2022-01-04 00:00:00 - Joint Committee on Revenue
2022-01-04 00:00:00 - Joint Committee on Revenue
SHOW NON-ESSENTIAL DIALOGUE
right.
Um
yeah. Um hmm.
Mhm.
All right. All right.
Um
mhm.
Mhm. Thank
you. Start things off. So welcome to this. The Committee on Joint Committee on revenues, Hearing on Covid and student loans. Um I'd first like to welcome some of our members are co chair David Linsky Good to see you. I'll go down who I see here in order. Representative Markey um Representative
you're testifying
Mindy Domb Good to see you. Representative either Hoban representative whips and we'll welcome others as they join before.
[SEN HINDS:] Before we get started. I wanted to essentially take the liberty of making a few remarks related to state revenue and how we are confronting the current covid 19 surge created by the omicron variant this week residents across massachusetts tried are trying to return to work and school in quite frankly an unacceptable environment. It is appalling that this morning parents and teachers and schools have to choose which they want to sacrifice. First the physical safety of their kids, their intellectual development or their mental health because it is one of them when so many kids and teachers are forced to enter schools without testing or increasingly stay home because of uncertainty in spikes and spikes and133 cases what makes us even worse is that we knew this was coming, we knew the variant was taking hold and we knew there would be winter and post holiday surges and yet we appear to be caught flat footed once again and nearly two years into this pandemic, but147 we do have resources and this is where it links to the150 Committee on Revenue and to the Legislature.
We do have153 more than $2.3 billion in federal arpa funds still unspent. And we have even more of a budget surplus from fiscal 21 than we anticipated. Just yesterday, the164 controller announced that our surpluses in fact 5.86 billion in tax revenue and we spent 1.45 billion in surplus funds in our spending bill signed last month. That means there is money that can be used to ensure every kid and teacher has a free and instantly available test. We have given the governor $200 million in anticipation of future surges. And it's important we understand how that is being used today to confront this testing failure. I will work194 with the chairs of ways and means and public health and others to immediately move the resources needed for this emergency. Um so thank you for that and with that said, let's get today's agenda.
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Um and at the top of our list is Representative Garlick
[REP GARLICK:] [HB2910] Good morning to everyone on the committee. Good morning Senator. I appreciate your comments very much. Um, I'm testifying very briefly on H 2910. Um it is a legislation that deals with the statutory limitation that was written into the existing credit film Tax law, section six. Chapter 62. The statutory limitation is set for 12 months from the time that the sales tax exemption is first initiated. We have now witnessed through Covid that these timelines cannot be so concrete. We are asking for force majeure not to um it is not mandating that an exemption be given, but it would allow for an exemption to be given under certain circumstances. I think it258 would allow us to continue to support this industry and um and understand that in fact we are witnessing at this moment in time, um such a difficult time to continue work in an organized, consistent and cohesive manner. SHOW NON-ESSENTIAL DIALOGUE
Great, thank you comments and questions.
All right, well, I appreciate you coming for us today and report to be in touch on this and other matters. Excellent.
Um, continue with our customers, taking elected officials out of turn. Senator Eldridge has joined us over to you sir.
[SEN ELDRIDGE:] [SB1850] Great! Thank you so much. Chair Hinds chair, Cusack and members of the joint Committee on Revenue and thank you so much to chair Hinds for taking me out of turn and I'm here to testify on my314 bill, Senate 1850 act to provide equal stimulus checks to immigrant taxpayers.320 And we need to think back to the first round of federal stimulus, the cares act when there was, were these stimulus checks to all U. S. Citizens and legal permanent residents. However, unfortunately the Congress at that time and the president at that time explicitly prohibited stimulus checks to mixed status or undocumented immigrants who as we all know our taxpayers just paying taxes in different ways.
And so what this bill would look to do is that if there are future stimulus checks from the federal government, um, it would make sure that our massachusetts residents who are not documented received their equal fair share of stimulus funds. And so what the bill would do, it would make sure that anyone who has filed their taxes with an itin number, which is often how undocumented immigrants file their taxes would receive the same stimulus as any other U. S. Citizens or legal permanent resident. And obviously that's make sure from an equity point of385 view that people that are working387 hard giving back to their community, just like anyone else are getting their fair share of support at a time when there could be some very difficult financial circumstances.
So very specifically, the bill would direct the Department of Revenue Department of Revenue. Excuse me to provide a stimulus check to itin taxpayers. That is equal to the stimulus checks provide under federal law if there's a future stimulus. Um, and it would make sure that the stimulus checks would be automatic again if congress reauthorized more stimulus in the future. Um, I think this is a very simple, straightforward bill. We have a lot of conversations this this session and making sure to not forget our immigrant constituents who often are on the front lines are doing really critical work. So thank you so much. Chair Hinds Thank you to the committee for taking436 me out of turn and I respectfully ask consideration of this bill. Thank440 you. SHOW NON-ESSENTIAL DIALOGUE
Thank you Senator, appreciate your words. Any questions or comments from the panel or the committee's
No you are, you're free to go senator appreciate your time. Thank you. And we've been joined by a few others I think Representative Soter I think I did it again last week or two weeks ago. I have you on my list of those testifying and then forgot to mention you as a member. So welcome and Representative Consalvo as well. Thanks for joining and let's see who is next on our list. Representative Lipper-Garabedian I saw478 you hear I believe are you around here?
[REP LIPPER-GARABEDIAN:] [HB2985] Mr Chair thank you. Good morning everyone. Um to Hinds members of the committee, I'm here to request your favorable review of House 2985 act encouraging494 employer student loan repayment. I was glad to file this bill as a former public school teacher and an education attorney including most recently as the Chief legal counsel of the Executive Office of Education there. I frequently worked with the Department of Higher Education including on efforts related to college affordability509 and completion. I have supplied the committee with written testimony regarding the often crippling effect of student debt on individuals. Financial well being, recognizing that debt has a disproportionate impact on individuals and economically vulnerable populations, including people of color, Veterans and female heads of household this fall. The globe reported that Massachusetts ranks 14th nationwide and debt that students carry when graduating from the Commonwealth's public universities.
