CLT
UPDATE
Tuesday, May 4, 2004
Gov. Romney calls for
"unfreezing" tax rollback
Gimme Lobby predictably erupts
Citing tax collections that continue to beat budget benchmarks and a projected $250 million surplus in the Medicaid budget, Gov. Mitt Romney on Monday called on the Legislature to lower the income tax rate to 5 percent and to embrace a series of new Corner Office spending proposals....
Romney announced there is as much as $1 billion more available in fiscal year 2004 and 2005 than he believed when he filed his budget in January....
In announcing the state budget developments, Romney called on the Legislature, which is in the midst of budget season, to refrain from overspending, to build the state rainy day fund, and to cut the income tax rate. It marked Romney's first major push for a broad-based tax cut since he took office 16 months ago.
"The recovery is underway in Massachusetts," Romney said. "It is time to carry out the will of the voters. Let's get this underway. It helps the taxpayers, it follows their voice at the ballot box and it further stimulates our economy." ...
Michael Widmer, president of the business-backed Massachusetts Taxpayers Foundation, said the state should restore spending cuts from the last few years, and reduce the structural budget deficit before looking to cut taxes.
Reducing the income tax rate to 5 percent from 5.35 percent would cost the state between $200 and $230 million next year, Romney said, and would take effect on Jan. 1, 2005, when the tax year begins.
"Until we're out of the fiscal woods, which may be another 24 months, we should be focusing on eliminating the structural deficit and restoring programs," Widmer said.
State House News Service
Monday, May 3, 2004
Tax receipts, Medicaid news spur Romney
to call for income tax cut, spending
In 2000, voters approved a gradual lowering of the income tax rate, which was 5.85 percent at the time, to 5 percent. But in the depths of the state's fiscal crisis in 2002, the Legislature froze the rate at the current 5.3 percent. Now that the state's economy is rumbling to life, Romney said, it is time to follow through with the full tax cut....
Yesterday, Democratic legislative leaders reacted coldly to Romney's proposed income tax cut, saying it was premature to proclaim the end of the state's fiscal crisis and unwise to cut taxes at the expense of being more aggressive in restoring some of the $3 billion in budget cuts over the past three years....
But Michael J. Widmer of the Massachusetts Taxpayers Foundation, a business-funded nonprofit agency that monitors taxes and government spending, said ..."There's no indication that we can afford a tax cut and work our way out of the structural deficit and meet our legal and moral obligations," Widmer said....
"We feel strongly that the Commonwealth should take a look at the investments that need to be made before running down a tax-cut path," said Geoff Beckwith of the Massachusetts Municipal Association, a nonprofit organization that represents cities and towns on Beacon Hill.
John McDonough of Health Care for All said that "before cutting taxes, the state needs to meet its obligations to its needy citizens." McDonough said the state has already committed -- in writing -- to spending $15 million to restore health care to 10,000 legal immigrants, and it should fulfill that commitment before cutting any taxes.
Barbara Anderson of Citizens for Limited Taxation praised Romney for keeping his campaign promise to push for the lower tax rate.
"The typical Beacon Hill response is, 'Oh, we can't afford it, the voters didn't know what they were doing, and we want the money.' The unusual Beacon Hill response is a politician keeping his word and respecting the voters," Anderson said. "Now that the revenues are building again, if we don't do it, then they'll spend us into another fiscal crisis."
The Boston Globe
Tuesday, May 4, 2004
Romney seeks $225m in tax cuts
Says recovering economy allows more spending
Governor Mitt Romney, proclaiming that economic recovery is under way in Massachusetts, yesterday urged the Legislature to lower the state income tax rate to 5 percent. That would be repeating a mistake of the last economic boom. The Legislature as it considers the budget ought to be mindful that tax revenues are still out of line with the essential responsibilities of state government....
Even at the present 5.3 percent income tax rate, revenue for these programs is insufficient. If anything, the income tax -- the state's fairest levy -- should be raised. A 5 percent rate is out of the question.
