and the
Citizens Economic Research Foundation

House debate and vote on income tax hike
Monday, April 26, 2004

Roll Call Vote

State House News Service
House Session
Monday, April 26, 2004


Spellane amendment 441 personal income tax increase offered at 12:48 pm.

The amendment reads: Section 4 of Chapter 62 as amended by Section 13 of Chapter 186 of the Acts of 2002 is hereby amended by striking paragraph (b) and inserting in place thereof the following paragraph: -- (b) Part B taxable income shall be taxed at the rate of 5.95 percent for tax years beginning on or after January 1, 2004.

Rep. Spellane requested a roll call and there was support.

Rep. Spellane said earlier today Rep. Rogers discussed the work we have done over the last three cycles. He talked about the responsibility of this body, how the gimmicks other states engaged in Ė deficit financing and pension obligation bonds Ė were not even a temptation debated. He spoke about the pains we have taken as a body. He discussed the $3.5 billion in cuts faced, the transfer of $3 billion in accounts, including the $2 billion we had in the rainy day fund. We have sold valuable assets and changed our pension scheduled from 2018 to 2023. We have consolidated and restructured government. Despite all of these mechanisms, I would argue we still have a shortfall on revenues. Next fall students will return to schools with more students in classrooms. In higher education, they will battle higher fees and costs and services will decline. Elderly will battle the increasing costs of health insurance and drugs. Those receiving DMR and DMH services will battle for services they deserve. Our budget this year Ė nearly 82 percent of revenues are used in five categories. State employees pay more in GIC costs. Pensions to retirees and our debt obligations are two others. It leaves very little for other core services. Passing the amendment would generate I am told $1.5 billion in revenues this year and $1.1 billion in FY 06. If this is adopted, I will debate how that money should be utilized. It is ironic that the chief of staff to the president just spoke aout the oath we take. The responsibility of that oath can best be summarized in a Hubert Humphrey quote that society should be measured by the way we treat those in the dawns of life, the twilight of life and those in the shadows of life, the disabled. I hope the amendment is adopted.

Rep. Peterson said itís really simply amazing that we are even here debating an amendment that will increase the rate from 5.35 to 5.95 percent. This is two years after adopting the largest tax package in history, some $1.2 billion, followed by raising fees by some $700 million. We have overridden the will of the voters who in 2002 wanted to start a rollback of the income tax to 5 percent. In 1990, when Gov. Weld was elected, he had a veto-proof Senate. Through his veto pen, the government reduced total spending from the previous fiscal year. Since that time, that one year, we have continued to see the bottom line of the budget increase. Some programs have been cut and reduced. But the bottom line of the budget is larger this year than last year and the year before. We have a structural deficit. The governor has offered some proposals to reconfigure and reform state government, but we have not done that yet. I urge the members to vote against this amendment.

Rep. Balser said I commend the gentleman for filing this amendment. This is the most important amendment. It is a debate that should be happening throughout the Commonwealth. It is about is each of us willing to chip in a little bit more so we can all have the many many wonderful services that the Commonwealth provides and the people depend on. The current governor campaigned promising no new taxes. He won. He didnít only say no new taxes. He said not only no new taxes, but I wonít cut any essential services. A similar argument was made a few years earlier by the Cellucci-Swift team, which campaigned in favor of reducing the income tax to 5 percent. The people voted for that. What an interesting debate we would have if those who pushed for no new taxes actually told the people the truth. They would say I wonít vote to raise new taxes and I will make that work by cutting local aid so there will be layoffs. I am going to cut human services so the mentally retarded and mentally ill will have less access. I will cut the environmental department so we canít regulate clean air and open space. That would be an interesting debate because those people, that is exactly what they ended up doing - cutting the essential services people depend on. Maybe the people donít want to pay more taxes. I would like to see a vote of the public when those are the choices put before them. If this passes, we will have revenue for all of the other amendments. I bet the people if they saw the choices might actually go for this.

Rep. Hill said he hopes the amendment is not adopted. We talked about jobs a few months ago. Jobs create revenues, not increasing taxes. How many times are we going to go to small businesses and kick them in the teeth, as we have all year long. Remember the unemployment trust debate. Small businesses took it right on the chin. We are telling businesses donít bother coming to the Commonwealth. Let me remind people of our Chapter S corporations who pay this rate. What are they going to do? They are not going to come to Massachusetts. We are losing jobs, we are not gaining jobs. We passed a stimulus package. I donít see the jobs coming to Massachusetts the way you all hoped they would. Yesterday was the first morning of our softball team. A gentlemanís wife is not working. You are going to increase taxes more. I need help. I canít afford to live here. I heard that story over and over yesterday. People had two-income families and now have one. We have seen people making fun of the checkoff box. We have given people the opportunity to pay 5.95 percent. We raised $200,000. They said I canít afford it. I donít want to do it.

