To: Members of the General Court
October 29, 2001
What part of "will of the people" do some (few, we hope)
"representatives" not understand?
Despite its original opposition, CLT supports the voter-required implementation of the Clean
Elections Law. We would expect all legislators who respect the voters' will on
Clean Elections to be consistent, and support the voters' will on the income tax rollback as well.
Instead, some of them call for a "moratorium" on the latter
initiative, which passed in 91% of the communities with a 59-41% mandate statewide.
We know they really mean to repeal the rollback. Surely they
don't expect taxpayers to believe them when they promise only a "one-year moratorium"? Sorry, but the Legislature's
credibility on temporary tax hikes, along with billions of our surplus tax
dollars, was squandered long ago.
Too bad the Legislature didn't keep its promise on the
"temporary" 1989 tax hike, and return the rate to 5% before the additional revenues enticed spending the state into another
fiscal crisis. For a decade, it spent a billion dollars more a year, spent huge surpluses, enhanced
itself using our money. Now some legislators' solution to the fiscal crisis they've
again created is to again raise taxes.
If the rate presently mandated by law -- 5.3% next year --
is kept at 5.6%, this is obviously a tax increase.
As politicians on Capitol Hill prepare a second major tax
cut this year to stimulate the national economy, some politicians on Beacon Hill plot to do what they always do in an
economic slowdown: raise taxes and eat the state's seed corn.
A&F Secretary Steve Crosby has the right idea. Use some of
the billions of dollars no one could find a way to squander that were stashed away in "rainy day" slush funds. These were
sold as a hedge against recession (i.e., "rainy day") as an excuse for not returning the surplus
Use the $300 million the state receives annually from the
tobacco settlement "taxpayer reimbursement" for health-related budget items.
Pension fund? This isn't sacred anymore since taxpayers'
money helped fund the kickback/racketeer scandal. It was used in 1989 by Dukakis to bail himself out: Let
State programs? Funded during the boom without regard to
cost concerns. Find the profligacy and waste and eliminate it.
Sen. Magnani and other Democrats have a plan -- delay the
tax rollback -- that reflects their sudden concern about MassPike tolls. They opposed the toll repeal on last year's
ballot, and the voters -- remember them? -- voted to keep the tolls: "Toll repeal No, Tax rollback
The recession is hitting all of us, not just the government.
We only wish we had done an immediate cut to 5%, instead of a "reasonable" phase down; taxpayers could use the extra
money this year as an umbrella for their own rainy day.
The Lowell Sun
Monday, October 29, 2001
By Jennifer Fenn
Sun Statehouse Bureau
BOSTON -- With state budget cuts and layoffs looming to make up
a $1.1 billion shortfall, some Democrats are pushing to delay the income tax rollback for a year.
Sen. Cynthia Stone Creem, a Newton Democrat, filed legislation Friday that would postpone
for one year the voter-approved income tax cut.
But even though Creem secured support from Senate Majority
Leader Linda Melconian of Springfield, the bill will likely have trouble making it through the Senate, where some senators
have already lined up against it.
Democratic Sens. Steven Panagiotakos of Lowell and Susan
Tucker of Andover said the state should not tinker with the voter mandate. Question 4 on last year's ballot asked voters
to roll back the income tax rate from 5.7 percent last year to 5.6 percent this year, 5.3
percent in 2002 and 5 percent by 2003.
Creem's bill would delay the scheduled rollback from 5.6
percent to 5.3 percent.
"At this time, I don't support that," said Tucker, who was
one of two Democratic senators who initially supported the tax cut pushed by the Republican administration. "I think we
should stay the course in rolling back the income tax and any changes should be the last
resort. Before we ask taxpayers for more, we ought to improve some efficiencies in state
government and root out patronage. There are better ways to deliver services and I
think now is the time to implement that."
Panagiotakos, who lobbied against the rollback last year,
said the voters spoke clearly. The measure was approved by 56 [sic-59] percent of the voters.
"It would be a point of last resort," Panagiotakos said.
"The voters did vote it in. Until we're in a real prolonged economic emergency, we would first see if we can make the
difference between cuts and the rainy day account. If that doesn't balance it, then this is something
we're going to have to consider."
Acting Gov. Jane Swift's budget chief detailed a plan last
week addressing the budget shortfall. Finance Secretary Stephen Crosby wants to take $300 million from the state's
stabilization -- "rainy day" -- account, $200 million from the annual tobacco trust fund
settlement, and cut $600 million from the budget.
