CLT
UPDATE
Thursday, June 5, 2003
"Objective" polls and more
new taxes
Athletic programs at the University of Massachusetts' flagship campus would see $2.5 million in budget cuts under a proposal unveiled yesterday by Chancellor John V. Lombardi.
The reductions are among more than $10 million identified by Lombardi as part of his second phase of budget cuts at the Amherst campus, which is facing the loss of $24 million to $40 million in state support as Massachusetts struggles with a $3 billion budget deficit.
Associated Press
Thursday, June 5, 2003
UMass faces new cutbacks of $10 million
A strong plurality of 401 Massachusetts voters surveyed would prefer that Beacon Hill leaders raise taxes rather than cut government services to deal with the state's budget deficit, a new University of Massachusetts poll shows....
"The anti-tax sentiment seems to be ebbing," said Lou DiNatale, director of the poll.
The poll numbers come as lawmakers put the final touches on their nearly $23 billion budget for next year. Although the spending plan isn't expected to include new taxes, some Democratic lawmakers are discussing whether the Legislature should take up a tax increase package this fall.
The lawmakers suggest that by then, the public may be feeling the pain of spending cuts, including projected layoffs of police, firefighters, and teachers, and be more accepting of revenue increases.
The Boston Globe
Thursday, June 5, 2003
Poll: More favor tax hikes in lieu of cuts in services
Less than a week after the state Senate passed a tax-hike free budget, a senator from MetroWest yesterday filed legislation that would hike the state's income tax rate and authorize $600 million in short-term borrowing.
The bill, sponsored by state Sen. Cynthia Creem, D-Newton, would raise the personal income tax rate from 5.3 to 5.6 percent....
Creem's bill earned high marks from Massachusetts Taxpayers Foundation President Michael
Widmer, who called it a "thoughtful and balanced proposal."
...
Barbara Anderson, executive director of Citizens for Limited
Taxation, dismissed the bill as a "lone liberal adventure."
"This probably won't come as a surprise to anybody," Anderson said.
"(Creem) has been the loudest voice on the Hill for moving ahead with an income tax increase."
The MetroWest Daily News
Thursday, June 5, 2003
Proposal would hike income tax
The state House of Representatives yesterday rejected a plan to increase the tax on meals but approved a measure allowing cities and towns to collect higher property taxes....
The House, however, voted to give cities and towns the option of exempting the overlay account from the Proposition 2½ limit. That would create more room for communities under the cap on property taxes....
Critics claimed the proposal served as a "frontal assault" on Proposition
2½.
House Minority Leader Bradley Jones, a North Reading Republican, said cities and towns already can seek a Proposition 2½
override if they are worried about how much money they have to set aside in an overlay account.
The MetroWest Daily News
Thursday, June 5, 2003
House OKs giving towns flexibility with Prop 2½
"Find the revenues." That's what the ads tell us to do in order to avoid devastating state budget cuts. Otherwise we'll have to end nursing home coverage for thousands of seniors, lay off teachers, police officers, and firefighters, and close courts and prisons, turning criminals loose on the streets.
Governor Romney has argued that we can avoid Draconian measures such as these by adopting governmental reforms. But the governor's reform efforts are losing steam, and such reforms as are implemented may prove ineffective at reducing costs. Suppose, then, that the state turns to higher taxes as a way of closing the budget gap. What are the options and consequences associated with that course of action?
A widely accepted estimate holds that in order to sustain current services, the state needs an additional $3 billion in revenue for fiscal year 2004. Given that the state has already "found" $360 million in revenues in the form of higher fees and tax-loophole closings (tax hikes in disguise, some might say), that leaves a $2.64 billion shortfall.
There are different ways to close this shortfall through tax hikes, each with its own effects on individual tax burdens and on the greater economy....
If the Commonwealth refuses to cut services and can't or won't find a way to deliver existing services more efficiently, it will have to choose from a menu of tax hike options as sampled here. Whatever it chooses from this menu, there will be negative consequences for taxpayers and for the state economy as a whole. It is only sensible to know what is being served up before we order.