Overall, 71% of our college students graduate with debt with an average amount of roughly $31,000. H 2985 would establish a tax exemption for massachusetts, employers that assist their employees with paying off student loan debt. The bill sets the annual exemption at $2,000 per employee per my written testimony, Connecticut enacted a similar tax credit program in 2019 and Congress stood up a temporary tax free provision that enables employers to assist their employees with student loan payments for businesses. This offers an opportunity to attract and retain talent. According to 1 2017 survey, 86% of young adult workers say they would commit to their employer for five years if they helped pay off their student loans. Just yesterday, two studies released indicate that we ranked near the top of lists of states where people are leaving and near589 the bottom of those people are moving to affordability is a key driver of that dynamic employers continue to list access to workforce talent as a top concern.
Changing economic demands and implications from the pandemic, make post603 secondary education crucial for our residents to adapt606 to and meet 21st century workforce needs. Policymakers should embrace tools that make post secondary education more affordable. A tool like an employer student loan repayment program not only assists graduates with the challenge of college debt, it also supports our employers and recruitment and retention efforts promising additional benefit to the commonwealth economy. I respectfully urge you to report out H 2985 favorably. I really appreciate your consideration and I'm pleased to be joined today by rob McCarron, president of A I. C. U. Mass. SHOW NON-ESSENTIAL DIALOGUE
Great, thank you. And I believe we'll be hearing from him shortly. Yes, um, represents you. Your question. Yes.
[REP SOTER:] Thank you. Mr Chair. I just want to commend653 Lipper-Garabedian on this. Uh, this bill, it's very nicely written um, and it's something that I have been urging for. Um, and I'm glad that she has the courage and the wisdom to put this forth, especially now when we have these surpluses and um this, this stimulus money would help tremendously. I guess my one question is when I read the bill, um, it's not clear on government, um, employers people who, you know, the government employs so many folks682 that come out of college, a lot of them are are aids, I'll have to say. Um if we had to make a clear amendment, would you be open to that if there was something that we have to discuss or debate on the floor that we make sure that we uh include government employees into that.
[LIPPER-GARABEDIAN:] Thank you so much. Representative Soter and it's nice to talk to me for the first703 time as a representative. It's been quite a year and a half. Thank you so much for your interest, your support. Certainly I'm absolutely open to discussing the ways in which to ensure that we're crafting the tax exemption program to support college affordability and um and retaining really strong workers including as you note in our public sector,
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thank you Mr Chair, that's all I have to ask. That's it. Representative,
[DOMB:] thank you. Mr Chairman and Good morning everybody and good morning rapids. Good to see you. Um you had mentioned about you know this idea that loan payment gets tied to um students or employees committing for a certain period of time in terms of747 their work like five years. And I know that in the past some750 of these programs have been have not set these time limits some employers have individually, but I'm wondering if you could also share some insight um on your knowledge and experience with time limits and whether they are effective or not effective um if they sort of undermine the effort to attract people because um they sort of set a limit and it's better for people just to come to that naturally or just what does your knowledge and experience sort of discussion.
[LIPPER-GARABEDIAN:] Thank you for the question, Representative Domb Um So the what I referenced was a survey, that sort of, it's not in the bill itself as I recall my the bill does not set sort of required commitment um actually and nor, I don't believe does the Connecticut law that was enacted a couple of years ago. I could I would be happy to supply additional research to the committee. My written testimony references a few states that are also considering legislation currently where bills like this have been filed.812 Um and I'm not aware that any of them include a required commitment either. Um I agree generally that it's821 important for economic actors to have freedom in their choices. Um And so this bill, you know, it simply suggests for each year that the employee is with this particular employer, the employer could help pay down student debt um and sets a maximum amount for that.
[DOMB:] Thank you very much. I appreciate that because I'm not necessarily in favor of time limits. I sort of feel like that sort of ties students in a different way than those. Um So I appreciate your comments. Thank you. Thank you. Mr. Chair,
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you got it. Anyone else? Okay, I think that's uh thank you for your time. Representative appreciate it. Thank you all. In the interests of comedy between the chambers. I like going back and forth. Senator Kennedy Are you interested in testifying? Yes, I am. All right. The floor is yours.
[SEN KENNEDY:] [SB1891] Good morning. Chairman. Hinds Chairman, Cusack and members of the committee. I want to thank you. Thank the joint Committee on Revenue for taking up a piece of legislation that I have filed, Senate bill 1891 an act encouraging employers student loan repayment which seeks to provide relief to recent college graduates in Massachusetts from the often devastating financial burden opposed by student loan debt. Student loan debt has become increasingly pervasive in the Commonwealth crippling states, young people stifling their aspirations and financial outlook and amounting to nothing short of a crisis. It is in my view, this crisis that demands urgent legislative action and calls for creative solutions, creating an incentive in the form926 of a tax deduction for private employers to step up and participate in such a solution would represent a viable step towards providing overdue relief to people suffering under the burden of940 seemingly insurmountable student debt.
Senate 1891 would offer a tax deduction of up to $2,000 per year to employers to match principal payments made towards student loan debt debt of an employee. The example set by companies that have introduced student loan repayment as an employee benefit. Even without this proposed incentive illustrates that having such programs in place is beneficial to companies seeking to retain talent, employees are more likely to remain in jobs and are more likely to perform at a high level if their employer pays a share of their student loans. Despite this demonstrated value Massachusetts, companies have been slow to adopt student loan repayment programs. This measure would lift the financial hesitation associated with initiating every payment more significantly more significant than the value to employers, however, is the difference998 that the tax incentive called for under this1001 bill stands to make for recent college graduates and indeed for mid care professionals who may still be working to pay off loans.