Crosby said a delay in the tax cut is not an option. He said
two economists have advised Swift to stick with the schedule approved by voters. If the tax cut were delayed, it would
save $200 million for the state in 2002 but cost an average family of four $175.
But Crosby did admit that some programs may be axed to cut
spending. In 2003, the tax cut will take $400 million from the state's coffers. Crosby said that would make up just less than
one-quarter of the expected shortfall that year.
"It's material but it's not the issue," Crosby said. "This
administration believes it's better to leave the $175 where it is."
Creem said that $400 million is money that could enhance the
state's ability to deal with future public safety costs and the fiscal crisis, and maintain funding for education, health care,
housing and human services without dipping too far into reserves.
In a letter to colleagues seeking support for the legislation, Creem said the state must
respond to the new challenges.
"I understand that the voters of our state adopted the tax
rollback a year ago," she wrote. "We should always respect their views as expressed in approving ballot initiatives. But
we have a responsibility to adapt fiscal policy to current conditions."
Earlier this month, the Massachusetts High Tech Council
released a plan calling for the state to accelerate the timetable for the tax cut. The council says lowering it to 5
percent one year sooner would put $450 million into the state's economy.
The Salem Evening News
Monday, October 29, 2001
A strong dose of fiscal reality
Among the more encouraging missives we have received in
recent days was the following "urgent message" from the Massachusetts Libertarian Party:
"We need to collect 100,000 signatures to put our Libertarian initiative to end the income tax
in Massachusetts on the ballot," it declared. "We have 21 days left to collect
the last 32,989 signatures."
"But we have a huge problem," it continued. "By Tuesday,
October 30th, our paid petitioners will turn in another 10,000 petition signatures. We have $403.14 in the bank. We can't pay
our professional petitioners on Tuesday -- unless you help. If we don't pay them, they'll quit.
"We may fail if you don't help right now," it concludes. "We
may have to close the doors if you don't help."
Like President George W. Bush and the Republican majority in
the House of Representatives, the Libertarians don't seem to realize that the boom times are over and at a
time of national emergency such as the one we are currently facing, Americans
fully expect that sacrifice -- including the monetary kind -- will be necessary to keep our government and
our defenses up and running.
Neither Alan Greenspan's interest rate cuts nor the
GOP-inspired tax policies (the latter helps the rich much more than the rest of us, but then the theory is that the benefits
are supposed to "trickle" down eventually) have succeeded in reviving an economy that was in
serious trouble even before the events of Sept. 11.
Unlike the federal government, however, which can simply
print more money when it needs it, the state will shortly face the consequences of a serious cash shortage. Forget about
eliminating the income tax; there is now a good argument to be made for delaying the second
phase of the income tax endorsed by voters last fall, as well as spending down the "rainy
day" fund and diverting money from the tobacco settlement to pay the state's rapidly
escalating Medicaid and other health-related expenses.
We are in for a tough stretch, and the consequences of the
precipitous decline in state revenues -- estimated at $1.1 billion for the 2002 fiscal year that began July 1, $1.7
billion for fiscal 2003 and $2.2 billion for fiscal 2004 -- will soon be felt at the local level. And the
impact will be more akin to a deluge than a trickle.
Gov. Jane Swift and legislative leaders agree that belts
must be tightened. Veteran state Sen. Fred Berry, D-Peabody, observed Friday that the delay in crafting a budget for the
current fiscal year -- something for which House Speaker Tom Finneran and Senate President Tom
Birmingham have come under severe criticism -- may actually prove to be "fortuitous,"
since the amount the state anticipated having available to spend is much less today that it was back
in June when those discussions began.
Yet there are some areas, Berry noted, public safety being
foremost among them, where the state simply can't cut back. In fact, he noted, the bill for State Police overtime since Sept.
11 has been running at $500,000 a month. And is there anyone out there today who thinks
those security concerns are going to lessen anytime soon?
So the news that the Libertarian Party's ill-advised effort
to eliminate the state's most progressive tax [is in trouble] is very much
welcome here. Voters couldn't resist the urge to give themselves a tax cut last November. Perhaps they've come to
recognize that a referendum vote is a poor method of enacting tax policy, given the vagaries of the economy; certainly they
realize that an income tax of some sort is the best and fairest way of funding those government services
for which we're especially appreciative now that the terrorists are at the