The Boston Globe
Thursday, June 5, 2003
Weighing in the state's tax-hike options
By David Tuerck
Gov. Mitt Romney won't appeal a court order that ends a $1.30 prescription tax and refunds $18 million to pharmacists, a spokesperson said yesterday.
The tax, intended to raise money for Medicaid, was approved under the previous administration. It was challenged in a lawsuit from about 100 pharmacies.
"As far as we're concerned, it was poor public policy to begin with and this is good riddance to a bad idea," said Romney spokesman Eric Fehrnstrom.
The state will repay the pharmacies, he said....
The Boston Herald
Thursday, June 5, 2003
Romney sticks fork in drug tax:
Ruling on 'poor' policy won't be appealed
State lawmakers rushed through a bill last night that would greatly extend the powers of legislative leaders to grant unfettered political pay hikes and reward loyal lieutenants.
With no debate and at the end of a lengthy debate over a municipal relief plan, the House gaveled through the bill with no roll call vote.
Opponents said they decided to drop past opposition, saying they hope Gov. Mitt Romney will veto the bill - which they called a blatant power grab by House Speaker Thomas M. Finneran and Senate President Robert E. Travaglini.
The Boston Herald
Thursday, June 5, 2003
Lawmaker pay bill passed, as Romney veto eyed
It's amazing how all the municipal whiners and special interest lobbyists who whacked Gov. Mitt Romney's budget proposal in January, the one calling for a 5 percent reduction in local aid payments to cities and towns, are suddenly AWOL. Back then, they attacked the Republican administration as being heartless about the needy and uncaring about education.
But when the Democrat-controlled Legislature came out with their proposals, calling for deeper cutbacks, there was little outcry.
The Lowell Sun
Sunday, June 1, 2003
Of cell phones, budget whiners and vote shields
By Jim Campanini
Chip Ford's CLT
Commentary
"A strong plurality of 401 Massachusetts voters surveyed would prefer that Beacon Hill leaders raise taxes rather than cut government services to deal with the state's budget deficit, a new University of Massachusetts poll
shows," reported the Boston Globe today.
On the same day, the Associated Press reported "Athletic programs at the University of Massachusetts' flagship
campus ... are among more than $10 million identified ... as part of his second phase of budget cuts at the Amherst campus, which is facing the loss of $24 million to $40 million in state support
..."
Is it just my cynicism, or is there a vested interest
in the outcome of polling done by UMass?
"The poll numbers come as lawmakers put the final touches on their nearly $23 billion budget for next year. Although the spending plan isn't expected to include new taxes, some Democratic lawmakers are discussing whether the Legislature should take up a tax increase package this
fall." the Globe report reminds us. How perfectly timely.
I wonder just how objective this latest UMass poll is
... and I wonder if CLT had the funds to do its own poll whether we're
get the same result?
In the CLT Update of Apr. 19, 2003, "Deceptive tax hike strategy further exposed,"
I wrote:
This is the same UMass that polled on Question 1, abolition of the income tax, last year and indicated then that it would go down to defeat with only about 25 percent of the vote ... though it actually received 46 percent in November. According to today's report, "Those who preferred increasing taxes rose from 26 percent in December to 46 percent."
Looks like about the same UMass twenty-point "margin of error" to me.
In her column "To tax or not to tax?
Polls only say what pollsters want them to," Barbara perhaps
made the best points concerning UMass polls:
A real McCormack Institute at UMass poll recently asked this question: "If the state had to make a decision to fund Clean Elections or cover the shortfall in human services, which choice would you support?" Once again, the right answer is "This is a dumb question." ...
Another question from the same spring 2002 UMass poll: "Did you support the income tax rollback on the 1998 ballot?" Actually, the wording may have confused some respondents because there was no income tax rollback on the 1998 ballot, but in November 2000 it passed with 59 percent voter support.
The fall tax hike bandwagon is revving up under the
Golden Dome, folks.
There were at least two more Proposition 2½ override
defeats this week; one in Lexington and one that went "down in
flames" the Melrose Free Press reported, defeated by a 3-1 vote.