A Boston Globe editorial
Tuesday, May 4, 2004
Romney's rash tax plan
In light of these realities, it is unconscionable that Gov. Romney is willing to further jeopardize quality education in Massachusetts by proposing a deep reduction in the income tax. The Legislature should declare Romney's proposal "dead on arrival" and instead should take the courageous stand of restoring the income tax to its previous level so that the Commonwealth can meet its moral and constitutional obligations to our students.
Massachusetts Teachers Association
May 3, 2004
Statement of MTA President Catherine A Boudreau
in response to Gov. Mitt Romney's call
to cut the income tax to 5 percent
Chip Ford's CLT
Commentary
"Now that the revenues are building again, if we don't do it, then they'll spend us into another fiscal
crisis," is our view, as stated yesterday by Barbara.
"That would be repeating a mistake of the last economic
boom," is the view of the Gimme Lobby -- led by the Boston Globe
editorial board -- of rolling the income tax back to its historical 5
percent level and is still "frozen" at 5.3 percent. "If anything, the income tax -- the state's fairest levy -- should be raised. A 5 percent rate is out of the question."
Put aside for now how very strange it is that a 5
percent rate was not "out of the question" until the income
tax was "temporarily" hiked in 1989. The state budget has
more than doubled since then -- which is precisely what created the
"fiscal crisis" of the past few years during the most recent
cyclical economic downturn.
The state budget grew from $11 billion in 1988 to
at least a proposed $24 billion-plus in the upcoming fiscal year. But
a tax rollback of about a billion dollars a year since the spending
binge days of the roaring '90s,
we're supposed to believe, created the need to unconscionably cut
spending "to the most vulnerable among us" over the past few
years.
In fact, $24 billion is still not enough for
the Boston Globe, the state teachers union, the so-called
Massachusetts Taxpayers Foundation, or the rest of the Gimme Lobby's
usual suspects. More Is Never Enough (MINE) for them, and never will
be.
According to a Boston Globe report today, John McDonough of Health Care for All
doesn't believe the voters' mandated tax rollback should be honored
until "the state needs to meet its obligations to its needy
citizens":
"McDonough said the state has already committed -- in writing -- to spending $15 million to restore health care to 10,000 legal immigrants, and it should fulfill that commitment before cutting any taxes."
The Massachusetts Teachers Association almost single-handedly
funded the $1.5 million spent on the recent lawsuit demanding still more taxpayer money for increased
education spending. The teachers union was stunned that Governor
Romney would even consider keeping his word and respecting the voters,
abiding by an election result. Those voters ultimately rejected the MTA's
multi-million dollar signature challenge in 1998 and ballot campaign against our tax
rollback question in 2000, but that hasn't slowed the MTA down.
In its response to returning some of the increased
revenues to taxpayers, to the 59 percent of voters who gave the
teachers union what former senate president Tom Birmingham called the
"Beacon Hill middle-finger salute," the MTA asserted:
"... the House of Representatives just approved a budget last week that stops the free-fall in public education spending, but does not restore spending to programs that were slashed over the past two years....
On public higher education, the House budget keeps the promise to employees by funding their duly negotiated contracts, but, here, too, the Legislature was unable to come up with enough money to restore funding to our public colleges and the University of Massachusetts
... it is unconscionable that Gov. Romney is willing to further jeopardize quality education in Massachusetts by proposing a deep reduction in the income tax."
Despite losing the ballot question campaign after
spending over $1 million in its no-holds-barred effort to defeat it, the
teachers union is still calling for the trampling of democracy, the
voiding of an election, any means to justify its end to keeping the
good times rolling for them if nobody else. $31 billion of increased spending
on education over the past decade of Education Reform is still not enough. More never will
be.
Of course the Gimme Lobby is always looking to
expand "investments," especially now that more revenue is
again pouring in. Geoff Beckwith of the Massachusetts Municipal
Association, whined to the Boston Globe:
"We feel strongly that the Commonwealth should take a look at the investments that need to be made before running down a tax-cut
path."
