The Boston Herald
Sunday, January 12, 2003
Backtrack:
Romney opens door to local tax, fee hikes
by Elisabeth J. Beardsley
Gov. Mitt Romney threw open the door to local tax hikes
yesterday and added he would "aggressively" seek to raise fees on state-level services -
sparking accusations that he's abandoning his no-new-taxes campaign pledge in the face
of a giant fiscal crisis.
Romney said Lt. Gov. Kerry Healey would be collecting
budget-balancing ideas from local officials, and that local tax increases are already squarely on the
radar screen.
"That's certainly one of the items that will be fully vetted
and considered," Romney said. "We'll be reviewing that and considering under what
circumstances proposals of that nature would make sense." The comments
mark a drastic departure for Romney, who has drawn a stark line in the sand
over statewide levies like the income tax.
Romney's shift also comes one day after he enraged mayors
statewide by announcing he would cut local aid by $200 million if the Legislature grants him
expanded budget-cutting powers.
Boston Mayor Thomas Menino, who was out front bashing
Romney's local aid proposal, noticeably softened his rhetoric yesterday and praised Romney for
being "open-minded" to new taxes.
"I think that's a good sign," Menino told the Herald. "He
knows he can't get through this crisis by just cutting and cutting."
The mayor has filed a legislative package that would raise
$85 million for the city by jacking up eight different taxes - including a 50-cent surcharge on
tickets to movies, concerts and sports events.
The legislation would also allow all cities and towns - not
just Boston - to tack a 10 percent tax onto parking fees, and slap a personal property tax onto
telecommunication companies' equipment.
Menino said he would focus on a bill to allow cities and
towns to add 1 percent on the meals tax, which now stands at a statewide 5 percent - down from its
high water mark of 8 percent in 1986.
The meals tax hike was on the verge of passage last year -
but former acting Gov. Jane Swift spiked it with a veto threat.
"I'm not asking for all eight," Menino said. "Give us the
tools to help ourselves."
Anti-tax crusaders reacted viscerally to Romney's sudden tax
squishiness, warning that he's treading the fine line of broken promises less than two weeks
into his tenure as governor.
Imposing new taxes on people who can't vote on them amounts
to "taxation without representation," said Citizens for Limited Taxation chief
Barbara Anderson.
"Sorry, governor, but yes, these are new taxes," Anderson
said. "They would be a violation of the (no-new-taxes) pledge and they would have to be vetoed."
Fiscal watchdogs also struck a wary stance.
Massachusetts Taxpayers Foundation President Michael Widmer
said Menino's parking tax would be "reasonable," given that the city has historically
been "limited" in its ability to raise revenue.
But Widmer warned against giving cities and towns "absolute"
taxation powers, which he said could spark a tax stampede.
"It's probably important to be careful about how widely the
door's opened," Widmer said.
Romney also announced he's "vigilantly" canvassing for fees
that could be hiked as an alternative to harrowing program cuts.
Romney declined to say which fees he's eyeing, but said he
would target any that are "below the cost of providing those services."
"We will move aggressively to bolster additional fee revenue
as quickly as we can to generate additional revenue," Romney said.
Driver's license and vehicle registration fees were just
ratcheted up in October, and lawmakers last year sprinkled $80 million worth of statewide fee hikes
throughout the budget.
The tax-and-fee talk came as Romney called an unusual
Saturday event to bolster his case for expanded budget-cutting powers.
Mayors statewide - including Menino - went ballistic over
Romney's stated plan to trim $200 million off the $2 billion local aid installment due to cities and
towns by the end of the fiscal year, to help deal with a "worst case" current-year
deficit of $600 million.
Next year's deficit is pegged between $2.5 billion and $3
billion.
Yesterday, Romney trotted out a handful of supportive mayors
- mostly from smaller communities outside Greater Boston.
Chicopee Mayor Richard Kos, whose $117 million municipal
budget is supported by $50 million in state aid, said he'd rather have bad news upfront,
while there's still time to deal with it.