If student loan repayment1012 becomes a widely often employee benefit, it would encourage debt saddled jobseekers to pursue a career options that are better suited to their interest in skills1022 and in areas of our, of our economy, where there is a need for renewed talent,1027 it would enable them to contribute to our economy more fully rather than diverting every spare dollar1033 towards loan payments and allow them to solidify their financial futures by1038 buying homes and contributing to retirement accounts. In short, this bill would go a long way towards alleviating the source of hardship that too often seems inescapable. If there is any cause that warrants the creation of a new tax deduction, I believe it is student loan debt1055 relief. This proposal would come at a relatively modest cost to the Commonwealth costing between an estimated 1.8 and 6.7 million according to analysis by the Department of Revenue, but would have a resounding impact on our economy and on the future of college graduates. With these factors in mind. I hope that the committee um will give Senate 1891 a favourable report. Thank you very much. SHOW NON-ESSENTIAL DIALOGUE
Thank you Senator and good to see you you too Representative Domb your, your hands up and I presume that from the last testimony. Is that right? Yes, that's right. I'll lower it. I'm sorry. Okay, and then I Representative Soter .
[SOTER:] Yes, thank you. Again, Senator Kennedy Thank you. Once again, I'm very1102 in favor of the discussion that we're having around these incentives and I've been saying it for years that this is one of the big ways we need to approach student debt um without putting a huge tax burden on the whole entire society. Um the one thing I would ask you the same question I asked the representative, would you be willing if this bill moves forward to the floor and1125 the discussion to somehow make sure that we add. Um even though government agencies don't get tax incentives away to file an amendment that we use a portion of the money from COVID uh upper and or where we're going to get the money for this funding if we would move this bill forward, would you be willing with amendments and discussion About adding government employees?
A lot of them which like I said the last question, a lot of them work for us and I think it's very, very important for us. And we've learned, I think during this pandemic as legislators and senators and representatives. That the value of our staff was huge during this pandemic. And um fair pay equity certainly is a topic of conversation that I I've had over the last 22 months uh and for these positions. So um this would be one way I think we1178 could um incentivize some of our staff from not leaving, especially when they have been so valuable and we've learned how hard it is to train these folks and especially during the pandemic where none of us were prepared for it. So I just I guess that's1193 my question to you also, are you willing to open that up for discussion?
[KENNEDY:] Absolutely. Representative, I think that's1202 an excellent suggestion and um you know in my office there are people that struggle with student loan debt right now. Um And I think I probably have1211 at least one person in my office that that's kind of has a second generation student loan debt so that they've got student loan debt and so do their and their their Children have student loan debt as well. But I think that's an excellent suggestion and I would absolutely embrace that. and I would absolutely embrace that. SHOW NON-ESSENTIAL DIALOGUE
Mhm. Great anyone else? Thank you. Mr Chair. Seeing none. Thank you for your time. Senator look forward to being in touch on this. All right, thank you very much. And it's good to see you. Good to see you again take care. Happy new year. Um represents Soter Why don't you keep the floor and testify on the on the bill? You are interested in testifying on.
[SOTER:][HB3070][HB3071] [HB3072] Thank You. Mr Chair, I'm testifying on three. I have three bills in front of this committee today, but I am only testifying on 3070 and 3071. Um I did reach out to Cusack's office last week on 3072. I would ask the committee to to kind of consider putting that into study and that needs more research and development as far as that would bill would progress. But on 30 and 3071 I would like to thank both of you both. You chair Hinds and Chair Cusack for taking me out of order. And it's been a great pleasure to serve on this committee as a ranking minority member1285 in this session period. And this bill was designed originally with the intent during the height of1292 the pandemic to help retail and restaurant businesses. And when1295 I say that Mr chair, I say that with um not1298 the big chains. we're talking about, we're talking about those establishments, small establishments throughout our communities that we all know ones that we all grew up with knowing the owners of um and supporting the ones that we all go to for donations for our area school programs, sponsoring little league teams etcetera.
These are the folks that I drafted these bills around and I have so many of them in my district. The PPP. Loans were wonderful, but not everybody qualified for those loans. If you opened your business in 2019 under the qualifications of PPP. You did not get that loan because you didn't have enough information as a business to qualify. Many of the grants that we all had restaurants and retail and small businesses apply for were wonderful but that's almost like playing Powerball, You1354 have to hopefully get picked to get one of those. of those. of those. of those.
But it didn't really help a lot of those struggling businesses and a lot of urban businesses, a lot of inner city um, businesses when we talk about fair and equitable, which we hear a lot of, and we are making great strides as a House and a Senate, um, to make better strides towards that. This, these two pieces of legislation will really reassure, uh, that those businesses communities, especially in communities of color, are supported and investing in their business to keep their employees safe, but also investing in systems that they never thought they were going to ever have to invest in. It's very easy for the large conglomerates who are able to stay open during the 22 months or right at the beginning of the pandemic because they can adjust easily because they have access to the, the equity and the ability to change. A lot of these small business owners didn't have that ability. I have also drafted written testimony that I submitted that's in more detail because I know we have a limited time to speak, but one of the things that you have to remember the Commonwealth of Massachusetts small business.
This, this segment, retail in. Um, uh, and I put restaurants in that 45% of our employed uh, communities, employed people in this state are employed by small business owners. That is a huge number. We know what the rate of inflation just in November alone year to date, the rate of inflation increased by 6.8%, 1.9% of that, 1.9% of that's something I know very well was energy resources Have gone up dramatically and food costs have gone up dramatically. Small business owners. And when I say small business owners, this bill was designed to only target those retail and restaurants that do under $4 million dollars in sales revenue. This is about an estimated cost based on how many of these and how many of these establishments under that category. About 125 million to $185 million. However, just as you said Mr Chair, our surpluses are seeing higher numbers.