And how complete would the usual Gimme Lobby
eruptions be without inclusion of the so-called Massachusetts
Taxpayers Foundation? The State House News Service yesterday
reported MTF's position on a tax cut for average taxpayers:
Michael Widmer, president of the business-backed Massachusetts Taxpayers
Foundation, said the state should restore spending cuts from the last few years, and reduce the structural budget deficit before looking to cut taxes....
"Until we're out of the fiscal woods, which may be another 24 months, we should be focusing on eliminating the structural deficit and restoring programs," Widmer
said.
"Structural deficit" is the same
dodge Mickey's been using for over a decade, enabling the Gimme Lobby
to dig the state into a deeper and deeper financial hole. The
structural deficit has just kept growing, along with state spending,
despite Widmer's years of half-hearted and generally ignored
recommendations.
Widmer, a former Dukakis administration hack, is
either too dumb to realize that the only time he's listened to is when
he objects to tax cuts for ordinary taxpayers and the tax-and-spend
crowd needs an authoritative voice, else is complicit in the
tax-and-spend agenda. Either way, he and MTF have consistently enabled
and encouraged the state's fiscal instability under the self-promoted
guise of responsible state policy.
At least, after many years of struggling to expose
the so-called Massachusetts Taxpayers Foundation for the shill it has always been,
MTF is no longer preceded by "highly-respected" or "nonpartisan" every time
Widmer is trotted out and quoted as something akin to a fiscal oracle.
Today MTF is routinely and more accurately described as "business-backed," or "a business-funded nonprofit agency that monitors taxes and government
spending" as described today by Boston Globe reporter Scott
Greenberger. (Now if only we can get across how erroneous and
unreliable MTF's prognostications have been over the years!)
Yesterday the debate on Beacon Hill was
unilaterally transformed by Gov. Romney. No longer can the Gimme Lobby
play the "fiscal crisis" card -- and remember, it was only
last week that a hike to 5.95 percent in the income tax rate
was the proposal voted on in the House. The governor has exposed a
quiet little secret that -- if nothing else -- has redirected
political focus. He revealed that revenue is again rolling in; not
only do we not need a tax hike but we can now easily afford to
resume the voter-mandated tax rollback.
As we warned throughout the last decade, if the
money is left on the Bacon Hill table, they will spend it. That is
what the Democrats and the Gimme Lobby do -- and did. It is their
nature. If they can get away with doing it again this time, another
fiscal crisis inevitably looms ahead, and another opportunity for them
to scream bloody murder demanding another tax hike.
Now is the time to prepare for the next cyclical
economic downturn, prevent another "fiscal crisis." The
solution has always been available, if ignored: take our money off
their table and don't let them spend us into even greater oblivion all
over again.
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Chip
Ford |
State House News Service
Monday, May 3, 2004
Tax receipts, Medicaid news spur Romney
to call for income tax cut, spending
By Amy Lambiaso and Michael P. Norton
Citing tax collections that continue to beat budget benchmarks and a projected $250 million surplus in the Medicaid budget, Gov. Mitt Romney on Monday called on the Legislature to lower the income tax rate to 5 percent and to embrace a series of new Corner Office spending proposals.
At a press conference he called to push his death penalty proposal, Romney announced there is as much as $1 billion more available in fiscal year 2004 and 2005 than he believed when he filed his budget in January. The News Service reported Friday that the state was running a $500 million tax revenue surplus heading into the last quarter of fiscal 2004, which ends June 30. April collections reported today pushed that number up to $517 million.
In announcing the state budget developments, Romney called on the Legislature, which is in the midst of budget season, to refrain from overspending, to build the state rainy day fund, and to cut the income tax rate. It marked Romney's first major push for a broad-based tax cut since he took office 16 months ago.
"The recovery is underway in Massachusetts," Romney said. "It is time to carry out the will of the voters. Let's get this underway. It helps the taxpayers, it follows their voice at the ballot box and it further stimulates our economy."
