CITIZENS
for
Limited Taxation
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Barbara's Column
Tuesday, January 19, 1999


The Salem Evening News
Tuesday, January 19, 1999

Despite it's name,
this group has a spotty record helping taxpayers

By Barbara Anderson


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 coats?"

We defeated that proposal, then created Proposition 2, 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 2 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?


Barbara Anderson is co-executive director of Citizens for Limited Taxation. She writes regularly for the Viewpoint page. Her biweekly column also appears in other publications.


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