But one of the things that we're seeing in the higher revenue sales, especially in meals tax is the cost of goods have gone up, prices have gone up, so the meals tax is higher. However what's going to happen is the Fed is going to raise rates. They've made it very very clear the cost of capital for these small business owners. And I would strongly suggest mostly in our inner city areas are going to see large increases in interest rates and it's going to be much harder because banks have already pulled back because they realize one or two things are going to1532 happen, small business owners will not be able to1534 afford the increase in interest rates so they won't lend the money. And the second thing is the rate of inflation will swallow up a lot of these small business owners because they cannot compete in a market like the large conglomerates can Mr Chair. I hope, I hope with the rate of infections that we have seen over the last couple of months, which you clearly stated at the very1557 beginning of this this hearing, we do have an ongoing problem.
We need to right away infuse cash into these small business owners. These are individuals, they're not corporations, these are people, these are human beings, these are people that we know in our communities and it would we need to be proactive and not reactive. And when we as legislators are reactive, we tend to have a long sustainable. What I hate to say is a recession with a very long recovery. These small individual business owners can't take that can't take that. So Mr Chair, I would ask I've1599 submitted written testimony much more detail oriented than I had time to speak. I thank you for the opportunity to speak before yourself and the entire committee and I would really like and I hope that we can move this legislation forward and as always, I am willing and able to adapt my legislation to be so bipartisan that we pass it. It's not about Republican, it's not about democrats, it's about representing the people of the Commonwealth and the people that we represent in the district. Thank you. Mr. Chair.
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Thank you Representative. And I appreciate your comments. Um anyone with some reactions, comments or questions seeing none. You can come back to the other side of the committee table here. Senator Collins. You're up next.
[SEN COLLINS:][SB1820] Thank you Senator Hinds for hosting1659 this hearing. And I appreciate the previous testimony where um we have a you know, important role here in the in the Revenue Committee to see what1670 areas of relief we can provide and also examine what's going on. Um I was I'm honored to be um asked to focus on the recovery of the standards working Group on economic recovery, focus on the tourism and port industries. Um And you know, one of the areas that we found was devastated without much relief at this point. Um is the hotel industry um massive layoffs have taken place now. These are jobs. Where are you getting full benefits? Many people taking them from poverty to the middle1704 class with opportunities uh to leverage for their families. What that1709 means for the city of Boston over the last few years is a drop in local hotel taxes of $25 million dollars significant. And then I think what that means other than the layoffs is the devaluation of these businesses and how we tax um businesses is based off of a prospective valuation that we're assessing from the previous year.
So we're assuming that um in normal cases that's a good assumption. But here with the pandemic, we had businesses that flatlined. I mean if you recall, we turned the convention center as the lifeblood of the hospital, hospitality and tourist ministry mars into a field hospital. Um So the um the impacts are deep and significant. Um And so what this bill does uh is attempts to provide some temporary relief for the hotel industry to get back on their on their feet. Um You know, and what forget about the returns, what hotels are doing now they're borrowing against future returns um that are shrinking to pay down obligations. Uh And I think that we all have at least um some relief temporary relief because that's the only way we're going to be able to ensure that that labor force gets back to work.
Um I do think that this should be coupled. Uh This is in front of a different committee, but Um S 1158 uh filed by Senator Boncore that I also co sponsors and act relative to the hospitality comeback, which would if we're going to provide relief, also provide um you know, the pathways back for people who lost their jobs um to ensure that that that those1804 jobs continue to be um meeting our goals and values here in the Commonwealth. Um so I ask that the committee consider this and you know, the the topic is one that I think we can also take a look at in upper 2.0, or maybe the budget depending on where um uh we are there.
You know, I know the Baker administration had pushed for 100 million um for the tourism industry and at the time I wasn't really sure exactly what that was focused, but if that sort of funding could be focused here, I think it's a1837 way to provide temporary relief in the form of uh you know, you know, loans or um an ability to provide on the tax bill without hurting our budget. So, uh, that's the topic for this legislation and you know happy to answer any questions about it. Thank you very much for your time on and the opportunity to speak out of turn. of turn.
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Thanks Senator who is also a member of the committee. I appreciate your comments. Any any reactions1868 from the committee as well. Yeah, thank you for your time and look forward to working with you on this. Thank you. Representative Owens has joined us and you're the last elected official. I have signed up and you also have a panel with you, is that correct? And so why don't you introduce the panel and will transition from there. So I'm not sure. I apologize. I'm not sure if the panel is on. I believe they were supposed to be. They were we were weren't weren't sure if we'd all be out of turn or not. So I think they're going1905 to join later at the, the second half the back half its Todd Kaplan and Geoff Robins, if I understand, unless, unless they're on, I'll admit that even after all this time, I'm not quite as proficient in teams as I am with that with other videoconference stuff. So if they're on raise your hands and I do see Tom Chaplin. Yeah, so I think you might, you might have 50% of the panel.
[REP OWENS:][HB3030] Okay. Um, well anyhow, just thank you, chair Hinds members of the committee for your time today. Uh, and I'm letting me speak out of turn, um, I'm rising today in favor of H 3030 which is an act to exempt taxes of forgiven student debt and to encourage contributions to student tuition accounts. The purpose of this bill is to bring the Massachusetts tax code in line with the changes under the American rescue plan that make federal and state student loan forgiveness exempt from counting his income for the purposes of federal taxes. So just to be clear, this bill doesn't actually forgive any additional student loans or fees and just make1978 sure and if a borrower's loan is discharged through existing or future programs that they are not penalized with a large lump sum tax bill for the amount forgiven. Um, I will say this bill is very1992 timely. Um, just recently the Biden administration made reforms to the public service loan forgiveness program. That program was created in 2007 and it permits nonprofit and government employees to have their remaining federal student loans canceled after 10 years or 120 payments.
