Billions in tax relief. Sports betting. Arms control. Everything was at stake during the crazy end of the legislative session of the Mass, still in progress at 5 a.m.

Governor Charlie Baker’s announcement last week that record state revenues are set to trigger a nearly 40-year-old tax cap law, upending negotiations on a separate $1 billion tax relief proposal lawmakers passed months to develop and aimed to finalize before the end of the weekend.

The law in question passed by voters in 1986 seeks to limit the growth of state tax revenue to the growth of total wages and salaries in the state. If income exceeds this “allowable” amount, then taxpayers are entitled to a credit equal to the excess amount.

The Baker administration said last week the state was set to trigger it for the first time since 1987, and it’s estimated that taxpayers could have to repay more than $2.9 billion. In response, House Speaker Ronald Mariano had left open the possibility of seeking to repeal, amend or suspend the law just as it is poised to potentially benefit millions of taxpayers.

A boon for taxpayers upended the Legislative Assembly’s own plans for millions in one-time rebates and a host of permanent tax changes.

Voters of lawmakers are facing rapidly rising inflation, and economic worries top the list of residents’ concerns. In a bid to help, the House and Senate have each included a similar package of tax relief in massive economic development legislation, including proposals to increase a tax deduction for tenants, increase the credit for tax on earned income and levying state child and dependent tax credits. The economic development bill itself would also borrow or spend more than $4 billion to help support housing production, financially-struggling hospitals and the state unemployment trust fund, among a multitude of other things.

But that package stalled in negotiations as of 5 a.m. Monday, along with any potential legislation regarding the Tax Cap Act — two items that insiders say cast a shadow over just about everything else in the last hours of the session.

“We’re a little puzzled,” said Senator Cindy F. Friedman told reporters shortly before midnight. “We have this tax piece, which is really serious and which was presented to us in a fairly short period of time.”

Friedman said lawmakers are considering passing an economic development bill that doesn’t include any tax relief, and then “continue discussions with taxes.” It would mark an extraordinary turnaround, after lawmakers recently announced the significant relief their plan was set to deliver.

Senator Cindy F. Friedman spoke to reporters just before midnight.Carlin Stiehl for the Boston Globe

An end-of-session crisis is typical in Beacon Hill. Self-imposed deadlines by lawmakers often prove the last antidote to legislative deadlocks, forcing compromise, bargaining or, in some cases, the death of major bills. But not in at least a generation in the Legislative Assembly has entertained these big tax relief plans, let alone in the final hours of the session.

While common legislative rules require formal legislation to end at midnight, in Beacon Hill lawmakers can — and often do — suspend their own rules.

In addition to wanting to make major changes to state law in the middle of the night, lawmakers’ delay has also given the upper hand to Baker, a lame Republican governor who is not seeking re-election this fall. Baker has 10 days to act on any legislation that comes to his desk, meaning he can veto a bill and the legislature will have little opportunity to act beyond being summoned. of a special session, a rarity in Beacon Hill.

Baker was at the State House around 9 p.m. Sunday and was in “regular communication” with legislative leaders on major bills still under negotiation, including the economic development bill, the spokeswoman said. Sarah Finlaw.

A woman talked on her cell phone in the bedroom entrance of the Massachusetts State House Chamber.Carlin Stiehl for the Boston Globe

While awaiting information on pending bills, lawmakers took action on some points.

Shortly before 5 a.m., lawmakers said they had reached agreement on language that would revamp state gun laws following a Supreme Court ruling expanding the rights of guns across the country.

Hours earlier, Chambers sent Baker an $11.3 billion infrastructure and transportation loan bill that also includes a slew of policies, including regulations on so-called e-bikes and a $275 million in funding to expand passenger rail service from Boston to the western part of the state.

However, a provision passed by the Senate would have been deleted from the final version that would have required the MBTA to produce a plan for a low-income rate program. A coalition of transit advocates called the decision “deeply disappointing.”

Lawmakers also provided a response to a series of amendments Baker sought on a sweeping climate and energy bill, returning it to him on Sunday evening.