Now the Legislature is looking to end-run Proposition
2½ by excluding Overlay Accounts ... just as we predicted it would
attempt; a Finneran goal since he was House Ways & Means chairman.
The bill that passed in the House, no matter how they try to sell it, in
the end will cost taxpayers and homeowners more in property taxes. CLT
will strenuously oppose it, and later today will issue a news release
explaining in more detail exactly why.
No matter how deep the "fiscal crisis,"
nothing will get in the way of Tom Finneran's latest power grab, giving
himself unbridled and unprecedented power to create as many new
"leadership" positions with higher pay (read bribe) as he
wants or needs ... except perhaps Governor Romney's veto. Just think; if
Finneran has his way with this, he will be able to unilaterally spend
taxpayer money with no checks or balances whatsoever. If he wants to
spend it, he will just spend it with no oversight. Legislators who want
to fatten their paycheck will simply have to sign on to Finneran's
agenda ... or else. Senate President Robert Travaglini will enjoy the
same power on the Senate side but this has been Finneran's baby from the
outset.
If the governor fails to veto this bill, if it
becomes law, he can kiss his reform agenda goodbye and say hello to
anything else legislative leaders want. Finneran will hold all the power
that matters most on Bacon Hill -- pay, perks and privileges -- and his
flock will trip over themselves to further do his bidding, will sit up
and roll over on command.
|
|
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Chip
Ford |
Associated Press
Thursday, June 5, 2003
UMass faces new cutbacks of $10 million
Sports would take $2.5M hit
Athletic programs at the University of Massachusetts' flagship campus would see $2.5 million in budget cuts under a proposal unveiled yesterday by Chancellor John V. Lombardi.
The reductions are among more than $10 million identified by Lombardi as part of his second phase of budget cuts at the Amherst campus, which is facing the loss of $24 million to $40 million in state support as Massachusetts struggles with a $3 billion budget deficit.
Other areas that would see reductions include academic affairs, which would lose $1.5 million, administration and finance ($1.14 million) and student affairs ($390,000).
"These proposals will have a significant impact on many high-quality programs and activities, since the budget reduction imposed on us by the Legislature provides no way to avoid these consequences," Lombardi said in a letter posted on the
UMass-Amherst Web site.
It was not immediately clear which athletic programs would see cuts under Lombardi's proposal. Details were expected to be released at a later date.
UMass has 22 varsity teams and an athletic budget of about $18 million.
In March 2002 state cutbacks prompted the school to eliminate seven varsity teams: men's and women's gymnastics, men's and women's water polo, men's tennis, men's indoor track and volleyball. Officials said the total cost of the seven teams was about $1.1 million.
The Phase Two reductions will be open for public comment until Monday. A final version will be posted on the university's Web site on Tuesday.
In his first round of budget cuts, which were finalized Tuesday, Lombardi eliminated $3.1 million in funding for research centers and other services.
Lombardi has said that he wants to minimize the impact on academic and primary research programs by first reducing other expenses.
This year the campus received $214 million in state funds for its operating budget.
Among the research outlets that lost all of their university support as part of the Phase One reductions are the centers for Computer-based Instruction, Statistical Consulting, Energy Efficiency, and Real-time and Intelligent Computing.
The Environmental Institute, Scientific Reasoning Center and the Massachusetts Institute for Social and Economic Research lost up to 85 percent of their funding. Most of the centers also receive outside funding.
Lombardi also eliminated all university funding for the University of Massachusetts Press, the school's scholarly publishing outlet, public radio station
WFCR, the faculty club and Mass Ventures, a business development operation.
Michael Sutherland, director of the Statistical Consulting Center, which lost $190,000 of its $270,090 budget, told the Daily Hampshire Gazette that he hoped to transfer some functions to the School of Management and increase the statistical analysis work the center does for a fee for state agencies and private businesses.
Bruce Wilcox, director of the UMass Press, said the $340,000 it had received from the university had paid the salaries of half of his 12 employees. The press, which has published more than 30 books annually, has outside revenues of about $1 million.