And that system was played with inaccuracies where too few borrowers received forgiveness and too many didn't receive credit for years of payments That they made because of this just complicated eligibility rules, servicing errors, payments weren't counted. I think the average was 23 payments were not counted through the everyone in the program. Um, so that all those people in that program are starting to come due now. So as a result of those reforms, the U.S. of Education, it estimates that an additional half a million borrowers will be eligible for loan forgiveness, Massachusetts borrowers however, will be hit with what the Wall Street Journal calls a tax bomb as all that forgiven debt will be counted as income by the DOR So this is a tax bill that borrowers are not expecting and in many cases just can't afford under the income based student loan repayment plans.
Many borrowers end up not paying the full amount of monthly interest and that results in a loan that never gets paid down. It only grows so that means that those who can least afford it now owe tax on an amount greater than the loan they initially took out and what that results in is seize tax refunds, garnish wages etcetera etcetera. It puts people back into the debt that the student loan forgiveness program was intended to get people out of. And also what we're seeing more of is community colleges themselves paying off student debt that is owed to them with funds from the American Rescue plan Act that2106 funded the Higher education Emergency Relief Fund. So again, this is income as defined by the Massachusetts DOR And without this legislation, it will result in the taxation of that2117 forgiven debt in Massachusetts. So to reemphasize this forgiveness is specifically included from federal taxation at least until 2025, Roughly 895,400 Massachusetts have borrowed an average of $34,549.
So this is an issue that is likely to touch constituents in every district and later in the hearing. Um we will hear2144 testimony from one such individual. Additionally, this bill creates a tax advantaged prepaid tuition or college savings employer match program For taxpayers whose income does not exceed 200% of the federal poverty level. This will in particular help low income students pay for community college without accruing large amounts of debt in the first2165 place. So thank you so much for your time. I respectfully ask that you report out H 3030 favorably and I look forward to working with the committee to help relieve this burden for our residents.2175 And if Todd Kaplan is available um with your indulgence. Mr chairman. I would call on him. But if not he is he knows to come by for the second half of the hearing.
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Now this is a good, good transition point. So mr Kaplan, if you're available floor is yours or if you prefer, we can come back to you as well. Um Todd Kaplan, are you, I see you there. If you're ready to go you can otherwise we'll come back to you and Geoff Robins um good. Why don't we move along then and and we'll go from there. Um that would bring us to rob McCarron, President of the Association of Independent Colleges and Universities in massachusetts.
[ROBERT MACCARRON (AICUM):][HB2985] Thank you. Chair Chair Hinds Chair, Cusack members of the committee and thank you for providing an opportunity to provide some brief comments today. And I also would like to thank Representative Lipper-Garabedian for her leadership and support on the support initiative and for asking me to join her today. Um you know, and I wanted to offer as Just some brief comments to support her legislation House 2985 an act encouraging employer student loan repayment. And we do view this bill as a continuation of the collective efforts to provide additional tools and resources to help Massachusetts families plan for college education. Um I know many of you will recall that in 2016 we worked with this committee and the full house and Senate to create a 529 college savings tax deduction when that was created, it had a sunset provision.
It also that 529 college savings tax deduction proved to be incredibly successful, incentivizing significantly more families to start saving for future college expenses. And based on that five years of strong success that last year the legislature made that tax deduction2300 permanent as part of the FY 22 budget. Um, House 2985 now seeks to provide assistance to students after they graduate while at the same time giving Massachusetts employers a proven talent retention tool. The bill would incentivize more employers to provide a benefit to employees in the form of a tax exempt employers, student loan repayment while providing those same employers with a tool to encourage their employees, whom they have invested resources to train to stay and grow here in the Commonwealth.
A few large companies in Massachusetts have already launched this student loan repayment program um, and their seeing great success. Those companies include Fidelity and and PwC. Again, it provides2340 those employers with an incentive, um, support their employees and, and, and2345 help to provide another tool to retain them. Um, the legislation does capped the benefit for, for the employer incentive as well as for the employee benefit. And, you know, it provides a low cost option for the state to give just one more tool to students and families as they help finance their college education and again, I'd like to thank Representative Lipper-Garabedian for her support and leadership on this issue. Thank you.
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Okay thank you any reactions from the committee. I appreciate you taking your time and working with representative on this important issue. Thank you. I appreciate it. And happy New year to you Cynthia. Um we're gonna move down our list that I have in front of me which takes us to Angela. Is it meal mellie? The president of ST government Affairs and Tax Policy for the Motion Picture Association. Yes. Hi, can you hear me? I can go ahead. You're coming in a little soft if2416 you can. Okay, is that better? That's better. Thanks. Okay great, thank you.
[ANGELA MIELE (MPAA):][HB2910] Thank you. Chairman Hinds appreciate the opportunity to be here today and for giving us this opportunity to speak in favor House Bill 2910 which provides certainty for the industry. As representative Garlick spoke to earlier and our member companies2439 are Disney, Sony Warner brothers, a Paramount NBCUniversal and Netflix. And one of the things that we are so appreciative of is the industry is looking to provide certainty with the tax credit program and the committee and the governor got together with this program last year and provided a permanency of this program which was one of the cornerstones of any production tax credit program and that2471 was the permanency and when you're looking for when our member companies are looking for where they're going to2478 shoot a film. They look for that certainty. And one of the things that the pandemic has brought to light was the fact that this 12 month restriction that was imposed in the statute and there's a California is the only one who has a similar provision. But what it did is it says you have to film within this 12-month period and if you don't finish then your tax credit could be in jeopardy.
