CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Saturday, October 2, 2004

Another "embarrassment of riches" to squander again?


State Treasurer Tim Cahill is sitting on an embarrassment of riches. Massachusetts is just three months into the new fiscal year, and treasury coffers are already stuffed with $100 million more in tax money than state revenue officials planned....

With July and August also well ahead of plan, the awkward surplus is already into three figures.

If the surpluses continue, Beacon Hill lawmakers can have fun bickering over what to do with it.

The Boston Herald
Saturday, October 2, 2004
Tax surpluses may set Mass. pols bickering


Rolling back the state's income tax rate won't save Bay State residents much, and ultimately will force cities and towns to make tough budget choices in the form of layoffs or tax overrides.

That was the message delivered by MetroWest Democrats in a rare joint appearance yesterday morning....

"The reality is (Gov.) Mitt Romney wants to raise local property taxes," said Natick Rep. David Linsky....

If the rate is rolled back, he predicted that pool of money will shrink, forcing local officials to either find a way to do more with less, or ask voters to approve a Proposition 2 override....

Local Republicans shot back quickly yesterday, pointing out that the tax rollbacks were approved by voters.

"My point to David Linsky would be the voters voted to roll back the income tax rate," said James Coffey....

"But legislators like Karen Spilka, Debby Blumer and David Linsky believe they know better than the voters here in Massachusetts, and that, to me, smacks of arrogance," he continued. "Rolling back the tax rate is what the voters asked for, and that's what they should get."

Spilka, however, derided the rollback proposal as mere election-year posturing.

The MetroWest Daily News
Saturday, October 2, 2004
Democrats blast Romney tax policy


One would hope that the departure of House Speaker Thomas Finneran would usher in a new era of more open government in the Legislature. But those hopes have already been dashed.

Even before the speaker announced his resignation Monday to accept the lucrative post of director of the Massachusetts Biotechnology Council, a deal had been cut in secret to anoint his successor. This may be a fine way to select popes, but it is no way to elect the leader of a powerful democratic body....

And finally, let's decide that when the people vote on an initiative, their decision will be respected. DiMasi can start by calling for a vote on rolling back the state income tax rate to 5 percent from its current 5.3 percent just as voters demanded several years ago.

A Gloucester Times editorial
Thursday, September 30, 2004
Let's hope DiMasi deal isn't a bad omen


One day after replacing Thomas M. Finneran as House speaker, Salvatore F. DiMasi yesterday found himself in a spot familiar to his predecessor: He has become a Republican target.

Despite his big hug with Governor Mitt Romney on the rostrum Wednesday, the Republican Party released a pair of statements yesterday painting DiMasi as a "Beacon Hill insider" who believes "reform means higher taxes." ...

[Tim O'Brien, executive director for the Massachusetts Republican Party] said the statements the party released were a response to media reports of DiMasi's speech. "We got the perception, as well as all major news outlets did, that the new speaker has refused to rule out tax increases," O'Brien said. "If that is out of context, let the speaker clarify himself."

"This is a 180-degree turn in strategy from the previous speaker, who ruled out future tax increases," he said. "People want to know if the new speaker is going to raise taxes."

The Boston Globe
Friday, October 1, 2004
GOP wastes little time targeting the new House speaker 
Party hints DiMasi open to tax hikes


Chip Ford's CLT Commentary

The cyclical "embarrassment of riches" has returned, so you know the cyclical economic downturn has ended -- though no tax-and-spend socialist will admit it yet, or ever for that matter.

The question now is, will this latest "embarrassment of riches" lead to even more spending, state government growing until it's again unsustainable come the next inevitable downturn? This happened in the booming '80s which led to a huge "temporary" tax hike, then again occurred in the booming '90s which ultimately imposed "The Biggest Tax Increase in State History" in 2002.

Remember, the state budget DOUBLED between the "temporary" tax increase of 1989 and the most recent cyclical economic downturn that produced "The Biggest Tax Increase in State History" in 2002. And we taxpayers have yet to recover from that "temporary" tax hike of 1989 -- despite the billion dollar annual revenue surpluses during that period.

Despite even the voters' mandate in 2000 to at last return to the historical 5 percent tax rate, that the Legislature arrogantly "froze."

Yesterday the State House News Service reported:

"The [Department of Revenue] collected $1.698 billion in taxes during September, an increase of $56 million over September 2003, and $12 million more than the monthly budget benchmark. Three months into fiscal 2005, state tax collections are up $219 million, or 5.8 percent, and are beating budget benchmarks by $100 million. During September, income tax collections were up 8.1 percent compared to September 2003, withholding collections were up 1 percent, and sales and use tax receipts were up .5 percent."

