CLT
UPDATE
Tuesday, May 3, 2005
IF NOT NOW, WHEN?
Wrong as usual and despite $1B
surplus
MTF still fights against rollback
Revenue collections for April totaled $2.024 billion,
the largest single monthly total ever in the Commonwealth, Revenue
Commissioner Alan LeBovidge announced today....
"The biggest month we've ever had is due mainly to personal income tax
payments with returns and estimated payments on personal income,"
LaBovidge said.
Commonwealth of Massachusetts
Department of Revenue
Monday, May 2, 2005
April revenues set record, surpass $2 Billion mark
The state collected more tax revenue in April than in any
single month ever, prompting Gov. Mitt Romney on Monday morning to predict a
budget surplus of hundreds of millions of dollars and claim there's now no
reason not to deliver on an income tax cut approved by voters in 2000....
At a press conference to announce John Cogliano as the state's new
transportation secretary, Romney broke the news, saying receipts in April were
$318 million above a benchmark revised upwards just two weeks ago. Tax
collections are running $950 million ahead of the revenue forecast used to
assemble this year's state budget, and Romney predicted they'll total about $1
billion above the original forecast by the end of the fiscal year June 30....
The governor says he expects Democrats will propose many ways to spend the
unexpected tax revenues. "The voters have told us that that's not our right,
that instead we are to return to them this money," he said. "The surplus is
large. We'll either spend it or give it back to the citizens and I say it's time
to give it back to the citizens. There's no question but that we as a state can
afford to honor the will of the votes and return their tax rate to 5 percent."
...
Opponents of the tax rollback say the unanticipated revenue should be used to
return some of the $3 billion cut from the state budget during the fiscal
crisis.
House Majority Leader John Rogers (D-Norwood), former Ways and Means chairman,
argued during the House's budget debate last week that the budget remains
structurally imbalanced due to the state's continued reliance on one-time
revenues.... Approving a tax cut at this time would be "fiscally reckless."
State House News Service
Monday, May 2, 2005
Romney predicts big surplus,
calls for tax cut after record $2 billion month
Massachusetts collected more than $2 billion in taxes in
April, breaking the state's all-time record for a single month and prompting
Governor Mitt Romney to renew his call for a cut in the state income tax.
The $2.024 billion tax total for April 2005 was 11.2 percent higher than the
April 2004 figure. With two months remaining in the fiscal year, the state has
collected a total of $13.9 billion, an increase of $963 million, or 7.4 percent,
over the first 10 months of last year.
Governor Mitt Romney said the figures the Department of Revenue released
yesterday should spur lawmakers to reduce the income tax rate from 5.3 percent
to 5 percent, a change approved by voters in 2000, but delayed by the
Legislature in 2002 during the state's fiscal crisis....
"We as a state can afford to honor the will of the voters and return their tax
rate to 5 percent," Romney said yesterday at a press conference called to
announce his appointment of a new transportation secretary. "The surplus is
large. We'll either spend it or give it back to citizens, and I say it's time to
give it back to the citizens." ...
"I think it's very encouraging, but in terms of making a major policy decision
like cutting taxes, I think it's really premature," said Representative Robert
A. DeLeo, a Winthrop Democrat who is in his first year as chairman of the House
Ways and Means Committee....
The new revenue numbers will probably spark calls from advocates for more
spending....
Michael J. Widmer of the Massachusetts Taxpayers Foundation, a business-funded
nonprofit that monitors taxes and government spending, said the April revenue
growth probably will allow the state to have a structurally balanced budget in
the current fiscal year and in fiscal 2006. Nevertheless, he said the state
cannot afford the tax cut when its mandatory spending is growing at a faster
rate than reliable revenue, such as income-tax withholding....
"It's heavily cyclical and volatile by nature," Widmer said, "and so we should
treat it with caution, in terms of building in tax cuts or spending increases
based on it." ...
But David G. Tuerck, executive director of the Beacon Hill Institute at Suffolk
University, said he doubted that Democrats on Beacon Hill would be willing to
cut taxes.
"There will always be a reason," Tuerck said of the Democrats' refusal.
