Around 400,000 members of Massachusetts's working class will see some tax relief next year thanks to a bill signed into law by Gov. Charlie Baker today. The new law was a priority of both the state Senate and Baker, and will boost the state's investment in the Earned Income Tax credit by 50 percent. That translates to up to $500 per year for eligible poor working families.
Baker said the EITC is a good way to expand the state's upward economic growth to the working poor who needs it most.
"Today we are proud to deliver critical tax relief for over 400,000 hardworking individuals and their families who drive economic development and growth in the commonwealth," Baker said, according to prepared remarks.
During their initial budget negotiations with the House, the Senate had a different plan from Baker in the works to fund the expansion. The governor preferred the elimination of the state's film tax credit to make up the gap expanding the EITC would cause to the budget, but the House didn't go along with the idea. The Senate offered to pay for it by eliminating a corporate tax loophole, but it wasn't until the House offered a third way — a compromise to reduce the loophole — did all three parties see eye-to-eye.
But the 50 percent increase is only half of what Baker now says he wants from the Legislature. The governor said he will pursue a 100 percent expansion from the state — something Senate President Stanley Rosenberg vocally supports. At Wednesday's bill signing, Rosenberg loudly called out to Baker that the Senate would be with him if he pursued further expansion.
There's no plan yet on how to fund even more tax breaks for the working poor through the EITC, but Baker may still have his eye on the film tax credit.
