Dodges Debate on Income Tax Rollback
April 25, 2005
State House News Service
Senate Session - Monday, May 23, 2005
CONVENES: The Senate convened at 12:04 pm, Sen. Travaglini
presiding. The Pledge of Allegiance was recited....
TAXATION: At 3:17 pm, Sen. Travaglini
said we are going to get into the taxation piece....
CONSTITUTIONAL INTERPRETATION ON TAX AMENDMENTS
Sen. Travaglini said a ruling by Senate
counsel on several amendments in the tax category references the
constitution and says all money bills shall originate in the House and
Senate counsel advises that a bill that reduces or increases tax revenue
is a money bill. The position has been taken since 2003. The
parliamentary precedence requires that I as president preserve the
constitutional prerogatives of the House and we must not originate a
money bill in violation of the constitution. A pending amendment would
then be out of order. No tax provision in the House bill took effect
until further legislation is enacted.
Sen. Lees said we are talking about all
amendments dealing with decreasing or raising taxes. Quite frankly I am
a little disturbed about this latest twist here. You have ruled that any
amendment affecting tax revenues is out of order because the House did
not include any and the House bill is not a money bill. For the moment I
would agree. I draw your attention to amendment 6 House language. The
language is identical to the language in the House budget adopted as an
amendment on April 26. It states the income tax will be lowered to 5
Sen. Murray requested a brief recess and it
was granted. She crossed the chamber to speak to Sen. Lees at his desk.
Sen. Lees said let me make one explanation
here so you know where I am coming from. Not this year, but previously
the Senate counsel has made a determination Ė one I donít totally agree
with Ė that unless a bill comes over from the House in some way or form
indicating a tax increase or decrease for all people in Massachusetts Ė
that the Senate by law cannot offer any tax changes because we donít
have a vehicle in front of us that allows us to raise or lower revenues.
You could have a minor tax on food that would make it a tax or money
The Senate president has now ruled that all tax
matters before us Ė increases or decreases Ė are ruled out of order
because this bill sent over by the House Ė one of the first times ever
since Iíve been a member Ė has not had any increases or decreases across
the board. Thatís the counselís ruling. I am now speaking on that issue.
The House did something that puts us at a
disadvantage potentially. I have an amendment that has the same language
of the House. If the Senate president is ruling that amendment 6 is out
of order, then he is ruling that the House budget contained provisions
affecting tax revenues because it is the exact same language. The Senate
canít have it both ways. If the House budget does not affect tax
revenues, then my amendment should be in order. Or if amendment 6
affects tax revenues, then the House budget affected tax revenues and
all amendments should be accepted.
This amendment 6 is the tax cut to bring taxes back
to 5 percent, which the voters voted on. The amendment added by
Democrats in the House asked for a report from the Department of
Revenue. When we appoint the conference committee, they could go in and
take out that amendment.
Under President Bulger, we rewrote statutes and added
language in conference. When you go into conference, anything that is
not exactly the same is called conferenceable. This provision is
conferenceable because it is already in the House budget.
A few years ago everyone in the chamber voted on an
economic stimulus package and it came over from the House with all kinds
of language about spending money. We made it a tax bill by adding a
tax-free day. That is tax policy. That went into law. Should we send a
letter to everyone who bought a high-ticket item and say you owe us
That tax policy was reviewed by counsel here. Itís
important to get to the issue of reducing the income tax. I agree there
are tax vehicles that will eventually come over here at some point,
including changes in corporate tax structure. The Senate, to give up its
ability to have a discussion of having more money to spend or less, is
The minority has a counsel and he disagrees 100
percent, as do most outside counsels I talk to. He is totally totally
out of sync with what most people think. You have the votes Mr.
President. I want to get to this issue at some point this legislative
year. All I will say is I donít agree with this ruling. We are setting
the Senate up in the future for potential problems. The public has a
right to at least hear where we stand on the income tax. They have voted
on it. I know some of you would vote on it.
Sen. Lees said how can you rule item number 6
is out of order when the exact same language is in the House?
Sen. Travaglini said there is no hesitation on
the part of this body to discuss and argue fully the merits of a tax
increase or tax cut. We have done that repeatedly. There is a respect
for the constitution and the relationship between the branches. The
minority leader is mistaken. The language is not identical. The House
was involved in an action that made it clear that it was not their
intent to pass that amendment or offer a tax cut. They said no tax
provision shall take effect until further legislation is enacted. That
language is missing from your version. Since that is the case, I canít
act on it.
Sen. Lees read from the House journal,
referencing a Binienda amendment.
Sen. Travaglini said the reference was a
subsequent third reading amendment that negated everything that happened
Sen. Lees said I am only reading what they
have printed is part of their budget.
Sen. Travaglini said the third reading
amendment negated everything that your are now reading.
Sen. Lees said let me read it.
Sen. Travaglini said Iíd prefer you not.
Sen. Lees said the section is printed in the
House journal. I am reading it and it says the tax cut shall not take
effect until the DOR has completed a study. That is in there. That is
the wording. You have to explain this to me further. They say it wonít
take effect until the amendment is first implemented. What is so
difficult for everyone to understand here? I follow the rules and have
been in the job for a long time. I think your ruling is wrong in this
case. Explain what I donít understand.