Rep. Cabral said reducing the income tax lost in my district by an overwhelming margin. People did not buy the argument of the previous governor. This is about choices and priorities. Talk about restructuring and reforming. When they talk about reforming, itís about cutting. We are paying today almost a full percentage less than the 6.25 percent rate we paid. And we are crying? Human services and elderly affairs has taken the brunt of cuts. I donít see too many cuts in the governorís office. It has actually increased. One service cut last year was basic health care to elderly folks and the disabled. We cut it because they are immigrants. Every time there is a company restructuring, there is a budget for that at a company. You have to invest in the changes you are making. It costs actual money.

Rep. Lepper said we have a philosophical difference. We donít believe your side. We believe if you keep the taxes low you will conceivably gain more revenue and therefore lift all boats. If a small businessman at the same time is expanding business is then hit with taxes, he would be able to do that. Jobs will produce more revenue. It is very basic philosophical difference. I donít think the philosophical difference will go away. It is just a matter of how many people get elected with that point of view. Hopefully it will be more.

Rep. Cabral said it is a philosophical difference. We feel government has a very important role in making every resident of this state have access and opportunities and in creating infrastructure to help every business thrive. We have provided those infrastructures to allow the business community to thrive. It is important to prioritize services that are important for residents. All we are doing is shifting costs and taxes from income tax to property taxes and fees. It is OK to raise fees by $700 million. Today it costs you double to apply for anything. You donít call it a tax. Small businesses need to renew applications that cost double. That is a tax. Property taxes have increased incredible. The income tax is the fairest way to tax. It takes into account oneís ability to pay.

Rep. Spellane said I had conversations with PTOís and school councils. In the form of an official letter, what happened? Both school committees asked me to support an income tax increase to 5.95 percent. I want to recall the 1990s, a time where this body was able to bring the stabilization account up to $2.2 billion. We were able to fund social service agencies, to fulfill a commitment to fund Chapter 70, to implement programs that helped so many in the disability community. Did the tax increase stunt the growth of businesses in Worcester? No. Maybe I should offer an income fee increase. Perhaps my 23 friends on the other side of the aisle would join me.

Rep. Jones said I donít know where to begin. I realize not every member who spoke in favor of 5.95 voted for every item of the budget order. In the final analysis they did. We want talk about gambling. Thatís out. A majority of members voting thought we should have the right to have the debate about gambling. The majority party has the ruled structured so that in that instance you need two thirds to say you want to have a debate. The order said you could not raise revenue and earmark where you want to spend it. We tried to change the section on additional assistance and Chapter 70. The voters in 2000 made a decision to adopt a phased rollback. In 1999, the Republican caucus offered an amendment for a phased rollback. The majority rejected it. A year later, they said maybe that is not such a bad idea. They adopted it and the Senate did not go along. The people decided. We changed the charitable deduction and the income tax. Here we are again, saying we did not take enough a couple of years ago. The people in the representativeís district can pay more if they want to. They choose not to. In 2002, the people came close to repealing the income tax. Very few people in this Commonwealth advocated the question. There was not a strong organized base Ė yes, the Libertarian Party, but small in numbers and resources. The voters sent a message. They said if you go too far, we will be back and we will repeal it. If you thought we needed additional revenues, why limit the membershipís ability to offer ideas. There are ways to find economies and efficiencies and reforms. We should always every year, certainly in down years, look for ways to more efficiently and effectively deliver services. If you have some respect for the voters in 2000 and 2002, you should not be here offering this amendment today. If you are, then you should darn well be paying that income tax yourself.

Rep. Cabral said I have respect for the Minority Leader, but I disagree. Thatís OK. Thatís what this country is all about. This is not about one. The question to eliminate the income tax lost in my district because we understand the services provided by government are extremely important. Itís about priorities. The voters made their choices, and made their priorities. This is our collective responsibility. Those programs and areas that suffered in the good times, some of them are being hit again. Health and Human Services have seen $1.5 billion in cuts over the last 2 years. The brunt of cuts again is on health and human services. We defended and refunded those individuals who Congress cut. We stood up and said thatís wrong. We are going to provide those services and continue to provide them. What are you going to say to the 70-year-old in your district? What about if she is a legal immigrant Ė legal Ė weíre not talking about undocumented workers? What kind of approach is this? We have an administration that, with a straight face, cuts out the people who need those services. I hope that we make a statement and say Ďyes, you are a resident, like everybody else. You are elderly and disabled and deserve to be supported for those needs.í

Rep. Cabral continued: If I were here, and health and human services had increased by 4 and 7 percent and 10 percent like our revenues did in the 1990s, then you could say I just want more and more. But the health and human services budget increased by just 1.2 percent in the good times, excluding MassHealth. You do the math. They were cut. This is about collective responsibility.

