Kaufman Lauds METCO Funding, EITC Increase

The Massachusetts legislature has wrapped up its work on the $­­­­­­­­­38 billion state budget for Fiscal Year 2016 (FY16.)  Representative Jay Kaufman summarized it as “a mix of good news, bowing to necessity, and an indication of work still in progress.”  Included in the good news is a $1 million increase for the METCO program, the state’s premier racial desegregation program, which Kaufman has championed from the earliest days of his service in the legislature.  This year’s increase is the largest one-year jump in the program’s history and comes on the heels of increases in each of the past 3 years.  “I’m thrilled that, in a budget with relatively few increases, METCO was able to get one of the largest,” said Kaufman, adding “I’m grateful for my partners in the METCO caucus and glad that our colleagues in the House and Senate are increasingly seeing METCO as singularly successful in reducing the education gap, producing student excellence as much as racial desegregation.”

The budget also takes immediate steps to address systemic management problems at the MBTA, among them a 3-year suspension of the statute preventing the privatization of services, a new fiscal management and control board, and steps to bolster accountability and transparency.  “While I am concerned about the risks of authorizing limited privatization, I joined the vast majority of my colleagues, bowing to necessity in voting for it as part of a reform package,” Kaufman offered.  “We will need to monitor this carefully,” he added.

Kaufman also pointed to the important step the legislature took to begin to address wealth and income inequality.  The budget increases the state’s Earned Income Tax Credit (EITC.)  Economists of all stripes agree that increasing this credit is an effective way to fight stagnant wages and lift working families out of poverty.  Currently, eligible citizens can claim 15% of their federal EITC allowance on their state tax returns.  Under the new budget, low-to-moderate-income households can claim 23 percent, an increase of over 50%. “Increasing the EITC was one of the recommendations of the Tax Fairness Commission I chaired last year, and this is the first of what I hope will be a series of steps to address the fundamental unfairness and unsustainability of the way we tax ourselves in Massachusetts,” Kaufman said.  “My goal is to double the EITC match, so this newly-passed budget gets us half way there,” he added.

EITC reform is only one of the elements of the fundamental tax reform that Kaufman has been advocating, adding that for too long, our budget choices have been constrained because of the structure of our state tax system which places a disproportionate share of the responsibility for raising revenue on the poorest among us.  As the Tax Fairness Commission’s report concluded, taxes in Massachusetts are fundamentally unfair, with those in the lowest income brackets paying over 10% of household income in state and local taxes while the wealthiest pay around 5%.  This is unfair and unsustainable.”  A recent release by the Massachusetts Budget and Policy Center concludes that “state budget choices are being shaped by fiscal challenges that date back to the late 1990s. After cutting the income tax by over $3 billion dollars between 1998 and 2002 our state has had to make deep cuts in areas like higher education, local aid, and public health. Meanwhile, the highest income residents in the Commonwealth are paying a substantially smaller share of their income in state and local taxes than do the other 99%. If our tax system were reformed so that [those with] the highest income, [the] 1%, paid roughly the same share of their income in taxes as everyone else, that would raise about $2 billion that could be invested in things like making college affordable, improving our transportation systems, and providing all children with the supports they need to thrive.”

“We need to find the courage to make our tax system more fair and absent fairer taxation, we cannot provide the fundamental services that our Commonwealth needs to thrive,” Kaufman concluded.