What’s a “Money Bill?” (More Annals of Senate-House Discord)

Update: May 19: Speaker DeLeo continues to be peeved that the Senate regards the budget proposal that the House passed last month as a money bill, and is now threatening to take the entire matter to court, which could delay the completion of the budget past the end of the fiscal year on June 30.

Let’s review. The House budget includes a provision expanding the amount of money available for a tax credit program, thus reducing general state tax revenue. The House and Senate have agreed (in a document on the Legislature’s website) that a money bill “may either reduce general state tax revenue or increase state tax revenue.” Q.E.D.

Hmmm. Is litigation over the meaning of a money bill the sort of “progress and cooperation” that we were promised?

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Original post: May 7

The annual state budget process, now underway, has opened a new battlefront in the ongoing power struggle between the Senate and the House: what’s a “money bill?”

Our State Constitution (in Part II, chapter 1, section 3, article 7 for you wonks out there) says that “all money bills shall originate in the house of representatives; but the senate may propose or concur with amendments, as on other bills.”

We know from a very old decision by the Supreme Judicial Court (126 Mass. 557 for you wonks out there) what a money bill is not — it is not simply a bill that appropriates money for government spending. Money bills, the court said in that decision, are those that “transfer money or property from the people to the State.”

The Constitutional provision giving the Senate the power to “propose or concur with amendments” to money bills muddies the waters of that court decision a little. Are money bills only those that raise taxes? If the House were to propose a new tax, the Senate’s power to propose amendments would seem to allow that body latitude to increase or to lower that tax, or other taxes, or to change tax deductions or tax credits, or to otherwise amend state tax policy.

So in recent memory the House and Senate have defined a money bill as any bill that alters tax policy. In 1997, for example, the House budget proposal included a tax credit for homeowners who had to upgrade their septic systems and a one-year extension of an investment tax credit. The Senate, with the understanding that the House budget was a money bill, proposed additional tax credits and deductions, including the establishment of a state counterpart to the federal earned income tax credit for low-income families.

In the interest of preserving its sole power to originate money bills, and therefore to control when taxes are even considered, the House has been very careful about when it proposes any changes in tax policy. And the Senate has kept its side of the bargain, deferring to the House — to the frustration of many of that body’s members who would like an opportunity to debate tax policy, including its GOP members, who are eager for a debate on tax cuts.

But this year there are complications. During its budget debate last month the House adopted an amendment expanding the cap on a land conversation tax credit from $2 million to $5 million (a proposal, if you’re wondering, that has not been through the Speaker’s vaunted “committee process”). The inclusion of that provision led Senate President Rosenberg to pronounce the House budget a money bill and to add that the Senate would be taking up taxation issues in its budget debate.

It’s not clear whether House Speaker DeLeo was aware of the money bill implications of the tax credit amendment when he agreed to it. He has said that he disagrees with the Senate position (but note that he avoids using the language — “money bill” — that would clarify his view): “I don’t think it’s a revenue bill…I think a revenue bill involves that where, very simply, you’re talking about the increasing of revenue and I don’t think the budget that we did did that at all. So I feel clear that it’s not a revenue bill.”

It would seem that the Speaker now has a couple of choices: to concede that the tax policy provision in the House budget makes that bill a money bill, or to adopt a new policy that restricts the definition of a money bill to one that increases revenue rather than one that alters tax policy. The second choice might help save face this year, but it would mean a significant weakening of the power of the House to control tax policy debate in the future.

In the meantime, the Senate will have a rare opportunity for far-ranging tax policy discussions in its budget debate next week.

To sum up this latest skirmish: unforced error by House Speaker DeLeo, advantage Senate President Rosenberg.

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