The Boston Globe
Tuesday, May 3, 2005
Record receipts fuel call for tax cut
State tax revenues are booming again, with April setting an
all-time monthly record and annual revenues coming in at nearly $1 billion more
than forecasts at the start of the fiscal year, fueling Republican calls for a
long-sought rollback of the state income tax rate to 5 percent....
At this point, the governor said, "There is no good reason," not to honor a
5-year-old voter referendum that called for a rollback of the income tax rate
from 5.9 percent to 5 percent. The income tax rate was rolled back to the
current 5.3 percent before the recession created a major fiscal crisis for the
state, with sagging revenues creating a multi-billion dollar state budget
deficit....
"We don’t have any excuse to keep spending people’s money above the amount
people voted for," Mr. Romney said, adding, "This is still a democracy." He said
he expects calls to use the additional money for pay raises and new programs,
but that he wants to hold the line on spending until the income tax rate
rollback is enacted.
The Telegram & Gazette
Tuesday, May 3, 2005
State tax revenues are surging
Romney wants tax rate cut back to 5 percent
"Don't even think of investing in Massachusetts because you
don't know from one hour to the next what your capital gains tax is going to
be." - Barbara Anderson, Citizens for Limited Taxation.
Taxpayer advocate Barbara Anderson's bottom line about the message sent to
investors by the twists and turns in the capital gains tax saga - the
implementation of the 2002 increase has now twice been ruled unconstitutional by
the Supreme Judicial Court - best frames the argument for changing the effective
date of the new tax rate from Jan. 1, 2002, to Jan. 1, 2003. Otherwise, to the
outside world, Anderson said, Massachusetts' tax policy looks "certifiable."
A Boston Herald editorial
Tuesday, May 3, 2005
Romney on taxes: What side is he on?
Facing state aid shortfalls of more than $500 million
compared to three years ago, communities more often than ever are considering
raising their own property taxes to pay for services like schools, police and
fire protection, according to state and local officials.
Voters in almost half the towns in the region will consider -- or have already
-- Proposition 2˝ overrides on their ballots this spring....
Barbara Anderson, executive director of the group Citizens for Limited
Taxation, said towns were too liberal in their spending during the 1990s.
Communities were "getting a lot of money in local aid and spending it like there
was no tomorrow," Anderson said. "Yes, they're in trouble. But it's their own
fault."
The MetroWest Daily News
Sunday, May 1, 2005
Overrides: A taxing choice
In 2004, thousands of voters in many states still had
problems with faulty registration records. Extremely long lines in Ohio and
other states deterred thousands more, and there were serious technical glitches
and errors, including 4,438 computer votes that simply disappeared in North
Carolina....
Congress owes much greater commitment to the mechanics of democracy, and voters
should demand it.
A Boston Globe editorial
Monday, May 2, 2005
Voting devalued
Editorial cartoon by David Hitch
May 3, 2005
Worcester Telegram
& Gazette
A CLT Blast from the Past
Some Democratic senators, saying that a proposed $1.2
billion tax and fee package doesn't go far enough to shore up state finances,
are backing a move to raise more taxes by increasing the state income tax from
5.3 percent to 5.6 percent....
Michael J. Widmer, president of the nonpartisan Massachusetts
Taxpayers Foundation, said he supports [Sen.] Berry's idea of using
a tax increase to replenish reserves.
The Boston Globe, Jun. 7, 2002
Some eye
hike in income tax rate
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.
State House News Service, May 3, 2004
Chip Ford's CLT Commentary
"Revenue collections for April totaled $2.024
billion, the largest single monthly total ever in the Commonwealth."
If not now, when?
"Tax collections are running $950 million ahead of
the revenue forecast used to assemble this year's state budget."
If not now, when?
"State tax revenues are booming again, with April
setting an all-time monthly record and annual revenues coming in at
nearly $1 billion more than forecasts at the start of the fiscal year."
If not now, when?
Never, if the decision is left to Michael Widmer of
the so-called Massachusetts Taxpayers Foundation, and the other tax-and-spend
liberals of his ilk for whom he provides cover.
