CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Tuesday, December 6, 2005

It's official: Legislature repeals Retro Tax


House and Senate lawmakers approved a bill Monday designed to repeal a retroactive capital gains tax hike from 2002 and send out about $275 million in tax rebates over the next four years.

A spokesman for Gov. Mitt Romney said he's expected to sign the bill.

The legislation should bring relief to taxpayers who had begun receiving notices telling them to pay capital gains taxes from 2002.

Associated Press
Monday, December 5, 2005
Lawmakers pass bill repealing
retroactive capital gains tax hike


It took two decisions by the Supreme Judicial Court to convince lawmakers that no matter what sleight of hand they chose, they could not change tax law in the middle of a calendar year. That left two choices - rebate taxes paid by those under the new rate or collect retroactively from taxpayers who reported capital gains in the first part of the year under the old rate.

Because most Democratic lawmakers have an aversion to giving money back to the people who earned it, the retroactive tax bills went out - along with bills for interest that accrued while the Legislature was fiddling and diddling with the issue....

Lawmakers opted to stretch the $275 million in tax rebates over four years (Imagine if taxpayers asked to do that!), although taxpayers due $1,000 in rebates or less will get a lump sum payment.

Gov. Mitt Romney hung tough on this one - amending a legislative proposal to collect those back taxes. But he won with the help of angry constituents everywhere, who refused to sit back and take it.

A Boston Herald editorial
Saturday, December 3, 2005
Angry taxpayers score a big win


Despite spiraling gun violence that continues to claim young lives, overtaxed Boston cops are logging more than 500 lucrative detail shifts a day, pocketing hefty paychecks for traffic duty while the city struggles to control crime, a Herald review found....

Critics have long argued that detail assignments waste public resources on a job that could easily be performed by civilian flaggers.

"Police are supposed to be our most respected public employees, and most of the time we see them standing at the edge of a hole with coffee in their hands," said Barbara Anderson of Citizens for Limited Taxation. "It doesn’t help their image, but it does help their paycheck."

The Boston Herald
Friday, December 2, 2005
Cops cash in, at what risk?
'Detail' shifts lure police as crime strains staffing


A policy report released this week links $3.1 billion worth of cuts in state funding for health care, education, emergency and affordable housing services, child care and social services made between 1991 and 2001 to increases in homelessness, teen smoking, teen pregnancy and poor MCAS performance.

The report, "Kids, Cuts and Consequences," was drafted by the liberal policy group Massachusetts Budget and Policy Center and the Home for Little Wanderers, New England's largest, private, nonprofit child and family service agency....

Noah Berger, executive director of the Massachusetts Budget and Policy Center, said the goal of the report was "not to point fingers," but rather cast light on the plight of children in danger of losing critical state services....

Berger's group has found an odd bedfellow in the typically conservative Massachusetts Taxpayers Foundation.

"Through the fiscal crisis of 2001-2004 services were cut dramatically all through state government," said MTF President Michael J. Widmer. "I can't vouch for the particular impacts on kids," but Widmer said his group is against the proposed reduction in state income tax from 5.3 to 5 percent.

And, in its own report released earlier this month, the MTF called for the state to boost funding to local governments to reduce municipal reliance on property taxes that, Widmer said, "fall disproportionately on the poor."

But not everyone agrees with Berger's call for increases in social spending.

Good government watchdog and advocate of the Proposition 2½ local tax cap, Barbara Anderson said the report is an emotional plea from a group with a stake in the state's social spending.

"No matter how much you give these people, it's never enough," she said. "You never hear anybody calling for cuts to social programs, but somehow our tax dollars never seem to make it there."

The Brockton Enterprise
Sunday, December 4, 2005
Study: Kids hurt most by new cuts


Former University of Massachusetts president William Bulger won a huge victory in court Monday when a Superior Court judge ruled that his pension must be increased to over $200,000 a year.

Judge Ernest B. Murphy ruled that Bulger must receive a housing allowance and a portion of an annuity in his pension. The housing allowance and annuity had been discounted as perks during Bulger's reign as president of the UMass system.

Murphy's ruling will add roughly $45,000 in annuity payments and a $29,000-a-year housing stipend. Bulger's pension will rise from $179,000 to $208,000 per year....

"He's become a predator on our paychecks, that's the way I can describe Billy Bulger," said Chip Faulkner, associate director of the Massachusetts Citizens of Limited Taxation....

"The old argument used to be that with public employees, they earn a relatively low salary, but good benefits," said Faulkner. "What it's turned into now is huge salaries and huge benefits. That's why government costs so much in Massachusetts... That's why we have one of the highest income tax rates in the country."