"This may be the death knell for a scholarly publishing program that has taken 40 years to build," Wilcox said.
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The Boston Globe
Thursday, June 5, 2003
Poll: More favor tax hikes in lieu of cuts in services
By Frank Phillips, Globe Staff
A strong plurality of 401 Massachusetts voters surveyed would prefer that Beacon Hill leaders raise taxes rather than cut government services to deal with the state's budget deficit, a new University of Massachusetts poll shows.
In the survey taken late last week, 47 percent of those polled said they want Governor Mitt Romney and the Legislature to use taxes to close the spending gap, while 29 percent want them to cut programs.
That's a shift from February, when a UMass poll found the public more evenly divided, with 42 percent favoring taxes and 38 percent favoring spending cuts.
"The anti-tax sentiment seems to be ebbing," said Lou DiNatale, director of the poll.
The poll numbers come as lawmakers put the final touches on their nearly $23 billion budget for next year. Although the spending plan isn't expected to include new taxes, some Democratic lawmakers are discussing whether the Legislature should take up a tax increase package this fall.
The lawmakers suggest that by then, the public may be feeling the pain of spending cuts, including projected layoffs of police, firefighters, and teachers, and be more accepting of revenue increases.
The poll of registered voters has a margin of error of plus or minus 5 percent.
It contained some signs of public confidence in the Legislature.
When asked whom they trust more to deal with the issue of taxes, 51 percent chose the Democrat-controlled Legislature, and 37 percent said Romney, who has made his anti-tax stance a linchpin of his platform.
Asked about cuts to services, 54 percent said they trusted lawmakers to make the right decisions, and 34 percent picked Romney, whose personal popularity, according to the poll, seems to be slipping.
DiNatale noted, however, that voters also express a favorable view of Romney's sweeping government restructuring plan: 63 percent either strongly or somewhat support the reforms, and only 29 opposed them.
"That strong support for reform clearly shows Romney is hitting a popular theme," DiNatale said. "But raising taxes may not be the political third rail that the Democrats fear."
Because Romney has vowed to veto any tax-raising bill that the Legislature sends him, Democratic legislative leaders, realizing the difficulty of obtaining a two-thirds majority in the both the House and Senate to override him, have avoided pushing the issue.
Other recent surveys have found voters offering mixed messages on the issue of taxes vs. service cuts in order to deal with an expected $3 billion budget gap. A Boston
Globe/WBZ-TV poll in early April indicated Massachusetts residents opposed tax increases, but also in equal numbers opposed cutting health and human service programs and reducing state aid to cities and towns. An Opinion Dynamics survey done for Mass Insight in late April found voters evenly split on whether they trust Romney or the Legislature in dealing with taxes and cuts in state programs.
In the UMass poll, voters still give Romney decent marks for his job performance, but his personal favorability has declined. Some 56 percent of those surveyed rate his job performance favorably, while 36 percent had a negative view. The ratio is almost identical to what a UMass poll showed two months ago.
But Romney's personal popularity seems to be slipping, with only 48 percent rating him favorably, and 39 percent unfavorably. In April, the UMass survey showed, 56 percent rated the governor favoraby and 25 percent viewed him unfavorably. In February, just a month into office, Romney received a very strong 61-to-21 percent rating.
DiNatale said what is significant about the poll findings is that the Legislature, which has been the target of Romney's campaign and much of his governing, has gained public credibility in the budget debate.
He said that notion is reinforced by the poll results showing that only 19 percent of those surveyed believed Romney's contention that if his reforms were implemented by the Legislature, large cuts in state services would not be needed. Another 54 percent echoed assertions that even with the Romney reforms, big cuts would still be needed.
Still, the governor's personal rating dwarfs that of his regular Democratic nemesis on Beacon Hill, House Speaker Thomas M. Finneran. The House leader received a 29 favorable rating and 45 percent unfavorable rating when voters were asked their opinions of him. Senate President Robert E. Travaglini, who took office in January, is not as well known as the controversial Finneran, who has led the House since 1996. Of those surveyed, 18 percent had a favorable opinion of the East Boston Democrat, 10 percent unfavorable. Another 50 percent had never heard of him. Only 13 percent had not heard of Finneran and a mere 2 percent did not know Romney.