"The sooner we know what we're dealing with, the better off
we'll all be," Kos said.
With both the House and Senate expected to debate Romney's
bill next week, Romney plans to plot strategy tomorrow with human service activists, who he
hopes to enlist to lobby lawmakers.
Romney has made the case that unless lawmakers allow him to
cut local aid, he will have no choice but to slash deeper into human service programs that have
already borne the brunt of past cuts.
Healey, who will begin traveling the state tomorrow to meet
with local officials, said Romney asked her to create a package of reforms aimed at freeing cities
and towns from unfunded state mandates.
Local leaders have complained of heavy administrative
burdens associated with state rules governing civil service, transportation, purchasing, prevailing wage
and construction, Healey said.
"What they need is more freedom to conduct their own
affairs," Healey said.
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The Lawrence Eagle-Tribune
Monday, January 13, 2003
School closing threats derided
By Meg Murphy
Staff Writer
School leaders' threats to end the school year early because
of possible local aid cuts are just an old form of political posturing, said
Barbara Anderson, executive director of Citizens for Limited
Taxation.
"It is not like they are suddenly out on the street eating
from garbage cans. They still have a lot of money," said Anderson, who is head of the state
taxpayers association. "You have to remember that it is their job to whine and
complain and panic, but it is not like they are being left with no money."
Yesterday, education leaders in Lawrence and Haverhill said
they might end up closing schools early this year if Gov. Mitt Romney follows through on plans to
make a $200 million cut in local aid -- a 10 percent reduction in money
communities were expecting over the last few months of the year.
The threat seems unrealistic, said Department of Education
spokeswoman Heidi Perlman.
"I don't know if it is something they can actually do," she
said, adding that if the superintendents close schools without state permission they could be sued by
the attorney general's office.
Methuen Superintendent Charles P. "Phil" Littlefield said he
will watch carefully as Romney's proposed budget cuts move through the legislative
session, which begins today. It is too early to tell how much money will be cut
and if some districts will be hit harder than others, said Littlefield, who likened
the uncertainty to making predictions from a crystal ball.
"How do I know? It would be impossible to know yet. I assure
you we will have a well-planned and well-articulated response to this emergency," he said.
Threats to shorten the school year pale in comparison to the
dramatics Anderson remembers local leaders resorting to after her group successfully
engineered a law limiting how much money towns can collect in property taxes.
City and town leaders were chagrined by the future loss in revenue for schools,
police and fire services and they began predicting "death and blood in the
streets" after that 1980 victory, said Anderson.
Once again, Anderson is suggesting local leaders tighten
their belts rather than trying to gain public sympathy for a financial plight she believes is manageable
-- and self-created.
"It is just too easy to spend the money when it is there --
so they just spend it is like we will worry about the money tomorrow. Well, it is tomorrow," she said.
"They just acted like they could go on spending forever."
This threat of early school closing strikes Anderson as
unrealistic. First of all, she said, cites and towns cannot just shut down schools because the state
requires they stay open for 180 days a year. But the more important issue, said
Anderson, is that local governments have to seize this opportunity to stop the
overspending that began during boom times.
Lawrence Mayor Michael Sullivan did not want to comment on
the possibility of a shorter school year in Lawrence.
Does he think Lawrence Superintendent Wilfredo T. Laboy, who
said a 10 percent cut would cost him $5.5 million of his $110 million budget, is off-base
even considering a shorter school year?
"I respect his emotion," said Sullivan. "He is passionate
about education and that is where his emotions come from. One thing I will say about him, though, is
he knows how to deal with facts, and we will do that together."
Sullivan said he is following a "wait and see" approach to
the looming possibility of cuts, but that the city should be prepared for a major funding loss in 2004 if
it doesn't happen sooner.
"We need to see how it plays out for our city and then we
will react appropriately," he said.