And so What this does is it allows that extension for that 12-month period and it doesn't force the film office to do anything. It just allows them to make a determination and the regulations that will be promulgated to provide for that extension for the 12-month period. And it's not only for2524 the pandemic, the provision is called the force majeure provisions which is in other business contracts. And what it simply does is it allows for the state to determine whether you can extend that rule. And when the pandemic had first come upon us, we had sought clarification and try to get2545 some relief through the Department of Revenue, but it's a statutory provision. So what we've done is we were now looking for a legislative relief and a statutory change in that regard. And I think what that does is it just it just provides a certainty because the Member Companies if something's going to happen. And it's really just came to light in the pandemic. But there are other things that could cause delays in a in a film, there could be a death, there could be hurricanes, tornadoes. I mean any number of things that could come upon us that would never be anticipated.
And so what we're trying to do2581 is continue this program and make sure that it's it's going to be sound and it's going to provide the certainty necessary to continue2589 this, the robust economic impact that this industry provides. So with that I just want to thank you so much for this committee support for this program for many, many years. I know there have been some strategic adjustments to the program. I know they just made you know, with the transparency with making sure more is done in Massachusetts. There have been some some great changes that have been made to the program and its in great form and we just look for your support for this legislation that would add one more um needed certainty piece of certainty to this program. So with that I would be happy to answer any questions.
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I think you captured it. Well, there's been a pretty wide widely stated support and and we often find this that once you implement a programme you might need to tweak it in the future. So thanks for your attention to this. Any comments from the committee. Okay, I appreciate it. And thanks for your time. Thank you. Um I'm going to go down the list now and let's see who is2657 here because I don't see the case that everyone is here. But I do see Henry Barbaro, Barbara, Henry Barbaro. You are up. Okay. We'll come back. Um Maureen maloney and I don't see Maureen maloney in the list of participants. Um Geoff Robins, but I also don't see. Okay, Vincent Dixon, I see your name. Mr Dixon, are you interested in2705 testifying today? All right, we'll keep going. Can2710 you hear me chair? There we go. Yes, go ahead. Ok.
[VINCENT LAWRENCE DICKSON (CONCERNED CITIZEN):] [HB2865] Um thank you for this hearing and thank you for dealing with these complex issues. My2729 name is Vincent Lawrence Dickson of 60 Lake Street unit N Winchester Mass 01890. Co chairs senators, representatives and staff. I appear to2739 support H 2865 and act for a COVID-19 vaccination. Tax credit. VTC2747 COVID-19 vaccinations are crucial to combating the virus and2751 various actual and perceptual barriers exist to individuals obtaining their vaccinations. The merits of H 2865 are further reinforced by recent events and examples. This bill is specifically a tax credit so that it is performance based and capable of2770 record keeping, tracking. It is simple, straightforward and direct. Many other approaches have been developed along the way. I believe that tax credits should be strongly associated with the idea of incentivizing positive societal behaviours and this bill does that To successfully combat the COVID-19 virus.
We should use a range of tools to reach the highest possible level of vaccination in our population recognizing the distinct economic value of doing so vaccination. Tax credit VTC specifically offers an economic incentive to individuals who go to the effort of receiving vaccinations in effect sharing the important economic value of such actions. In doing so. It will likely improve even further the respect for the value of safe and approved vaccinations. As you consider the various public policy aspects of this proposal, it is worthwhile to look at what may be the most extensive range of incentives that will provide a written form of these remarks at the conclusion of which is a link to New York city vaccine incentives. New York City has a sophisticated range of COVID-19 vaccine incentives which can be read at a length that will provide. I want to thank you for your attention to this issue and holding this hearing and welcome any questions.
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Okay, thank you appreciate your time with us today. Any comments or questions. Seeing none. Thank you again for your time and attention and thank you Mr Chair and thank you committee. You got it. Mr Kaplan. I see you're possibly ready to go. Is that right? I was sorry to be often video for a second. We were sent an email saying that we would not be on until one p.m. As and I was hoping to be on a panel with um Geoff Robins who's a another Soho resident and rep Owens who has proposed this bill H 3030. So I don't know if you guys are zipping through things so quickly that that you're ready for PM. Um, here are bills at this time. I think that is the case. And Representative Owens told us to be expecting you. He wanted to testify with you. But if you're able to go now, otherwise we have a couple of more and we can see if you can wrangle mr Robbins. We're happy to do that. Yes, that would be fantastic because I'm sure it would be better and we can get him on the line most likely right now as well. So thank you. Thank you for circling back.2936 You've got Henry Barbara. That leaves you I believe. And I just saw you. There you are. Hello. Hi there. Thank you. Gosh.2946 Um, can you hear me okay? I can the floor is yours.
[HENRY BARBARO (CONCERNED CITIZEN):][SB1850] Thank you to chairs Hinds and Cusack and all2961 the members of the Committee on Revenue. My Name is Henry Barbaro and I live in Newton. I oppose Senate Bill 1850 because it would serve to reward and incentivize illegal immigration in Massachusetts unless the committee believes that illegal immigration is good for the Commonwealth. This legislation should be struck down instead of using tax dollars to2987 reward illegal behavior. The Legislature should be working to discourage illegal immigration and do more to help the federal government enforce our immigration laws. Sure, let's3000 help people during the challenges3002 of COVID but not to the point of using tax dollars to reward those who have broken our immigration laws In closing, I urge the committee to vote against Senate Bill 1850 because it rewards and incentivizes illegal immigration and it's unfair to Massachusetts, taxpayers law abiding citizens and legal immigrants as well as to those working to legally immigrate into Massachusetts. Thank you for the opportunity to comment on this proposed legislation.