If Widmer had his way in 2002 and ever since, the
income tax rate would have been jacked up to 5.6 percent and the state
would be rolling in even more of our cash -- unless he and his protégés
had already spent it.
As David Tuerck of the Beacon Hill Institute astutely
noted, "There will always be a reason" to forestall the voters' mandate.
The time is either "heavily cyclical and volatile," as Widmer calls it
when our money is pouring in, else the state is in the midst of a
"fiscal crisis" -- in between there's always a "fiscal crisis"
looming just around the corner as they squander the surplus on unmet
wants and new programs that never go away.
We watched this transparent diversion throughout the
Roaring '90s with the years of billion dollar revenue surpluses. This
was when state spending managed to double since the previous
self-imposed "fiscal crisis" -- but a good time to keep the promise and
roll back the "temporary" income tax rate was never found. That
unsustainable spending created the most recent "fiscal crisis." If
Widmer and the rest of the tax-and-spend cabal have their way, they'll
happily pave the way for the next one and then demand another tax hike.
We've been there, done that. A couple of times now.
If not now, when?
"We as a state can afford to honor the will of the
voters and return their tax rate to 5 percent," Governor Romney
honorably recognized. "The surplus is large. We'll either spend it or
give it back to citizens, and I say it's time to give it back to the
citizens."
Sixteen years after the promise was made that it'd be
only temporary. Sixteen years that it's remained a broken promise. Yes
governor, we too say it's time to keep that promise, to finally honor
the voters' mandate of 2000.
And this just might be the year for it to finally be
kept!
Barbara's pretty upbeat that it will be, considering
the changes in the House and Senate leadership, especially the latter.
Senate President Travaglini seems to be sincerely attempting to change
the public's negative impression of the Legislature in general, the
senate in particular. He seems more respectful of voters and the ballot
question process, she believes.
The senate is next to propose its version of the
state's FY06 budget. An amendment to keep the promise and return the
income tax rate to 5 percent will be offered by senate Republicans.
That's where our next effort must be directed. Be prepared to act when
it's time to pull the trigger -- be prepared to call your state senator
and tell him or her that you want the 16-year old promise finally kept:
no excuses, no stalls, no "study," just kept.
If not now, when?
We'll keep you posted, and let you know when it's
time to act.
On a lighter note, all I can do is grin and shake my
head in awe at the Boston Globe editorial elites' schizophrenic
ramblings. Yesterday's editorial pontification urged a "much greater
commitment to the mechanics of democracy, and voters should demand it."
But just last Thursday ("Fixated
on 5 percent") this very same editorial board urged that the
2000 election result be thrown out, the voters ignored. How can even
they with their situational ethics be on opposite sides of an issue
in the span of only five days?
I often marvel that the Globe's editorial board
obviously doesn't read its own newspaper, the often excellent reports
about government waste and corruption. Apparently they don't read
their own editorials from day to day either, or else they suffer
extreme short-term memory loss.
What else can you do but laugh as whatever
credibility they have becomes victim to self-immolation.
 |
|
Chip Ford |
Commonwealth of Massachusetts
Department of Revenue
Monthly Revenue Report
Monday, May 2, 2005
April revenues set record, surpass $2 Billion mark
Revenue collections for April totaled $2.024 billion, the largest single
monthly total ever in the Commonwealth, Revenue Commissioner Alan
LeBovidge announced today.
The monthly collections increased by $203 million or 11.2 percent over
last April. Year-to-date revenue collections totaled $13.937 billion, an
increase of $963 million or 7.4 percent. Receipts for April were $318
million above the monthly benchmark, which was revised upward just two
weeks ago. Year-to-date revenues were $316 million above the new April
15 benchmark for the first 10 months of fiscal 2005.
"The biggest month we've ever had is due mainly to personal income tax
payments with returns and estimated payments on personal income,"
LaBovidge said.
