The Patriot Ledger
Wednesday, April 21, 1999
Return to 5% income tax long overdue
By Ingrid Shaffer
(Quincy) Patriot Ledger columnist
"Since a politician never believes what he says, he is surprised when
others believe him."
-- Charles DeGaulle
Every parent's heard it -- "And, anyway, I never said I'd wash the dishes
every night!" -- or some such weak defense from the child whose allowance we raised
on the good-faith promise of extra work, but who now doesn't wish to deliver. Memory grows
dim -- and the pleas loud -- once the money's been spent, but the best parents accept no
We shouldn't, as taxpayers, either. Three recently filed Senate bills to reduce
the state income tax from 5.95 percent to 5 percent -- either by 2000 or in a three-year
phase-in have produced enough crocodile tears pouring from the State House down
Beacon Street to return the Back Bay to a swamp.
Thomas Birmingham cries that a tax cut would cause a dip in education, health care and
public safety money. Others wail that Gov. Paul Cellucci's militant
support for the rollback is "fiscally irresponsible" despite the windfall
tobacco settlement coming to Massachusetts, along with this year's anticipated record
budget surplus of $300 million to $600 million -- money that will more than cover
And now, the latest chutzpah: Though the Legislature raised the income tax from 5
percent to 5.75 percent in 1989 in order to plug a temporary budget deficit, which has
long since evaporated, politicians such as Rep. John Rogers,
D-Norwood, are claiming the "promise (to return the rate to 5 percent) never
existed." Oh. I must have imagined the following account of the 1989 tax hike
published in The Boston Globe that summer: "The Massachusetts House gave ... approval
to a temporary 15 percent increase in the state income tax ... for an 18-month
In fact, every major news source at the time touted the tax increase as temporary,
as voters like me who were about 10 years old know. But truth can be stretched -- or
dodged -- in the politicians' elastic world. Pressed on the issue of the Legislature's
original intentions at the March 31 Taxation Committee hearing on
the tax reduction bills, Rep.
John Slattery, D-Peabody, punted: "Well, I didn't make that promise. We can't go
back to that promise because it's a whole different time."
How convenient that Slattery and so many of our reps weren't around when earlier
lawmakers floated those bonds to cover the Dukakis budget shortfall with our bailout tax
money. Now those bonds are paid off and the fiscal crisis is over, but the pols have
bailed out, leaving their followers to collect the extra tax revenue, but not the blame.
Well, most followers. One exception is Sen. Robert Hedlund,
R-Weymouth, co-sponsor and leading proponent of the three rollback bills now being
considered. He doesn't buy the no-blame-game semantics of the anti-rollback faction. He
says lawmakers have a moral obligation to live up to the representations made by their
predecessors. "The Legislature may not be legally bound by the promises of past
Legislatures, but I do think we are morally bound to acknowledge that this (tax hike of
1989) was of a temporary nature," Hedlund told me recently.
He saved special outrage, however, for Massachusetts' handling of the
stabilization fund, the "rainy day" money gleaned from tax revenue surpluses
that are set aside by the state for fiscal emergencies. Originally capped at $585 million
-- an amount believed sufficient to cover an economic downturn -- the excess was to revert
to the Taxpayer Reduction Fund and trigger a tax break for you and me. But it never
happened because lawmakers "don't want to take taxpayer money out of the pipeline and
send it back to the people," said Hedlund.
Instead, he said, the Legislature, "unconscionably and without economic
justification" raised the cap on the rainy day fund to $950 million in 1997, and
again to $1.4 billion in 1998, which eliminated automatic tax reductions of $365 million
and $475 million, respectively. "This was a disgrace," Hedlund stated, noting
that this year's doubling of the personal tax exemption, which will return just $443
million to taxpayers, will ironically bring less tax relief than if our lawmakers had just
honored the last cap on the rainy day fund.
Less tax relief and more mischief, it seems. Thirty-two states set aside emergency
funds, a few even approaching $500 million, but Massachusetts maintains a $1.4 billion
Most states have "strict guidelines about how stabilization funds are
managed," Hedlund said. Such safeguards typically include "demonstrating
economic need, or at least requiring lawmakers to obtain a two-thirds majority" in
order to spend or add money to rainy day funds. He noted that Massachusetts holds no
public hearings on such proposals, requiring "only a simple appropriation" to
tamper with this enormous pool of money. "This makes (the rainy day account) a slush
fund for the legislative leadership."
That's why Hedlund's most sensible proposal might be Senate bill 1526, which
rightfully -- and by statute -- limits the amount of the rainy day fund to 7.5 percent of
all revenue. For each year that cap is reached, taxes decline by about a quarter percent,
until we're back to a 5 percent income tax rate after three years of defined state
It's also best in line with House Speaker Thomas Finneran's recent public support
for a possible immediate reduction to 5.75 percent. "What the (legislative)
leadership wants, usually goes," Hedlund said.
Always? Or do the people have a say in the matter of tax cuts? I asked. "Oh,
they certainly do," Hedlund replied, "so if you want to be heard, call your
legislators" before the budget debates in June.
Ingrid Shaffer lives in Quincy. She can be reached by E-mail at