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‘We can’t delay this forever’: Nonprofits reject as legislature stops charitable tax deduction again

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Republican Governor Charlie Baker favored implementing the tax rebate, saying powerful state revenue numbers and an influx of federal COVID relief dollars put the state budget in pleasing shape. The Senate leadership said the Democratic-led House of Representatives overturned its decision by 124-35 votes, and the Senate is expected to make a similar move on Thursday.

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Legislative leaders said that while the state’s current fiscal picture is steady, the coming is uncertain and requires a cautious budget — even following they recently revised revenue forecasts more than $4 billion than they projected in January.

State officials estimate that the rebate will amount to about $300 million in lost revenue in its first packed year, a little part of its roughly $48 billion annual budget.

“While the state is running a healthy excess right now, we are still at the mercy of the virus,” said state Representative Aaron Mitchellewitz, the Democrat from Boston who leads the chamber’s budget committee. “Non-gain organizations around the Commonwealth have been struggling and this delay is only temporary. It is significant that we preserve the path we have set.”

House Speaker Ron Mariano said delaying the rebate again would allow lawmakers to consider “enduring changes to the tax code that depend not only on current revenue, but in view of their lengthy-term impact on taxpayers, charitable organizations and tax collection.”

The overriding of the veto comes as a disappointment to some Massachusetts nonprofits and charities, whose tax-exempt leaders are encouraging donations at a time when they need donor money more than ever.

Jeffrey Chen, CEO of Big Brothers Big Sisters of Central Mass & Metrowest, said his organization’s fundraising efforts have been hit firm by the pandemic, forcing leaders to scale back programming and hire fewer staff than usual.

Part of this organization’s responsibility is to find and hire the right considerate of mentors. We can’t do it without the right resources and staff,” Chen said.

The tax credit, he said, will motivate individual donors whose charitable efforts support the organization.

This is the time to apply this discount, Chen said.

Most states offered a discount on charitable donations when Massachusetts voters approved the tax credit in 2000. But taxpayers have only had the opportunity to take advantage of it once, because lawmakers suspended the measure in 2002, due to a budget crisis. It was due to go into effect in 2021, but lawmakers and Baker delayed it due to the uncertainty of the pandemic.

This year, though, Baker said it was time to let the deduction take effect, writing earlier this month that it was “unnecessary to further delay the charitable tax deduction as the Commonwealth’s financial position has improved materially in recent months.”

Some advocates agreed.

“We can’t delay this forever,” said Jim Kluck, CEO of the nonprofit Massachusetts Network, which represents hundreds of organizations. “We are talking about an incentive that was approved by the voters and was delayed by 21 years.”

Kluck said most of the people eligible to take the discount are low- and middle-income.

“It’s the flawless point in time to say to the voters who passed this overwhelmingly in 2000, ‘Finally we’ll honor the commitment. “We will finally live up to my request,” said Representative Brad Jones, a North Reading Republican and minority leader.

Critics of the discount say that, from now on, it will greatly aid higher-income families, which will preserve more money as they tend to write bigger checks. And they say the state’s 5 percent discount won’t do much to motivate giving.

“This is a very simple tax burst,” said Mary Frances Rivera, president of the left-leaning Massachusetts Center for Budget and Policy. “Saying that families are making their decisions based on this very little discount of 5 cents to the dollar that they are going to get simply doesn’t grip much water.”

“The delay makes sense until we have more clarity about the economy and our revenues in the absence of federal assistance,” said state Senator Adam Hinds, a Democrat from Pittsfield.

“Right now, all indications are that we’re not out of the woods yet,” Hinds said. “We need to make sure we have all the tools available.”

Emma Platoff can be reached at Follow her on Twitter Tweet embed.


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