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The MetroWest Daily News
Thursday, June 5, 2003
Proposal would hike income tax
By Michael Kunzelman, Staff Writer
Less than a week after the state Senate passed a tax-hike free budget, a senator from MetroWest yesterday filed legislation that would hike the state's income tax rate and authorize $600 million in short-term borrowing.
The bill, sponsored by state Sen. Cynthia Creem, D-Newton, would raise the personal income tax rate from 5.3 to 5.6 percent.
But Creem, the Senate chairwoman of the Taxation Committee, said the measure softens the blow of the tax hike by increasing the personal exemptions taxpayers can claim.
The exemptions would increase from $3,300 to $4,400 for individuals; from $5,100 to $6,800 for a head of household filer; and from $6,600 to $8,800 for a married couple filing jointly.
More than half of the state's 3.3 million taxpayers would not owe more or would receive a "modest" reduction on their taxes under the plan, according to
Creem.
"I'm trying to respond to colleagues who feel that we've raised people's taxes and they can't afford any more (increases)," Creem said.
Creem said the state Department of Revenue estimates her proposed tax hike would generate $255 million in new revenue in fiscal 2004, which begins July 1.
Creem's bill also would allow the state to borrow $600 million over the next two fiscal years.
The borrowing would cost the state about $129 million per year, but Creem said a portion of the revenue from her proposed tax hike would help repay the loan.
Creem said she wanted to offer her Beacon Hill colleagues an alternative to other revenue-generating options, such as expanded gambling.
"I'm not suggesting that we vote on this tomorrow," she added. "This is just another option we can consider.... We're talking about doing a gambling bill. This should be on the table as well."
Creem's bill earned high marks from Massachusetts Taxpayers Foundation President Michael
Widmer, who called it a "thoughtful and balanced proposal."
"From a fiscal point of view, this is a sound proposal -- the borrowing, in particular," he said. "The borrowing is limited. It's a very small amount and it's phased out after two years."
The bill's political viability remains a big question mark, however.
"Gov. Romney made it clear he will veto any attempt to raise taxes," said Romney spokeswoman Shawn Feddeman. "Higher taxes hurt working people and kill jobs."
Leaders of the House and Senate have said that few lawmakers have an appetite for tax increases this year, given that the Legislature approved a record-setting tax package last year.
Both chambers already have passed budgets that close a $3 billion revenue gap without borrowing or tax hikes.
"From a practical point of view, it faces a steep uphill climb," Widmer said of Creem's bill.
Barbara Anderson, executive director of Citizens for Limited
Taxation, dismissed the bill as a "lone liberal adventure."
"This probably won't come as a surprise to anybody," Anderson said.
"(Creem) has been the loudest voice on the Hill for moving ahead with an income tax increase."
Creem distributed the bill to her Senate colleagues, but the measure didn't immediately attract co-sponsors.
"If this had come out of the Taxation Committee, I would be very worried," Anderson said. "I just think this is an individual effort to show her liberal credentials."
In 2000, voters approved a ballot question lowering the state income tax from 5.95 percent to 5 percent over three years. Last year, however, the Legislature approved legislation that froze the rate at 5.3 percent rather than rolling it back to 5 percent, as scheduled.
If Creem's bill is signed into law, the Department of Revenue estimates that 1.8 million of the 3.3 million personal income tax returns filed annually would not receive an increase or would be eligible for a slight reduction.
An additional 940,000 taxpayers would pay less than $2 per week in higher taxes under the plan, according to
Creem.
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The MetroWest Daily News
Thursday, June 5, 2003
House OKs giving towns flexibility with Prop 2½
By Michael Kunzelman, Staff Writer
The state House of Representatives yesterday rejected a plan to increase the tax on meals but approved a measure allowing cities and towns to collect higher property taxes.
House lawmakers, debating legislation aimed at helping communities cope with steep cuts in state aid, defeated a proposal to allow cities and towns to raise the 5 percent meals tax by 1 percent.
