CLT
UPDATE
Tuesday, November 22, 2005
"Institutional memory" or voters:
which should be institutionalized?
Flush with new tax money, the Legislature is on track
to add as much as $1 billion in new spending on expanded healthcare
coverage, construction projects, government salaries, and dozens of
local projects in the districts of leading lawmakers....
The Democratic-controlled Legislature, at the same time, has repeatedly
resisted Governor Mitt Romney's calls to return the growing budget
surplus back to taxpayers by rolling back the state income tax rate and
by refunding an unusual, retroactive capital gains tax increase that
48,000 investors owe because of a court ruling....
"They spend money for the same reason a person climbs a mountain --
because it's there," said Barbara Anderson, who heads Citizens
for Limited Taxation. "When times are good and the money is flowing
in, they spend it."
Because of the improved economy, tax revenues from personal income
taxes, corporations, and other levies are running 7.9 percent ahead of
projections for the current fiscal year, putting the state $232 million
ahead of what it expected to have by the end of October. Massachusetts
also ended fiscal years 2003, 2004, and 2005 with more revenue than
expected....
Romney, who has clashed with the Legislature on the income tax rollback
and the retroactive capital gains taxes, has threatened vetoes of the
spending initiatives. But with their overwhelming majority in both
chambers, Democrats usually can muster the votes to overrule him. For
example, the Legislature restored about $100 million in spending that
Romney vetoed earlier this year.
"Spending on feel-good projects that are not essential at a time when
people voted for tax relief is not right," Romney said last week. "I
will continue to fight in my budget to lower the tax rate to 5 percent,
and veto any additional excessive spending." ...
The Boston Globe
Monday, November 21, 2005
Legislature looks to add $1b in spending
Pushing healthcare, construction projects
We’re long past the fantasy that the Legislature will someday
approve an income tax rollback simply to keep faith with the electorate that
demanded it back in 2000.
But how the tone-deaf majority on Beacon Hill continues to insist that we can’t
"afford" the tax cut defies any sort of logic. The numbers tell a different
story....
But so it is, and voters considering who to support next year should remember:
If they won’t roll back taxes now, with revenues booming and elections on the
horizon, they probably never will.
A Boston Herald editorial
Tuesday, November 22, 2005
Revenues boom, no tax cut in sight
Massachusetts has spent a small fraction of the $25 million
appropriated to care for the Hurricane Katrina victims who lived temporarily at
Camp Edwards on Cape Cod.
The Legislature approved the funds in an emergency action shortly after Katrina
tore through the Gulf Coast region, leaving tens of thousands of people
homeless. Massachusetts expected upward of 2,500 evacuees, but got just 235.
There are some lingering bills to pay, but overall there's about $20 million
unspent. But instead of returning it to the state's general fund, the Senate has
voted to make the leftovers available to communities that suffered their own
flooding in heavy rains last month.
The watchdog group Citizens for Limited Taxation says the money should be
returned to taxpayers.
"They never do that," said Chip Faulker, associate director of the
Marblehead-based group. "They always find another use for it. That's why state
spending is out of control."
Faulker acknowledges he has "seen worse," such as when the Legislature increased
the gasoline tax but used less than 10 percent of the increased revenue on the
stated goal of improving highways.
Associated Press
Friday, November 18, 2005
Lawmakers eye leftover Katrina funds
State trial court clerks could get a double pay increase that
will boost their salaries to six figures under a supplemental budget amendment
approved by the state Senate this week that also would raise salaries for
sheriffs, assistant district attorneys, trial court judges and the state’s top
elected officials.
The Boston Herald
Friday, November 18, 2005
Senate weighing double pay boost
State trial court clerks are in line for a sweet double pay
raise from their friends in the Legislature for no apparent reason other than
they want it – and they have the juice to get it....
There is still time to correct this cash-grab by the politically connected,
since the House hasn’t signed off on the plan. But as our colleague Howie Carr
points out, you can’t swing a dead cat in a court clerk’s office without hitting
a former rep. We’re not exactly holding our breath.
A Boston Herald editorial
Monday, November 21, 2005
Clerks’ pay hike is twice as nice
Don’t forget the court clerks! Gov. Romney willing, they’ll
be getting a big fat pay raise, too.
Oh sure, the oft-investigated sheriffs of Massachusetts are all grabbing obscene
pay raises, ditto the preening, underworked hack judges.
But what’s gone under the radar screen so far is that the commonwealth’s court
clerks have been inserted into the pork-laden bill. And the clerks will be
getting not just a pay raise, but a double bump up.
They’re getting a bigger kiss, percentage-wise, than the judges ...
The Boston Herald
Friday, November 18, 2005
Same old hack story: Court clerks clean up
By Howie Carr
More than 200 years ago, colonists boarded a ship and dumped
tea in Boston Harbor because of a new tax imposed by a distant and out-of-touch
government. Imagine how much more upset they would have been if the tax was on
tea they already drank.
That is exactly the situation we face with the controversy over retroactive
capital gains taxes.