Income tax collections for April totaled $1.532 billion, an increase of
$240 million or 18.5 percent from last April. Withholding tax
collections totaled $611 million, an increase of $11 million or 1.8
percent. Sales and use tax collections were $317 million, up $10 million
or 3.2 percent. Corporate and business tax collections in April were $38
million, a decrease of $33 million or 46.6 percent over last April.
Year-to-date income tax collections were $7.982 billion, an increase of
$724 million over last year at this time. Year-to-date withholding tax
collections were $6.442 billion, up $254 million or 4.1 percent over
last year. Sales and use tax collections for the first 10 months of
fiscal '05 were $3.198 billion, up $124 million or 4.0 percent over the
same period last year. Year-to-date corporate and business tax
collections were $1.282 billion, an increase of $11 million or 0.9
percent over last year at this time.
Return to top
State House News Service
Monday, May 2, 2005
Romney predicts big surplus,
calls for tax cut after record $2 billion month
By Michael Norton, Amy Lambiaso and Cyndi Roy
The state collected more tax revenue in April than in any single month
ever, prompting Gov. Mitt Romney on Monday morning to predict a budget
surplus of hundreds of millions of dollars and claim there's now no
reason not to deliver on an income tax cut approved by voters in 2000.
At a press conference to announce John Cogliano as the state's new
transportation secretary, Romney broke the news, saying receipts in
April were $318 million above a benchmark revised upwards just two weeks
ago. Tax collections are running $950 million ahead of the revenue
forecast used to assemble this year's state budget, and Romney predicted
they'll total about $1 billion above the original forecast by the end of
the fiscal year June 30.
"It's an extraordinary amount of good news," Romney said.
When this fiscal years ends, Romney said, state government will have a
surplus "in the hundreds of millions of dollars." Romney declined to
more specifically estimate a projected surplus because it's too early to
say how much supplemental spending and budgetary reversions will be
recorded in the next two months.
Romney earlier this year proposed reducing the state income tax rate
from 5.3 percent to 5 percent. The House, in the budget it approved on
Friday, did not include the tax cut, with Democrats saying structural
budget imbalances and unmet spending needs make it premature to cut
taxes. The House voted to study the issue instead.
The governor says he expects Democrats will propose many ways to spend
the unexpected tax revenues. "The voters have told us that that's not
our right, that instead we are to return to them this money," he said.
"The surplus is large. We'll either spend it or give it back to the
citizens and I say it's time to give it back to the citizens. There's no
question but that we as a state can afford to honor the will of the
votes and return their tax rate to 5 percent."
The Senate budget is due out in mid-May.
Those with an eye on Beacon Hill said the unexpected revenue surge was
good news for the state's economy, but cautioned the governor and
lawmakers against implementing any tax cuts or new permanent program
spending.
"Clearly, this is unexpected good news," said Michael Widmer, president
of the business-backed Massachusetts Taxpayers Foundation. "But there
are several cautionary points to emphasize."
Much of the increased revenue is from capital gains taxes, one of the
most volatile sources of state revenues, Widmer said. He also pointed
out that the state is subject to losing millions of dollars in the long
and short term through the potential elimination of federal Medicaid
reimbursements due to budget cuts and rules interpretation.
Romney said the revenue surge also means this year's state budget is
structurally balanced. "We will not need to rely upon reserves or rainy
day funds in order to balance the budget for the '05 fiscal year,"
Romney said.
But Senate Ways and Means Chairwoman Sen. Therese Murray (D-Plymouth)
says a structural deficit remains.
"April's revenue figures certainly come as good news," Murray said in a
statement. "However, a structural deficit for FY '05 of approximately
$735 million remains. This is something that we have to address as we
prepare the Senate Ways and Means FY '06 budget recommendations."
Murray was not available to elaborate.
Senate Minority Leader Brian Lees (R-East Longmeadow), asked today if
the income tax cut would be proposed during Senate budget debate, said:
"Oh yeah."
Sen. Robert O'Leary (D-Barnstable) said the state ought to spend the
excess money in areas that have been cut or neglected during the last
several years, such as health care and higher education. "When all is
said and done, I don't think the dollars are there" for the tax cut, he
said.
