It's time to sit up a pay real close attention, folks. Up on Beacon
Hill the pols are scheming fast and furiously on devious ways to spend our money, and
every day a new plot is contrived to squander more of it.
Between it being pay-back time for the teachers union for spending
over a million bucks of its members' dues to kill our petition, an outright attempt to buy
off senior citizens and manipulate them against younger taxpayers, and an ambitious senate
president conspiring to use our money to set himself up for a run for governor, the
feeding frenzy is on and white hot.
When even the misnamed Massachusetts Taxpayers Foundation recognizes
the problem, you know it's a problem! According to an Associated Press report
"The conference committee is going to be a lulu," said
Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-backed
"There is no slack in either budget so the conferees will have
to go head-to-head on the major priorities," he said.
While the Senate Ways and Means budget was $20.83 billion, the House
budget, passed last month, added up to about $20.73 billion, a difference of about $100
million. Cellucci's budget was lower at $20.55 billion.
Widmer said the Senate's budget is higher than the others, both
because there is more to spend - revenue estimates have increased since the beginning of
the year - and because the Senate has proposed a smaller tax cut.
The budget signed last year was $19.53 billion.
"We're pushing the spending envelope," said Widmer.
"The budget is expanding at a rate that can't be supported long-term by normal
Yesterday CLT delivered the following memos to every member of the
Chip Ford --
A CLT Memo
To: Members of the General Court
Re: S.B. 1495 -- Senate President Birmingham's "Circuit Breaker" for
Senate President Thomas Birmingham desires to use our state tax
dollars to bribe senior citizens to vote to raise others' property taxes for new schools?
At the May 25th hearing on his bill "to provide assistance to
low and moderate income elderly property taxpayers," he addressed seniors who were
present. He expressed concern about property taxes that are forcing them to leave their
communities. In a reference to overrides of Proposition 2½, he stated sympathetically,
"you are not in a position to make a fair, rational assessment of proposals to
So he offered them cash: Their own if they still pay income taxes;
someone else's if they don't.
It's true that senior citizens were the strongest supporters of
Proposition 2½ and are property taxpayers' first line of defense against overrides that
go too far. While seniors are often accused of voting against education, they might well
define education differently than those who settle for mediocrity and failure in return
for increased funds.
Many senior citizens simply cannot afford higher property taxes. This
was one of the primary reasons why we offered Prop 2½ relief almost 20 years ago and have
applauded the Legislature's support of that initiative law.
Not all were supportive, however. We've been suspicious of the
circuit-breaker concept because it was initiated by those who opposed Prop 2 ½. One of
the sponsors of S.B. 1495, Sen. Magnani, often voted for changes in Prop 2½ that would
have made the property tax burden far worse for senior citizens.
Sen. Birmingham has not attacked Prop 2½ so we accept that his
concern for seniors is genuine. However, seniors would be unwise to trust politicians.
Politicians have admittedly broken the promise of a past Legislature on the income tax
rate and can as easily break a promise about a "circuit breaker."
If seniors stop voting against overrides, their and their neighbors'
property taxes will increase indefinitely, while the circuit breaker could be repealed by
future legislators who, legislators themselves tell us, cannot be bound by a promise of an
We also fear for the next tier of property taxpayers: without the
protection of senior votes against overrides, they might see their taxes become even less
affordable. Low and moderate income homeowners, who must pay not only taxes but mortgages
and student loans while caring for elderly parents and saving for their children's college
tuition, also are hurt by overrides.
The income tax rollback will help all taxpayers with these costs.
Once that promise has been kept, the next tax cut could include a circuit breaker. Better
yet, we could use the property tax to fund only property-related expenditures, and use
existing broad-based state taxes to fund education vouchers. This would really help senior
citizens, if that is in fact your goal.
A CLT Memo
To: Members of the General Court
Re: Senate Alleged Tax Cut Package
1. Circuit Breaker Tax Credit
Purpose: Bribe senior citizens who are burdened by property
taxes to vote for Proposition 2½ overrides.
Impact: If seniors, believing that the Legislature can be
trusted, stay at home for override elections, they could pay higher property taxes until
they lose their home or die, while their circuit breaker goes the way of the income tax
rollback and capital gains tax phase-out, i.e., another broken promise. And, low and
moderate-income younger taxpayers get hit with higher property taxes too.