In Haverhill, Superintendent Arthur W. Tate Jr. also spoke
about a possible early shutdown of schools, although he did not specify a date. Tate cut $5.6
million and about 10 percent of his work force to balance the budget this year.
Both he and Laboy say cutting more from their cash-starved budget is impossible.
Either way, local governments should prepare to get sleeker,
since they have grown spoiled by the combination of property tax revenues, increased money
from local development and state aid, said Anderson. It is time for schools,
among other town departments, to take a hard look at their budgets, she said.
Anderson suggested schools might want to reconsider building development
plans or look at whether they have been ineffective in negotiating with their
unions -- agreeing to too much pay.
"The only time you can get anything done is during a fiscal
crisis. I see this as an opportunity," she said.
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The Boston Globe
Monday, January 13, 2003
Mayors dismiss Menino proposal
Say leisure taxes help only Boston
By Ralph Ranalli and Michael Rosenwald
Globe Staff
Mayors from across the state, facing potentially devastating
cuts in local aid proposed by Governor Mitt Romney, said yesterday they do not expect relief
from Boston Mayor Thomas M. Menino's legislative proposal to allow cities and
towns to levy new taxes on items such as restaurant meals, movie tickets, and
parking garages.
"I love Tom Menino, but let's not fool anyone - that
legislation is a Boston bailout," Lynn Mayor Edward J. Clancy said yesterday. "There's nothing there
for us, for New Bedford, for Brockton. That legislation wouldn't do us any good
at all."
Romney is facing a projected state budget gap as high as
$600 million and, in an attempt to save $200 million, has asked Beacon Hill legislators for broad
new powers to cut state aid to cities and towns. Several key lawmakers,
including House and Senate leaders, said this weekend they are leaning toward
giving the new governor that power - at least temporarily.
The specter of aid cuts has local officials alarmed. Several
mayors held emergency meetings yesterday with their staffs, and a number of others are
planning a Thursday meeting to come up with alternatives to give Romney.
Romney has pledged to listen, and will send Lieutenant
Governor Kerry Healey on a fact-finding mission across the state beginning this morning. He also has
indicated a willingness to raise fees on state services and has said he
will consider supporting local tax hikes to help close the funding gap.
Yet mayors of several smaller and poorer cities and towns -
which typically rely more heavily on state funding - already were saying yesterday that
Menino's proposed tax package would not help them.
"We don't have a movie theater," Medford Mayor Michael J.
McGlynn said. "And we have very few restaurants because we have very antiquated local
liquor laws."
Springfield Mayor Michael J. Albano, meanwhile, said even a
1 percent meals tax would make up only about $300,000 of the city's projected $11 million
shortfall should the proposed cut in state aid pass.
"Those taxes would only help larger communities," Albano
said. "There are big differences from community to community. One size does not fit all."
Without a meaningful way to offset lost revenues, the mayors
predicted dire consequences if Romney is given the power to reduce the state's aid to cities
and towns by as much as one-third.
Clancy said there will be "massive" layoffs in Lynn,
"hundreds of them across the board." Sixty percent of his city's budget comes from the state and 90
percent of that money funds the school system. More than 200 school personnel may
have to be laid off, Clancy said.
The cuts "are to me so off the wall and unfathomable that I
can't imagine any serious discussion about how it would affect Lynn," Clancy said. "It's like
cutting my legs off at the knees. I'm 5-foot-6 to begin with, and I don't have far
to go to the floor."
Albano said there would also be heavy school layoffs in
Springfield, adding, "I don't know how we can get through this without devastating the school
system."
McGlynn, the Medford mayor, is working with city officials
to offer incentives, perhaps even a one-time bonus, to persuade nearly 100 city employees to
retire early. "The other option," he said, "is giving them the ax."
Layoffs come with the added expense of unemployment costs.
Cutting nearly $11 million out of Springfield's budget with layoffs would actually cost $13
million, Albano said.
"It's hard to figure out what we'll do," he said. "This has
never been done in the middle of the fiscal year, to have these types of cutbacks. It's very hard to
calculate all of this."