State budget writers since 2001 have relied on one-time revenues and
reserve funds to keep the budget balanced in the face of a recession
that cut deeply into the state's tax base, prompting spending cuts and
tax and fee increases.
A spokesman for House Ways and Means Chairman Robert DeLeo (D-Winthrop)
said the chairman is "encouraged by the numbers," but wants to learn
more.
"DOR isn't able to tell us right now what exactly is driving those
numbers, whether it's capital gains or real growth in wages," said
spokesman James Eisenberg. "We need to see what's behind those numbers
so that we don't commit the sins of the last economic downturn."
The implosion of capital gains tax revenues was a major factor in the
budget deficits that accrued in the early 90s.
The Department of Revenue reported Monday that tax collections in April
were up 11.2 percent over April 2004. Income tax receipts were up 18.5
percent for the month, withholding taxes were up 1.8 percent, sales and
use tax receipts nudged upwards by 3.2 percent, and business tax
collections in April plummeted 47 percent for the month.
The state collected more than $2 billion in tax receipts during April.
Opponents of the tax rollback say the unanticipated revenue should be
used to return some of the $3 billion cut from the state budget during
the fiscal crisis.
House Majority Leader John Rogers (D-Norwood), former Ways and Means
chairman, argued during the House's budget debate last week that the
budget remains structurally imbalanced due to the state's continued
reliance on one-time revenues. He said the revenue spike is due mainly
to increases in capital gains taxes, estate taxes and bonus payments.
Approving a tax cut at this time would be "fiscally reckless."
Return to top
The Boston Globe
Tuesday, May 3, 2005
Record receipts fuel call for tax cut
By Scott S. Greenberger, Globe Staff
Massachusetts collected more than $2 billion in taxes in April, breaking
the state's all-time record for a single month and prompting Governor
Mitt Romney to renew his call for a cut in the state income tax.
The $2.024 billion tax total for April 2005 was 11.2 percent higher than
the April 2004 figure. With two months remaining in the fiscal year, the
state has collected a total of $13.9 billion, an increase of $963
million, or 7.4 percent, over the first 10 months of last year.
Governor Mitt Romney said the figures the Department of Revenue released
yesterday should spur lawmakers to reduce the income tax rate from 5.3
percent to 5 percent, a change approved by voters in 2000, but delayed
by the Legislature in 2002 during the state's fiscal crisis. During its
budget debate last week, the House rejected an amendment that would have
lowered the tax rate to 5 percent. The Republican governor has been
calling for the tax cut for almost a year.
"We as a state can afford to honor the will of the voters and return
their tax rate to 5 percent," Romney said yesterday at a press
conference called to announce his appointment of a new transportation
secretary. "The surplus is large. We'll either spend it or give it back
to citizens, and I say it's time to give it back to the citizens."
The state has about $900 million more than budget specialists on Beacon
Hill had predicted the state would have at this point when the fiscal
year began last July.
But Democrats pointed out that most of last month's windfall came from
capital gains taxes, which are highly volatile and, they say, an
inaccurate barometer of the state's overall economic health. In
contrast, a jump in revenue from income withholding would signal job
growth, and that figure went up only 1.8 percent, compared to April
2004. Sales taxes were up only 3.2 percent, and corporate and business
tax collections were down 46.6 percent, compared to April of last year.
Those drops were offset by an increase of roughly 25 percent in capital
gains tax revenues.
For the fiscal year thus far, income withholding is up 4.1 percent,
sales taxes are up 4 percent, and corporate and business taxes are up
0.9 percent, compared to the same point in 2004.
"I think it's very encouraging, but in terms of making a major policy
decision like cutting taxes, I think it's really premature," said
Representative Robert A. DeLeo, a Winthrop Democrat who is in his first
year as chairman of the House Ways and Means Committee. "The big
economic indicator that we're getting out of the problem we're in is job
growth."
Economists have called the state's job picture mediocre. In March, the
last month for which figures are available, employers added 5,600 jobs,
the most since October 2004 and the state's seventh consecutive month of
employment growth. The state has 175,000 fewer jobs than in February
2001, the peak prior to the recession, and 25,000 fewer than when Romney
took office in January 2003, the Globe reported last month.
