CITIZENS   FOR  LIMITED  TAXATION  &  GOVERNMENT
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Wednesday, May 15, 2002

Excise tax hike killed


House lawmakers yesterday shot down House Speaker Thomas M. Finneran's attempts to jack up the auto excise tax.

Finneran's top lieutenants pushed the plan to tack $5 onto the current excise tax of $25 per $1,000 of valuation, arguing it would be an easy way for locals to raise more money.

But rank-and-file members balked at hiking what's widely regarded as the most hated tax in the state, snubbing the proposal on a lopsided 35-119 vote.

The Boston Herald
May 15, 2002
House puts brakes on excise tax hike


The freeze doesn't hit the weekly paycheck, therefore take-home pay remains the same and it is, just as if there had been no tax hike. It is easy to forget that the rollback does halt the phased-out rate reductions that had been approved by voters.

The House package was carefully crafted to hide the seizing of the taxpayers' dollars until filing time comes around again. By then an election will have passed and any protests next spring at tax time will be easily deflected on Beacon Hill....

This reveals once again the inability of legislators to control themselves when there is an opportunity to spend money. It explains in part why the state budget has been climbing steadily, from $12 billion in 1991 to $23 billion in this fiscal year. Education reform accounts for a large share of this hike. But factored in as well is self-interest spending. It is this that will stir the wrath of taxpayers again -- just as soon as they find out about it.

Which is always too late, of course.

A Taunton Gazette Editorial
May 15, 2002
Self-interest still guides many legislators


Insider politicians tend to have too little appreciation for the disdain with which most voters view state government. That attitude is rooted in the perception that for every hard working state employee doing an important job, there's someone with political connections taking home a fat check without having earned it.

A MetroWest Daily News editorial
May 15, 2002
Close the state trough


The state budget crisis that House lawmakers are grappling with doesn't have to be a crisis at all.

The right people simply have to ask: How do you think creatively when the dilemma calls for creative solutions?

But if you're part of the power structure on Beacon Hill, it's not exactly second nature.

The Boston Herald
May 15, 2002
It's time to budge on budget
by Cosmo Macero Jr.


The Boston Herald
Wednesday, May 15, 2002

House puts brakes on excise tax hike
by Elisabeth J. Beardsley

House lawmakers yesterday shot down House Speaker Thomas M. Finneran's attempts to jack up the auto excise tax.

Finneran's top lieutenants pushed the plan to tack $5 onto the current excise tax of $25 per $1,000 of valuation, arguing it would be an easy way for locals to raise more money.

But rank-and-file members balked at hiking what's widely regarded as the most hated tax in the state, snubbing the proposal on a lopsided 35-119 vote. "I don't want it to be easy for the local cities and towns to increase the car excise tax," said Rep. Scott P. Brown (R-Wrentham). "I want to make it difficult. That's the proper check and balance."

House Taxation Committee Chairman Paul C. Casey (D-Winchester), Finneran's tax-carrier, lectured members at length on the merits of consistency, saying they had just voted to allow cities and towns the option of giving more tax relief to seniors. "Be consistent," Casey said. "Be honest."

The auto excise tax has been limited for 21 years, since voters approved the landmark Proposition 2, which also restricted property tax hikes. Several budget amendments to undo Proposition 2 came up for debate yesterday -- and all were resoundingly defeated.

Rank-and-file members also torpedoed an attempt by Finneran's leadership team to ratchet up the meals tax by another 1 percent, putting it down on a 38-106 vote.

House Republicans and many moderate Democrats expressed disgust at the appetite for new taxes, less than two weeks after the House OK'd a massive $1.065 billion hike package. "Taxing and spending is alive and well," said Minority Leader Francis L. Marini (R-Hanson). "What next? Shall we tax catnaps?"

On the spending side, the House yesterday restored $86 million to public safety programs.

But large cuts are still inflicted on at-risk youth services, sheriffs, prisons, the Parole Board and the Registry of Motor Vehicles.

Nevertheless, lawmakers managed to protect and even enhance one of their favorite pieces of pork -- $2.3 million for special state police patrols at beaches and shopping malls.

Lawmakers also added another $73 million back into education accounts, on top of the $321 million restored Monday night.

The House has blown through over $700 million of the $1.065 billion tax-hike package, which could put the budget in the red after Monday's revelation that tax receipts plunged another $400 million.

