High court sides with state Senate in dispute with House over taxing powers

The state's highest court sided with the Senate in a constitutional dispute with the House over taxes.

In a 27-page advisory opinion Monday, the Supreme Judicial Court expressed the view that the Senate was not out of line when it approved a budget amendment that freezes the state's income tax rate at 5.15 percent, while also increasing the state's earned income tax credit by 50 percent over the next three years.

The court's opinion isn't binding and does not guarantee those changes will become law. But it appears to clear the way for House and Senate negotiators to decide whether to include the Senate language in the final version of a $38 billion state budget for the fiscal year starting July 1.

"We appreciate the prompt and clear answers from the justices ... in their response to the request for an advisory opinion," said Senate President Stan Rosenberg, in a statement. "This opinion allows the budget conference committee to continue to work together and deliver an on time budget to the governor."

The justices were asked to weigh in on a dispute over whether the budget was technically a "money bill" when it reached the Senate after first being approved in the House. By definition, a money bill must make changes in tax policy by either increasing or decreasing tax revenues, and the state constitution requires that money bills originate in the House.

That rule, the court noted, grew out of a centuries-old English parliamentary tradition that taxes paid to the King must first go through the House of Commons, rather than the unelected House of Lords.

In the current case, however, the justices said in the advisory opinion that because the House adopted two relatively minor tax changes in the budget — including an expansion of a conservation land tax credit — the spending plan was in fact a money bill when it came to the Senate, giving senators the power to propose "even far-reaching alterations" in taxes.

The House had argued that the budget was not a money bill because it did not "levy taxes in the strict sense of the word."

In a brief statement Monday, House Speaker Robert DeLeo thanked the court for considering the issue and said negotiators would continue working toward a budget compromise.

The proposed increase in the earned income tax credit appears to have broad support in the Legislature and is backed by Republican Gov. Charlie Baker. But the move to freeze the income tax rate at 5.15 percent, rather than allow it to continue falling in increments to 5 percent over the next several years, has generated more opposition.

Massachusetts voters approved a ballot question in 2000 calling for a 5 percent income tax rate, but it was never fully implemented.