April's $2 billion in revenue breaks the previous record set in January
2001, when the state pulled in about $1.937 billion at the peak of the
economic boom. Within months, the economy slowed, and state tax revenues
began to drop, eventually forcing about $3 billion in cuts in state
spending during the fiscal crisis of 2002-2004.
The new revenue numbers will probably spark calls from advocates for
more spending.
"This is good news for the Commonwealth," said Geoff Wilkinson,
executive director of the Massachusetts Public Health Association.
"Public health suffered disproportionate cuts, and we hope the
Legislature will take advantage of this revenue to restore, and make
sure the restorations are proportionate to the damage that was
suffered."
Many advocates and other observers expected DeLeo and House Speaker
Salvatore F. DiMasi to be less fiscally conservative than their
predecessors, former House speaker Thomas M. Finneran and former Ways
and Means chairman and current House majority leader John H. Rogers, who
were famously tight-fisted.
But DiMasi and DeLeo kept a tight rein on new spending during last
week's budget debate, allowing lawmakers to add about $100 million to
the original spending plan that the House had crafted earlier this year.
Michael J. Widmer of the Massachusetts Taxpayers Foundation, a
business-funded nonprofit that monitors taxes and government spending,
said the April revenue growth probably will allow the state to have a
structurally balanced budget in the current fiscal year and in fiscal
2006. Nevertheless, he said the state cannot afford the tax cut when its
mandatory spending is growing at a faster rate than reliable revenue,
such as income-tax withholding.
"The strong April, the very strong April, seems to be tied principally
to capital gains," Widmer said. "It's good news to see this kind of
revenue increase, but as we saw in 2002, it can very quickly evaporate."
He referred to the stock market slump that followed the bursting of the
Internet bubble and the Sept. 11, 2001, terrorist attacks.
"It's heavily cyclical and volatile by nature," Widmer said, "and so we
should treat it with caution, in terms of building in tax cuts or
spending increases based on it."
Cutting the tax rate from 5.3 percent to 5 percent would cost $225
million in fiscal 2006. But it would cost more than twice that much in
fiscal 2007, when it would be in effect for the entire calendar year.
In a full year, the cut would be worth about $146 to a married couple
earning $60,000 a year and $133 to a single person earning $50,000.
But David G. Tuerck, executive director of the Beacon Hill Institute at
Suffolk University, said he doubted that Democrats on Beacon Hill would
be willing to cut taxes.
"There will always be a reason," Tuerck said of the Democrats' refusal.
"The point is, the state's economy is in recovery, and we shouldn't be
surprised to see revenues regaining strength at the current rate."
Globe correspondent Janette Neuwahl contributed to this report.
Return to top
The Telegram & Gazette
Tuesday, May 3, 2005
State tax revenues are surging
Romney wants tax rate cut back to 5 percent
By John J. Monahan, Staff writer
State tax revenues are booming again, with April setting an all-time
monthly record and annual revenues coming in at nearly $1 billion more
than forecasts at the start of the fiscal year, fueling Republican calls
for a long-sought rollback of the state income tax rate to 5 percent.
Gov. Mitt Romney wasted no time yesterday announcing the monthly revenue
spike, $318 million above the most recent revenue forecasts for April,
and letting the public and legislators know he wants some of it used for
the income tax rollback.
In all, the state brought in just over $2 billion in revenues in April.
Revenue Commissioner Alan LeBovidge said it was the largest single
monthly revenue total in the history of the state, an 11 percent
increase over April 2003.
Just last week, House Democrats rejected a call by Republican lawmakers
during budget discussions to roll back the income tax rate from the
current 5.3 percent to 5 percent, saying available funds were still
needed for schools, health care and local aid after three years of state
budget cutbacks.
Mr. Romney said he sees the one month record as an indicator that state
revenues are recovering strongly with income tax, sales tax and capital
gains tax receipts surging along with signs of an economy on the move.
Mr. Romney said 5,400 jobs were added in the state in March and that
retailers are reporting "better" sales while stock market stabilization
has increased tax revenues on capital gains.