The Boston Herald
Friday, November 18, 2005
State’s error mustn’t cost taxpayers
By Kerry Healey
Increased tax revenues have pushed Massachusetts' budget
surplus to nearly $1 billion.
So why have state representatives on Beacon Hill approved a law to enact a
retroactive tax on capital gains, dating back to 2002?
The budget surplus proves the Legislature has enough tax revenue already.
Yet, it's not enough, because the Legislature can't seem to control its spending
addiction, even after the great recession of 2002 that caused a $2.5 billion tax
increase.
Now legislators are punishing property owners and business people by making them
reach into their pockets a second time on capital gains.
A Lowell Sun editorial
Saturday, November 19, 2005
Retro-taxachusetts
In 2001, like many other businesses, we experienced a
significant reversal of fortune in our new enterprise due to the recession
following 9/11. To avoid laying people off I took a calculated personal risk and
gave up my entire salary for stock. At the time I wondered if I would ever again
have a paycheck from my business, or regain even a portion of my investment.
But in April 2002, our risk, sacrifice, and hard work paid off in a way we had
not anticipated. A large firm in our industry approached us and we sold our
business.
As a result, I received an once-in-a-lifetime capital gain. By design, our
employees also participated in the windfall, enjoying a well-deserved reward for
their dedication and effort. The American dream had come true for all of us.
But now, after having sold our company and paid our taxes over three years ago,
both the founders and employees of our former business will be taxed again by
means of a capricious new law. Our lawmakers have rewarded hard work and good
fortune with a slap in the face....
Now it is 2005 and my new, entirely unanticipated, retroactive tax bill is
larger than my annual salary.
The MetroWest Daily News
Sunday, November 20, 2005
Retroactive tax sends wrong message
By Irwin Jungreis / Guest Columnist
Chip Ford's CLT Commentary
What happened to that overly-vaunted "institutional
memory" that was so often touted by the professional politicians when
term limits was a hot issue that threatened their sinecures? The
Democrat dinosaurs who comprise "The Best Legislature Money Can Buy"
haven't learned a thing; this self-serving crowd will never change.
Here they go again -- still defying the voters'
mandate to roll back the income tax to 5 percent while our cash is again
pouring in almost faster than they can spend it. The Beacon Hill pols
are actually working overtime to institutionalize the next "fiscal
crisis," again spending annual billion-dollar revenue surpluses in yet
another feeding frenzy like a suicidal with a death wish.
The next "fiscal crisis" has already begun; this is
the start of the next call for a tax hike, in six or seven years when
this new pork spending, these new programs, are again unsustainable come
the next cyclical economic downturn. The genesis of the next
spending crisis is upon us.
Will the voting majority of Taxachusetts never
learn that they get the government they deserve?
It's a crying shame that the rest of us are plagued
by their elected government as well, so long as we remain among the clueless who keep
reelecting the dysfunctional.
Now that "The Best Legislature Money Can Buy" has
institutionalized its automatic pay raises -- the only
constitutionally-mandated pay raises in the history of the world -- they can go
full-tilt taking care of their cronies, cohorts, coat-holders, and
former "colleagues." They see the purpose of government as being
government itself, belonging to and first and foremost benefiting them;
of the pols, by the pols, for the pols. "Belly up to the bar, boyos, pay
raises all around!"
Everyone and everything is connected. More and more
hacks are tied into a percentage of what everyone else gets, so when one
bureaucrat's pay is hiked, hike'em all in one fell swoop. This way broad
support for someone's else's pay grab is indirect support for your own;
every hack is behind every other hack's good fortune at taxpayers'
expense. This keeps them all fat and happy, and so what if taxpayers
become a bit upset? Reelection in The Peoples' Republic is a given --
still. But will it be come next November?
Sooner or later the electorate will either wake up,
or move to someplace sane and affordable. That day is closing in if not
already here: Massachusetts is the only state that lost population
in the last U.S. Census. Does anyone really still wonder why?
(See: CLT Update, Jan. 3, 2005, "Why
the Bay State Diaspora")
There's nothing new yet to report on the retroactive
capital gains tax abomination, but it's doing wonders for CLT membership
recruitment. It's funny how having the pols' hands directly in one's
pocket suddenly focuses attention, sends a taxpayer scurrying to the
only friend they've got. Folks we've never heard from before
all of a sudden are finding and contacting CLT for assistance, offering
support and - since we can only help members - are joining us. It's been a
long time since we've had anything to thank the Legislature for, but
this fiasco is proving to be one of the best recruitment tools that's
come our way for a long time.
We've received phone calls, e-mails, and new members
signing-up directly on the CLT website, paying for their memberships
right then and there.
CLT member Irwin Jungreis, who attended last Friday's
State House news conference with the governor, had his column (below)
published in The MetroWest Daily News on Sunday. Loretta LaCentra, also
an attendee and now a member, has submitted hers to The Boston Herald.
Barbara's column appeared in The Salem News last Thursday, Sunday in
The Lowell Sun, and in other newspapers around the state. Editorials
abound, and none yet has found one thing good to say about retroactive
taxation.
