Inflation is on the rise again in Massachusetts - can refund checks help like in New York?
BOSTON - New data from the Department of Labor shows inflation rose last month and as New York proposes inflation refunds, could a similar proposal work in Massachusetts?
Prices going up again
As we inch closer to Christmas, prices at the grocery store, restaurants and coffee shops seem higher than ever.
"You've got to pick, do I get eggs or do I pay my bills," said Cristian Abarca, who's discouraged by what he sees at the register. "In a year, goods that we got from the supermarket - let's say $130 a week, today it's $160."
New York inflation refund proposal
But there may be hope on the horizon. This week, New York Gov. Kathy Hochul announced the state would take $3 billion of excess tax revenue and return it to consumers.
"The cost of living is the number one concern of New Yorkers," said Hochul.
The proposal would give $500 to families making less than $300,000 and $300 for taxpayers making less than $150,000. The checks would come from money the state has collected from New Yorkers paying more for everyday products.
"That money can stay in the state or it can go back to New Yorkers," said Hochul. "I'm on the side of New Yorkers."
Would it work in Massachusetts?
But would New York's proposal work in the Bay State if Massachusetts residents have been spending more too? According to Boston College economics professor Peter Ireland, New York is in a unique position.
"They are operating from an initial state of fiscal strength, they already collected more tax revenues than they expected, so they're just returning to the taxpayer," said Ireland.
But free cash hasn't always worked in the past. During the pandemic, stimulus checks helped families and consumers but only added to a significant federal deficit. The feds then used inflation to make some of that money back.
"The increase in government spending put severe pressure on the federal budget," said Ireland.
So what about Massachusetts?
"The Massachusetts budget situation seems less positive," said Ireland.
Ireland suggested Massachusetts may not have the extra money New York does, at least not now, and may be better off with more permanent solutions.
"Permanent changes that make our tax system fairer and more efficient. Permanent reduction in the rates of income and sales taxation as opposed to these one-off giveaways," said Ireland.
A spokesperson for the governor said, "Governor Healey is always considering ways to provide relief from inflation and make life more affordable for the people of Massachusetts. She's proud that her tax cuts went into effect this year, saving money for families, seniors, homeowners and renters."