampton, Holyoke, Westfield, Agawam, Granville, Montgomery, Russell, Southwick, Tolland and parts of Chicopee will change, though those changes would be exclusively in Hampden County. The winner of the election would be sworn in in January 2023 to represent a district inheriting West Springfield from state Sen. Adam Gomez’s Hampden District while losing several Chicopee precincts. Senate representation in Southwick, Tolland and Granville would also shift away from Velis. Westfield, Agawam, Easthampton, Holyoke, Southampton, Montgomery and Russell will remain part of the district.