In March, the state’s most powerful legislative leaders appeared on a virtual panel and lauded each other for their cordial relationship and good communication.
House Speaker Ronald Mariano, who began in the role in December 2020, recalled how often he would call his Senate counterpart when he found himself questioning his political decision-making or just wanted a friendly ear.
“I will admit this now, that there were some desperate phone calls to see how she would handle a situation,” Mariano said of Senate President Karen E. Spilka during the panel. “There is not a playbook or a handbook that comes with this job.”
Fast forward to the last week of the formal legislative session in July. The two leaders’ disparate views on an obscure law that could force the state to give back billions to taxpayers chilled that once-warm relationship and ultimately scuttled — at least for now — a $4.5 billion economic development bill, according to interviews with lawmakers and longtime lobbyists with direct knowledge of the conversations, who spoke on the condition of anonymity.
When Governor Charlie Baker announced the possible taxpayer windfall, it shook Beacon Hill and complicated legislators’ months-long negotiations over a $1 billion package of tax breaks and rebates and the sweeping economic development bill that contained it.
Spilka, an Ashland Democrat, said publicly the fact that the state’s tax revenue would trigger the 1986 law was an opportunity to make a compromise on legislation that would still get money in taxpayers’ pockets. Mariano, a Quincy Democrat, saw Baker’s announcement as a “bomb” that called into question the financial decisions the Legislature had already made, he told reporters at the time.
The divided reaction to the same piece of information was a key moment that changed their relationship, the insiders said.
Warm phone exchanges gave way to infrequent calls, lawmakers said, and celebrations of collaborative efforts to return $1 billion to taxpayers in various forms of relief turned into a standoff that has played out in the press.
Over the course of a marathon 23-hour formal session that began July 31, House and Senate negotiators agreed on a range of bills that would legalize sports betting in Massachusetts, expand access to mental health care, and reshape the state’s firearms laws, among others. All are now law.
But negotiations on the economic development bill, once heralded as a historic piece of legislation that would provide much-needed relief to the state’s working- and middle-class, slowed to a glacial pace and, eventually, a halt. People involved said the House rebuffed several compromise ideas sent over from the Senate. They said Mariano insisted the chambers could not move forward until questions about the state’s surplus were answered by the state auditor’s report in September.
Mariano declined a request for an interview for this story, but a spokeswoman for him said in a statement that the committee charged with negotiating the economic development package is “actively working.”
“To suggest that there is no longer an appetite for the same cooperation that facilitated the passage of several vital pieces of legislation this session is simply not true,” Ana Vivas, the spokeswoman, said.
Mariano and the chamber’s budget chief, Representative Aaron Michlewitz, have both said that with the state’s fiscal outlook uncertain and the economy potentially tipping into a recession, it’s prudent for lawmakers to wait for a more certain outlook before they make decisions. They say the conversation should remain open about what the state can or can’t afford to do.
Sarah Blodgett, a Spilka spokeswoman, said the Senate president “agrees that much was accomplished by collaborating” and she believes “it’s absolutely crucial that we embrace that spirit of collaboration that served us well in other areas to deliver on the promises of real tax reform and investments to ensure the economy works better for everyone in the Commonwealth.”
The state auditor is required every September to review Department of Revenue data to determine whether the state has triggered the tax refund law and then file a report with the governor and legislative leaders. That included last year, when Mariano and Spilka’s offices both received the report.
Still, Mariano accused the Baker administration of keeping lawmakers in the dark for months about the potential of the state triggering the tax law. Mariano said it was Baker’s responsibility to flag lawmakers that the law might come into play if his administration was already seeking to change a regulation around it, as a May notice from the Department of Revenue suggested.
Baker’s office denied misleading lawmakers, telling the Globe last month that the budget office identified the regulation as part of a “routine review and cleanup of outdated regulations that happens on a regular basis” and that the regulation has not been rescinded.
Senate leaders did not blame Baker, saying they thought there still was a way forward. The Senate took the stance that there may be a way to reach a compromise by factoring in the cost of the old law or breaking out pieces of the spending package.
“We did not have to do the entire package,” Spilka told the Globe earlier this month. “But the approach was all or nothing,” she said, referring to the House’s stance. “I have said in the past: We should not be taking an all-or-nothing approach.”
Now, several weeks since the formal end of the session, the prospects of the Legislature passing a tax relief plan remain unclear.
Ultimately, the legislation was left on the table, but not the cutting room floor, Spilka said earlier this month.
“We can’t dance alone. We need a dance partner here,” she said. “I am hoping that the . . . dancing takes place much sooner rather than later.”
Those with direct knowledge of the negotiations said Mariano has expressed that he was personally offended by the way Baker’s announcement of the old tax law interrupted negotiations and that he wasn’t interested in taking up the compromise proposals Senate negotiators put forward.
As the last night of formal session wore on, other bills were reconciled and squared away. But negotiators working to find compromise on the economic development bill found themselves at an impasse.
Senator Cindy F. Friedman, a negotiator on a number of major bills, told reporters at the time that she was “perplexed.”
“It’s a priority for everybody to get that money out,” she said, expressing her desire for House members “to come to the table” and reach a compromise.
“The commitment on the Senate side is there to solve this problem,” she said. “We don’t want to stop this effort.”
Chamber budget chief, Senator Michael J. Rodrigues, told reporters early that Monday morning: “We are all disappointed.”
Some longtime members and watchers on Beacon Hill say the tension is normal and policy disagreements are a healthy way compromises are reached.
State Representative Tackey Chan, who has served in the Legislature since 2011, said the relationship among the House, Senate, and the governor’s office has always been about pushing the priorities of each branch forward, often through compromise and trade. He said he had faith that eventually a deal would be reached and an economic development bill would move forward.
The drama surrounding the situation has been “overblown,” the Quincy Democrat said. The House is exercising an appropriate amount of caution over how the old tax law may change the state’s economic picture, he said, and has legitimate concerns about the state’s ability to afford it all. And, since much of the money that would come from the spending bill wouldn’t take effect until the next calendar year, there is plenty of time to regroup once the auditor’s numbers are made public.
“As a practical matter, does it really mean anything in the short run? It’s optics,” Chan said. “It’s August, everybody needs to take a deep breath and continue the conversation . . . In two months, the whole [economy] could flip on its bloody head.”
And this year wouldn’t be the first time major spending bills were delayed. Every two years as the Legislature wraps up, policy disagreements emerge between the speaker and the Senate president and their respective chambers, current and former lawmakers said. Sometimes, the disagreements emerge from a budget negotiation or economic development package.
“Tension between the House and the Senate is not a bug, it is a feature,” said former lawmaker and lobbyist Marty Walz. “The system is designed to create back-and-forth negotiations based on different perspectives, which leads to better laws.”
While the formal session has ended, leaders can bring up some major legislation for a vote in an informal session. But doing so carries risk, because even one dissenting vote can sink a bill.