Earlier, the House approved a plan to boost the amount of revenue local governments can collect from property taxes.
Under existing state law, cities and towns are required to set aside a portion of their property tax revenue in order to reimburse taxpayers who overpay.
The money, which is set aside in a so-called "overlay account," counts toward the Proposition
2½ limit on property taxes.
The House, however, voted to give cities and towns the option of exempting the overlay account from the Proposition
2½ limit. That would create more room for communities under the cap on property taxes.
In Framingham's case, the exemption would allow the town to collect about $1.7 million above the existing
2½ percent limit.
"That would be a big help for us," said Town Manager George King. "It's a fair proposal and an important one."
The change would have to be approved by at least two-thirds of a board of selectmen or city council and then a majority of voters.
Critics claimed the proposal served as a "frontal assault" on Proposition
2½.
House Minority Leader Bradley Jones, a North Reading Republican, said cities and towns already can seek a Proposition
2½ override if they are worried about how much money they have to set aside in an overlay account.
"Therefore, the need for this is moot," he added.
The plan's sponsor, state Rep. Karen Spilka, D-Ashland, said the exemption isn't meant to be an "end run" around Proposition
2½.
"If the town wants to do this, why shouldn't we let them?" Spilka asked.
The House approved the measure 91 to 62, a margin that would not survive a veto by Gov. Mitt Romney.
State Rep. Deborah Blumer, D-Framingham, said Romney should support the exemption because he has vowed to endorse any local-option tax measure that reflects the "expressed will of the voters."
"This is one tool in a toolbox," Blumer said. "(We can) provide them with this one tool so that they can deal with the financial crisis and keep services in place."
On Tuesday, House leaders unveiled a municipal relief bill that contains 42 different proposals aimed at helping cities and towns cut costs, raise revenue and delay payments on certain debts.
The legislation would allow communities to raise a wide range of fees, but no taxes.
House members filed more than 80 proposed amendments to the bill, including several plans for local-option taxes.
The meals tax amendment was defeated 93 to 63.
The amendment's supporters included Spilka, Blumer and state Reps. Cory Atkins, D-Concord; Ruth
Balser, D-Newton; Jay Kaufman, D-Lexington; Kay Khan, D-Newton; David
Linsky, D-Natick; and Alice Peisch, D-Wellesley.
Its opponents included state Reps. James Eldridge, D-Acton; Peter
Koutoujian, D-Newton; Stephen LeDuc, D-Marlborough; Marie Parente, D-Milford; James
Vallee, D-Franklin; Patricia Walrath, D-Stow; Karyn Polito, R-Shrewsbury; Susan Pope, R-Wayland; and Paul
Loscocco, R-Holliston.
House members also approved an amendment, sponsored by Linsky that would allow any resident who pays a fee for school transportation to claim a $500 income tax deduction.
But they rejected a plan to allow cities and towns to post public notices on the Internet rather than pay for newspaper ads.
The Senate is expected to debate its own relief package later this month.
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The Boston Globe
Thursday, June 5, 2003
Weighing in the state's tax-hike options
By David Tuerck
"Find the revenues." That's what the ads tell us to do in order to avoid devastating state budget cuts. Otherwise we'll have to end nursing home coverage for thousands of seniors, lay off teachers, police officers, and firefighters, and close courts and prisons, turning criminals loose on the streets.
Governor Romney has argued that we can avoid Draconian measures such as these by adopting governmental reforms. But the governor's reform efforts are losing steam, and such reforms as are implemented may prove ineffective at reducing costs. Suppose, then, that the state turns to higher taxes as a way of closing the budget gap. What are the options and consequences associated with that course of action?
A widely accepted estimate holds that in order to sustain current services, the state needs an additional $3 billion in revenue for fiscal year 2004. Given that the state has already "found" $360 million in revenues in the form of higher fees and tax-loophole closings (tax hikes in disguise, some might say), that leaves a $2.64 billion shortfall.