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The Taunton Gazette
Wednesday, May 15, 2002

A Gazette Editorial
Self-interest still guides many legislators

Perhaps it is because "Taxachusetts" is associated with Michael S. Dukakis, and the so-called "Miracle" was a few years ago, but whatever the reason, the massive tax hikes making their way through the Legislature have produced few howls of protests from taxpayers.

It is strange when the only criticism of the tax plan passed by the House and sent to the Senate comes from editorial writers who in the past always could count on fired up taxpayers at least telephoning their legislators if not marching on Beacon Hill.

Either Massachusetts taxpayers have suddenly become passive or they accept the reasoning that it is better to pay more than it is to cut human services and educational funding. Or it could be that the effects of the $1 billion tax cut won't be felt immediately by working men and women.

There is much in the House tax package that will come due next April. Reducing the personal exemptions, for instance, and freezing the income tax at 5.6 percent rather than going along with the phased-in reductions approved by voters.

The freeze doesn't hit the weekly paycheck, therefore take-home pay remains the same and it is, just as if there had been no tax hike. It is easy to forget that the rollback does halt the phased-out rate reductions that had been approved by voters.

The House package was carefully crafted to hide the seizing of the taxpayers' dollars until filing time comes around again. By then an election will have passed and any protests next spring at tax time will be easily deflected on Beacon Hill.

The utter disregard of the budget crisis that has been accepted as fact by taxpayers was exemplified by House members stepping forward with hundreds of budget amendments that would channel the new revenue into their favorite projects. The plan was to assign the bulk of that revenue to education, local aid, and human services, but more than 1,000 amendments were filed immediately for a share of what would be left.

This reveals once again the inability of legislators to control themselves when there is an opportunity to spend money. It explains in part why the state budget has been climbing steadily, from $12 billion in 1991 to $23 billion in this fiscal year. Education reform accounts for a large share of this hike. But factored in as well is self-interest spending. It is this that will stir the wrath of taxpayers again -- just as soon as they find out about it.

Which is always too late, of course.

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The MetroWest Daily News
Wednesday, May 15, 2002

Editorial
Close the state trough

Almost six months ago, the Carter Commission found a familiar culprit in the lax security at Logan Airport on September 11: The culture of political patronage at Massport and throughout state government. 

"In the post Sept. 11th world, patronage cannot be tolerated as the most expedient means to an end," the report said. "It is a misuse of scarce resources. It is a gross abuse of the public trust. Massport cannot afford to pay the high price of patronage any more."

With state government facing a deepening fiscal crisis, those words are more true now than ever. But we've seen no concerted effort to tame the patronage culture. Acting Gov. Jane Swift embraced the Carter Commission report, but followed through on few of its recommendations. The budget now being debated in the House would raise taxes and cut programs, but includes no assault on the patronage havens legislators created to take care of their friends.

Nor have we heard much from the candidates for governor about battling the "four-headed monster" described by the Carter Commission. The exception is Democrat Robert Reich, who tackled the topic in a speech in Boston last week. Among his proposals for dealing with what he calls state government's "profound, pervasive, ongoing tolerance of the trough":

  • Reform the state pension system, eliminating the sweetheart deals designed to enrich politicians and their cronies.

  • Reform the state's creaky civil service system.

  • Ban political contributions from lobbyists. Contributions are now limited to $200, but there are hundreds of registered lobbyists -- most of whom will be on hand tonight at Speaker Tom Finneran's annual budget week fundraiser at Anthony's Pier 4 -- whose contributions add up to more than enough to corrupt the legislative process.

  • Prohibit the long-standing practice of pressuring state employees to donate to the campaigns of the people they work under.

  • Double, to two years, the amount of time state employees must wait before becoming lobbyists.

  • Create an "Anti-Patronage Strike Force," to be given 90 days to root out and eliminate no-show and make-work jobs in state government.

  • Require monthly "sunshine reports"  -- a Carter Commission recommendation --  making public every request made by a politician for the hiring of a friend or the creation of a job.

  • * Sell the Hynes Convention Center, a patronage playpen since the day it was built.

Insider politicians tend to have too little appreciation for the disdain with which most voters view state government. That attitude is rooted in the perception that for every hard working state employee doing an important job, there's someone with political connections taking home a fat check without having earned it.

That perception may be exaggerated and unfair. But it's a perception anyone who hopes to lead the Commonwealth should address head-on, with concrete proposals to rein in the patronage culture.