Under state law, only state lawmakers can cut local aid
unless Romney is given new powers. House Speaker Thomas M. Finneran and Senate Ways and Means
Chairwoman Therese Murray, Democrat of Plymouth, said over the weekend
that they could consider doing so - especially if it meant avoiding further
cuts in state programs.
Other legislators, however, said they would meet with local
officials about the potential effects of cuts on cities and towns before deciding how to vote. The
House is scheduled for a caucus on the issue today, while the Senate is expected
to take up the issue later in the week.
"I am wary of abdicating our power as legislators," said
Senator Linda Melconian, a Springfield Democrat. "I'm not inclined to give blanket authority
or total discretion to the governor without a sunset provision, perhaps for one
year."
The Romney administration is also expected to poll local
officials this week, with Healey scheduled to meet today with mayors from Everett, Somerville,
New Bedford, Fall River, and Brockton. A spokeswoman for Healey said the
administration has not decided whether to back the Menino proposal and is
considering other mitigation measures to help financially struggling municipalities, including allowing them to opt out
of paying for some costly state-mandated programs.
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The Boston Globe
Tuesday, January 14, 2003
Romney considers raising state service fees
to reduce shortfall
By Yvonne Abraham
Globe Staff
Trying to address a yawning budget gap without breaking a
pivotal campaign promise, Governor Mitt Romney is now looking at raising fees for some state
services in next year's budget, arguing that some of the fees charged by state
agencies do not cover the cost of the services they provide.
He said the fee increases would help offset a budget
shortfall for fiscal year 2004 which could be as much as $3 billion.
Some conservatives criticized Romney yesterday for proposing
fee increases, which they called tax hikes in different form, and accused him of edging away
from his firm campaign pledge not to raise taxes, a pledge they believe helped
the Republican win in November.
"It's clear that raising fees is a politically more
acceptable move than raising taxes given the promises he made during the campaign," said David
Tuerck, executive director of the Beacon Hill Institute, a fiscally conservative think
tank at Suffolk University. "No one can raise taxes without incurring very
substantial political risk, so it's not surprising the governor would turn to a
source of revenue that looks like a tax and walks like a tax and sounds like a
tax but really isn't one."
At a press conference yesterday, Romney would not specify
which fees he might increase.
"I have asked our secretary of administration and finance to
look at the various fees we charge and find out whether there are some fees where we're charging
a rate that's less than our cost of providing the service," Romney said. "And
were that to occur, I would want to move quickly to adjust our fee structure.
But I don't have any suggestions of that nature right now."
Even if Romney were to increase a number of fees, the money
raised would make only a small dent in the $3 billion shortfall expected in fiscal 2004, which
begins July 1.
Last year, the House and Senate each reviewed an exhaustive
list of fee hikes, for driver's licenses, car registrations, bicycle registrations, licensing fees for
funeral directors, state inspections of dairy farms, the courts, and more than
100 others. At the time, legislators were proposing the fee hikes to close a $2
billion gap in the fiscal 2003 budget, and even some of the lawmakers involved
in compiling the list said fee hikes alone would be entirely inadequate to that
task.
In addition to the fee hikes, Romney is considering deep
cuts in spending for the current fiscal year and next. Last week, he asked the Legislature to grant
him new powers to cut aid to cities, towns, and higher education in the current
fiscal year, which ends June 30, because revenues could yet fall $600 million
below expectations.
Romney has further warned of cuts to local aid of between 10
percent and 20 percent for 2004. But he said he would seek to protect services for the
homeless, and some education spending. Even as he raises the possibility of fee
hikes, Romney has steadfastly refused to consider tax increases for 2003 or
2004.
"I also would fight against raising taxes in the next fiscal
year," he said yesterday. "I don't think that's the answer in the short- or long-term, but even
if I were an aggressive tax-and-spender, which I'm not, taxes at this point
don't solve the short-term emergency. We're going to have to take cuts."