48,000 taxpayers are reportedly affected and, if the
response we're getting is an indication, as the tax bills arrive
legislators' phones must be ringing off their hooks.
I got an e-mail message just this morning from a New
York resident, formerly of the Bay State. He wrote:
Someone from your organization is free to contact
me to "put a face to this problem" -- I just got a notice for an
outrageous and unconscionable retroactive tax bill, due to the sale of
probably my life's biggest asset in the early part of 2002.
I live now in New York City, and thus do not have a local
representative to address.
This is unspeakable.
I wonder if this retroactive law qualifies as a
federal violation of the U.S. Constitution's Interstate Commerce clause
-- or at least is considered Interstate Transportation of Stolen
Property?
If not, it sure ought to be!
|
 |
|
Chip Ford |
The Boston Globe
Monday, November 21, 2005
Legislature looks to add $1b in spending
Pushing healthcare, construction projects
By Scott S. Greenberger, Globe Staff
Flush with new tax money, the Legislature is on track to add as much as
$1 billion in new spending on expanded healthcare coverage, construction
projects, government salaries, and dozens of local projects in the
districts of leading lawmakers.
Five months after approving a $24 billion state budget for the fiscal
year, lawmakers in recent weeks have approved sweeping spending and
"economic stimulus" bills as well as an $80 million energy plan, and are
readying a healthcare proposal that would cost several hundred million
dollars.
The Democratic-controlled Legislature, at the same time, has repeatedly
resisted Governor Mitt Romney's calls to return the growing budget
surplus back to taxpayers by rolling back the state income tax rate and
by refunding an unusual, retroactive capital gains tax increase that
48,000 investors owe because of a court ruling. The Department of
Revenue is sending out bills for the capital gains taxes this month.
Fiscal watchdogs say the Legislature is frittering away money on pet
projects instead of spending it on long-term needs or socking it away
for the state's reserve fund. Other critics say the surplus should be
returned to the taxpayers in the form of tax cuts.
"They spend money for the same reason a person climbs a mountain --
because it's there," said Barbara Anderson, who heads Citizens for
Limited Taxation. "When times are good and the money is flowing in, they
spend it."
Because of the improved economy, tax revenues from personal income
taxes, corporations, and other levies are running 7.9 percent ahead of
projections for the current fiscal year, putting the state $232 million
ahead of what it expected to have by the end of October. Massachusetts
also ended fiscal years 2003, 2004, and 2005 with more revenue than
expected.
Democratic lawmakers, defending their handling of state spending, say
they have used some of the budget surplus to partially restore the
roughly $3 billion in cuts made during the fiscal crisis in 2001 and
2002. Earlier this year, they also put $690 million into the state's
reserve fund, which now totals $1.7 billion.
"I think we've shown great fiscal restraint," said Representative Robert
A. DeLeo, the Winthop Democrat who chairs the House Ways and Means
Committee. "What we've done with the surplus funds is address many
one-time needs, as opposed to putting ourselves in a further hole in the
next fiscal year budget."
Romney, who has clashed with the Legislature on the income tax rollback
and the retroactive capital gains taxes, has threatened vetoes of the
spending initiatives. But with their overwhelming majority in both
chambers, Democrats usually can muster the votes to overrule him. For
example, the Legislature restored about $100 million in spending that
Romney vetoed earlier this year.
"Spending on feel-good projects that are not essential at a time when
people voted for tax relief is not right," Romney said last week. "I
will continue to fight in my budget to lower the tax rate to 5 percent,
and veto any additional excessive spending."
During the summer and early fall, lawmakers approved several routine
spending bills and quickly gave the nod to a $25 million fund for
Katrina victims relocated to Massachusetts. But the biggest bump in
spending came in October and November, when both the House and the
Senate approved midyear spending plans to supplement the roughly $24
billion budget for fiscal 2006 that Romney signed last summer. In
addition, each chamber approved an economic stimulus bill designed to
create jobs. House-Senate negotiators will craft two compromise measures
in the coming weeks and send them to Romney.
The House's $317.2 million supplemental spending plan includes $100
million for capital improvements at state colleges and universities; $72
million for roads, bridges, and other transportation-related projects;
and $40 million for capital improvements to parks, beaches, and historic
sites.
Those are known as one-time costs because they are individual projects.
But the House bill would also commit the state to some continuing costs.
For example, there is $25 million to pay for healthcare coverage for
about 10,000 people who have been unemployed for a long time and $7
million to raise the salaries of judges, sheriffs, court officers, and
other state workers.
The Senate's $240.7 million supplemental budget also includes one-time
and recurring spending.
Among the projects in that bill: a new $500,000 bathhouse at
Constitution Beach in East Boston -- which is represented by Senate
President Robert E. Travaglini -- and $250,000 "for the creation of a
new brand identity" for Plimoth Plantation, a historic site in the
district of Senate Ways and Means Chair Therese Murray; and $55 million
for transportation projects around Fenway Park and the Longwood area.