Voters in 2000 agreed to lower the income tax rate to 5 percent, but lawmakers froze the rate at 5.35 percent in 2002 as part of a $1.2 billion package of tax hikes intended to preserve programs and services and minimize local aid cuts in the face of a recessionary economy. The governor's new call for tax relief is likely now to trigger an election-year debate, as well as a new campaign issue, over whether or when to cut or raise taxes and by how much.
Senate budget debate is set for mid-May. The House last week voted 129 to 27 to reject a plan to raise the income tax rate to 5.95 percent. The unanimously approved House budget did not include broad-based tax cuts.
Romney's announcements were driven in part by a 29 percent surge in April tax revenue collections. Department of Revenue officials reported Monday afternoon that collections for the month were up $410 million over April 2003. Ten months into the fiscal year, collections are up $867 million, or 7.2 percent. Tax collections are now exceeding benchmarks used to build this year's budget by $517 million, the department reported. Romney was especially pleased to see withholding taxes, a measure of job levels, up $84 million, or 16 percent during April.
Calling his own budget plan "more conservative than needed," Romney said he will revise it and propose "substantial support" for drug treatment and substance abuse rehabilitation centers; increased spending on homeland security for rail and transit systems, and higher health care provider payments. Romney said he will propose the specific increases by June 1, after the administration has more time to monitor revenues.
Democrats and state fiscal watchdog groups were quick to pounce on the governor's move, calling it "bold" and "premature." Lead House budget writer Rep. John Rogers (D-Norwood) said the House will take a "wait and see" attitude before acting on any proposed tax cut. Rogers said 40 percent of the state's tax revenues are collected during the final three months of the fiscal year.
"You can't look at one month and call it a recovery," Rogers said. "As much as I'd like to and love to do it, I'd love to say it. But you have to be very cautious before you say such a word."
Rogers said he was "not surprised" with today's revenue news and remains concerned with the state's unemployment rate and the large number of residents who are working at lower paying jobs and discouraged with the employment market.
"I don't think good times are here again for them," he said.
Michael Widmer, president of the business-backed Massachusetts Taxpayers Foundation, said the state should restore spending cuts from the last few years, and reduce the structural budget deficit before looking to cut taxes.
Reducing the income tax rate to 5 percent from 5.35 percent would cost the state between $200 and $230 million next year, Romney said, and would take effect on Jan. 1, 2005, when the tax year begins.
"Until we're out of the fiscal woods, which may be another 24 months, we should be focusing on eliminating the structural deficit and restoring programs," Widmer said.
Widmer said the governor and the House both rely on one-time revenue to present a balanced budget proposal for next year. Rogers agreed that the state ought to reduce its structural deficit and boost its rainy day fund before introducing any tax cuts.
"We need a healthy stabilization fund and we have to draw upon our reserves wisely," Rogers said. "We need to make sure we replenish it as we go along and work our way out of this cycle." Rogers has predicted the economic downturn to last "at least" another two years.
Rep. Michael Festa (D-Melrose) called the governor's plan "bold" in a time when state-funded programs are suffering and communities are having to sustain programs with less state funding.
"Are we proud of what we've done the last few years?" Festa said. "I'm certainly not."
Medicaid Trends, Major Implications
According to state Health and Human Services Secretary Ronald Preston, a Romney appointee, there are several reasons behind the projected $250 million surplus in the Medicaid budget.
Enrollment in Medicaid, which serves about one of every six Massachusetts residents, has not hit projections because the economy is picking up and because some enrollees are dropping coverage because of transportation, language, or mental health problems, Preston said. There were 936,000 people enrolled in Medicaid on March 31, according to Preston aides, and that's 50,000 fewer than projected for fiscal 2004.
Half of the projected Medicaid surplus accounts for federal matching funds, Preston said.
In the fiscal year ahead, Preston said, the administration plans a major push to boost Medicaid enrollment, largely because many who could be in the program are instead falling into the so-called free care pool, where costs are paid by employers, insurers, hospitals and state taxpayers. The federal government covers half of most Medicaid costs.