At this point, the governor said, "There is no good reason," not to
honor a 5-year-old voter referendum that called for a rollback of the
income tax rate from 5.9 percent to 5 percent. The income tax rate was
rolled back to the current 5.3 percent before the recession created a
major fiscal crisis for the state, with sagging revenues creating a
multi-billion dollar state budget deficit.
Mr. Romney said while some of the surplus building in the fiscal year
that ends June 30 will be needed for supplemental appropriations, the
state can afford the rollback.
"We don’t have any excuse to keep spending people’s money above the
amount people voted for," Mr. Romney said, adding, "This is still a
democracy." He said he expects calls to use the additional money for pay
raises and new programs, but that he wants to hold the line on spending
until the income tax rate rollback is enacted.
Return to top
The Boston Herald
Tuesday, May 3, 2005
A Boston Herald editorial
Romney on taxes: What side is he on?
"Don't even think of investing in Massachusetts because you don't know
from one hour to the next what your capital gains tax is going to be." -
Barbara Anderson, Citizens for Limited Taxation.
News that April was a revenue "record-breaker" prompted Gov. Mitt Romney
yesterday to point out there's "no reason" for lawmakers to oppose
returning the income tax rate to 5 percent. Since turnabout is fair
play, lawmakers - or rival gubernatorial contenders - now have the rare
opportunity to one-up the governor on tax policy by pointing out there's
no reason for Romney to oppose returning some $250 million in wrongly
collected capital gains taxes, either.
Taxpayer advocate Barbara Anderson's bottom line about the message sent
to investors by the twists and turns in the capital gains tax saga - the
implementation of the 2002 increase has now twice been ruled
unconstitutional by the Supreme Judicial Court - best frames the
argument for changing the effective date of the new tax rate from Jan.
1, 2002, to Jan. 1, 2003. Otherwise, to the outside world, Anderson
said, Massachusetts' tax policy looks "certifiable."
Romney's proposal to provide a tax credit to those forced by the most
recent SJC decision to pay some $160 million more for capital gains
realized from January to May of 2002 does nothing to change that
perception. It just adds to the confusion.
Tax collections are running about $1 billion ahead of the revenue
forecast used to assemble this year's state budget, according to the
Department of Revenue. April collections alone were some $318 million
above the monthly benchmark.
"The surplus is large. We'll either spend it or give it back to the
citizens," Romney said in support of the income tax cut.
The choice is just as clear on the capital gains tax. If Romney's not
going to be on the side of giving back the unconstitutional increase,
who will be?
Return to top
The MetroWest Daily News
Sunday, May 1, 2005
Overrides: A taxing choice
By Tyler B. Reed, Daily News Staff
Facing state aid shortfalls of more than $500 million compared to three
years ago, communities more often than ever are considering raising
their own property taxes to pay for services like schools, police and
fire protection, according to state and local officials.
Voters in almost half the towns in the region will consider -- or have
already -- Proposition 2˝ overrides on their ballots this spring.
Wayland, Sudbury and Acton have already approved operational overrides,
which permanently raise property taxes. Westwood voters rejected by a
2-to-1 margin a $4.5 million override, which would have raised the
average homeowner's taxes by $663.
With no significant replenishment of state aid planned for this year,
towns are forced to fill budget gaps in excess of $1 million that have
opened because of the rising costs of health care, employee pensions and
fuel.
"Without adequate state aid, cities and towns have to cut to the bone.
They have exhausted their reserves, and they're forced to rely more and
more on the property tax," said Geoffrey Beckwith, the executive
director of the Massachusetts Municipal Association. "When the state
gets a cold, cities and towns get the flu."
Sudbury just approved a $3.05 million override, which increases the
average homeowner's yearly property taxes by $494.
Some towns have approved one override after another, said Sudbury's
Finance Director Sue Petersen. Others "are very slow to go after
overrides, like some of the bigger cities."
Wellesley, a medium-sized, wealthy town with an average home value of
$548,000, has considered at least three overrides in the last several
years. This year, residents will weigh in on one for $3.55 million.