"There may be an argument for individual line items, but clearly it's a
bit of a grab bag," said Michael J. Widmer of the Massachusetts
Taxpayers Foundation, a business-funded nonprofit organization. "The
state's fiscal picture has clearly improved, but we're not in any kind
of position to be adding several hundred million dollars to the bottom
line before we even address healthcare reform."
According to an analysis by the Taxpayers Foundation, the two House
bills include $519.5 million in one-time spending and $104.2 million in
recurring spending. The Senate plans have $522.2 million in one-time
spending and $192.4 million in recurring spending.
Widmer also cautioned that the state's economic recovery remains
sluggish; Massachusetts lost 7,100 jobs in October, the third straight
month of job losses.
Supporters say the two stimulus bills, which total $353 million in the
House and $473 million in the Senate, are designed to create jobs
through infrastructure improvements, money for research, and development
in growing high-tech fields; and myriad tax credits and incentives. Both
plans also include money for job training and adult basic education.
The Senate, for example, wants to spend $35 million to create a
nanomanufacturing and biomanufacturing complex at the University of
Massachusetts at Lowell, $10 million on a bioprocessing facility at the
University of Massachusetts at Dartmouth, and $2 million on tax credits
for medical device companies.
Representative Daniel E. Bosley, the North Adams Democrat who played a
leading role in putting together the House version, emphasized that he
and his colleagues toured the state to gather ideas from business
owners. Bosley also said the House measure is free of "pork" for any
specific firm.
Daniel R. Feenberg, a research associate at the National Bureau of
Economic Research in Cambridge, said that with the exception of the job
training programs, the Legislature's stimulus bills won't do much to
boost employment in the Bay State. The real problem, Feenberg said, is
the high cost of housing. The Legislature approved a separate measure
last week designed to spur more housing construction.
"Is anyone on the Hill aware that the only thing that prevents the
creation of more jobs in Massachusetts is the inability of people to
find a place to live?" Feenberg said.
Plans for the money
The Legislature has passed several spending bills since the start of the
new fiscal year July 1. In recent weeks, the House and Senate have also
approved separate versions of large spending bills that will be melded
into two compromise bills that the full Legislature will consider in the
coming weeks.
Here is a list of the spending bills and a snapshot of some of the
spending projects.
PASSED
Katrina Relief: Approved $25 million, spent about $5 million. The state
may be reimbursed by federal government.
Deficiency budgets: To reimburse depleted accounts and pay for
previously negotiated raises for employees of state colleges and
universities: $153 million
Energy bill: $80 million in tax incentives to spur purchase of
energy-efficient products and home heating aid for thousands of
additional families
PENDING
House supplemental spending bill: $317.2 million
Senate supplemental spending bill: $240.7 million
House economic stimulus bill: $353 million
Senate economic stimulus bill: $473 million
Some items in the supplemental bills:
$55 million for transportation projects in Fenway-Longwood area in
Senate plan; $12.5 million in House plan
$100 million reserve for capital projects at state colleges and
universities in House bill; $13 million in Senate bill
$500,000 for a bathhouse at Constitution Beach in East Boston and $3
million for capital improvements and maintenance costs for Revere Beach,
in the Senate bill.
$7 million for new bulletproof vests for police officers, in Senate bill
$150,000 for a skate park in Cambridge, in Senate bill
$100,000 for the restoration of Merrymount Park in Quincy, in House bill
$900,000 for the East Street renovation project in Ludlow, in House bill
$50,000 to the Barre Historical Society for the restoration of an
antique stagecoach, in Senate bill
$250,000 for Plimoth Plantation "for the creation of a new brand
identity," in Senate bill
$100,000 for the renovation of the Bing Theatre in Springfield, in House
bill
$150,000 for a winter moth worm study by the University of Massachusetts
at Amherst's Agricultural Department
Return to top
The Boston Herald
Tuesday, November 22, 2005
A Boston Herald editorial
Revenues boom, no tax cut in sight
We’re long past the fantasy that the Legislature will someday approve an
income tax rollback simply to keep faith with the electorate that
demanded it back in 2000.
But how the tone-deaf majority on Beacon Hill continues to insist that
we can’t "afford" the tax cut defies any sort of logic. The numbers tell
a different story.
Massachusetts collected nearly $1.2 billion more than it budgeted to
spend in fiscal 2005, with the majority transferred into the state’s
rainy day fund, now approaching a $2 billion balance.
Meanwhile, revenues are exceeding projections so far in fiscal 2006 by
about $290 million.
And by the way, we’re not alone. A report in USA Today last week
suggested "soaring" tax collections have states from South Carolina to
Utah considering all manner of tax cuts.
But in Massachusetts, the Legislature is debating new spending and
economic stimulus bills that call for hundreds of millions more in
spending this year. They have thus far refused to make up for a mistake
of their own doing, that now has three-year-old tax bills landing in the
mailboxes of unsuspecting investors. And as for cutting taxes? Well,
they’ve done little more than nibble at the edges.
It wasn’t easy to balance the budget when the commonwealth was $3
billion in the red, and for doing so without raising taxes over the last
few years, we give the Legislature and the Romney administration credit.