The Daily Collegian
University of Massachusetts
November 30, 2005
Judge rules Bulger entitled to higher pension payment


Economic development bills should be designed to help 6 million Massachusetts residents, not 40 state senators. The latter appears to be the goal of the economic stimulus bill passed by the state Senate.

State tax revenues are coming in higher than projected, but that's no reason to dole out special projects to help a single district in the guise of economic development....

Some of these projects may deserve state aid, though Nantucket can probably afford to enlarge its network of bike paths on its own. But these earmarks should be excised unless senators can show they will have a strong regional economic impact....

The House version of the stimulus bill avoids the temptation to load up with special projects, and at $336 million it is far less costly than the Senate's $494 million package.... House and Senate conferees are trying to resolve differences between the two versions this month. Legislators should consider it in the cold light of January, after the gift-giving season is past.

A Boston Globe editorial
Tuesday, December 6, 2005
Christmas in the Senate


Chip Ford's CLT Commentary

It's all but official now, the law of the land with Governor Romney's signature.  After a long battle by CLT, its members, and a lot of other afflicted taxpayers, the retroactive capital gains tax is about to become just a bad memory, another flawed law finally acknowledged by "The Best Legislature Money Can Buy." It was adopted during the Legislature's revenue feeding frenzy of 2002 (see:  CLT Update, Jul. 25, 2002, "Beacon Hill "village idiots" betray us again"), the biggest tax increase in state history.  Congratulations taxpayers!

*                         *                         *

Another perennial report is out on the unnecessary cost of police "details," and again don't expect anything to change in Massachusetts -- the only state that uses high-cost police at roadway construction sites instead of far lower cost flag men and women.  With pubic employee unions controlling the predominantly Democrat Legislature and its agenda, taxpayers always come in a distant second place.  Come Police "Detail" Day at the State House, most of our "representatives" in the "Great and General Court" will once again be found hiding beneath their desks.  (How long has this boondoggle been discussed ad nausea?  See:  "Police Details" on the CLT website.)

*                         *                         *

The Massachusetts Budget and Policy Center is out with another tax-and-spend report, as it exists to do.  Formerly known as TEAM (in these quarters better known as "Tax Everything And More" before its abrupt name-change), its conclusions have been ratified by none other than the so-called Massachusetts Taxpayers Foundation -- no surprise here.  We have frequently charged that MTF is nothing more than a shill for the tax-and-spend brigade, providing it with MTF's overrated stamp of legitimacy as cover.  Our longtime observation has now been recognized by The Brockton Enterprise.  I'm sure that none of us find MTF to be at all "an odd bedfellow" of the big-spenders; just a usual member of Gimme Lobby chorus --  unless a tax increase targets its fat-cat big-business membership.  (Remember how quickly MTF president and spokesman Michael Widmer came around to opposing the retroactive capital gains tax -- after he'd "received more e-mails on this than on any subject since I came to the foundation, 15 years ago.")

Chip Ford


Associated Press
Monday, December 5, 2005

Lawmakers pass bill repealing
retroactive capital gains tax hike


House and Senate lawmakers approved a bill Monday designed to repeal a retroactive capital gains tax hike from 2002 and send out about $275 million in tax rebates over the next four years.

A spokesman for Gov. Mitt Romney said he's expected to sign the bill.

The legislation should bring relief to taxpayers who had begun receiving notices telling them to pay capital gains taxes from 2002.

The problem dates back to the state's most recent fiscal crisis, when lawmakers approved a capital gains hike to begin in May 2002.

The state's top court struck down the tax, saying it was unconstitutional to create a new tax midway through the year. The court said the tax must go into effect either at the start of 2002 or 2003, but not in between.

Under the legislation, anyone who did not pay capital gains taxes during the first four months of 2002 won't be required to pay those taxes retroactively -- and anyone who paid the capital gains taxes during the last eight months of 2002 will get a rebate.

Paying the rebates out over four years will mean a loss of revenue of between $56 and $69 million a year for the state.

Anyone owed $1,000 or less will get a one-time lump sum rebate.

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The Boston Herald
Saturday, December 3, 2005

A Boston Herald editorial
Angry taxpayers score a big win


No sooner did those retroactive capital gains tax bills start arriving in taxpayers’ mailboxes than the angry letters began to flow in - certainly at this newspaper and apparently on Beacon Hill too.

So Thursday, Senate President Robert Travaglini and House Speaker Sal DiMasi caved to the pressure - and it was a beautiful thing.

"Anybody who got a retroactive notice is going to get another notice saying disregard the first notice," Travaglini said.

It took two decisions by the Supreme Judicial Court to convince lawmakers that no matter what sleight of hand they chose, they could not change tax law in the middle of a calendar year. That left two choices - rebate taxes paid by those under the new rate or collect retroactively from taxpayers who reported capital gains in the first part of the year under the old rate.