The state has taken in $219 million more in just the first three months of this fiscal year than it had last year at this time. The Legislature just spent the surplus $700 million from FY'03 revenues with not one cent of tax relief.

Democrat legislative incumbents are fighting tooth-and-nail to hang onto -- to spend -- even more of our tax over-payment all over again, setting taxpayers up for the next "Biggest Tax Increase in State History" down the road a few years.

Few on Beacon Hill listened the last time we warned where they were inevitably taking us. Few listened when we saw the writing on the wall during Dukakis' "Massachusetts Miracle." And few are listening now, blinded by yet another opportunity to grow government, to spend even more, to create their next "fiscal crisis" that they'll further burden us with to bail themselves  out again.

The only chance we have to avoid yet another "fiscal crisis" ahead and yet another tax increase is to throw the bums out next month and replace them with reform candidates.

Otherwise, begin saving now to get yourself and your family through their next fiscal crisis and the next tax hike imposed on us to bail them out again.

Chip Ford


The Boston Herald
Saturday, October 2, 2004

Tax surpluses may set Mass. pols bickering
By Brett Arends


State Treasurer Tim Cahill is sitting on an embarrassment of riches. Massachusetts is just three months into the new fiscal year, and treasury coffers are already stuffed with $100 million more in tax money than state revenue officials planned.

September was another strong month. A surge in advance payments of estimated income tax pushed the total tax take up to $1.7 billion - or $56 million a day.

That was a 3.4 percent rise compared with a year ago, and $12 million above budget forecasts.

With July and August also well ahead of plan, the awkward surplus is already into three figures.

If the surpluses continue, Beacon Hill lawmakers can have fun bickering over what to do with it.

Gov. Mitt Rommey is in favor of a tax cut. A $75 million surplus from last year has only just been spent.

"We're early in the fiscal year," a spokesman for the Department of Revenue cautioned yesterday. "It's a good sign, but you can't really read too much into it. There's still nine months to go."

Cahill, for his part, signs all the state's checks.

Last month's estimated income tax payments jumped a remarkable 20.7 percent, to $328 million.

The advance payments come from those whose income is not from a payroll. The DOR says these mainly fall into two categories: small independent businesses and the rich.

At least one of them is doing well. The DOR is so surprised by the rise, it has set its economists to work to find an explanation.

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The MetroWest Daily News
Saturday, October 2, 2004

Democrats blast Romney tax policy
By Peter Reuell, Staff Writer


Rolling back the state's income tax rate won't save Bay State residents much, and ultimately will force cities and towns to make tough budget choices in the form of layoffs or tax overrides.

That was the message delivered by MetroWest Democrats in a rare joint appearance yesterday morning.

"The reality is (Gov.) Mitt Romney wants to raise local property taxes," said Natick Rep. David Linsky.

Under the state budget, Linsky explained, part of the money raised through the state income tax is returned to cities and towns in the form of local and education aid.

If the rate is rolled back, he predicted that pool of money will shrink, forcing local officials to either find a way to do more with less, or ask voters to approve a Proposition 2 override.

"That's a choice...we don't want to make," he said.

Local Republicans shot back quickly yesterday, pointing out that the tax rollbacks were approved by voters.

"My point to David Linsky would be the voters voted to roll back the income tax rate," said James Coffey.

A Hopkinton resident, Coffey is vying with state Rep. Karen Spilka, D-Ashland, to fill the Senate seat vacated by David Magnani.

"But legislators like Karen Spilka, Debby Blumer and David Linsky believe they know better than the voters here in Massachusetts, and that, to me, smacks of arrogance," he continued. "Rolling back the tax rate is what the voters asked for, and that's what they should get."

Spilka, however, derided the rollback proposal as mere election-year posturing.

"He just doesn't get it," she said, of Romney. "It's all a smoke and mirrors tactic. Our state is still struggling to get out of a recession...we need to make sure our seniors, our teachers, our children and our disabled continue to get the services they need."

What's more, Framingham Rep. Debby Blumer said, shifting away from the income tax to local property taxes puts the onus on a far more regressive form of taxation.

"This has exactly the opposite effect of what he's talking about," Blumer said of Romney.

"The No. 1 thing I hear from seniors is their property taxes are too high," agreed Tom Sannicandro, a candidate for the House seat Spilka is vacating to run for the Senate. "This shift is going to force them even higher."

But his opponent, Republican Mary Connaughton, disagreed.

If the Legislature would follow through on some of the reforms the Romney administration has proposed, there would be more than enough money to support local communities.