And it’s not a terrible idea to keep the commonwealth’s economic engines
humming by making targeted investments in certain areas of the economy.
But the voters expect and deserve more. The Democrat-controlled
Legislature loses all credibility when it fails to stop the great
Capital Gains Raid of 2005, then launches into a thoughtful debate over
just how much to spend on a new skate park in Cambridge.
But so it is, and voters considering who to support next year should
remember: If they won’t roll back taxes now, with revenues booming and
elections on the horizon, they probably never will.
Return to top
Associated Press
Friday, November 18, 2005
Lawmakers eye leftover Katrina funds
By Ken Maguire
Massachusetts has spent a small fraction of the $25 million appropriated
to care for the Hurricane Katrina victims who lived temporarily at Camp
Edwards on Cape Cod.
The Legislature approved the funds in an emergency action shortly after
Katrina tore through the Gulf Coast region, leaving tens of thousands of
people homeless. Massachusetts expected upward of 2,500 evacuees, but
got just 235.
There are some lingering bills to pay, but overall there's about $20
million unspent. But instead of returning it to the state's general
fund, the Senate has voted to make the leftovers available to
communities that suffered their own flooding in heavy rains last month.
The watchdog group Citizens for Limited Taxation says the money
should be returned to taxpayers.
"They never do that," said Chip Faulker, associate director of
the Marblehead-based group. "They always find another use for it. That's
why state spending is out of control."
Faulker acknowledges he has "seen worse," such as when the Legislature
increased the gasoline tax but used less than 10 percent of the
increased revenue on the stated goal of improving highways.
Taunton Sen. Marc Pacheco said his measure is "very consistent" with the
original $25 million legislation in September.
"Why spend it? For anybody not to see the need for it would have to have
been asleep in October," Pacheco said.
A portion of Pacheco's hometown was evacuated when it looked like the
Whittenton Pond Dam would break and send a 6-foot wall of water surging
through downtown Taunton. Downtown businesses closed for several days,
losing money, while overtime costs for police, fire, and other municipal
departments piled up.
Heavy October rain also caused flooding damage in Worcester,
Springfield, and in the Berkshires. Nine counties received a "major
disaster declaration" by the federal government, meaning business and
individuals can qualify for assistance. Cities and towns in six of those
counties -- Franklin, Berkshire, Hampden, Hampshire, and Worcester --
also have been approved to get 75 reimbursement for their storm-related
costs, according to the Federal Emergency Management Agency.
Pacheco's measure, adopted this week as part of a larger spending bill,
would put the Massachusetts Emergency Management Agency in charge of the
leftover Katrina funds, and make them available to individuals,
businesses, and local governments after federal reimbursements are paid.
Mainly, he said, it's designed to help cities and towns whose budgets
already are cut to the bone.
"At the end of the year, they would be coming back to the state
Legislature seeking supplemental relief," he said. "They don't have the
resources."
Even if Greenfield received 75 percent federal reimbursement for its
flood costs, that would leave a $375,000 dent in the town budget, said
Marjorie L. Kelly, the town's director of municipal finance. Roads,
bridges and dams were damaged in the Columbus Day weekend flooding.
Ultimately, that would mean a decrease of town services, or an increase
of taxes to cover the difference.
"It's very gratifying that the state Legislature is responding," she
said.
Pacheco wasn't along in eyeing the leftover funds. Milton Sen. Brian
Joyce wanted to direct $10 million to homeless prevention efforts such
as job training, but his amendment failed this week.
Of the Katrina victims relocated to Massachusetts, 135 have since moved
to other states, often with family or friends. The other 100 have
remained in the state. Another 860 have come to Massachusetts on their
own.
Massachusetts hosted the evacuees at Camp Edwards, on the Massachusetts
Military Reservation. The camp closed on Oct. 24. At a closing event,
Gov. Mitt Romney resisted suggestions that leftover funds go to other
programs for the homeless. He said the money should go "back to the
general fund to be appropriated to the needs of the commonwealth, such
as capital needs and education needs... I don't imagine any sense that
this is cash to be spent willy-nilly."
The measure would need House approval before it would go to Romney.
Spokeswoman Julie Teer said on Friday that Romney "will review any
legislation that reaches his desk."
Return to top
The Boston Herald
Friday, November 18, 2005
Senate weighing double pay boost
By Kimberly Atkins
State trial court clerks could get a double pay increase that will boost
their salaries to six figures under a supplemental budget amendment
approved by the state Senate this week that also would raise salaries
for sheriffs, assistant district attorneys, trial court judges and the
state’s top elected officials.
Superior Court clerk salaries are based on a percentage of the salaries
paid to the judges they serve. In addition to approving a boost in
judges’ pay, this week the Senate approved a supplemental budget
amendment to raise Superior Court clerk salaries from 75 percent of what
judges are paid to 81 percent. That measure would give clerks – already
set to receive a pay raise after lawmakers voted to raise judges’
salaries – a bonus boost.
Trial court clerks are now paid more than $85,000, roughly 75 percent of
judges’ salaries, which are set at just under $113,000. Under the pay
boost the Senate approved for judges, clerks would stand to make more
than $97,000 annually at the current percentage. But the new formula
would hike the salary for clerks to more than $105,000.