Because most Democratic lawmakers have an aversion to giving money back to the people who earned it, the retroactive tax bills went out - along with bills for interest that accrued while the Legislature was fiddling and diddling with the issue. The screams of pain - and anger - could be heard in households throughout the commonwealth - including a lot of good Democrat households. In all some 48,000 taxpayers were on the receiving end of those bills.

"In the end it wasn’t liberal or conservative, Democrat or Republican, but everyone heard it so frequently and loud and clear," said Sen. Mark Montigny (D-New Bedford). "Ultimately when people started to receive bills, the outcry was loud enough."

Lawmakers opted to stretch the $275 million in tax rebates over four years (Imagine if taxpayers asked to do that!), although taxpayers due $1,000 in rebates or less will get a lump sum payment.

Gov. Mitt Romney hung tough on this one - amending a legislative proposal to collect those back taxes. But he won with the help of angry constituents everywhere, who refused to sit back and take it.

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The Boston Herald
Friday, December 2, 2005

Cops cash in, at what risk?
'Detail' shifts lure police as crime strains staffing
By Casey Ross


Despite spiraling gun violence that continues to claim young lives, overtaxed Boston cops are logging more than 500 lucrative detail shifts a day, pocketing hefty paychecks for traffic duty while the city struggles to control crime, a Herald review found.

"We are down the better part of 200 officers in the city," said state Rep. Marty Walz (D-Back Bay). "In the meantime, what are we doing? What is the impact of the detail work? My primary concern is we don’t have enough officers on the streets preventing and solving crimes."

Walz said she fears that the high detail pay combined with the relatively light duty creates a disincentive for officers to work overtime patrol shifts during which they could be more useful in combating mounting street crime.

Police records show about one-fourth of the department’s 2,058 uniformed officers are assigned to daily detail duties that range from Big Dig traffic shifts to security in supermarkets and department stores. The details leave scores of officers working 14-16-hour days on a regular basis.

While cops insist the details put more eyes on the street, some officials fear the $33- $47-an-hour jobs are limiting the department’s ability to stretch threadbare resources to combat surging crime. Two more young men died because of gun violence this week — increasing the year’s homicide tally to 66 — while another street battle in Dorchester sent bullets flying outside an elementary school.

"How can they be effective (on patrol) if they’re working that many details in a week’s time?" said Sam Tyler, president of the Boston Municipal Research Bureau. "You want to have confidence that officers on duty can perform at a peak level."

Police union officials say department regulations prevent details from taking precedence over patrol overtime shifts or regular tours of duty.

Patrolmen’s union president Thomas Nee said cops assigned to stand outside construction sites and direct traffic have a primary responsibility to the city and the safety of its residents. He said an off-duty officer who broke up a gunfight Wednesday night in Mattapan and shot one of the combatants was only in the area because he was returning home from a detail assignment.

"I can’t tell you how many times a detail officer has been the back-up in an incident or helped avoid a tragedy," Nee said last night. "These assignments put an additional 300 to 400 officers on the streets at private expense, not taxpayers’ expense."

Details are supplemental assignments for officers who fiercely defend them as a useful service that increases police street presence while reducing deadly accidents. Most assignments are paid by private firms who must hire officers for road work, but many also are funded by state agencies such as the Massachusetts Turnpike Authority.

A Herald review of a week’s worth of detail records found that Boston cops made well in excess of $600,000 from Nov. 3-10, including a median daily pay of more than $17,000 from the taxpayer-funded Big Dig.

Critics have long argued that detail assignments waste public resources on a job that could easily be performed by civilian flaggers.

"Police are supposed to be our most respected public employees, and most of the time we see them standing at the edge of a hole with coffee in their hands," said Barbara Anderson of Citizens for Limited Taxation. "It doesn’t help their image, but it does help their paycheck."

Devil in the details

The Herald reviewed one week’s worth of Boston police detail assignments between Nov. 3 and Nov. 10, finding the department’s officers made well in excess of $600,000 for standing at construction sites or directing traffic. Here are some other statistics from the review:

l  Hourly detail pay rates: Captain $47; lieutenant $42; sergeant $40; patrolman $33.

l  About 500 officers per day worked detail shifts; the department has 2,060 uniformed members.

l  133 officers worked four or more detail shifts.

l  40 officers worked six or more detail shifts.

l  Weekly detail pay for a patrolman logging five, eight-hour shifts: $1,320 before taxes.

l  Median daily cost of taxpayer-funded Big Dig details: $17,400.

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The Brockton Enterprise
Sunday, December 4, 2005

Study: Kids hurt most by new cuts
By Tim Grace, Enterprise staff writer


If he wasn't playing basketball at the Old Colony YMCA, 14-year-old David Stanton of Brockton isn't sure where he'd be or what he'd be doing.