Some cities and towns are considering their own tax
increases to cushion against next year's anticipated shortfall. In Boston, Mayor Thomas M. Menino
has suggested new taxes on restaurant meals, movie tickets, and parking
garage fees. Such increases would have to be approved by the Legislature.
Romney, who previously has threatened to veto any new taxes,
yesterday left the door open to approval of the local increases.
"I've indicated that with regard to local option taxes I
will listen to what the mayors have to say," he said. "I will express my [views] to mayors, but not at
this point."
Tuerck lumped Romney's possible fee hikes in with those tax
increases yesterday.
"I'm skeptical of any plan to raise fees or taxes until we
have exhausted all the opportunities for finding revenues, and for cutting spending," he said. "There
are nontax and nonfee sources of revenue available: tobacco revenues, reducing
lottery prizes, dipping more deeply into what's left of the state reserves, all of which we could and should do before we
get around to raising fees, which are in fact very much like taxes."
That comparison was rejected by the administration yesterday, however.
"I think people understand the difference between a fee and
a tax," said Romney spokeswoman Shawn Feddeman. "Taxes are broadbased and
generally applied across the board. Fees are a payment for a specific service."
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The Boston Herald
Tuesday, January 14, 2003
A Boston Herald editorial
No backtracking on cutting budget
C'mon governor, you haven't been there two weeks and already you're backtracking on raising taxes and scouring the state ledgers to see what fees to raise?
Gov. Mitt Romney refused to take a "no new taxes" pledge during the campaign, asserting it was a gimmick. Maybe so, but it's a gimmick that you can hang your hat on when the screaming starts from various constituencies about budget cuts.
The latest screams are coming from municipal officials who reacted to Romney's warning that local aid may see up to a $200 million cut in this fiscal year with predictable outrage.
Local officials have the art of whining about budget woes down pat (there's a reason that governors in recent years have sent their lieutenant governors to chair the semi-regular meetings of the Local Government Advisory Council).
But the governor was right on when he pointed out in a speech to the Massachusetts Municipal Association (graphs and all) that cities and towns have shared in the largesse of state revenues when economic times were good and must now share in the belt-tightening.
If the political fallout from such an obvious point is causing concern in the new administration, just wait until sign-carrying toddlers and welfare moms organized by human services advocates show up on the corner office doorstep, or the doorstep of Romney's Belmont manse.
Delivering the bad news to a bunch of selectmen and mayors is nothing compared to looking in the face of someone who legitimately needs state services and acknowledging that the funds for their care may not be available.
Budget cutting is tough stuff and that's why the voters chose Romney, believing his campaign promises to focus on cleaning up the mess on Beacon Hill through cost reduction and restructuring, not higher taxes.
Local taxes place a burden on working people just as surely as statewide taxes do, and while we can grant Romney the latitude of not immediately having a position on every issue, some positions are easier calls than others. When it comes to raising taxes, clarity is critical. Give a mayor or legislator an inch on this issue and he will take a mile.
Furthermore, there's nothing wrong on its face with ensuring that fees charged for state services, like licensing fees for doctors or plumbers, are adequate to support state regulatory oversight. But looking to raise state fees before Lt. Gov. Kerry Healey has finished her two-week review of local finances and before the green eyeshades down the hall in the state budget office have gotten very far in unearthing sound restructuring ideas strikes us as premature. Cut spending first, Governor. It was what you were elected to do.
The Boston Herald
Tuesday, January 14, 2003
Hold on, Mitt: Pols want gov to detail $ cuts
by Elisabeth J. Beardsley
House lawmakers refused to give Gov. Mitt Romney free rein
to slash into local programs yesterday, instead demanding that Romney first detail his intended
targets.
After a heated, three-hour Democratic caucus, House Speaker
Thomas M. Finneran said lawmakers want to be "cooperative," but they're not willing to
blindly cede their power over the public purse strings.
