January 11, 2017

Rosenberg ready to ring the bell on taxing Airbnb, short-term rentals [w/ video]

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Sam Doran (SHNS / file photo)

Senate President Stanley C. Rosenberg and House Speaker Robert A. DeLeo

BOSTON — Lawmakers should consider taking swift action on Airbnb taxes, the Senate president has said, while the speaker of the House indicates that upcoming hearings would help him determine whether new taxes are necessary.

Both Democratic legislative leaders agreed they would want to see January revenue numbers to inform decisions about potentially restoring spending that Gov. Charlie Baker made to the fiscal 2017 budget.

The Senate last year passed legislation applying the room tax to short-term vacation rentals, such as those offered by Airbnb, an online property rental listing company that has endorsed taxation of its industry.

Related editorial: Our thoughts on the proper Airbnb balance in Worcester

In regards to potentially reversing spending cuts made by the governor, Senate President Stan Rosenberg said early action on Airbnb would bring in more revenue.

“And another thing we could do on this is if we made Airbnb a priority and get that through early in the year, that will start generating some additional revenue and so maybe that’s another way we could cut at this problem,” Rosenberg said.

Bills raising taxes must emerge from the House, according to the constitution, and House Speaker Robert DeLeo said he would want to hear feedback from the budget process and potentially other legislative hearings before deciding whether to support a tax increase.

Watch: Baker, Rosenberg and DeLeo on Airbnb + more

“Let’s see what happens relative to the hearings that are going to be held. Now I’ll need to have some long-term discussions with the House chair of Ways and Means [Brian Dempsey] at that point and see exactly where we are in terms of budgetary needs, and where we are in terms of revenue to meet those needs,” DeLeo said.

He said he wanted to weigh the impact of burdening taxpayers with additional costs as well as “those who need the services of the Commonwealth the most.”

The gap between revenue benchmarks and actual revenues has grown since Baker unilaterally reduced state spending by $98 million in early December.

In the first six months of fiscal 2017, revenues grew 2.3 percent, falling about $38 million below estimates used to build the $39.2 billion budget as of December, according to the Department of Revenue.

DeLeo, who has called Baker’s spending cuts “premature,” was in agreement with Rosenberg to wait for the January revenue numbers before determining whether to restore that spending through legislative action.

“Being fiscally conservative, I think we have to make sure that we are in good fiscal position. I think the only way we can do that is to wait and see what happens in January,” DeLeo said.

“I’d like to see some restored,” Rosenberg said, “and I’m hoping that the January numbers will reinforce that we’re still heading in the right direction and we can revisit some of those cuts.”

The speaker, Senate president and governor spoke to reporters on Monday afternoon, Jan. 9, after their regular closed-door meeting. Sunday is the deadline for lawmakers and the Baker administration to agree on a consensus revenue estimate forming the basis for the fiscal 2018 budget, and Baker said the fiscal 2018 estimate would be based off an agreement on fiscal 2017 revenue.

“I think the final conversation on revenues is on Friday, right? I think that’s when the Ways and Means folks are getting together to confirm ’18 revenue, which obviously will be built off of an agreement on ’17 revenue,” Baker said.

“We’re $38 million below the current benchmark for the year, which is actually plus-or-minus .3 percent, which is not a bad place to be, but it’s certainly not a big increase relative to where other projections were a few months ago.”

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