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The Boston Herald
Wednesday, May 15, 2002

It's time to budge on budget
by Cosmo Macero Jr.

The answers are out there, sprinkled haphazardly in different corners of our economic and political reality.

The state budget crisis that House lawmakers are grappling with doesn't have to be a crisis at all.

The right people simply have to ask: How do you think creatively when the dilemma calls for creative solutions?

But if you're part of the power structure on Beacon Hill, it's not exactly second nature.

And that's too bad.

Example 1: Like most anything else offered up by GOP lawmakers these days, Rep. John Locke's plan to sell two MDC-owned golf courses landed with a thud last week.

"Why are we in the business of running golf courses when we're cutting money for breast-cancer research?" the Wellesley Republican told the MetroWest Daily News.

Good question. And it goes to the heart of a much bigger issue.

State lawmakers are loath to part with any of the hundreds of millions of dollars worth of capital assets that Massachusetts has accumulated over the years.

"I think that would be like cutting our nose off to spite our face," House Speaker Thomas M. Finneran said recently.

Yet maintaining a tight grasp on so many office buildings, parking lots and land holdings does little to serve the core mission of state government.

For instance, if we are hellbent on building the white elephant that is the South Boston convention center, then the state's Hynes meeting hall should be put up for sale now. Tell me Ed Linde and Mort Zuckerman wouldn't jump at the chance to control another piece of prime Boylston Street turf?

A temporary (two years?) lease-back agreement in the RFP would allow convention and trade show operations to continue until the Southie hall is up and running.

And that should only be the starting point of an exhaustive effort to get maximum value from the Bay State's capital assets. Sometimes, as in the case of money-losing golf courses or underused urban land, the answer is to let them go.

Example 2: Job cuts are an unpleasant symptom of economic downturns. But they have come to mean dramatically different things in the private and public sectors of Massachusetts.

In corporate Boston, the cuts have been coming strong for two years now -- a necessary evil in response to sagging profits; a valve on costs that was opened to flush out the excess when revenues could no longer support bulging payrolls.

"It is very difficult to let great people go, but in this economic environment it is imperative we take these actions," Sapient co-chairman Jerry Greenberg said in February, as the struggling software firm cut loose more than 500 people.

But mass dismissals in state government have become a political tool. Beacon Hill uses them to terrorize workers and social service advocates into supporting runaway taxes.

We're hearing plenty about pending job cuts now, when lawmakers are pushing a menu of tax hikes not seen here in more than a decade.

But how come the valve was never opened in any significant way over the past 36 months?

Consider: Not including the courts, a paltry 32 jobs were trimmed from the state payroll in 2001 -- a year filled with economic turmoil. The federal Bureau of Labor Statistics reports that nearly 37,000 lost jobs across all industries last year.

In 2000, just 26 nonjudicial state jobs were cut, while the Massachusetts work force as a whole lost nearly 28,000 jobs -- including 373 in agriculture, 9,128 in manufacturing, 758 in construction and 1,764 in retail.

Already in 2002, according to the Executive Office of Administration & Finance, more than 500 nonjudicial state jobs have been eliminated * with all the requisite fear mongering and obligatory protests. But it's too late. State government is two years behind in adjusting to the economy.

Example 3: Here's where House lawmakers get a little credit.

Finneran's tax-heavy budget plan was unveiled last month alongside a pledge to create an independent panel to make periodic state revenue forecasts.

It's a good idea aimed at solving an awful problem -- competing revenue estimates prepared by the governor's office and legislative budget writers are often comically different.

Blame this gross political process -- the governor's estimates are often designed solely to support executive branch budget priorities -- for the aforementioned failure of state government to adjust to economic change.

"It's time to get the politics out of revenue forecasting," says state Treasurer Shannon O'Brien, the leading Democratic candidate for governor.

O'Brien gets credit, too, because she has improved upon the House proposal.

Rather than drawing revenue predictors merely from the respective legislative and executive branches, O'Brien and running mate Chris Gabrieli would appoint top economists to a Revenue Forecast Council and hold public hearings on this dry-but-all-too-critical chore.

They also propose multiyear budget planning based on the RFC's consensus estimates. That may seem impossible for a Legislature that is chronically late getting its budget work done. But it's a worthwhile endeavor -- particularly if it helps stave off just one tax-hike frenzy.

These aren't all the answers. But they're evidence that a better solution is out there.

Because what's happening now is really no solution at all.

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