Supporters say judges and their staff are hard workers long overdue for
a raise, which they have not had since 2000.
"If you look at the increase in the cost of living (since the last pay
raise), it would come way short of this amount," said Sen. Robert S.
Creedon Jr. (D-Brockton).
But critics said the double boost in pay for the position is too much.
"The bottom line is: Are taxpayers getting their money’s worth?" said
Pamela Wilmot, executive director of Common Cause Massachusetts.
"Certainly the responsibility of a clerk is not 81 percent that of the
judges, nor is the education level required."
James Dolan, a retired District Court judge who has studied patronage in
the court system for the Pioneer Institute, defended the raise.
"The clerks and the judges are in the same boat," said Dolan, now in
private practice at a Boston firm. "One can certainly make the argument
that they are underpaid and they are entitled to the same (boost) in
benefits."
The proposal and a host of other supplemental budget amendments, many of
which would fund pet projects in legislators’ districts, must be
reconciled with the House budget in conference committee before being
sent to Romney’s desk, where he will have the power to veto it.
Return to top
The Boston Herald
Monday, November 21, 2005
A Boston Herald editorial
Clerks’ pay hike is twice as nice
State trial court clerks are in line for a sweet double pay raise from
their friends in the Legislature for no apparent reason other than they
want it – and they have the juice to get it.
Tucked in a Senate bill passed last week was a pay hike for trial court
judges, assistant DAs, sheriffs and the clerks.
Put aside, for a moment, the effort to boost salaries for most of these
folks, some of whom have gone without a raise since 2000. What’s really
insulting is that senators didn’t stop with the 14 percent raise for
clerks, which would bring them to about $97,000 a year.
State law sets clerks’ salaries at about 75 percent of what judges earn.
But the Senate would bump that up to 81 percent – $105,000-plus – for
reasons apparent only to Beacon Hill insiders.
Pamela Wilmot, executive director of Common Cause Massachusetts, nailed
it when she questioned the value for taxpayers.
"Certainly the responsibility of a clerk is not 81 percent that of the
judges, nor is the education level required," Wilmot said.
Exactly. Somehow we doubt the clerks are going to start doing 6 percent
more work. That’s sort of like expecting the workload for the Dukes
County sheriff to instantly grow to that of his counterparts in Suffolk
or Middlesex. But that didn’t stop the Senate from approving yet another
official kiss, this one to pay all sheriffs equally – in most cases, a
lot more.
There is still time to correct this cash-grab by the politically
connected, since the House hasn’t signed off on the plan. But as our
colleague Howie Carr points out, you can’t swing a dead cat in a court
clerk’s office without hitting a former rep. We’re not exactly holding
our breath.
Return to top
The Boston Herald
Friday, November 18, 2005
Same old hack story: Court clerks clean up
By Howie Carr
Don’t forget the court clerks! Gov. Romney willing, they’ll be getting a
big fat pay raise, too.
Oh sure, the oft-investigated sheriffs of Massachusetts are all grabbing
obscene pay raises, ditto the preening, underworked hack judges.
But what’s gone under the radar screen so far is that the commonwealth’s
court clerks have been inserted into the pork-laden bill. And the clerks
will be getting not just a pay raise, but a double bump up.
They’re getting a bigger kiss, percentage-wise, than the judges – and
boy, does that frost the robed ones. Watch your back, Judge Mulligan –
your troops have got the long knives out for you.
Right now the mostly ancient clerks are supposed to get 75.4 percent of
the salary of their court’s presiding justice. Under a provision
inserted in the Senate supplemental budget, that percentage goes up to
81.4 percent.
What that amounts to is, if the governor goes along to get along, the
clerks go from about $89,000 a year to $110,000.
Happy Thanksgiving, clerks!
And another thing: The assistant clerks, who are usually hacked up
themselves, get 71 percent of what the clerks get, so they’re in line
for a mega-boost, too.
Who are these coat-holding hacks, you ask? They tend to be old, very
old. Again, consider the phrase, "Forgotten but not gone."
Consider Joe Croken of the Malden District Court. He was a Torby
MacDonald guy – and when was the last time you heard that said of
anyone?
For those of you too young to remember exactly where you were when you
heard Foster Furcolo had been indicted, Torby was a Harvard classmate of
JFK (class of ’39) and later a congressman. He’s been dead 30 years.
Not wanting to embarrass myself, I phoned the Malden District Court
yesterday to make sure Croken hadn’t croaked.
"I think he’s at lunch," said the woman who answered the phone.
Out to lunch. That pretty much sums up all the clerks. Down in Hingham,
there’s Joe Ligotti – a Johnny Powers guy, another phrase you don’t hear
much anymore. Stress does not take a lot of clerks off the board. The
previous clerk of the South Boston District Court made it past 90. His
name was Flaherty, and he was succeeded by a woman whose maiden name was
Flaherty.
