Question: What do legislative
leaders, the Massachusetts Teachers Association, the Tax Equity Alliance of Massachusetts
(TEAM) and the Massachusetts Taxpayers Foundation (MTF) have in common?
Answer: They all oppose Gov. Paul
Cellucci's plan to roll back the state income tax rate from 5.95 to 5 percent.
Next question: What is something
called a "taxpayers foundation" doing on that list of tax cut opponents?
Legislative leaders often oppose tax
cuts; they like having the money to spend. The teachers' union and TEAM are both liberal
organizations that support big government and high taxes as a matter of principle. But
MTF, which the media often refers to as "a conservative taxpayers' watchdog,"
would be expected to support, well, the taxpayers!
Chip Faulkner, who came to work at
Citizens for Limited Taxation in 1979, still remembers his surprise at being assigned his
first project -- opposing an MTF plan to expand the sales tax to clothing.
"Why," he wondered, "would a taxpayers' group want to tax our winter
We defeated that proposal, then created
Proposition 2½, which cut and limited the property and auto excise taxes. Our chief ally
in that ballot campaign was the Massachusetts High Tech Council. Our chief opponents were
the Legislature, the public employee unions, the Massachusetts Municipal Association,
representing the cities and towns, and ... the Massachusetts Taxpayers Foundation!
The municipalities were concerned that
legislators wouldn't share state revenues to make up for property tax cuts. The public
employee unions feared layoffs. But what was something called a "taxpayers
foundation" doing opposing a property tax cut?
Voters passed Prop 2½ anyhow. Six years
later we and the High Tech Council worked for a state tax cap and repeal of the
"temporary" state surtax -- and this time we were joined by the MTF! The
pleasure of this joint venture was diminished after the tax cap passed, when an MTF
lobbyist at a public hearing recommended changes that would weaken the cap.
Yet for years, the MTF's voice was heard
in the Statehouse warning about the dangers of overspending. It has always expressed
legitimate concern that a temporarily strong economy would increase the state budget to a
level that could not be sustained when the economy slowed. Gov. Michael Dukakis and the
Legislature didn't listen, and sure enough, the state spent itself into a fiscal crisis.
In mid-1989, as revenues declined, an
income tax increase was passed to cover the huge deficit. We were told by the Legislature
that the tax increase was temporary.
The next year, with the state still in
deficit, legislators proposed another income tax hike. Instead of joining those of us who
were still trying to cut state spending, MTF supported a compromise proposal -- a lesser
income tax increase, and a sales tax broadened to include business-to-business services.
It claimed to be surprised when the final package broadened the sales tax to include all
services -- accounting, legal, engineering, financial, plumbing, landscaping, etc.
Eventually, the foundation went to court in opposition to this new service tax, which was
repealed after Gov. Weld took office.
The MTF and its personable new
president, Michael Widmer, became our ally again as we defeated the graduated income tax
in 1994. It worked hard for last year's ballot question to cut the double tax rate on
savings and investment income.
But now it's changed sides again,
arguing that the state should be increasing tolls and restoring Registry fees that were
cut by Gov. Weld -- even as the ongoing, 5.95 percent, "temporary" income tax
rate results in record revenue surpluses.
Widmer says he would support a gradual
rate rollback after more state needs are met. This is the sort of thing the teachers'
union and Tax Equity Alliance of Massachusetts say. A real taxpayer association says,
"It's our members' money creating that surplus. Give it back!"
Some people are understandably confused
by the discrepancy between the MTF's name and its often contradictory positions. There is
certainly a place in the political arena for a business-funded association that analyzes
the state budget and warns against overspending. But when the time comes to prevent waste
and overspending, serious taxpayer advocates realize that the only way to stop politicians
from wasting and overspending is not to give them the money in the first place.
If instead, during a period of record
state surpluses, an organization opposes efforts to hold legislators to their promise that
the last tax increase would be a temporary one, it should at least answer a final
question: Why does it call itself the Massachusetts Taxpayers Foundation?