The Boston Globe
Wednesday, January 6, 1998
For Cellucci, an uphill battle from here
By Brian C. Mooney
[ . . . ]
A tax cut of any significance may also be beyond Cellucci's grasp, despite brimming state
revenues and the likelihood of a budget surplus this fiscal year. The Massachusetts
Taxpayers Foundation now projects the state will be in the black, $300 million to $500
million, by June 30. The surplus should be used to pay capital costs now cannibalized by
long-term borrowing for the $10.8 billion Central Artery/Ted Williams Tunnel project,
Michael Widmer, president of the business-backed watchdog group, said this week. Highway
and other building projects are being sacrificed to the Big Dig's demands, Widmer said.
"We think we need to solve the capital problem first," Widmer said.
In a recent interview, Finneran, a hawk
on debt and capital spending, agreed with Widmer. That spells trouble for a Cellucci tax
cut, which would cost $230 million in the first year of a three-year phase-in and $1.2
billion fully implemented.
Of course, all of this presumes the
continuing hum of the economy, now generating revenues 5.6 percent above budget
projections. Cellucci's own budget writers, however, say last year's $1 billion in tax
cuts will produce record refunds this spring, and they see a cooling economy through the
year 2000. They also envision a budget surplus near the low end of the taxpayers'
foundation range. That would be enough to offset year one of the governor's tax-cut
proposal, but not much else.
Moreover, the faint hint of an economic sputter may have sounded this week. On Monday,
Cellucci's Department of Revenue reported record December tax revenues but with one
exception: Sales and use tax collections actually dipped 1.7 percent compared to the prior
December, reflecting a drop in consumer spending. Not a good sign.
[ . . . ]
A BOSTON GLOBE EDITORIAL
Wednesday, January 6, 1998
Using the surplus wisely
A strong economy in Massachusetts has
yielded unexpectedly high tax revenues and produced a sense of fiscal euphoria. That
should not exempt the state from its obligation to plan for the future. Governor Cellucci
wants to cut personal income tax rates from 5.9 percent to 5 percent over time - and a
case can be made for judicious moves in that direction - but other pressing needs deserve
Looming large among these is a hefty
backlog of capitalprojects, many of them overshadowed by the hugeCentral Artery
reconstruction but still vital to local needs.
Transportation dominates capital
projects, but many communities also need new school construction as enrollments rise. Many
courthouses and jails are a disgrace and impede the orderly functioning of justice. In
all, more than $7 billion in capital projects authorized by the Legislature remain
unfunded because they would put the state over its $900 million borrowing cap.
Paying for some of these projects out of
general revenues would justify increased borrowing in the future if the economy took a
downturn and state revenues slowed. The state cannot constitutionally run an operating
budget deficit, but prudent spending on capital projects to help stimulate the economy
would provide a real boost without inflicting any immediate burden on taxpayers. Likewise,
an increase in the state's gasoline tax, currently 21 cents a gallon, would take the
pressure off general revenues and help fund badly needed transportation projects. We can
support a reduction in the state's income tax rate, but not before the Commonwealth's
needs are met.
Capital projects, unlike operating
budgets, are one-time charges that do not commit the state to programs far into the
future. They are prudent and appropriate uses of budget windfalls.
A Boston Herald editorial
Tuesday, January 5, 1999
It's Cellucci's turn to use bully pulpit
The real Cellucci administration - not
the "acting" one - officially gets to move into the State House Thursday, and a
somewhat jaded and skeptical public is looking for a reason to cheer.
It takes a lot to capture the public
imagination these days (not everyone can be a former pro wrestler). And following a
governor noted for both his top-notch intellect and his quirkiness (Yes, we will miss the
armadillo and the Charles River dives.) is not an easy job.
But Paul Cellucci has more than a few
things going for him. He is, after all, a creature of the Legislature and when
itcomes to dealing with an overwhelmingly Democratic House and Senate, this isn't a bad
thing. And he is your basic middle-class guy, putting two kids through college and coping
with some rather well-publicized debts - pretty much like most of his constituents.
So with the bully pulpit of the
governorship at his disposal, Paul Cellucci has a real opportunity this week to speak to
and to speak up for that overburdened class of citizens who just want a little more
paycheck left at the end of their week. We know that too many of this state's young wage
earners are leaving for places where the cost of living - including the tax burden - is
lower. It's time to stop this brain drain by lowering that cost of living.
Department of Revenue officials
confirmed yesterday that state tax collections grew 8.9 percent in the first six months of
the fiscal year that began last July 1. During the same period last year collections had
grown 6.6 percent and even that figure had state coffers filled to overflowing.
The Massachusetts Taxpayers Foundation
is already projecting a surplus for this fiscal year of $300 million to $500 million.
So before the let's-spend-it-all crowd
in the Legislature gets a chance to have it, the governor's top priority must be to
fulfill his campaign pledge of a cut in the income tax from 5.95 percent to 5 percent. The
spending cap suggested by Harvard economist Martin Feldstein is a fine idea, but nothing
compares to taking revenue off the table and putting it back in the pockets of those who
earned it. And nothing is fairer, either.
We look forward to hearing the new
governor's vision of state government, of how it can become more business-friendly. A cut
in unemployment insurance costs (that's another fund full to overflowing) and abandoning
the state's onerous pay-to-play tax appeal system (one of the few such systems in the
nation) would be a good start. And a real budget planning process that looks beyond the
current year is also much to be admired.
But nothing can match the dramatic
appeal - and the good sense - of an income tax cut. It won't happen, however, without a
direct appeal to the public. This is the time to make that appeal.