You can see why the House is expected to go along with the Senate’s pay
raises. Among the former House members who will be getting another $400
a week out of this: Rick Walsh (West Roxbury), Paul Malloy (Marlboro),
Carlton Viveiros (Bristol County Housing), Ed Teague (Falmouth), Kevin
Finnegan (Peabody) and Bill Nagle (Ware). Was Clerk-Magistrate Arthur
Tobin of Quincy a rep before he was the state senator?
His son, of course, is Steve Tobin, who is now the state rep. "Merry
Christmas, Dad, I voted for your pay raise."
Does the name Timilty ring a bell? Come on down, Norfolk Superior Court
Clerk Walter Timilty. He’s one of those Timiltys – the K-Mart Kennedys –
who include a rep, a solon, a governor’s councilor and an ex-con.
Come on down, Clerk Kevin Creedon of the Brockton District Court. It’s
going to be a great Thanksgiving for the Creedon family. Brother Mike, a
judge, is going up to $133,000, and Kevin’s in line to make $110G. Thank
you, Sen. Bob Creedon, another brother, and his wife, Rep. Geraldine
Creedon.
Who’ve I missed here? Clerk Dan Hogan of the BMC – I believe his dad was
a judge. Sal Paterna of Dedham – a Bellotti guy. Joe Faretra – a Sargent
guy. One final blast from the past: Joe Croken, the Torby MacDonald guy
in Malden. He’s 81, a young 81. At the clerks’ meetings, they call him
"the kid."
Return to top
The Boston Herald
Friday, November 18, 2005
State’s error mustn’t cost taxpayers
By Kerry Healey
More than 200 years ago, colonists boarded a ship and dumped tea in
Boston Harbor because of a new tax imposed by a distant and out-of-touch
government. Imagine how much more upset they would have been if the tax
was on tea they already drank.
That is exactly the situation we face with the controversy over
retroactive capital gains taxes. In 2002, the Legislature changed the
tax rate on capital gains in the middle of the calendar year. People in
the first four months of the year paid one rate; in the latter eight
months, a higher rate. The Supreme Judicial Court ruled that it was
unconstitutional to change tax rates on income from the same class of
property during the course of a tax year. The court also ruled that the
rate increase was effective Jan. 1, 2002.
The upshot is that people who sold assets during that first four months
are now receiving surprise bills for additional tax owed – three years
after the fact. That is wrong.
An uncertain tax environment in the state, both for individuals and
small businesses, is not conducive to growth and investment. Individuals
and businesses alike can reasonably conclude that what might seem like
an opportunity today can effectively be wiped out by the caprices of the
Legislature tomorrow. This retroactive tax will not only impact
professional investors, it will also catch people who sold a home in
early 2002, elders who sold investments to move into nursing homes or
middle-class taxpayers who liquidated stock to send a child to college.
The point is that individuals who sold assets in 2002 did so based on
the tax laws at the time. Of the more than 40,000 affected individuals,
38 percent made less than $70,000 a year and owe an average retroactive
tax of $525, according to the Department of Revenue. Correspondence to
the governor’s office tells part of the story. One man built a
veterinary practice in Brookline, sold it in 2002 and paid all the taxes
due. Now, three years later, he is being billed another $92,000. Another
man sold a multifamily home in South Boston. He owes a $19,000 tax
liability that did not exist at the time of the transaction.
So, how do we fix this problem?
Gov. Mitt Romney filed a bill to set the effective date of the tax rate
at Jan. 1, 2003, which will result in refunds to people who sold assets
in the latter part of 2002. But the Legislature did not act on the
governor’s bill. Instead, they have sent him legislation that just
nibbles around the edges: it waives interest on the amount owed, and
authorizes exemptions for people owing less than $100 in capital gains.
Let’s face it: This was a good-faith mistake by the Legislature, and in
order to fix the mistake, it will cost the state some money. The good
news is we have the surplus revenues to pay for it. The governor plans
to propose amendments to once again establish Jan. 1, 2003, as the date
of the tax law change. Sending out refunds is not ideal, but it is the
cost of fixing a mistake of the government’s own doing. To do anything
less breaks faith with Bay State taxpayers who deserve a tax code that
is reliable, fair and transparent.
Return to top
The Lowell Sun
Saturday, November 19, 2005
A Lowell Sun editorial
Retro-taxachusetts
Increased tax revenues have pushed Massachusetts' budget surplus to
nearly $1 billion.
So why have state representatives on Beacon Hill approved a law to enact
a retroactive tax on capital gains, dating back to 2002?
The budget surplus proves the Legislature has enough tax revenue
already.
Yet, it's not enough, because the Legislature can't seem to control its
spending addiction, even after the great recession of 2002 that caused a
$2.5 billion tax increase.
Now legislators are punishing property owners and business people by
making them reach into their pockets a second time on capital gains.
Unfair? Here's the background:
In 2002, the Legislature approved a mid-year increase in the
capital-gains tax, raising it to 5.3 percent. In 2004, the Supreme
Judicial Court rightly ruled that the mid-year increase was
unconstitutional. It left the Legislature two options: go back to Jan.
