More than 20 years ago, Massachusetts voted to allow tax deductions for charitable giving.

For the better part of two decades, however, the Democratic-controlled Legislature has kept the deduction on the shelf, citing the need to plug leaky budgets.

Now it’s time to let the deduction take effect.

Charlie Baker vetoed the deduction delay when he signed the new state budget earlier this month. It would take a two-thirds vote of the Legislature to restore the delay.

With the massive influx of federal COVID-19 aid, the state budget is looking stronger than ever. Most Massachusetts nonprofits, meanwhile, continue to struggle as they emerge from the pandemic. Allowing the deduction could mean a boost in charitable giving at a time when those organizations need it most.

“Most nonprofits saw significant revenue losses last year and had to lay off workers and cut hours,” Jim Klocke, CEO of the Massachusetts Nonprofit Network, told Statehouse reporter Christian Wade. “This law will promote charitable giving and help nonprofits recover from the pandemic.”

Under the law, taxpayers would be able to claim charitable contributions against their adjusted gross income on their state taxes. Opponents of the measure say delaying it until 2023 would save the state $63 million. Of course, there’s no guarantee the Legislature wouldn’t delay the measure again in two years.

The state budget is healthier than it has been in years, with a $34.3 billion tax revenue forecast for the fiscal year that began July 1. That’s up $4.2 billion from estimates earlier this year, thanks to federal coronavirus aid and better-than-expected tax collections. The state hasn’t had to tap into its “rainy day” reserve accounts, instead depositing another $1.1 billion to the fund. 

Nonprofit groups, meanwhile, dismiss the notion that the deduction would benefit only wealthy taxpayers.

“The vast majority of Massachusetts residents who will benefit from the state charitable deduction are low- or middle-income earners,” Danielle Fleury, the Nonprofit Network’s director of government affairs wrote on the group’s website last year, when lawmakers again delayed the change. “Over 15,000 of them earn less than $50,000 per year, and 300,000 of them earn between $50,000 and $100,000.”

As Fleury notes, “Charitable giving is the lifeblood of the nonprofit sector, and individual donations are particularly important, making up almost 70% of the total charitable contributions upon which nonprofits rely to accomplish their important missions.”

The deduction was approved by almost 70% of voters in 2000. It’s long past time to let it go into effect.



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