NEWS RELEASE
Wednesday, November 5, 2003
CLT recommendations on
the Senate's economic stimulus package
– MEMO
–
To: Members of the Massachusetts Senate
cc: Members of the Massachusetts House
November 5, 2003
Re: Economic Stimulus etc.
CLT can empathize with proposing a sales tax holiday only to have it shot down. We suggested one to Governor Weld in the early 90's and he didn’t like it either. But it still would be valuable to learn if such a holiday would increase sales while jump-starting a poor economy, and we appreciate the
Senate Ways & Means Committee offer.
The best thing the Legislature can do for the economy is to both cut taxes and get out of the way of economic activity . By ignoring those who want to increase the income tax, you’ve already helped begin our recovery. Thank you for not going along with the usual suspects who want to raise taxes on working people. It would help to get our income tax rate down to 5 percent, lowering the high total tax burden that repels some businesses and productive workers who might otherwise want to relocate here.
CLT would like to even the score with the Mass. Taxpayers Foundation for supporting new "people" taxes by supporting "big-business" taxes that MTF resists, but business taxes are usually just passed along to consumers or absorbed by pay cuts or layoffs. Since business creates the jobs that provide all the revenue for all state services, it is counterproductive to raise its taxes.
If we knew some way to tax MTF banks, insurance companies, utilities, and law firms without hurting their employees, customers, and the economy, we would file the bill ourselves.
Classification was supported by voters in 1978 because court-mandated revaluation was about to create a huge property tax shift from business to residential, before Prop 2½ was on the ballot. Voters were not anti-business; they feared losing their homes. A smaller shift now occurs during recessions; rather than risk hurting businesses and impacting jobs by increasing the classification ratio, you might want to work with us toward further control of the regressive property tax itself.
In its recent report, which claims that "cuts in state aid lead to higher property tax burdens," MTF’s concern for property taxpayers would be heartwarming if MTF hadn’t opposed Prop 2½ in 1980. Even back then, it supported high taxes on working people to avoid tax hikes on business. But if we all agree that we want local aid increases, MTF recommendations for reform and savings should be considered, along with those from Pioneer Institute, the governor, and the state auditor’s office. A tighter, more efficient state government would be very good for the economy.
We also applaud the Senate plan to use some tobacco settlement money to reimburse businesses that in good faith paid for smoking-issue renovations. This would demonstrate responsibility for abrupt policy reversals that are otherwise financially crippling to some, unfair to all.
State House News Service
Thursday, October 30, 2003
Senate to consider broad-based $115M bill
aimed at lifting the economy
By Amy Lambiaso
Senate leaders used a $115 million economic stimulus package Thursday to propose legalization of stem cell research, lifting the current ban on Sunday liquor sales, and creating two days of sales tax-free shopping.
The Senate jobs or economic stimulus bill was introduced three months after the House approved its $110 million package and one month after Gov. Mitt Romney filed his $125 million stimulus plan. The Senate plans to debate and pass its bill next week. Formal legislative sessions end this year on Nov. 19.
Senators and business leaders stopped short of predicting how many jobs would result from their plan. Sen. Therese Murray (D-Plymouth), chairwoman of the Senate Ways and Means Committee, said if the bill passes, she anticipates a full economic return on the $115 million investment within three years.
Like the House, Senate leaders are dipping into the tobacco settlement fund and reserves to boost housing, workforce training, land development and health care technologies. The Senate plan calls for using $45 million in tobacco money. The remaining $70 million would be taken from the state's stabilization fund. The House bill used only tobacco settlement revenues to pay for its economic development initiatives.
Romney's plan offers a series tax credits and rebates to help businesses growth and rather than dipping into reserves, the governor's bill is financed largely through revenues from closing tax loopholes.
Senate leaders of the Science and Technology Caucus, a 240-member group focused on improving the biotech and science sectors, used a press conference Thursday to outline the newest plan. Sen. Linda
Melconian, chair of the Senate Science and Technology Committee, called it a "broad based" package.
"Each sector should receive some benefit," said Melconian, a Springfield Democrat. "We have a potentially vibrant economy here in Massachusetts. We can recover and we will recover."
After hearing the Senate's detailed presentation of the plan, members of the business community, retail groups and environmentalists were generally pleased. In particular, observers are predicting victory for two areas that were included in all three plans: making the 3 percent investment tax credit permanent for businesses, and extending a tax credit to promote brownfields redevelopment for three years.
Associated Industries of Massachusetts (AIM), the state's largest employer group, praised the leaders for "acknowledging the importance of the issue" to solidify the investment tax credit, and for sending a positive message to businesses, said AIM president Richard Lord. "The state's attitude toward businesses is very important in attracting and sustaining our workforce," Lord said.
The Distilled Spirits Council applauded the Senate's push to lift the Sunday liquor sales ban, calling it a "win-win for everyone - the state, small businesses and Massachusetts consumers," said Peter
Cressy, president of the council. The move is estimated to raise $2 million each year in revenue, senators said.
The legislation does include a local opt-out provision for cities and towns wishing to maintain the so-called blue law, with local governing bodies deciding.
Small businesses proclaimed their excitement for the workforce training and small business development grants. Joseph
Kriesberg, president and CEO of the Massachusetts Association of Community Development Corporations, said the provisions included to help entrepreneurs get their business off the ground recognize the need to develop business in communities "outside Routes 128 and 495."
"A strong, local business environment is what we need in these smaller communities," Kriesberg said. "Entrepreneurs need the support that so many others take for granted."
The bill also includes a "first-in-the-nation" approach to developing employer-assisted housing, Melconian said. The plan uses a $5 million matching fund to provide $1 of state money for every $2 spent by an employer on housing available to employees earning less than 120 percent of the area's median income. "This is one of the most attractive pieces we have here," she said.
The plan for two sales tax-free days each year will likely attract shoppers from nearby states hoping for cheaper prices, said Sen. Jack Hart (D-Boston). Under the bill, some big-ticket items would not be exempt from the state's 5 percent sales tax on Sunday, Dec. 21 and on Patriots Day in April.
Murray touted the bill's inclusion of tourism-boosting provisions, and said that by losing 242,000 visitors to the state last year, the state lost more than $400 million. "We need to bring back the international market," she said. "I think we have a lot more to offer here."
Shawn Feddeman, Romney's spokeswoman, said the governor was "pleased to see we are making progress on a jobs bill in Massachusetts." She added that although the governor has some concerns with the funding sources for the package, he "hopes to sign something into law as quickly as possible to help get the Massachusetts economy back on track."
Sen. Bruce Tarr (R-Gloucester), a member of the Senate Science and Technology Committee that released the bill favorably Thursday, said he too is concerned with the large use of stabilization funds in the plan. Tarr said he abstained from voting on the bill Thursday so he could have more time to review the individual sections. "Any use of those funds has to be justified," he said. "The issue is not necessarily something I'm against, I just need to be convinced of it and so far I haven't been."
Tarr envisioned amendments dealing with more tax credits for job creation, and using more surplus state property for housing creation. He said he was disappointed a section dealing with the rapidly depleting unemployment insurance trust fund wasn't included in the bill. "If we don't (amend the unemployment insurance) we don't do much for the business community," he said. "This was a major omission that we should have taken care of by now."
Murray said the bill will be voted on by the Senate Ways and Means Committee on Monday. Amendments are due in the clerk's office by 11 am Tuesday and the full Senate will begin debating the package Wednesday.
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