The Berkshire Eagle
Monday, March 20, 2000
A better tax plan, but state isn't ready
The proposal Governor Paul Cellucci has made to cut
state income tax, reducing the amount individuals pay from 5.85 percent to 5 percent over
three years, has very few friends. The governor has doggedly hung on to his ax despite the
great money-sucking sound emanating from the Big Digs' muddy finances, not too far from
his Statehouse offices. He's hung on despite warnings that the current boom may not last
forever. He's hung on despite the spate of ballot initiatives and his other tax cut
proposals that would cut state revenues by almost 25 percent. He should let the tax ax go.
But he will most likely continue to fight for his tax
cut, one of his very few enthusiasms, despite last week's much more reasonable proposal
from the Massachusetts Taxpayers Foundation. In years past, the MTF has been a strong
advocate for reducing taxes on state wage earners, but even they will not join in the
governor's folly. They have proposed a much more modest plan, one that is tied to
measurable increases in inflation-adjusted personal income.
The MTF has proposed a one-tenth percent decrease next
year to 5.75 percent of income. In each of the following years the tax would be reduced
another tenth of a percent, but only if average personal income growth topped 2.5 percent
that year. In this way, the Taxpayers Foundation would protect the state budget while
incrementally reducing the tax burden on individuals.
The group rightly points out that too many competing
tax cuts are currently on the table. They say the most damaging, beyond the governor's
aggressive approach to the income tax, is ballot initiative which seeks to shift all of
the burden of state road building and maintenance to the general tax fund by giving
dollar-for-dollar credits for tolls and auto excise taxes. The group emphasizes that the
general fund already supports 90 percent of state road projects, while the excise and
tolls pays for only 10 percent. No compelling rationale exists for shifting the full
burden onto the state's taxpayers.
The foundation's support of a gradual approach to tax
reduction is certainly a less dangerous route than the governor's all-out slash-and-burn
approach. But they have failed to make the case that, in light of the challenges facing
the state, it can afford to institute the changes now. In fact, their evidence supports
the conclusion that a host of difficulties, particularly the expanding money pit in
Boston, must be addressed before any reduction in revenues should be attempted. Fiscal
houses should not be built on quicksand. Let the state shore up the existing structure
before chipping away at the taxation foundation.
State House News Service
Monday, March 20, 2000
Birmingham Says Good Times
Make $245M Boost to Education Affordable
By Trevor Hughes
STATE HOUSE, BOSTON, MARCH 20, 2000 ... Spurred on by
a strong economy, Senate leaders today proposed continuing major K-12 education funding
increases, saying the money will decrease class sizes, help kids pass the MCAS and remove
disruptive students from classrooms.
The $245 million plan represents a 7 percent increase
over this year's $2.8 billion state appropriation for local schools and is about $100
million more than Republican Gov. Paul Cellucci requested for fiscal 2001. Cellucci today
criticized the Senate plan, saying municipalities already have enough money to pay for
education. Senators say Cellucci is shortchanging education to help pay for his $1.4
billion tax cut.
"We're saying good education is expensive and
lousy education is worthless," said Senate Ways and Means Committee Chairman Mark
Montigny (D-New Bedford) at a press conference today at Boston's Josiah Quincy Elementary
School, one of Boston's best public elementary schools.
Added Senate President Thomas Birmingham: "If we
can't be supportive of public education in these good times, then when can we be?" He
added, "I would not have a hard time spending $500 million on our schools."
Birmingham said another year of major education
funding increases is doable, despite fears that the economy may slow down and that the
state will have to absorb more Big Dig and health care-related costs. "We can afford
it," said Birmingham.
Municipal officials joined the teachers unions and
school superintendents in endorsing the Senate's plan. ...
Massachusetts Federation of Teachers President
Kathleen Kelley applauded Birmingham's announcement, saying that class size reduction is
one of the best ways to improve student performance. The Senate plan won strong votes of
confidence from the Massachusetts Municipal Association, the Massachusetts Teachers
Association, the Massachusetts Business Alliance for Education and the Massachusetts
Association of School Superintendents.
The Lowell Sun
Friday, March 24, 2000
Local reps opposing cut in state income tax
By Jason Lefferts
LOWELL -- Area legislators teamed up for the first
time yesterday in bashing a proposal to decrease the state's income tax rate.
The ballot question initiative that would reduce the
state's income tax rate from 5.95 percent to 5 percent, a top priority for Gov. Paul
Cellucci, came under fire at yesterday's second annual meeting of legislators and business
leaders sponsored by the Greater Lowell Chamber of Commerce.
Ten state representatives and senators from across the
Merrimack Valley decried the proposed tax cut, which would lead to about $1.3 billion in
decreased state revenues over five years, claiming it will leave the state cash-poor as
demands for funding at the state and local levels continue to rise.
"There's only so much money to go around,"
said Rep. Colleen Garry, D-Dracut. "The state can only fill the gap for so
Sen. Steven Panagiotakos, D-Lowell, said the
delegation from the region has not talked about a unified effort to defeat the question
that will appear on November's ballot, but yesterday's forum may have been the start of a
yearlong effort to kill the proposal.