Rep. Peterson said I wish I could take his words and compare them to his votes. He voted to cut off debate on gaming. So itís easy to say youíre for free and open debate. Because on the day we debated rules, I said beware. Beware the budget resolutions, because we had not seen the document. We could have taken care of the areas he is concerned about.

Rep. Swan said I cannot figure out if the gentleman is debating the amendment before us or the rules debate last week.

Rep. Correia, in the chair, said that is not a point of parliamentary inquiry.

Rep. Peterson said I urge you to reject this amendment.

Rep. Swan said I rise in support of the amendment before us at this time. It probably could not be more serious at this time, in this chamber. I think of the city of Springfield. In the Constitution, it talks about the common good, their safety, prosperity, and happiness. This budget for í05 does not engender a great deal of prosperity or happiness. In Springfield, we have had to lay off police, firefighters, and public works workers, teachers. This is in a time when Springfield needs teachers today like at no other time. The state has not yet seen fit to reimburse Springfield for the cost of court-ordered busing. When we think about reducing police, fire, and think about that now at a time when homeland security is alleged to be a priority in the nation. It is not getting attention in the federal government, which is misusing funds. I urge your support for this amendment. Everyone here has an amendment asking for more money, even those who say they are against this amendment. Yet we recognize there is a limited expectation of revenue. We cut taxes 52 times in recent years. Now we are simply talking about increasing the personal income tax to where it was 10 years ago. Everybody in here wants better schools, police Ė in order to have that, you have to pay for it.

Rep. Scaccia said these amendments before us all add to the bottom line. We have the Ruane amendment, too. He is a great civil servant. But what we are forced to do is to subtract money from somewhere. So we are only going to add to areas that are politically popular. Pensions, courts, local aid, Medicaid went up. Everything else went up. Thereís no extra money. Thereís no money, in fact. So we keep borrowing from those who have it. We keep borrowing from those who need it because the costs we canít control. Already we have eliminated two fees in this budget that were just beginning. Most of the GOP amendment was going to reduce revenues even further. If this issue fails, we should end the budget process tonight. Thereís no money. Why should people get up here and ask for more services and not pay for them? Iím an old dog and I do old tricks and Iíve been preaching this for many years. Not to do this is to play the fool. I am not pleased today. I donít think people are taking this seriously. I have been here 30 years and Iíve seen ups and downs. As the chair of Ways and Means said, the last four years have been horrendous. The next two arenít going to better. If you want to stay in this chamber for years and bring home less to your people, I donít want to say shame on you. But thatís probably why you came here. We want to do well. But sometimes we have to gulp and swallow. You have to put up, ladies and gentleman, or you have to go home. This is a litmus test. We should be going home and going home very quickly. Taxes are never popular, but they are necessary. I urge your support.


27 who voted in favor of the tax increase (with last CLT rating):

Balser, D-Newton (14%), Blumer, D-Framingham (21%), Cabral, D-New Bedford (14%), Demakis, D-Boston (21%), Donovan, D-Woburn (14%), Falzone D-Saugus (0%), Fennell, D-Lynn (30%), Festa, D-Melrose (8%), Fox, D-Boston (0%), Jehlen, D-Somerville (21%), Khan, D-Newton (14%), Malia, D-Boston (0%), Marzilli, D-Arlington (29%), Owens-Hicks, D-Boston (7%), Paulsen, D-Belmont (21%), Rushing, D-Boston (14%), Sanchez, D-Boston (0%), Scaccia, D-Boston (14%), Smizik, D-Brookline (15%), Spellane, D-Worcester (7%), Story, D-Amherst (15%), Sullivan, D.B., D-Fall River (14%), Swan, D-Springfield (0%), Toomey, D-Cambridge (14%), Walsh, M.J., D-Boston (15%), Walsh, S., D-Lynn (7%), Wolf, D-Cambridge (0%).

3 who didn't vote:

Atkins, Connolly, Simmons.

All 129 other members voted against the tax increase.

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