2. Increase Rental Deduction
Purpose: Partially adjust the rental deduction, created by
Proposition 2 1/2, to inflation. Good idea.
Impact: Would help renters save toward a down-payment on a
house that becomes increasingly unaffordable as property taxes increase with overrides
(see item 1).
3. Capital Gains Tax Increase
Purpose: To increase the capital gains rate that was phased-out
in return for a legislative pay-raise in late 1994.
Impact: Proves to the business community that the Legislature
cannot be trusted to keep its side of a deal, while reiterating to all citizens that the
Legislature cannot be trusted to keep its word.
4. Repeal of Pay to Play Provision
Purpose: States that the taxpayer is innocent until proven
Impact: About time.
5. Enhance Earned Income Tax Credit
Purpose: Give a "tax cut" to people, many of whom
don't pay taxes.
Impact: Back-door welfare check, using money stolen from real
6. All Deductions
Purpose: Minor tax cut substitute for keeping the Legislature's
word on major income tax rollback for all taxpayers.
Impact: Governor puts real tax cut on Year 2000
The Boston Globe
Friday, June 4, 1999
Senate budget pleases some, irks Cellucci
By Tina Cassidy, Globe Staff
The Senate released a record $20.8 billion spending plan yesterday
with big increases in education and health care funding, but without the kind of
broad-based tax cuts sought by both the House and Governor Paul Cellucci.
The budget drew immediate praise from the AARP, the Massachusetts
Teachers Association, and other groups that would benefit from the freer spending, but it
was criticized by fiscal watchdogs and Cellucci, who said such outlays could not be
sustained in future years.
Cellucci has already threatened to veto a section that would freeze
the cut in the capital gains tax before it is fully phased out, for investments held at
least six years.
"Since Jane Swift and I sent over the budget it seems to be
growing significantly," Cellucci said, referring to the spending plan he and his
lieutenant governor submitted in January. "Geez, what does that sound like? It sounds
like the late 1980s. I think we've learned from that period that that's not the way to go.
I'm a little bit concerned."
Others said a budget offering all things to all people may be a way
for Senate President Thomas F. Birmingham to gather support for a possible gubernatorial
bid, courting key constituencies like the education establishment and the elderly.
"This budget looks more like a campaign document than a
blueprint for responsible spending in the 21st century," said House Ways and Means
chairman Paul Haley, a Weymouth Democrat.
"There does seem to be something in there
for everybody," said Chip Ford of Citizens for
Limited Taxation and Government, a group fighting
for the rollback of the income tax rate from 5.95 percent to 5 percent, something
Birmingham, a Democrat from Chelsea, opposes.
"I don't see this so much as political," Birmingham said.
As for a tax cut, "That's the politically easy course to take."
The Senate budget, for the fiscal year that begins July 1, is
ideologically removed from the $20.7 billion House plan, which emphasizes capital
improvements over new spending programs, and Cellucci's $20.4 billion outline focusing on
a tax cut.
Education is the centerpiece of the Senate budget, allocating $140
million more than the House plan would for everything from early childhood programs to
state college scholarships.
The budget would raise the per-pupil expenditure to $150 statewide,
up from $125, for nearly 1 million students.
The budget would fund MCAS remediation cut by the House and would
increase spending for school nutrition, after-school programs, and libraries. The Senate
plan would be generous toward higher education, offering the University of Massachusetts a
$40 million increase. And it would provide a new scholarship plan that would enable those
families making less than $32,000 a year to go to a state college for free; those earning
slightly more could go for as little as $1,000 a year.
Although the Senate plan does include tax cuts, they are mostly
targeted toward the elderly, specifically, $50 million in property tax relief for seniors.
The budget proposal also recommends an increase in the deduction for renters from $2,500
to $3,500, and making interest paid on student loans fully deductible.
Unlike the House, the Senate did not propose sweeping changes in
funding for the Massachusetts Bay Transportation Authority, or fare increases.
Meanwhile, Cellucci and state Treasurer Shannon O'Brien unveiled a
joint legislative proposal to use $275 million of the expected surplus this fiscal year to
pay off high-interest state bonds and issue lower interest notes.
Cellucci and O'Brien said the newly borrowed funds would be used to
finance highway and bridge projects around the state.
Frank Phillips of the Globe Staff contributed to this report
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