None of the 10 legislators who appeared at yesterday's
breakfast are expected to face a tough challenge in this year's election, which will offer
them greater flexibility in speaking out on what will be a touchy political item this
Sen. Susan Fargo, D-Lincoln, who called Cellucci's
crusade "rhetoric and demagoguery" said she expects other legislators to join
her in an effort to defeat the bill this election season.
"All of us will be out there lobbying against
this tax rollback," Fargo said. "You have to think about what you are giving up.
It sounds good, but when you run the numbers, it isn't."
Cleven, R-Chelmsford, said she is in favor of reducing the tax rate to the 5 percent
level of a decade ago, but said with costly priorities like health care looming, she
couldn't support the cut now.
"I said I'd roll back the increase (to 5.95
percent). A drastic cut in taxes at this time is wrong, though," she said.
The tax-cut debate sprung from a question-and-answer
session attended by about 200 local business leaders. Most of the discussion revolved
around providing services and infrastructure for businesses.
Along with attacking the governor's tax-cut plan, the
legislators on the panel -- all of whom besides Cleven are Democrats -- questioned
Cellucci's position on Internet taxes and his handling of the Big Dig and MBTA.
Cellucci has said he opposes adding a sales tax to
Internet purchases. Rep. Kevin Murphy, D-Lowell, questioned that stance, however,
comparing book shopping from a web site with no tax to a local store that charges
customers an extra 5 percent.
"I think we have to be careful with the taxation
of Internet companies," Murphy said. "I think it's very unfair and we have to
keep mindful of the small businesses."
Panagiotakos said the state needs to devise a way to
make it attractive to Internet companies or else fall behind the efforts of other states.
"We in Massachusetts have to look to Virginia and
Maryland on Internet companies. Both states have set up a comprehensive Internet policy
that is friendly to those start-up companies," Panagiotakos said. "If we don't
make it friendly to them, we're going to lose them to the Virginias and the
Legislators and audience members also criticized the
change in MBTA funding and the decision to start charging assessments to communities like
Chelmsford that do not have direct T services.
All of the panelists said they were opposed to the
final forward-funding MBTA package in last year's budget, which puts financial
restrictions on the authority for the first time.
Sen. Susan Tucker, D-Andover, said Cellucci is to
blame for the problems at the MBTA, which Fargo called an "antiquated and mismanaged
In wrangling over money for the T and the possibility
of a tax cut, legislators also realize the Big Dig is a looming, $1.4
The administration is cobbling together a payment plan
based on tolls, bonds, and other funding mechanisms, but Panagiotakos said the state's
cash reserves are the best starting point in reducing the Central Artery Project's
"Do we pay for it now, or bond it and let our
children pay for it in the future," Panagiotakos said. "We have a $2 billion
rainy day fund, and right now with the Big Dig it's pouring outside."
FOR IMMEDIATE RELEASE: March 23, 2000
CONTACT: Mark Carron (508) 765-0488
Tax cut opponents to gather with Democratic town
STURBRIDGE -- Opponents to Gov. Paul Cellucci's tax
cut initiative are scheduled to gather at 7:30 p.m., Wednesday, March 29 at the American
Legion on Main Street.
The Sturbridge Democratic Town Committee will host the
meeting, which is being held to discuss the Massachusetts Republican Party's proposal to
reduce the state income tax rate from the current 5.85 percent to 5 percent. Bay State
voters will be faced with this ballot question on Election Day this November. Other town
committees attending are Charlton, Southbridge and Dudley.
"This is a comprehensive presentation on what the
effects this referendum question would have on cities, towns and middle class families
struggling to make ends meet," said Carron, chairman of the Southbridge Democratic
Town Committee and a Democratic state representative. "The Massachusetts Municipal
Association as well as the Mass. Taxpayers Federation [sic] are taking positions against
this tax cut. I, along with the Democratic town committees in my district are doing our
part to get this information out, so people can take and make an educated vote on this
very important issue. We hope after this presentation, there will be a solid rejection by
the people to this question."
"People must recognize the hard work the
Legislature has done to reduce taxes and become closer to leveling the burden among the
classes. When fully implemented, which we have yet to recognize we will see a total relief
in tax levying to a tune of some $350 million a year," Carron added. "People may
remember in last year's budget that again, the Legislature took steps and brought the
income tax rate down from 5.95 to 5.85 percent. The Legislature is working toward honoring
its commitment to the taxpayers of Massachusetts."
A representative from the Boston-based Tax Equity
Alliance for Massachusetts will conduct the meeting. TEAM has created the "Campaign
for Massachusetts's Future," which will be going all-out across the Commonwealth to
ensure the GOP's initiative does not pass. TEAM will be looking for Democratic Party
support, particularly in south central Massachusetts. The group's representative will ask
the local committees how the organization can beef up support here.
The TEAM representative will conduct a short
presentation on its goals and objectives, and will describe what the proposed tax cuts are
and how Bay State residents -- in particular, how low to middle-income tax bracket -- will
be impacted by them. Surely to be mentioned will be how the state cannot afford to reduce
the tax rate, especially now that the mammoth Big Dig (Central Artery Tunnel) project has
skyrocket in cost to $13 billion and counting.