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questions or comments from the committee. Okay, thank you very much. Mr tim multi senator timilty. Good3047 to have you with us. This is a member of the committee.3050 Um Now, let me see, I think um we might be at the end here. I have. Let me confirm. Debbie dugan, I don't see. But who signed up?3066 Um and john Thompson signed up and I don't think I see. So, Jeff Robbins, I think I may have already asked. Okay, so I think we're down Todd Kaplan, I think we're actually down to you and I just mr Robbins has just got the link and he's now should be jumping on momentarily. If I don't know if Owens is available and I can put myself on video as well. Sorry, my video may freeze. I just want to warn you so that's not personal. Good. Well then why don't you kick it off if you want. And then we'll allow there's Geoff Robins. And so it's over to you To and Representative Owens as well.
[TODD KAPLAN (CONCERNED CITIZEN):][H3030] Yes, OK, very good, thank you so much. So, I want to start off by framing the discussion here and I will be extremely brief because I know that you all of your time is extremely valuable. But the the issue is something that is completely counterintuitive to most citizens of Massachusetts, which is that when their student loans are forgiven or released or they go away because of some government action or when somebody pays student debt on your behalf. Like for example, some community colleges today are paying student debts and off so that the student can re enroll in their programs that actually is3167 counted as income by the Massachusetts Department of Revenue and that's counterintuitive to most people because they think of income as something they receive as opposed to something that is forgiven at the federal level. This has been3182 taken care of in the cares act and we anticipate that as a result of that particular part of the cares Act and initiatives by Senator Warren, Senator Markey all Pressley and many, many others across the nation that we anticipate there will be a lot of student loan debt in the future.
And so in the past, this was an isolated issue, A few people3209 dealt with it, but in the future and right now it is a big looming issue, for example, as I mentioned earlier, Community colleges got funding from the federal government to help support them and help support their students And we are trying and we're going to do our best to quantify this with the community colleges, but we're trying to figure out how many community colleges in Massachusetts actually took that federal money and paid off student debt that is. They want to allow those students to re enroll, they can't re enroll if they have outstanding balances on their accounts. They've paid3251 off that student debt. And we hope to have a report to the committee soon. And how much, but I just want to be clear that when community college pays off that student, that, that is counted as income by the Department of Revenue. So this bill, Which represents Jones has filed H 3030 is is is to eliminate the taxation of the, what we would call phantom income or not of forgiven student debt.
And that comes up in many, many different um context. One of the biggest ones that's going to happen very soon is happening is that the federal government has a income-based repayment program for student loans after 10 years, if you work for a nonprofit that you, the balance of that loan number, it's
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saying that there's no taxi there. But okay, someone needs, I think to mute3314
But uh,
the, the, what I was saying is that3320 at the nonprofits, if you work for a nonprofit after 10 years of payments under the income-based repayment3326 program, then the balance is forgiven and for some people who have worked for government for hospitals for non for any kind of nonprofit as a public defender, any kind of even a teacher after 10 years of service and those payments they get a tax bill could be 20 or 30 or $40,000 in one year. That is due immediately. Mr. Robbins is going to talk a little bit about his own experience, which was very unfortunate3356 where that similar situation happened unfortunately, was because his child passed away and his child's tax, a student loan was forgiven and released, but because Mr. Robbins was a cosigner, he immediately got a tax bill and so I'm going to pass it over to Mr Robbins. Then Mr. Rep some comments as3379 well, but I just wanted to give you the context for this and why that we think that this is not just an isolated issue.
It's an issue that is going to3391 balloon both because community colleges are paying student debt because the nonprofit um, tax forgiving student loan forgiveness is kicking in. And because we think that at some point the Biden administration is going to wholesale forgive student debt and in every district across in every Reps and senators district across the commonwealth, there will be people affected by this and they will be shocked to learn that they are now getting a tax bill and will be calling the department of revenue and they will be calling you trying to figure out what happened. And just as a final note about we've reached out to the Department revenue. They, I don't think are going to testify in favor of this, but our feelers indicate that people are with3440 our liaisons to the Department revenue, They indicate that they think that going after people for this phantom income is just a nightmare because most people don't have the money to pay and they call the department revenue. They're shocked. Like Mr Robbins will tell you about his conversations with the Department of Revenue and uh it's it's so counterintuitive and3464 and it's honestly going to overwhelm Department of Revenue because right now they have zero discretion to not count this. So I'm sorry to be so long winded here, but I'd like to turn over Mr. Robbins, take it away.
[JEFF ROBBINS (CONCERNED CITIZEN):] Thank you and thanks for taking the time to hear me out on this. Um briefly, you've heard my sad tale, My middle son Aton passed away valentine's day nearly eight years ago, A freshman in college. And quick personal note, I actually had the pleasure of3500 being with Aton at the State House 10 years ago where he testified as part of the Cambridge youth council, I believe it was called regarding the topic of lowering the voting age and local elections. Um Interestingly3517 enough personally, he told me he didn't actually favor that idea, but but his group viewed him as the most able spokesperson and pushed him out front side I had the pleasure sitting in one of your3529 hearing rooms, a something or other 22, I don't know, um, where he went up and he was the first kid to speak and he did a great job and it was just a beautiful memory, which I hold3541 onto, especially coming before you today to talk about very painful memories of losing him unexpectedly he had epilepsy was probably a seizure, which happens unfortunately to more kids than we realize.
And um, I had taken out a parent plus loan as part of the strategy, you know, to pay for college and that loan was forgiven, which I thought was very compassionate and terrible time in my life. I'm sure if any of your parents, you can, have an inkling of what3574 happens to your life, you lose a child. Um, and you know, maybe a year or so went by because I had no idea that this forgiven loan was imputed as3587 income. I made to make a point of paying my taxes every year. I managed to do it that year and I got letters both from the feds and the state saying, Hey, you didn't declare all your income. And I was like, oh, I looked at, you know, my W2, I was like, that can't be true. And I called people, I called federal, I called state and that's when I learned that, that forgiven loan was treated as ordinary income in that year, which even if you guys didn't think it should just go away as a tax event, the idea that alone you were planning on paying over time all of a sudden hits you as a, not the whole loan as a lump sum payment, but the taxes, you know, when you treat the forgiven loan as income, it hits you immediately.
And of course there were penalties and interest because I was way late because I, you know, I know ignorance is no excuse, but I really had no idea that this was possible that this would be treated as income. Um, and, and the tax people I spoke with were very compassionate. I want to say both at the federal and state level beyond what I had any reason not, not to be cynical, just, you know, they have busy days. I know you do trying to move this along. Um, but they were very kind and one person actually was, I was crying and they started crying to, and they were very helpful and they used their discretion to wave the penalties and fines, which to this day I'm grateful for because it was already a hard hit. But I owed the money and yeah, I pulled it together and paid it. Um, you know, because the law is the law, but, but it struck me at the time as something that just didn't feel right, like as a, not to deny. And I understand enough about accounting to understand there was a benefit that accrued the day the loan was forgiven.
I, you know, I know there's lots of technical ways of looking at it, but when you look at the impact on people not expecting this forgiven loan to all of a sudden hit you as if you had received a check, which of course I didn't, I received the benefit of3729 no longer owing this money over and I'm sure, you know, as for many of us, it's like Jesus college, it costs so much. We'll just have three kids well now have two, but you know, you just kind of kick it down the road and they let you refinance it out more and more years. So it turns into another mortgage on your head and you say, all right, that's modern life. I'm living with another mortgage in effect, but then to have it all hit you that year as ordinary income in effect, just can't be right, can't3762 be the right way to balance all the things that I know you folks have to balance. Um, So anyways, I3769 taking too much time, but I, so as as someone in the most extreme, probably case of3775 why would a student loan get forgiven? Um, I can tell you, it hits really hard and unexpected to have that forgiveness turned into another government agencies saying, well, not so fast, a piece of that you owe us right now.
I was like couldn't3799 you guys have worked this out amongst yourselves, you know?3803 So that was anyways, I hope this makes sense to you and I'm sorry for my emotionalism Yeah, even even eight years later, it's it's rough.
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I can't imagine thanks for hearing your story and powerful example that you and your family are providing us really appreciate you taking the time and the energy to3829 come and share that. Yes, thank you. Thanks share that. Yes, thank you. Thanks to Todd Kaplan and Representative Owens as3833 well. Um any any other questions on on this bill from members and Representative government? Oh sorry, did you just call me? I apologize, I must have cut out.
[REP UYTERHOEVEN:] Um Yeah, thank you, I thank you Chair, I just wanted to first thank Mr. Robbins and uh Mr. Kaplan for for speaking on this bill and for sharing your story. It's really just um challenging to hear that that's been your experience with, you know, our institution which many of us hold really uh fight really3872 hard to to not have that experience on our constituents and I think your case is a really important one. So I just want to thank you for sharing that and highlighting that for us to help us make decisions. And also thank you to my of course my colleague Rep Owens for bringing this bill forward. So um I did want to just um just highlight something that I think3894 I heard in the the testimony, I just wanted to ask if perhaps Mr. Kaplan or or anyone on the panel could just clarify and make sure that kind of highlight this within the committee, which is that. Um, and something that surprised me when I took office, which is that oftentimes Massachusetts unlike other states, um, do not adopt the federal3914 income exclusions. Um, so this is actually something quite exceptional for Massachusetts if I'm understanding correctly.
[KAPLAN:] Yes, I think that that's a really important point that that many, many, in fact, it's probably the majority of states do follow the federal exemptions. And so Massachusetts has chosen not to do that automatically. And so that makes it even more incumbent on us to really think3941 about what is the impact of that. And as I said earlier, this student debt relief and forgiveness is exempted under the Cares Act at the federal level. And we really need to think carefully about whether this is one of those few things that should also follow on those exemptions. I think it's also important to note that, you know, we always, especially the Revenue Committee thinks about the fiscal impact of what is going to happen3972 here. And as I pointed out earlier, most of the people that are benefiting or from, for example, the community college, um, paying off their student bills. Those are low income people. And so this is targeted relief. That is mostly young people who are of student loans or low income people that are trying to get ahead and to tax the debt forgiveness really, especially in the COVID era just to be clear, feels like um giving people something with one hand and taking it away So I really appreciate your all thinking about this and and hopefully we can work together to figure out how to move it forward.
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Thank you. Mr Kaplan., 4045 the Vice chair Representative Linsky um at that point um john Thompson are you here and available and ready? I see a screen but nobody is there. Well that would be unfortunate wouldn't it? Um There has been some confusion around timing on some of these. So maybe we can Well let's see if anyone else is here who wishes to testify and we can come back to John anyone here who have not called on who wishes to testify today on COVID-19 or student loans but it's a signal electronically or visually
um seeing none Steve on my team and others, why don't we try to get a hold of Mr. Thompson and have them come back at the next hearing which is only a week away.
Um you never know what's happening. Everyone, everyone agree with that. I guess we'll we'll move along on that basis. Thank you. Vice Chair Linsky for being willing to step in. Um
How? It's a pleasure Senator. Alright, great. All right, well, thank you everyone. We'll talk with john Thompson after this. Um That is all we have for today. I appreciate your time on these important issues and look forward to seeing you next week for our next hearing of the Joint Committee on Revenue. Is there a well, I guess I should go through the procedure. Is there a motion? Motion?
Thank4138 you. Is there a second second? All those in favor say, aye,
opposed. Nay, the eyes have it and this hearing is adjourned. Have a good afternoon everyone. Thank you as well.
Mhm. Thank you.
Thank you.
Um
Thank you.
Yes.
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