While critics say layoffs are increasing the need for insurance programs and budget cuts and new premiums are knocking people off Medicaid, Preston said there are other factors at work. "It turns out to be hard to keep people in the Medicaid program," he said. "This issue of helping people to stay enrolled an awful lot of orchestration."
In the fall, the state expects as many as 40,000 more people to enroll in Medicaid once screening of free care pool applicants begins, Preston said. In addition, health care providers and activists will be equipped with "virtual gateway" software to help sign up eligible applicants. While the newly projected savings may be good news for taxpayers or other state programs, Preston said, "It's being driven by lower than expected enrollment and we're very bothered by that. We don't think it's good for the people. We don't think it's good for the Commonwealth."
John McDonough, executive director of the advocacy group Health Care For All, said the administration should meet its obligations in providing health insurance to immigrants, children, poor and disabled residents by fully funding Medicaid programs. McDonough said he was "not surprised" to hear Medicaid accounts were running a surplus because enrollment has dropped and the overall increase in health care spending is "moderating."
Asked if the state could afford to boost Medicaid enrollment while cutting income taxes, Preston said, "that's not my side of the problem." He added that he presumes the two goals can be achieved if recommended by Gov. Romney, who is privy to a broader spectrum of economic and budgetary facts.
Study Shows State Budget Problems Continuing
Romney's call for both new spend and tax cuts corresponded with the release of a new national study.
Following three budget cycles that put a "tremendous strain" on state budgets, Massachusetts and its counterparts throughout the United States face fiscal difficulties for "the foreseeable future," according to the survey released Monday by the National Governors Association and the National Association of State Budget Officers.
The uptick in the national economy helping to stabilize state tax revenues, but state spending in general remains "sluggish," states continue to be hobbled by skyrocketing health care costs and many states have nearly exhausted rainy day reserve accounts.
According to the report, governors expect fiscal 2005 expenditures to rise 2.8 percent from 2004, well below the 26-year average of 6.2 percent, but up from the anemic 0.6 percent increase in fiscal 2003, the smallest increase in the previous 20 years.
Only 18 states cut their fiscal 2004 budgets - cuts totaling $4.8 billion - while a record 37 states slashed budgets in 2002 and 2003. The survey takers also found that governors in 26 states have recommended tax and fee increases in fiscal 2005 totaling $5.4 billion, while four governors have proposed decreases totaling $266.2 million.
Budget writers in the Massachusetts Senate are due to release their fiscal 2005 budget bill next week.
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The Boston Globe
Tuesday, May 4, 2004
Romney seeks $225m in tax cuts
Says recovering economy allows more spending
By Scott S. Greenberger, Globe Staff
Governor Mitt Romney called yesterday for a $225 million tax cut in the coming fiscal year, pointing to a resurgent economy that is sparking an "extraordinary growth in revenues" after four years of fiscal crisis.
The governor wants to cut the state income tax rate from 5.3 percent to 5 percent, which translates into an average of $100 per taxpayer the first year. Romney would also use some of the extra money to increase spending on substance-abuse programs and homeland security, boost Medicaid reimbursement rates to hospitals and other health care providers, and replenish the state's depleted rainy day reserves. The governor did not specify how much he would spend in those areas.
In 2000, voters approved a gradual lowering of the income tax rate, which was 5.85 percent at the time, to 5 percent. But in the depths of the state's fiscal crisis in 2002, the Legislature froze the rate at the current 5.3 percent. Now that the state's economy is rumbling to life, Romney said, it is time to follow through with the full tax cut.
"It's time to carry out the will of the voters by lowering our tax rate to 5 percent. Let's get this underway," Romney said at a State House news conference he called to unveil a new report on capital punishment. "That helps the taxpayers, it follows their voice at the ballot box, and it further stimulates our economy."
