MEDFORD/SOMERVILLE, Mass. (June 8, 2020)-Massachusetts could help struggling businesses, workers and families by adopting a host of creative policies to rapidly stimulate the economy and provide safety nets for those most in need, including easing regulations on certain industries, creating a surtax on healthy businesses to help hard-hit ones, and temporarily increasing income tax rates. The ideas are described in a new policy brief from the Center for State Policy Analysis (cSPA) at Tufts University’s Jonathan M. Tisch College of Civic Life.
Among the options:
- Ease regulations for small businesses by creating a deregulatory commission focused on hard-hit sectors such as the retail and restaurant industries.
- Set up a COVID-19 recovery fund to provide direct assistance for those in need, and finance the fund by allowing individuals and companies to pre-pay future taxes.
- Apply a surtax on corporate profits beyond a certain threshold so that thriving businesses can help support a broader economic recovery.
- Temporarily increase the income tax while simultaneously providing rebates to workers and middle-class taxpayers to ensure a more equitable impact.
- Give cities and towns more latitude to borrow, thus limiting cuts to local services.
- Provide rent relief by offering loans to embattled renters and corresponding tax breaks to landlords who provide appropriate rent reduction.
- Because the state is prohibited from carrying a deficit from year to year, deliberately embrace pseudo-deficits, effectively borrowing across fiscal years to avoid austerity.
Read the full report here.
“Talking with economists and budget experts helped us identify fruitful ways to help workers, families and businesses despite the real constraints on state spending,” said Evan Horowitz, executive director of cSPA. “These ideas would need additional in-depth analysis to determine their full impact before being adopted, but they represent some of the many creative options available to lawmakers as they look to address the budget challenges brought on by the COVID-19 pandemic.”
In the coming months, cSPA plans to release:
- An analysis of the Transportation Climate Initiative, which would establish a regional cap-and-trade system covering emissions from cars and trucks; and,
- Research on the projected impact of the 2020 Massachusetts ballot questions, potentially including right to repair, nursing home reimbursement rates, expanded sales of beer and wine in food stores and ranked-choice voting.