"Right now, he seeks a very broad sweep of authority,"
Finneran said. "Most of the members would like a little bit more specificity as to what the governor and
his team have in mind."
The House had convened in a formal session yesterday, with
initial hopes of fast-tracking Romney's request for expanded emergency budget-cutting
powers to allow him to cut local aid.
Romney said last week he would be forced to make further
damaging human service cuts unless lawmakers allow him to trim as much as $200 million from
local aid, which is now exempt from his emergency powers.
While most lawmakers seem inclined to grant Romney some
expanded powers, Finneran said they're considering slapping "specific limitations or restrictions"
on Romney's actions.
Lawmakers are also mulling whether they should try to steer
Romney's budget ax by passing a resolution recommending areas of the budget he should cut,
Finneran said. Others want Romney to file a supplemental budget bill detailing
line-by-line where he would cut, Finneran said.
House members also want to know what Romney would do if they
refuse to give him the power at all, Finneran said.
"The more specificity the members see, probably the more
gratified they'd be," Finneran said.
The sudden delay filtered rapidly to the Corner Office,
where Romney spokeswoman Shawn Feddeman pledged the governor's undivided attention to
concerns.
"Gov. Romney is willing to be as cooperative and helpful as
he possibly can in giving the Legislature information that they're looking for or answering any
questions they may have," Feddeman said.
The minor delay in passing Romney's bill appeared to be more
of a hiccup than serious foundering - with Finneran saying House action could "possibly" occur
as early as today.
But Romney doesn't appear to possess the level of detail
that lawmakers say they want - raising questions about whether he'll be able to mollify them
enough to push the bill into law.
Feddeman said Romney has not yet determined which local aid
programs would be cut, because the size of the current-year deficit will remain fuzzy until
tax receipts for January are tallied.
Romney, meanwhile, acknowledged at a press conference
yesterday that he may have to break his campaign pledge to protect essential government
services, saying that the scope of the state's fiscal crisis came as "a bit of a
surprise" to his new administration.
Despite the consensus from Finneran, House lawmakers emerged
from the caucus with clashing opinions - and some bristling at recent suggestions that
lawmakers are trying to avoid making unpopular decisions.
"I wasn't elected to come up here and rubber-stamp and duck
for cover," said freshman state Rep. Jennifer Callahan (D-Sutton). "Once we get the right
information, I think people will feel they can make the decision expediently."
House Energy Committee Chairman John Binienda said he would
never allow the governor to usurp legislative powers - adding that he willingly made tough
choices during the recession a decade ago.
"I'd rather go in and cut the budget myself rather than give
away my power and have the governor say, 'I had to fix the mess that was made by the
previous legislatures,'" Binienda (D-Worcester) said.
Senate leaders, meanwhile, are waiting in the wings with a
series of concessions they hope to wring from Romney.
Senate President Robert E. Travaglini said he wants a "fair
and equitable" solution that will prevent more harrowing cuts to the human services sector,
which has borne most of the past cuts.
But senators don't want to give up their budgetary prerogatives forever,
Travaglini said. "You can count on there being a sunset (provision) - two or
four years," he said.
The lion's share of the $5.5 billion local aid disbursement
goes to the Chapter 70 education reform account - raising fears that Romney would zero in on
school funding if granted the power.
Teacher union lobbyists swarmed in an anxious pack outside
the room where House lawmakers were meeting.
"This legislation would almost certainly bring lasting harm
to public education and public higher education," said Massachusetts Teachers Association
President Catherine Boudreau.
But human service advocates rallied to Romney's cause, after
the governor met with them.
While most agreed to help Romney warn against more devastating cuts, there
was balking from public health advocates.
If local aid is cut, cities and towns will protect education
and public safety by slashing first into local public health programs, said Massachusetts Public
Health Association Director Geoff Wilkinson.
"Public health is going to get slammed coming and going,"
Wilkinson said.
Elizabeth W. Crowley contributed to this report.