It was the second election-year tax cut proposed by Romney in the last two weeks: the governor suggested a cut in the capital gains rate last month -- to answer a court ruling -- but he backed down after the Legislature came up with a revenue-neutral compromise. Yesterday, Democratic legislative leaders reacted coldly to Romney's proposed income tax cut, saying it was premature to proclaim the end of the state's fiscal crisis and unwise to cut taxes at the expense of being more aggressive in restoring some of the $3 billion in budget cuts over the past three years.
Senator Therese Murray, chairwoman of the Senate Ways and Means Committee, warned that the Supreme Judicial Court may order the state to increase spending on schools by $1 billion or more as a result of a lawsuit filed by students in poor districts.
"To say, 'Let's spend this money and give tax cuts,' when just about every single city and town is hurting, I don't think is a smart thing to do right now," said Murray, Democrat of Plymouth. "We could be anywhere from $1.5 billion to $3 billion in the hole because of that court case. Why would you get yourself in a deeper hole and hot water now, when that's looming in front of us?"
Lowering the income tax rate to 5 percent would cost the state between $200 million and $225 million in fiscal 2005. But it would reduce revenue by twice that amount in fiscal 2006, when it would be in effect for the entire year. Tax increases must take effect at the beginning of the calendar year on Jan. 1, while the fiscal year begins July 1.
Romney's optimism is based largely on a substantial spike in the amount of money Massachusetts collected last month from income withholding, which makes up most of the state's revenue and is considered a key barometer of overall economic health because it is tied so closely to job creation. The state took in $599 million in income withholding last month, up $84 million, or 16.3 percent, from April 2003. Overall, it received $1.8 billion in revenue, up $410 million, or 29 percent, compared with last April.
Since the beginning of the year, the state has collected $517 million more than what administration and legislative budget writers forecast for fiscal 2004, meaning it is likely to carry at least that much into the next fiscal year. Although revenue has been rising fairly steadily for months, state officials had always cautioned that income withholding was stagnant. That changed yesterday.
"Something's happening out there. I can't tell you how many jobs that represents, but we're clearly going in the right direction and the trend seems to be consistent," said Revenue Commissioner Alan LeBovidge. "This is a big jump."
But Michael J. Widmer of the Massachusetts Taxpayers Foundation, a business-funded nonprofit agency that monitors taxes and government spending, said the state is "far from out of the woods." Widmer said the state still has a so-called structural deficit, or a gap between recurring revenues and its yearly spending obligations, of at least $1 billion. Revenue may be rising, he said, but it is not enough to keep up with rising costs that are largely unavoidable, such as health care, pensions, and debt service.
"There's no indication that we can afford a tax cut and work our way out of the structural deficit and meet our legal and moral obligations," Widmer said.
Critics said that many cities and towns have cut payrolls and raised property taxes to compensate for cuts in state aid. If there is new money to spend, they say, it should be used to beef up spending on schools, public works, and police and fire protection.
"We feel strongly that the Commonwealth should take a look at the investments that need to be made before running down a tax-cut path," said Geoff Beckwith of the Massachusetts Municipal Association, a nonprofit organization that represents cities and towns on Beacon Hill.
John McDonough of Health Care for All said that "before cutting taxes, the state needs to meet its obligations to its needy citizens." McDonough said the state has already committed -- in writing -- to spending $15 million to restore health care to 10,000 legal immigrants, and it should fulfill that commitment before cutting any taxes.
Barbara Anderson of Citizens for Limited Taxation praised Romney for keeping his campaign promise to push for the lower tax rate.
"The typical Beacon Hill response is, 'Oh, we can't afford it, the voters didn't know what they were doing, and we want the money.' The unusual Beacon Hill response is a politician keeping his word and respecting the voters," Anderson said. "Now that the revenues are building again, if we don't do it, then they'll spend us into another fiscal crisis."
Romney said that lowering taxes stimulates the economy. Tax cuts put Massachusetts in a better position to compete with other states for businesses and workers, he said, and a thriving economy could fill the state's coffers.