"We haven't had one in a couple years, so we felt pretty good about
that," Petersen said of Sudbury's override.
In Holliston, where voters have not approved a Proposition 2˝ tax hike
since 1993, town officials say they need a $1.85 million override to
avoid almost two dozen teacher layoffs and $250 school bus fees.
Holliston Finance Committee Chairman William McColl said, "It all stems
from the state's local aid numbers." The state took away 20 percent of
local aid funding three years ago, he said. "We have all the obligations
increasing every year, but no follow through from the state."
Both Gov. Mitt Romney and the House of Representatives proposed budgets
that would send $177 million more to cities and towns this year. But
McColl said that will only mean a 1.3 percent increase in Holliston.
Larger cities get the bulk of the money, Beckwith said. In some cities,
education aid has even increased, he said.
"Local aid still goes to the big cities," said Rep. Susan Pope,
R-Wayland, whose district also includes Sudbury. "I think the city
representatives have a lot more clout."
Besides cuts in state aid, communities are also stuck covering the
escalating costs of health insurance, pensions and salary increases.
Medway faces a $2.7 million budget gap, the largest portion of which
comes from health insurance, Finance Committee Chairman Jay Leader said.
Town officials say there are considering a Proposition 2˝
override.
Barbara Anderson, executive director of the group Citizens for
Limited Taxation, said towns were too liberal in their spending
during the 1990s.
Communities were "getting a lot of money in local aid and spending it
like there was no tomorrow," Anderson said. "Yes, they're in trouble.
But it's their own fault."
Since state aid numbers were cut, towns have fired 14,500 employees,
including teachers, police officers and librarians, Beckwith said.
"Unless and until in future years we see a significant infusion and
reinvestment in state aid, we will continue to see the necessary
reliance on the Proposition 2˝ override."
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The Boston Globe
Monday, May 2, 2005
A Boston Globe editorial
Voting devalued
Voters frustrated by Florida's recount debacle in 2000 got better
results last year -- but not much. Congress will lower voter confidence
again if it fails to confront the problem.
After the Florida recount, Congress responded far too slowly. In 2002 it
finally created the US Election Assistance Commission, but gave it too
weak a mandate, and then underfunded it. The commission was unable to
start operations for 10 months, and then, as its own annual report says,
"had no offices, equipment, or staff." President Bush has not helped; he
has proposed $600 million less than the agreed-upon target budget for
the agency, even as he pushes more tax cuts.
In 2004, thousands of voters in many states still had problems with
faulty registration records. Extremely long lines in Ohio and other
states deterred thousands more, and there were serious technical
glitches and errors, including 4,438 computer votes that simply
disappeared in North Carolina.
One explanation for the lassitude in Washington comes from an easily
understood congressional mind-set: Any system that elected us can't be
too bad. But it is bad. The members of Congress should be embarrassed by
the continued problems last year, and also by the recent resignation of
the commission's first chairman, DeForest Soaries, who complained to the
Associated Press: "You have to beg Congress for money as if the
commission were your idea." Soaries said citizens should expect high
voting standards, but "there doesn't seem to be a corresponding sense of
urgency among policymakers in Washington."
The current chair, Gracia Hillman, emphasizes the progress that has been
made. In a visit with Globe editors last week, she noted that
provisional voting is now required nationwide, so thousands of people
who might have been excluded in the past were able to vote provisionally
in 2004, and two-thirds were counted. Also, nearly $2 billion in federal
grants helped most states upgrade their voting machinery. And the
commission, she said, is pushing states to maintain statewide voter
registration lists, as required by the 2002 Help America Vote Act.
Still, there are major gaps. In most cases, the commission was empowered
by Congress only to offer guidelines rather than set standards. Also,
many states are jealous of their historical role as masters or their own
voting systems, and they resist the uniformity that would make sense --
at least for national elections. Likewise, the commission has no power
to require that new voting machines make a paper record, even though the
technology is simple and inexpensive -- millions of ATMs do it every
day.
Congress owes much greater commitment to the mechanics of democracy, and
voters should demand it.
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