There are different ways to close this shortfall through tax hikes, each with its own effects on individual tax burdens and on the greater economy. One problem that arises in assembling a menu of alternative tax hikes is accounting for the inevitable shrinkage in economic activity, and thus in the tax base, that any tax hike will bring about. Generally, the higher the rate at which something is taxed, the lower the base on which that tax can be assessed. Thus the amount of revenue raised depends in part on how much less there is to tax once a tax rate is increased.
The Beacon Hill Institute has developed its State Tax Analysis Modeling Program for the purpose of sorting out these conflicting effects. The institute used the program to develop a menu of tax hike options, each of which would yield the needed $2.64 billion:
Option 1: Raise the personal income tax from 5.3 to 6.3 percent, expand the sales tax to apply to groceries and alcohol, raise the sales tax rate from 5 to 6 percent, eliminate the "single-sales-factor" tax break for certain corporations (which allows them to compute their taxes on sales rather than other factors), eliminate the investment tax credit, and raise the motor fuels tax from 21 to 22 cents.
Option 2: Raise the personal income tax to 6.3 percent, raise local property tax revenues by 7 percent (overturning Proposition 21/2 as necessary), and double the corporate income tax rate.
Option 3: Raise the personal income tax by 2 percentage points to 7.3 percent, reduce personal exemptions by about 50 percent.
Consider the average taxpayer who files jointly, owns an average home, and generally behaves as an average consumer. Under Option 1, this taxpayer would pay $1,004 more a year in taxes. Option 2 would put more of the burden on corporations, lowering this taxpayer's added bill to $784. Option 3 would put the entire burden on individual income earners, raising this taxpayer's added bill to $1,277.
Because taxes discourage the activities (work and investment) on which they are imposed, they cause reductions in these activities. Thus, in addition to imposing higher burdens on individual taxpayers, corporations, or property owners, each option would inflict collateral damage on the broader economy in the form of lost jobs, wages, and investment.
Using the modeling program, we determined these collateral effects for each option. The chart at left illustrates.
The state could go with Option 1 and sacrifice 47,937 jobs, putting about 1.4 percent of people currently employed out of work. As a result of the loss in jobs, wages would fall by almost $2 billion, or by 1.0 percent. Investment would fall by 1.7 percent.
Alternatively, it could go with Option 2, shrinking the loss in jobs but expanding the loss in investment. Or it could go with Option 3, putting most of the burden on workers. Those are some of the choices.
If the Commonwealth refuses to cut services and can't or won't find a way to deliver existing services more efficiently, it will have to choose from a menu of tax hike options as sampled here. Whatever it chooses from this menu, there will be negative consequences for taxpayers and for the state economy as a whole. It is only sensible to know what is being served up before we order.
David G. Tuerck is executive director of the Beacon Hill Institute and a professor and chairman of economics at Suffolk University.
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The Boston Herald
Thursday, June 5, 2003
Romney sticks fork in drug tax:
Ruling on 'poor' policy won't be appealed
by Jennifer Heldt Powell
Gov. Mitt Romney won't appeal a court order that ends a $1.30 prescription tax and refunds $18 million to pharmacists, a spokesperson said yesterday.
The tax, intended to raise money for Medicaid, was approved under the previous administration. It was challenged in a lawsuit from about 100 pharmacies.
"As far as we're concerned, it was poor public policy to begin with and this is good riddance to a bad idea," said Romney spokesman Eric Fehrnstrom.
The state will repay the pharmacies, he said.
"That will create some additional pressures on the budget, but we will look for compensating reductions in other areas," Fehrnstrom said.
The tax was expected to raise a total of $36 million a year. So far, the government collected only half of it.
Fehrnstrom said no decision has been made on where the money will come from.
Pharmacy leaders said they are pleased that Romney is giving up the fight over the tax.
"It was poorly written to begin with," said Carmelo Cinqueonce, executive vice president for the Massachusetts Pharmacists Association.
The tax was passed, with little debate, as part of the budget last year. Pharmacies, however, created an uproar when they initially tried to pass it on to consumers.
A Superior Court judge ruled the tax was illegal because state regulators failed to get the required federal approval.