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The Boston Globe
Tuesday, May 4, 2004
A Boston Globe editorial
Romney's rash tax plan
Governor Mitt Romney, proclaiming that economic recovery is under way in Massachusetts, yesterday urged the Legislature to lower the state income tax rate to 5 percent. That would be repeating a mistake of the last economic boom. The Legislature as it considers the budget ought to be mindful that tax revenues are still out of line with the essential responsibilities of state government.
Romney is right that the 42 percent increase in income tax revenue last month compared with April 2003 is a powerful indicator that the economy is on the upswing. He predicts that state revenue for the next fiscal year, which begins July 1, will be $500 million to $1 billion higher than had been expected.
The state, however, is still suffering from the cumulative effect of all the $3 billion in cuts that the Legislature, Romney, and his predecessor, Jane Swift, imposed to tide the government over a three-year period of economic stagnation. The strain was exacerbated by the decision of the voters to cut the income tax to 5 percent in 2000. The voters were gulled by then-Governor Paul Cellucci into believing that the cut would not hurt essential services and would even increase state revenues by stimulating economic growth. A cut of this size, while harmful to state government, has little impact on the overall economy compared with national trends. The Legislature wisely stabilized the rate at 5.3 percent in 2002.
At his press conference yesterday, Romney urged the Legislature to increase spending on drug treatment programs, assistance to health care providers, and homeland security and to begin to replenish the rainy day fund. All of these are worthy objectives, and homeland security wasn't an important consideration when the voters approved the tax cut. New priorities require new money.
The rainy day fund is especially important to prepare state government for the next economic downturn. But Romney would undercut his goal of fiscal prudence by urging a lower income tax. When the next downturn comes, future governors and legislators would have to raise taxes -- always a difficult task -- or resume the cutting.
Romney can't have it both ways. If he wants an activist state government, as he apparently does, he must make sure the state has the ability to pay for it.
To the governor's priorities, we on this page would add more aid to cities and towns (including the possibility of increased educational assistance to comply with the court ruling last week), support for a raft of neglected social services, and more money for public higher education, work force training, and housing. The last two are especially important to the long-term economic health of the state. Even at the present 5.3 percent income tax rate, revenue for these programs is insufficient. If anything, the income tax -- the state's fairest levy -- should be raised. A 5 percent rate is out of the question.
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Massachusetts Teachers Association
Statement of MTA President Catherine A Boudreau
in response to Gov. Mitt Romney's call
to cut the income tax to 5 percent
May 3, 2004
Gov. Mitt Romney's call to cut the income tax to 5 percent at a time when the state has failed to restore funding to public schools and public higher education because of the current deficit is cynical and irresponsible.
Just one week ago today, Suffolk Superior Court Judge Margot Botsford issued a compelling and carefully documented 358-page report in which she concluded that the plaintiff school districts are not receiving the funding they need to provide all students with the quality education to which they are constitutionally entitled. This decision has been forwarded to the Supreme Judicial Court, and it could lead to a mandate that the state provide significantly more funds to our public schools.
In the meantime, the House of Representatives just approved a budget last week that stops the free-fall in public education spending, but does not restore spending to programs that were slashed over the past two years. The cuts were so deep, in fact, that Massachusetts has the dubious distinction of having cut public education spending per student by more than any other state during that time. This year's House budget, while preferable to the Romney proposal, does not come close to guaranteeing children the level of education Judge Botsford's report concludes they must receive.
On public higher education, the House budget keeps the promise to employees by funding their duly negotiated contracts, but, here, too, the Legislature was unable to come up with enough money to restore funding to our public colleges and the University of Massachusetts - institutions that lost a quarter of their state aid (adjusted for inflation) over the past three years.
In light of these realities, it is unconscionable that Gov. Romney is willing to further jeopardize quality education in Massachusetts by proposing a deep reduction in the income tax. The Legislature should declare Romney's proposal "dead on arrival" and instead should take the courageous stand of restoring the income tax to its previous level so that the Commonwealth can meet its moral and constitutional obligations to our students.
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