Bay State News

Governor Maura Healey has refiled legislation that would allow municipalities in Massachusetts to increase local option taxes on meals, occupancy, and vehicles. This decision comes despite a previous statement where Healey emphatically denied considering tax increases. Last session, a similar bill was proposed but failed to gain traction in both the House and Senate.

The new proposal, referred to as the Municipal Empowerment Act, suggests the following changes: increasing the local option meals tax from 0.75% to 1%, raising the local option occupancy tax from 6% to 7% (and from 6.5% to 7.5% in Boston), and allowing for a new annual tax of up to 5% on a vehicle's value. Currently, these taxes are imposed by 251 and 217 communities, respectively. Local officials in various municipalities have shown support for the Governor's plan, considering it a means to enhance local revenues.

The National Federation of Independent Business (NFIB) has voiced strong opposition to the proposed legislation, with Christopher Carlozzi, the NFIB's Massachusetts state director, reiterating the organization's stance on SouthCoast Now radio.

In a separate but related issue, the NFIB has emphasized the need for unemployment insurance reforms in Massachusetts. This is in light of a $2.1 billion error which has required local employers to cover the cost. Carlozzi argues that the state's rainy day fund should be utilized to repay the federal government, referencing an opinion piece he wrote for the Commonwealth Beacon.

The unemployment insurance system in Massachusetts is under scrutiny following a significant oversight that surfaced in 2023. An external audit revealed an accounting error from the previous administration, resulting in unemployment claims being charged to incorrect accounts. The Biden administration has since mandated the state to rectify this error, leading to a $2.1 billion debt burden for businesses in Massachusetts.

Carlozzi has highlighted the historic issues within the state's unemployment insurance policies, noting that Massachusetts was slow to reform despite receiving significant federal funding during the pandemic. The NFIB's call for reform comes with a warning that Massachusetts could face greater financial challenges if these issues are not addressed.

Christopher Carlozzi continues to advocate for reforms, emphasizing that moving toward a more stable and efficient unemployment insurance system is imperative for the sustainability of businesses and the state economy.