1, 2002 to start the tax increase or go forward to Jan. 1, 2003.
Of course, there was a catch.
Pushing ahead to the later date would result in a refund to property
owners who had paid the higher 5.3 tax rate during the last four months
of 2002. The state stood to lose $200 million under this plan.
A return to the earlier date, however, meant the state would recoup $156
million in retroactive capital gains taxes from the same taxpayers,
because they'd be forced to pay for the eight months when the illegal
law wasn't in effect.
So which option did the House pursue?
The answer is obvious. The retro-tax has now joined the vast arsenal of
ways for legislators to seize money from hard-working citizens.
According to the state, the largest group of taxpayers affected by the
new policy are middle-class earners whose adjusted gross net income
ranges from $50,000 to $59,000 per year. The 33,543 taxpayers owe an
average of $4,477 each. These people likely sold smaller homes at a
profit, paid taxes, and then reinvested into bigger homes. Or maybe they
went on vacation. Whatever, they'll now be tapping savings accounts or
taking out bank loans to pay another tax on the tax they've already
paid.
In 15 communities covered by The Sun, 1,194 citizens will be receiving
surprise three-year-old tax bills for Christmas, unless Gov. Mitt Romney
steps in. They “owe” $3,620,883.
In 2002, these people acted in good faith and played by tax rules that
were on the books. They made important decisions based on Massachusetts'
tax code. They should not be subject to an uneven, capricious rules
change by legislators.
Of area legislators, only House Democrat Corey Atkins and Republican
Robert Hargraves had the good sense of fairness to reject the
middle-class retro tax.
Gov. Romney is the citizens' last hope to right this wrong. He should
demand a Jan. 1, 2003 starting date and a tax refund for those snared in
the Legislature's tax trap.
Return to top
The MetroWest Daily News
Sunday, November 20, 2005
Retroactive tax sends wrong message
By Irwin Jungreis / Guest Columnist
At the close of the last decade a friend and I left secure positions and
started a new business in a risky but promising area of the construction
industry. To fund it we invested a fair part of our life savings,
raising additional money from other investors.
Within a few years we were employing dozens of people, creating new jobs
where none had existed before. We all worked long hours because we
believed passionately in what we were doing.
In 2001, like many other businesses, we experienced a significant
reversal of fortune in our new enterprise due to the recession following
9/11. To avoid laying people off I took a calculated personal risk and
gave up my entire salary for stock. At the time I wondered if I would
ever again have a paycheck from my business, or regain even a portion of
my investment.
But in April 2002, our risk, sacrifice, and hard work paid off in a way
we had not anticipated. A large firm in our industry approached us and
we sold our business.
As a result, I received an once-in-a-lifetime capital gain. By design,
our employees also participated in the windfall, enjoying a
well-deserved reward for their dedication and effort. The American dream
had come true for all of us.
But now, after having sold our company and paid our taxes over three
years ago, both the founders and employees of our former business will
be taxed again by means of a capricious new law. Our lawmakers have
rewarded hard work and good fortune with a slap in the face.
How can this be in a state that prides itself on its spirit of
enterprise; that tries through scores of incentive and tax give back
programs to attract the risk takers and entrepreneurs so vital to
maintaining our knowledge-based economy?
Here's how: In 2002, with tax revenues in free fall, the Legislature
increased the tax rate on long-term capital gains, with May 1, 2002
slated for the law to go into effect.
In 2005, the Supreme Judicial Court reviewed the Legislature's decision.
In Peterson v. Commissioner of Revenue, 444 Mass. 128, the court ruled
that the effective date of the tax increase could not be mid-year.
The court then set the increase back to January 1, 2002. Taxpayers who
reported capital gains in the first half of 2002 would be billed for the
new tax, regardless as to whether they had already paid capital gains
under the old law.
Some in the Massachusetts House see the unfairness of this form of
public double dipping and are considering a bill (H.B. 4165) that would
set the effective date of the increase to January 1, 2003. In doing so
they seek to remedy a class of individuals, including my colleagues and
me, whose once-in-a-lifetime good fortune has in part been tainted.
Some might say the difference between the old and new rates is only a
few percentage points (anywhere from 0.3 percent to 5.3 percent,
depending on holding period). How can it be unreasonable to raise the
tax rate by a few percent? Won't the change only affect wealthy
individuals who can easily afford to pay, and aren't capital gains
earned on nothing more than the strength of a phone call and a stock
sale?
The rate at which capital gains are taxed in Massachusetts is not at
issue here. My position speaks to when one is taxed, and for what
reason. A new tax bill issued now to someone who realized income years
ago and has already paid taxes does so without reference to personal
circumstance and common fairness.
Now it is 2005 and my new, entirely unanticipated, retroactive tax bill
is larger than my annual salary.
It is not just for entrepreneurs that the Legislature must maintain a
standard of reasonableness. No one should have to live with the fear
that improvised law of the most opportunistic sort will create
unwarranted penalties disproportionate to circumstance.
The Legislature must act to remedy an unjust law that is both an
oversight and an insult to personal initiative and new enterprise.
Return to top
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
|