They agreed to several of Baker’s proposed changes, including one to eliminate the “price cap” on offshore wind projects – a mechanism that requires each new project to offer electricity at a lower price than previously posted online. him. Some fear the cap may have discouraged bids, and while lawmakers initially left it untouched, they eventually capitulated to pressure from Baker to kill him.

“Removing the price cap has been a top priority for the Governor, and we share his view that it will allow our future purchases to give us more value per dollar, said Rep. Jeffrey N. Roy, chief negotiator of the Chamber, from the chamber. floor.

Legislative leaders, however, rejected other changes, including Baker’s offer to inject $750 million in US federal funding into the bailout law.

House and Senate lawmakers, mostly Democrats, also agreed to Baker’s changes to a bill that would revamp oversight of the state’s two trooper homes, including elevating the Department of Veterans Services to an office. Cabinet-level executive who reports directly to the Governor.

In a letter to lawmakers, Baker said he supports the changes, but asked that deadlines for the creation of new offices be pushed back four months to March – when Baker’s successor, not him, will be in function.

And early Monday, lawmakers sent Baker a compromise reform package to the state’s marijuana industry that clamped down on high local fees charged to marijuana operators and directed a significant portion of the tax from state excise on sales of recreational pot into a fund for disenfranchised cannabis entrepreneurs.

Advocates, cannabis companies and progressive lawmakers had spent years pushing for the reforms, arguing they were simple fixes to well-documented problems with the original legalization law, passed by voters in 2016. and rewritten by the Legislative Assembly in 2017.

Among those problems: a onerous municipal approvals process that has been embroiled in two federal corruption investigations and a lack of institutional funding that has allowed large corporations backed by wealthy private investors to dominate the space at the expense of smaller ones. local businesses with more diversified ownership.

From As of Monday morning, lawmakers were still scrambling to iron out differences in other major pieces of legislation where the House and Senate differed.

After years of unsuccessful efforts, lawmakers were trying to hammer out a final version of a bill to legalize sports betting.

At the center of the disagreement was a proposal to allow people to place bets on college games. The House wants it, and the Senate – whose main leaders have historically opposed legalized gambling – does not.

If signed into law by Baker, who has expressed support in the past, Massachusetts will join 30 states and Washington, DC, in allowing the increasingly popular type of gambling, according to the American Gaming Association.

Ever since the Supreme Court in 2018 struck down a federal law banning sports betting, the concept has been a priority for House Speaker Mariano, who said a year ago that a sports betting bill without the ability to bet on college games “probably would” be a deal-breaker for him.

Last week, Senate Speaker Karen E. Spilka told WBUR’s “Radio Boston” that Mariano should soften his “all or nothing” stance.

A conference committee, a group of representatives and senators seeking a compromise, has been deliberating on sports betting since early June.

The prospects for the betting bill, a House priority, were unclear as August dawned. So was the potential for a separate mental health access measure that Spilka personally presented as a top priority.

The Senate version of the bill would mandate insurance coverage for an annual mental health wellness exam, and mental health bills passed by both houses attempt to ensure compliance with parity laws in state mental health.

A woman walked towards the Senate chamber in the Massachusetts State House.Carlin Stiehl for the Boston Globe

Amid the final day melee, lawmakers were also negotiating a piece of relatively obscure conservation legislation designed to protect public lands from development pressure.

Last year, the House passed a bill environmentalists have championed for more than 20 years that would require anyone looking to sell or develop a protected public green space to replace it with another comparable property.

The Senate, however, passed a different version, which has the backing of the Baker administration and would create an alternative where developers or communities could set aside money to purchase property later when replacement land does not exist. cannot be found in the community.

Globe staff Dan Adams and Globe correspondent Simon Levien contributed to this report.

A reflection near the Senate Chamber in the Massachusetts State House.Carlin Stiehl for the Boston Globe

Matt Stout can be contacted at matt.s[email protected] Follow him on Twitter @mattpstout. Samantha J. Gross can be contacted at [email protected] Follow her on Twitter @samanthajgross.

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