Legislative leaders are expected to address the issue as they head into a conference committee to hammer out a budget.
"We recognize that there has been a hit and we will have to work with the House on coming up with a solution," said Kevin O'Reilly, spokesman for Therese Murray (D-Plymouth), chairwoman of the Senate Ways and Means committee.
Druggists said they're concerned that the Legislature might move to reduce payments for filling Medicaid prescriptions.
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The Boston Herald
Thursday, June 5, 2003
Lawmaker pay bill passed, as Romney veto eyed
by Elizabeth W. Crowley and David R. Guarino
State lawmakers rushed through a bill last night that would greatly extend the powers of legislative leaders to grant unfettered political pay hikes and reward loyal lieutenants.
With no debate and at the end of a lengthy debate over a municipal relief plan, the House gaveled through the bill with no roll call vote.
Opponents said they decided to drop past opposition, saying they hope Gov. Mitt Romney will veto the bill - which they called a blatant power grab by House Speaker Thomas M. Finneran and Senate President Robert E. Travaglini.
"The governor gets to prove if he's a real reformer now," said state Rep. James Marzilli (D-Arlington). "He can veto this or he can give legislative leaders control."
"We've shown we can sustain a veto so he can't use that as an excuse," said state Rep. Byron Rushing (D-South End), who challenged Finneran for the speaker's post this year.
"It has damaged our reputation as a legislative body by making it appear that this is how (Finneran) controls the legislature - through money," he said.
The bill would give Finneran and Travaglini the power to set pay for all leadership, including committee chairmen, vice chairmen and floor leaders.
It would also allow them to create new positions on their own.
Currently, any such changes must be approved by both houses and signed by the governor.
Last month, House liberals blocked a move by Finneran to push the bill through with an emergency preamble, which would allow the bill to take effect immediately rather than the normal 90-day wait.
Charles Rasmussen, a spokesman for Finneran, said the vote should have been no surprise.
"We've hashed this one out over and over but, sometime, it finally needs to be (passed)," he said.
A Romney spokeswoman couldn't be reached last night.
But the governor has previously said while he doesn't want to interfere with the way the Legislature organizes itself; however, he does want to retain some power over how much they get paid.
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The Lowell Sun
Sunday, June 1, 2003
Of cell phones, budget whiners and vote shields [Excerpt]
By Jim Campanini
It's amazing how all the municipal whiners and special interest lobbyists who whacked Gov. Mitt Romney's budget proposal in January, the one calling for a 5 percent reduction in local aid payments to cities and towns, are suddenly AWOL. Back then, they attacked the Republican administration as being heartless about the needy and uncaring about education.
But when the Democrat-controlled Legislature came out with their proposals, calling for deeper cutbacks, there was little outcry. The House proposal chops local aid payments by nearly 20 percent in some communities. The Senate's puts a fee on everything but peanut butter-and-jelly sandwiches, the new staple for the working taxpayer class.
I remember Somerville Mayor Dorothy Kelly Gay calling Romney's cuts "irresponsible." North Adams Mayor John Barrett III threatened the state with a lawsuit. School superintendents got in their digs too, particularly Billerica's Robert Calabrese and Lawrence's Wilfredo
Laboy.
I have to credit legislative leaders for sticking to their guns no new taxes. The reality is, local aid payments to municipalities has increased 140 percent over 10 years. What did communities do with the money? Most spent it wildly. Like opium, the free cash became an annual craving and then an addiction.
Gov. Romney, House Speaker Tom Finneran and Senate President Robert Travaglini were right to take the "cold turkey" approach in weaning municipalities off local aid.
Also, if the bulk of Romney's governmental reforms never make it to the light of day, his influence over the budget process has been historic. House and Senate leaders have used a lot of Romney's conceptual ideas to restructure agencies and to economize. Sadly, though, they've protected the patronage-laden court system, Mass. Turnpike Authority, state highway department and higher education system, which is loaded with former state
office-coatholders.
Oh, well, change for the good comes slowly in Massachusetts when Other People's Money -- the taxpayers' -- is the primary issue.
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