Local Option Tax Bill Advances Despite Pushback on Statewide Hikes

Like a stake through Dracula's heart, the Massachusetts Legislature dealt a fatal blow to some of Governor Maura Healey's most egregious tax hike proposals floated this year by refusing to include them in the annual budget discussions for fiscal year 2026, which began on July 1.

Legislative Pushback on Statewide Tax Increases

Healey's proposals to tax candy, prescription drugs and some tobacco and nicotine products were unpopular with state lawmakers who would have to explain them to the voters back home. As it is, a new cable box tax took effect in June.

Voters, already reeling from the high cost of the ongoing migrant crisis, food prices and staggering energy costs are not in the mood for new or increased taxes.

The Municipal Empowerment Act and Local Tax Options

Not all of Healey's tax hikes are resting peacefully. Several have been reconstructed and may find their way into law. Some parts of Healey's local option tax legislation will get a hearing in September.

The Municipal Empowerment Act, which Healey introduced in January, allows local communities to raise the local option tax on meals and lodging and impose a new tax on motor vehicle excise.

While local businesses cringe at the thought of a tax hike, local government leaders love the idea because it generates more revenue for them. None of these ideas were particularly popular with the masses when first suggested by Healey.

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What’s Next: Upcoming Hearings and Future Tax Battles

The governor's legislation includes several less controversial non-revenue items.

State House News Service reported the Legislature's Municipalities Committee has scheduled a hearing on Healey's bill on September 9. The Revenue Committee, which will also consider portions of the legislation, has not yet released a hearing date.