"If we cut state government, we can afford the rollback," she said, highlighting Romney proposals, like merging MassHighway and the Massachusetts Turnpike Authority. "It can be accomplished through reforming state government."

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The Gloucester Times
Thursday, September 30, 2004

A Gloucester Times editorial
Let's hope DiMasi deal isn't a bad omen


One would hope that the departure of House Speaker Thomas Finneran would usher in a new era of more open government in the Legislature. But those hopes have already been dashed.

Even before the speaker announced his resignation Monday to accept the lucrative post of director of the Massachusetts Biotechnology Council, a deal had been cut in secret to anoint his successor. This may be a fine way to select popes, but it is no way to elect the leader of a powerful democratic body.

As Finneran was preparing to leave, House Majority Leader Salvatore F. DiMasi, D-Boston, cut a deal with Ways and Means Chairman John Rogers, D-Norwood. In return for leaving the speakership to DiMasi, Rogers will be named majority leader.

The DiMasi deal leaves the powerful speaker's post in control of Boston politicians. It would have been nice to see a speaker from outside the city, especially since the Senate president is from the same neighborhood. But let's see what DiMasi has to offer.

We hope he's as conservative on fiscal matters as his predecessor. Finneran worked effectively with a series of Republican governors in stemming the profligate tendencies of some in the Legislature.

In terms of how the House conducts its business, we'd suggest an end to those midnight sessions at the end of a term. The Legislature is notorious for conducting all sorts of mischief in the dark of the night.

Let's have full hearings on all matters of importance, rather than having them attached to budgets and other legislation to avoid proper scrutiny. And let's bring all bills to a vote promptly, not leave them to languish forever in committee a favorite tactic when the leadership wishes to punish an uncooperative member of the rank-and-file.

And finally, let's decide that when the people vote on an initiative, their decision will be respected. DiMasi can start by calling for a vote on rolling back the state income tax rate to 5 percent from its current 5.3 percent just as voters demanded several years ago.

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The Boston Globe
Friday, October 1, 2004

GOP wastes little time targeting the new House speaker 
Party hints DiMasi open to tax hikes
By Elise Castelli, Globe Correspondent

One day after replacing Thomas M. Finneran as House speaker, Salvatore F. DiMasi yesterday found himself in a spot familiar to his predecessor: He has become a Republican target.

Despite his big hug with Governor Mitt Romney on the rostrum Wednesday, the Republican Party released a pair of statements yesterday painting DiMasi as a "Beacon Hill insider" who believes "reform means higher taxes."

The GOP charge followed DiMasi's remarks in a speech on Wednesday that "everything will be on the table" when the House considers the state budget.

"He hasn't been speaker for 10 minutes and he's already taking about raising taxes on working families," said Tim O'Brien, executive director for the Massachusetts Republican Party. "We've said all along that DiMasi is just taller than Finneran, and while he's speaker, it's going to be more of the same."

Following his speech on Wednesday, DiMasi told reporters that he was referring to the Legislature's general agenda, not to raising taxes, when he said, "Everything will be on the table."

"Everybody is going to be empowered, everyone's opinion is going to be taken into consideration, and we will form our plans then," he said at the time.

"It's election-year politics," said Douglas Pizzi, spokesman for DiMasi. "He's been speaker for less than 24 hours and they are putting words in his mouth that he didn't say."

"When he said, 'Everything is on the table,' he was referring to listening to all members of the House and not rejecting their views out of hand," Pizzi added.

"Where they are getting their idea that he is out to raise taxes is beyond me."

The GOP statements are part of a shift in the party's message since Finneran announced his departure on Monday.

Throughout this year's legislative campaign, Romney and the Republican Party have been calling for reform on Beacon Hill and targeting Finneran as a major hurdle to changes, including a proposed rollback in the state income tax rate.

On Monday, shortly after Finneran accepted a job with the Massachusetts Biotechnology Council, Romney said at a press conference: "The challenge on Beacon Hill to reform is not resident in any one person, and it certainly wasn't resident in Speaker Finneran alone."

In an interview with the Globe, O'Brien denied any calculated change in message, reiterating the view Romney took on Monday, saying, "Our reform message is much larger than one individual."

He said the statements the party released were a response to media reports of DiMasi's speech. "We got the perception, as well as all major news outlets did, that the new speaker has refused to rule out tax increases," O'Brien said. "If that is out of context, let the speaker clarify himself."

"This is a 180-degree turn in strategy from the previous speaker, who ruled out future tax increases," he said. "People want to know if the new speaker is going to raise taxes."

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