and the
Citizens Economic Research Foundation

Thursday, May 22, 2008

Senate rejects voters' tax rollback, again

Chip Ford's CLT Commentary

Yesterday's CLT memo was hand-delivered in the morning to every state senator in their respective State House offices.  The debate below took place yesterday afternoon.

Senator Hedlund's and Brown's amendment to the Senate budget was defeated by a vote of 3 in favor (Hedlund, Brown, and Timilty) and 17 opposed.

There aren't many Republicans in the state Senate, but there are more than the two who voted to respect the voters' 2000 mandate that the income tax be rolled back to its traditional 5 percent. (Even one Democrat voted in favor of it.)  Where were the other three Republicans, Tisei, Knapik, and Tarr -- or how did they vote, against it?  This means none of the other 37 care what the voters think -- twenty of them not even enough to bother voting!

A roll call vote wasn't allowed, so we're working on uncovering who the 17 were who voted against the rollback.

Chip Ford

State House News Service

Senate Session – Wednesday, May 21, 2008

CONVENES:  The Senate convened at 11:01 am with Sen. Murray presiding. . . .

INCOME TAX ROLLBACK TO 5 PERCENT: Question came on adopted Hedlund amendment 49.

Sen. Hedlund said:  We as a body have been extremely focused lately on bringing forward on finding efficiencies and on revenue.  We’ve seen the effort to bring the gaming proposal to study.  And of course there has been a lot of discussion on tax policy as we’ve seen a number of tax breaks go to industries that would benefit for our largesse.

This amendment would benefit the average hardworking taxpayer in all demographic ranges.

In 1989, the Legislature put in place the temporary income tax hike.  I don’t want to belabor this history.  That hike was supposed to last 18 months.

The next year we had a new governor who said we don’t need to engage in this kind of policy.

It’s 20 years later, that temporary hike has not returned to its traditional rate of 5 percent.

Several years ago, voters overwhelmingly approved an income tax reduction.  We ignored their will at that time.  We made some changes.  We enacted a phased rollback.  Today, we know that the income tax is scheduled to go down.

Taxpayers may actually go a vote for a complete repeal of the state income tax in November.  We have an opportunity through this amendment to preempt that effort and to restore faith in the Legislature.

Let’s put forward some tax policy that benefits and restores the trust of the average taxpayer in Massachusetts.  They’ve sat back and watched us enact tax breaks for financial services.  They’ve seen us enact tax breaks for defense contractors.  They’ve seen us enact target tax breaks for the movie industry.  The only people benefiting from those breaks seems to be the actors.

This is something we can do that will reach all taxpayers.  I’m hoping that we will not continue to stiff the average taxpayer and we will recognize the will of the voters.

This past April we saw receipts jump almost $400 million more in additional tax revenue.  We’ve seen $17 billion of tax receipts come into the commonwealth this fiscal year, $1.3 billion more than at this point last year.

This amendment would cost the commonwealth about $600 million in revenue.  Contrast that with the breaks we’re giving some narrow, segmented industries.

Some of my colleagues across the aisle would call that a special interest.  This is not about a special interest. This would benefit everybody.

The time has come for this amendment to be put forward.  We’re taking care of some of the big industries and some of our communities.  I think, Mr. President, that this amendment is much more broad-based and would reach the people who could use it.

I hope and I think it would certainly preempt the efforts of many who would put forward the question at the ballot box to eliminate the state income tax.  It got 46 percent of votes of the electorate last time.

Sen. Hedlund requested that a vote be taken by a call of the yeas and nays.  There was insufficient support.

Sen. Hedlund requested a vote be taken by a standing vote.


Members in favor included Sens. Timilty, Brown and Hedlund.

Members opposed included Sens. Walsh, Petruccelli, Spilka, Moore, Creedon, Chandler, Resor, and others.

Senate Amendment #49


Messrs. Hedlund and Brown moved that the bill be amended after Section 90, the following new Section:-

“SECTION _____. Section 4 of chapter 62 of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by striking out paragraph (b) and inserting in place thereof the following:-

(b) Part B taxable income shall be taxed at the rate of 5.0 per cent for tax years beginning on or after January 1, 2009.”

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