and the
Citizens Economic Research Foundation

Tuesday, May 4, 2003

CLT warms to Governor’s unfreezing of its rollback

For Immediate Release
May 4, 2004
Contact: Barbara Anderson - (508) 384-0100

The long winter of our discontent is over: Governor Romney is moving to unfreeze the voters’ income tax rollback that the Legislature froze two years ago. Yea Gov!

But lo, the sound of the cuckoo is heard in the land. The More Is Never Enough (MINE) spending lobby wants to grab the money and increase the budget even more. The so-called Massachusetts Taxpayers Foundation would let the Legislature keep its past tax hikes, so it can once again increase the size of government in good times, setting up the state’s next "fiscal crisis."

Both groups are still opposed to giving ordinary working people the tax rollback that was promised them when the income tax rate was "temporarily" hiked from 5 to 5.75 percent in 1989. Both groups again show their contempt for the voters who mandated that the rate be restored to its historic 5 percent rate.

It is important to remember these facts:

1.  The Massachusetts income tax rate was always 5 percent, until it was raised "temporarily" during the 1989 fiscal crisis. The state budget has since more than doubled.

2.  The voters finally kept the government’s promise that the rate hike would be temporary when they endorsed CLT’s and Governor Cellucci’s income tax rollback in November 2000 by 59-41 percent. This vote was to phase out the temporary rate hike over three years, and the rate was supposed to have returned to 5 percent for tax year 2003 but was temporarily "frozen" because of the most recent fiscal crisis.

3.  These cyclical fiscal crises are engendered by overspending in good economic years, creating bigger and bigger budgets that cannot be sustained during cyclical economic downturns.

4.  In 2000, the Massachusetts tax burden ranked 5th per capita, and 23rd relative to personal income. In 2003, the Massachusetts tax burden ranked 3rd per capita, – 30.3 percent above the national average – and 13th relative to personal income.

5.  Massachusetts per-pupil expenditures are 4th highest in the nation, 35 percent above the national average. And regardless of what the Supreme Judicial Court might say about school spending, the Legislature cannot be forced to raise taxes to pay for a court decision anymore than it could be forced to fund Clean Elections or vote on an initiative petition for a constitutional amendment, also ordered by the high court.

6.  CLT proposed and the Legislature adopted our voluntary tax check-off that first appeared on income tax forms last year. Any who wish to pay their income tax at the old 5.85 percent rate are free now to easily do so – though there have been but a handful of takers. Apparently if the tax rollback ballot question was available today, we’d get a vote of better than 99 percent!

Governor Romney pledged that he would continue the people’s rollback as soon as we emerged from the economic cycle downturn. We applaud his proposal to keep The Promise and immediately restore the income tax rate to 5 percent.

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