and the
Citizens Economic Research Foundation

Barbara's Column
April #4

Tax rollback is about respect
by Barbara Anderson

The Salem News
Thursday, April 20, 2006

So there I was, again, standing with the rare Beacon Hill taxpayer ally, calling for the income tax to be returned to 5 percent. This time the press conference was called by Lt. Governor Kerry Healey and her running mate, Reed Hillman. In the past, the taxpayer friends were Governors Bill Weld, Paul Cellucci and Mitt Romney. The timing usually coincides with the onset of the state budget debate, when Republican legislators attempt amendments to include the income tax rollback.

When I first met Reed Hillman, in 1999, he was running for state representative; his platform included a commitment to repealing the "temporary" tax. I recall running into Kerry Healey the next year, when I was in Beverly to debate the rollback that was on the November ballot. She had helped collect signatures on the initiative petition and was standing outside the debate venue with other taxpayer activists.

Taxpayers won the debate, 59 percent to 41 percent. Voters gave the Legislature three years to phase down the rate from 5.75 to 5 percent. In 2002, it was frozen at 5.3 percent "until the economy improves." And now it is three years later. Next week, the House begins to debate a budget that will increase by over $2 billion, and Republican legislators will attempt a rollback amendment, again.

The time is right. As Kerry Healey said at the news conference, state revenues continue to be strong; the most recent projections indicate a budget surplus (again) of more than $1 billion. The state's rainy day fund is at record levels; the current balance is more than $1.7 billion and may top off this year at more than $2.5 billion.

She noted opponents of the rollback proposed more than $1 billion in new spending in just one day last year during a supplemental budget debate, and suggested instead a commitment to fiscal discipline and low, predictable and stable tax rates to improve the commonwealth's competitive position.

Reed Hillman said during his three terms in the state Legislature he saw firsthand how the scramble for taxpayer dollars unfolds: "It's not pretty, folks." He described being at the Statehouse when a "feeding frenzy" breaks out, and said he never got used to watching elected officials pursue their pet projects with single-minded focus. He wondered what could be accomplished if they used the same amount of energy to identify cost savings as they do for pork-barrel spending.

I think that's much of the point. It's easy to avoid long-term solutions to anything important when there's plenty of our money to patch the holes in government efficacy. Sooner or later, the patches fall off, and another tax hike is necessary to fill the gaps.

The so-called Mass. Taxpayers Foundation, "big business" enemy of the rollback, says that "while revenues are improving, the demand for spending increases or an income tax cut greatly exceeds the state's fiscal capacity." The reality is, the Legislature will either give us our tax cut or it will use the money to spend us into another fiscal crisis, ignoring any suggestions for more efficient government that might save us in the long run.

After the Healey-Hillman news conference, a veteran reporter wondered aloud how many news conferences he had attended on the subject. The implication was, I believe, that it's time to give up.

The problem is, we won't be giving up only on a tax rollback. We'll be giving up any residual respect politicians may still have for the voters.

In 1989, Michael Dukakis and legislative leaders wanted a tax hike. Because there were many conservative Democrats as well as Republicans at the time, they didn't have the votes. The public was angry that Dukakis spent the state into fiscal crisis during his presidential run. In order to get past this, Dukakis and his legislative allies promised the tax hike would last "only 18 months." It's been 17 years now.

If we give up, we say it's OK to lie to us. It's OK to ignore direct orders from voters on a ballot question. Instead of the income tax rolling back, we voters get rolled, again.

The money from the tax cut isn't a significant amount. The message is huge. When we give up the 5 percent income tax rate, we give up the initiative petition process and any hope of being respected by our elected representatives. They think we are too busy watching reality television to pay attention to the reality of our own government. They think they can do anything they want and still get re-elected.

We always have a choice: To stand up for ourselves, or give up on our state government. I know many citizens have already given up. Yet two of the three Democrats running for Governor, Chris Gabrielli and Tom Reilly, have finally expressed support for the rollback after opposing it for years. The former Senate president, Tom Birmingham, who presided over the "freezing of the rate" in 2002, has said it is time to honor the will of the voters.

Next week, we'll see if House Democrats agree.


Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem News, Newburyport Times, Gloucester Times, (Lawrence) Eagle-Tribune, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence Journal and other newspapers.