Sen. Travaglini said you donít agree with the
ruling and you are refusing to acknowledge it was the intent of the
House that none of the actions they took at the time were to be taken
seriously and none of the actions would take effect until further action
by the DOR.
Sen. Lees said I am not a lawyer but intent
doesnít count. I have the exact same language. I have not changed a
word. You are a crystal ball reader I guess. They voted for it.
Sen. Travaglini said section 41 highlights
inclusive of this act nothing shall take effect until legislation is
Sen. Lees said right.
Sen. Travaglini said which negates sections 35
to 40 and thatís why itís not a money bill.
Sen. Lees said itís printed in the journal and
itís part of a large amendment. I guarantee the clerk in the House would
not rule in the same manner. We are going down a slippery slope and you
get in trouble by plucking stuff out of the air and saying this is what
I want and I donít care. You won. I wonít doubt the ruling of the chair.
This is just a study anyway. I respect the opinion of the chair of Ways
and Means but she could technically insist that the language be dropped
and that the tax cut go into effect. Weíve got to do some homework after
this. This is going to catch up with you and itís not a pleasant sight.
Sen. Murray said first what can potentially
happen in conference is not relevant in front of this body. He is
reading section 40 but section 41 negates the five House sections
previous. Section 41 says 35-40 shall not take effect until legislation
is filed and passed. I believe that is why Senate counsel has made this
Sen. Lees said I donít disagree with one thing
she said. It negates it. You are right. It is still in the House budget
and if you take it out, then in the House budget would be a tax cut.
Itís an amendment that could be dropped and all of the tax cut would be
in the budget Ė it is printed in the document. I am right on this point.
You donít want to drop the amendment and thatís fine. We have dropped
all kinds of language in conference and added study language to
amendments in the budget. You can take away study language just as
Sen. Walsh said I was hoping to discuss tax
policy in the budget. I accept and respect the ruling of the chair.
Because we have wandered into that path, in fairness to those I filed
this amendment for, I want to lay out principles to consider.
This is one of the oldest deliberative bodies. We
appreciate being deliberative. Among the things on my short list is the
problem in neighborhoods, such a major problem that we created a
committee on substance abuse. I know from our budget that we have a
major problem with addiction and lack of treatment. In our $24 billion
budget, we call some costs budget busters. If you look at DSS and the
DYS, they are two of our so-called budget busters. Look at the courts
and Medicaid and workersí comp and every big rock in the budget, what do
you find? The debris from addiction and lack of treatment. If you spend
time in district courts, 88 percent of cases involve a perpetrator with
an addiction problem. We intellectually recognize it but we have cut
resources 50 percent. We have eight beds for addicted women. We talk
about the importance of health care. It is the largest employer. Talk to
any ER physician or hospital CEO and you will find the biggest problem
we can help them with is addiction treatment.
As long as we believe Massachusetts is Taxachusetts,
then we canít look at any policy. I asked just to take that premise away
and open up our minds and hearts to see if itís true. For some here, it
does not matter that we are 38th nationally in fees and taxes.
Forty-three states have a sales tax on packaged sales transactions such
as a six-pack or a bottle of wine. That includes New Hampshire Ė Live
Free or Die. We have a law against it, against allowing a sales tax on
package store transactions. A third of adults choose not to drink
alcohol. Five percent who choose to drink drink 50 percent of what is
sold. We are approaching $4 billion on the debris left by people who are
addicted and canít get their lives together. I am just asking to lift
that exemption and direct the money to the General Fund and to addiction
treatment programs. You all know how crime is up and alcohol and drug
addiction is the most important factor. We donít have enough drug
testing equipment. Look at our excise tax. We have not touched it on
alcohol since 1976. We care so much about health care. We have started
to amend the constitution and make it a right. The number one issue we
have done this year is stem cell. And we have 100,000 people go to
emergency rooms and we donít treat them because the cost of treatment is
very expensive. We can redirect the $4 billion and put it back to making
people productive again. Itís a full debate we canít have. A glass of
wine would be one cent more and a glass of hard liquor two cents more. I
hope when the debate is right we can pursue it.
Sen. Lees said several members are concerned,
some Republicans and Democrats. My amendments has the negating language
in it as well. It is exactly the same. Verbatim. Word for word. Exactly
what the House has I have. In a House outside section, Section 41 talks
about sections 35-40 inclusive and they refer back. Itís a separate
section that is conferenceable. An outside section cannot amend
something inside. Itís related to it. Under the rules of the Senate,
something that is related to is something that is separately
conferenceable. There is no way that the outside separate section is not
conferenceable. The whole tax cut with the negating language, I filed it
together. The House did a subsequent outside section that referred to
the section but did not amend it. That could result in a potential tax
cut. This was the most bizarre ruling quite frankly that I have ever
seen here. A lot of people are surprised by what happened here today.
Sen. Murray said these are outside sections that we are referring
to. The Senate frequently uses outside sections. I donít think this is a
fast one being pulled on anybody. I look forward when the tax loophole
bill comes before us to debating this.
RECESSES: The Senate recessed at 5:36 pm.
NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml