Baker’s economic development bill has tax credits, holiday

  • Baker

State House News Service
Friday, March 09, 2018

A new $610 million economic development bill that Gov. Charlie Baker will press for this year calls for a permanent sales tax holiday, larger tax credits to address “extraordinary opportunities,” and new powers to enable housing authorities to advance redevelopment efforts.

To foster growth around the state, the bill adds to the state’s debt load with a $300 million capital allocation to the MassWorks infrastructure program, $100 million for a new regional program in which the state and communities would partner on “high-impact projects,” and $50 million apiece for saltwater dredging and to build maritime economies.

The Republican governor used a trip to Springfield, Friday to announce his bill.

Baker has steered cleared of pushing broad-based tax cuts to propel the economy, but in his new bill he calls for a new apprenticeship tax credit designed to spur companies to train and hire employees in health care, manufacturing and information technology — fields the administration says are hungry for qualified workers. Employers who meet requirements could take a credit of $4,800 or 50 percent of the wages paid to each qualified apprentice, whichever is less.

“This legislation will help close skills gaps and ensure that the next generation of workers in the Commonwealth has the training and resources they need to access next generation jobs,” Labor Secretary Rosalin Acosta said in a statement.

Massachusetts lured General Electric to Boston with an incentive package, and, like other states, is competing to attract other businesses, such as Amazon.

In a filing letter with the 49-page, 70-section bill, Baker said that “to increase our ability to attract new businesses to Massachusetts” the proposal features reforms to the state’s economic development incentive program such as expanding the availability of refundable tax credits and “creating the opportunity for larger credits commensurate with extraordinary economic opportunities.”

The governor did not specifically mention Amazon.

“The legislation also enables the use of credits to fill vacant downtown storefronts,” Baker wrote, and makes a correction to an existing tax deduction on the rehabilitation of abandoned buildings.

Other provisions of the bill clarify how Community Preservation Act funds may be used, enable municipalities to accept easements outside their boundaries in order to access broadband networks, and authorize the lease of state piers in New Bedford and Fall River “to better unlock the potential of this important coastal infrastructure,” the administration said.

Baker in his 2010 campaign for governor backed a reduction of the sales tax rate from 6.25 percent to 5 percent, but this year has not rallied behind an advancing ballot question calling for a 5 percent sales tax rate and making the annual sales tax holiday weekend permanent. Baker favors the tax holiday.

“For most summers since 2004, Massachusetts consumers and retailers have been able to benefit from a sales tax holiday,” Baker wrote in his filing letter. “However, we have had not a sales tax holiday the past two summers. This legislation would make a sales tax holiday a permanent fixture in Massachusetts, providing consistent benefits to our residents and businesses and predictability for our fiscal planners.”

Other provisions of the bill, according to Baker, “simplify healthcare reporting requirements and bring our insurance laws into compliance” with new model standards promulgated by the National Association of Insurance Commissioners. If Massachusetts fails to comply with those standards, Massachusetts could lose its accreditation from that group, which Baker said would increase costs for insurance companies in Massachusetts that do business in other states.

The legislation also enables fantasy sports gaming to continue, subject to regulation by the attorney general, beyond July 31, the sunset date included in a 2016 law. “The strong consumer protections that the Attorney General put into place have worked well, and this regulatory structure effectively governs the industry while protecting consumers,” Baker wrote.

“The Governor’s bill is another positive step for the innovation economy in Massachusetts. DraftKings recently announced plans to expand our presence and create more jobs in Massachusetts, and we thank Governor Baker for including this provision so we can continue that momentum,” James Chisholm, director of global public affairs for DraftKings Inc., said in a statement.

House Speaker Robert DeLeo told the News Service in February that he was interested in advancing an economic development bill this year.