Craven Capitulation: Massachusetts Edition

[Update: July 13, 2017: In light of the news that House Ways and Means Chair Brian Dempsey is stepping down, I note the following:

  1. ML Strategies is a lobbying powerhouse on Beacon Hill. Its biggest client in 2016, to the tune of $276,579.23, was Wynn Resorts.
  2. The budget provision that could give casinos (including Wynn’s Everett casino) a big competitive advantage was included as part of the House Ways and Means budget.  The Senate did not include such a provision.
  3. Today, House Ways and Means Chairman Brian Dempsey resigned from the House to become the chief operating officer at ML Strategies.]

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[Original post: July 7, 2017]

While we’re understandably fixated today on the craven capitulation of our president over in Hamburg, let us pause to recognize a nadir of submission reached right here in Massachusetts — in the annual budget released this morning.

Casino magnate Steve Wynn, the finance chairman of the Republican National Committee and a friend and supporter of his fellow tycoon Donald Trump, has been busy lately twisting the arm of Senator Dean Heller of Nevada, one of the few Republican opponents of the Senate health care plan, to retract his opposition and get with the program. That health care plan, of course, would cost Massachusetts a billion dollars a year starting in 2020 (the year after Wynn’s Everett casino is scheduled to open). By 2025, the plan would have ruined our health care system and possibly our economy: a quarter-million of our poorest residents would have lost their health care coverage and annual costs would have nearly doubled.

Our state’s response? To amend our gambling law so that casinos could continue selling alcohol after the 2 a.m. closing time for bars and restaurants.  A spokesperson for the House of Representatives, where the amendment originated, explained that we need to “ensure competitiveness,” a rationale that will come as a surprise to the hospitality industry establishments that will be trying to compete without the advantage of the late hours (or a slots barn).

Anyway, a nice kiss for Steve Wynn that leaves the rest of us wondering — whatever happened to this piece of advice from the current POTUS? “Get even with people. If they screw you, screw them back 10 times as hard. I really believe it.”

 

The State Earned Income Tax Credit: R.I.P?

(How Trumpism might play out in Massachusetts. One of a probably lengthy series.) 

Governor Charlie Baker, back from a meeting of the Republican Governors Association, held a press conference yesterday to offer his first extended remarks after the presidential election.

If, like Attorney General Maura Healey, you were hoping for a forceful denunciation of the presence of a white nationalist in the West Wing, you were disappointed: Governor Baker is willing to hold the record open for more evidence against Steve Bannon before issuing a judgment.  On most other subjects Baker took refuge in the comforting words of Mike Pence (!), who called for a “very deliberate and significant dialogue,” yada-yada.

Baker’s strategy of not confronting the President-elect was, if not courageous, probably fiscally prudent. After all, more than one-quarter of revenue for the state’s annual budget ($39 billion this year) comes from federal reimbursements. Much of that federal funding supports our universal health care plan. That health care money was on a track to expire, but fortunately four days before the election, the Baker administration secured a commitment from the Obama administration to provide nearly $60 billion over the next five years. Good news for sure — although it’s alarming that the feds’ promise is now reliant on a president who in the past has considered defaulting on the nation’s debt as a nifty solution to budgetary problems.

Health care is not the only program under threat from Trump administration policies. Our state Earned Income Tax Credit Program, which helps more than 400,000 families in Massachusetts who earn $50,000 or less, is, as a practical matter, in jeopardy as well. Governor Baker is a big supporter of the state EITC, and an increase to that program (the first in 16 years) was one of his first year policy successes. The state EITC program is still a modest one even with the increase (the average benefit will rise to $500 per family this year), but it’s nevertheless a step toward reducing income inequality, a disorder that Massachusetts suffers from in the extreme.

The tax overhaul that Trump is proposing is especially generous to the wealthy and especially hard on lower-income families, including those who receive the Earned Income Tax Credit. His plan would entirely eliminate the head of household filing status and the deduction for dependents, both of which help to reduce the tax burden owed by EITC families.

The Trump tax proposals, to take just one example from the Tax Policy Institute, would increase the federal tax bill of a couple with four children making $50,000 a year from $210 to $1090. That result would swallow the benefit of the family’s state EITC several times over.We’re looking, in other words, at the prospect of a state EITC program that in many cases no longer helps low-income families directly but instead simply goes to help to pay their (newly-increased) share of federal taxes. How many things are wrong with that picture?