Senate Budget: Old Dog, New Taxes

The Senate Ways and Means Committee released its proposed budget for FY18 clocking in at $40.79B in spending, a 3.3% increase over FY17 spending. Unsurprisingly, the Senate's version of next year's spending plan would involve more taking from taxpayers.

First, the plan for taxing lodging and short term rental websites such as Airbnb is expanded. The Governor’s proposal set a threshold of 150 days or more of renting out a room or house annually. The Senate ups the ante and includes rentals of all durations. The Senate plan also jacks up taxes on internet-based room resellers, like TripAdvisor or Expedia.

The Senate also tinkered with the controversial plan proposed by the governor to tax employers to offset the rising cost of MassHealth, which accounts for 41% of the state budget. Governor Baker's gotten an earful of trouble on the his proposal, which established a per employer fee on companies of 10 or more that don't insure at least 80% of their workers. The Senate changed that threshold to companies of 25 or more and added a second option: increasing the Employer Medical Assistance Contribution, the tax already in place which helps pay for subsidized insurance plans and medical care for the uninsured.

Absent from the Senate version was any attempt to address the structural issues that create such astounding growth year over year in the MassHealth budget. We’ll keep you updated on amendments offered to the senate budget.

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