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The Boston Herald
Tuesday, January 14, 2003
Antidote needed for pharmacy tax
by Wayne Woodlief
What a mess former acting Gov. Jane Swift and the Legislature left behind on
prescription drugs. New Gov. Mitt Romney and this year's session of the
Legislature ought to consider repealing it and devising a better plan.
The new year has been decidedly unhappy for thousands of
Massachusetts' sick and elderly citizens. Since Jan. 1, they've been socked $1.30 a prescription
- which will add up to hundreds and hundreds of dollars a year for many who
can't afford it - under a controversial new state tax that no one in government
ever said they had to pay.
Howls of rage are justifiably being raised across the state.
Attorney General Tom Reilly has put his foot down, vigorously scolding big pharmacy chains for
deceptively posting signs at the counter that tell customers this is a tax on
them (not an assessment on the drug store).
Get those signs down or face the music, Reilly warned the
five biggies - CVS, Wal-Mart, Brooks, Walgreens and Stop and Shop - in a press conference last
week and in letters from his office.
"CVS and other pharmacies are passing the buck. It is
particularly burdensome on the elderly who have to scratch for every dollar," Reilly said.
House Ways and Means Chairman John Rogers (D-Norwood) also
said yesterday, in a letter to House members, that the pharmacies should "cease
and desist," lest the Legislature "be forced to repeal the statute" and end state
Medicaid "dispensing payments" of $3 to $5 per prescription to the drug
stores.
Sadly, the way the tax is being handled subverts its whole
purpose. It was aimed at offsetting a revenue crisis and helping some of the ailing poor remain
on Medicaid. Yet other sick people who have private insurance - but in many
cases not a lot more income - are being hit with an onerous new tax.
As Phil Mamber, president of the Massachusetts Senior Action
Council, so succinctly told the Herald's Jennifer Heldt Powell, "A lot of people have eight,
10 or 12 prescriptions and this is a real boot in the butt."
Now, some customers are purchasing their prescriptions
online. And why not? A mail order house in Canada or Cleveland is unlikely to be collecting that little
$1.30-a-pop bounty for Massachusetts.
One discount operation already is advertising that it will
absorb the tax and not charge its customers the extra money. And that's likely to draw even more
business from the independent pharmacies whose profit margins on prescriptions
already are less than the $1.30 they'd have to shell out to the state themselves if they can't pass on the cost.
So, it may well be time to euthanize this turkey and find a
new - and fairer - way to cure the $36 million Medicaid dilemma it was intended to resolve.
Conveniently, a remedy may well be at hand in a repeal bill
that state Sen. Dick Moore (D-Uxbridge), Senate chairman of the joint Health Care
Commitee, has refiled.
Moore's measure does more than just end what he calls "the
RX Tax." It provides for full disclosure by the pharmaceutical industry of its wholesale
costs and manufacturer prices and proof of its estimates of profit margins.
That way, Moore suggests, a fair "dispensing fee" from the
state can be established for druggists serving Medicaid patients.
Moore warned that a new get-tough law to ban the pharmacies
from passing on the $1.30 tax to their customers "would undoubtedly kill the remaining
independent pharmacies and could result in financial stress for the chains."
Better to just repeal it and start again, preferably through "some broad-based
revenue source," he said.
Ah, there's the rub. Voters in 2002 showed no appetite for
some new broad-based tax, as an astonishing 45 percent voted to abolish the state income
tax. And Rogers indicated that Moore's plan wouldn't fly in the House; that a
repeal of the $1.30-a-pop tax would blow a $72 million hole in the upcoming
budget. (That's based on the $36 million the tax would raise, plus a $36 million
Medicaid match by the federal government.)
Still, this thing is a tax, even if Swift termed it a
"pharmacy assessment" and Rogers calls it a "business fee." The feds call it a tax. It sure feels like a tax to
the people who pay it. And Romney, who detests new taxes, should have his
deep thinkers find a way to get rid of this one, even if he didn't create the
monster.
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The Boston Globe
Tuesday, January 14, 2003