"It's probably good that I can come here," he said. "There's not much else to do around here except get in trouble."

Stanton is one of hundreds of Brockton kids involved in after-school programs at the YMCA, programs that would shrink drastically or even disappear altogether if the state funding that helps keep them afloat were to dry up.

Cutbacks in state funding for programs like those at the YMCA wouldn't be unprecedented.

A policy report released this week links $3.1 billion worth of cuts in state funding for health care, education, emergency and affordable housing services, child care and social services made between 1991 and 2001 to increases in homelessness, teen smoking, teen pregnancy and poor MCAS performance.

The report, "Kids, Cuts and Consequences," was drafted by the liberal policy group Massachusetts Budget and Policy Center and the Home for Little Wanderers, New England's largest, private, nonprofit child and family service agency.

Sandy Wixted didn't need anyone to tell her about the impact of recent reductions in state aid to programs that support children and families.

"We're reeling from the cutbacks," said Wixted, director of Catholic Charities South in Brockton. "We have at least 20 calls a day for all types of assistance, and half of them ask for help with rents due to an unexpected loss of income, complicated by multiple health problems, or family disruptions. We do everything possible to move people out of homelessness, but our requests are up. We are only able to help about 50 families from over a thousand who ask us for rental assistance each year."

According to the report, Massachusetts cut per-pupil state funding for education more than any other state between 2002 and 2004. Within that cut was an 80 percent reduction in remediation programs for children who have trouble learning the reading, writing and math skills tested on the MCAS exam.

When funding for teen pregnancy prevention efforts was cut by 38 percent in one year, the report claims teen birth rates began to climb in many high-risk communities.

And when the state reduced funding for anti-smoking programs by 91 percent, the steady decline in smoking rates among children slowed and illegal cigarette purchases by minors jumped dramatically.

Faced with an increase in need for services brought on by a sluggish economy and a reduction in state support, local charitable groups have been forced to make difficult choices.

Wixted's Catholic Charities office was forced to close its downtown Brockton detox center.

The office used to receive state funding for a program that trained immigrants to become certified nursing assistants.

"But that's been cut back and it's a struggle to find private funding," said Wixted.

"As a society, we say we value our children," said Evelyn Straun, regional director of the Massachusetts Society for the Prevention of Cruelty to Children. "But where we apply our dollars doesn't always line up with that sentiment."

Although MSPCC receives little state funding, Straun said cuts in social services have a tremendous impact on the group's efforts.

"If you're worried about whether you're going to make the rent, how can you worry about whether your kids are acting out in school," she said.

Jack Kelly, senior vice president and chief operating officer of the Old Colony YMCA in Brockton, said reduced state funding has forced the YMCA to cut programs, staffing and salaries.

"We've got some entry-level staffers making less than $19,000. That's just not making it," Kelly said.

"When vital programs for vulnerable children and families are fully funded the statistics show that children and families in the commonwealth do much better," said Joan Wallace-Benjamin, president and CEO of the Home for Little Wanderers. "As soon as we stopped fully funding programs like early intervention, homelessness prevention, teen pregnancy prevention, foster care recruitment and remedial education programs, we start to see folks who don't just slip through the cracks, they disappear."

Noah Berger, executive director of the Massachusetts Budget and Policy Center, said the goal of the report was "not to point fingers," but rather cast light on the plight of children in danger of losing critical state services.

"Government is not just the people on Beacon Hill," Berger said. "Our government is the schools that educate our children, the police that keep them safe, the social workers that help children at risk of abuse or neglect, and the healthcare safety net that 450,000 children rely on for basic medical care. This report shows vividly how, when the state budget is cut to pay for tax cuts, critical elements of our children's lives are affected: their education, health care and physical safety."

Berger's group has found an odd bedfellow in the typically conservative Massachusetts Taxpayers Foundation.

"Through the fiscal crisis of 2001-2004 services were cut dramatically all through state government," said MTF President Michael J. Widmer. "I can't vouch for the particular impacts on kids," but Widmer said his group is against the proposed reduction in state income tax from 5.3 to 5 percent.

And, in its own report released earlier this month, the MTF called for the state to boost funding to local governments to reduce municipal reliance on property taxes that, Widmer said, "fall disproportionately on the poor."

But not everyone agrees with Berger's call for increases in social spending.

Good government watchdog and advocate of the Proposition 2½ local tax cap, Barbara Anderson said the report is an emotional plea from a group with a stake in the state's social spending.

"No matter how much you give these people, it's never enough," she said. "You never hear anybody calling for cuts to social programs, but somehow our tax dollars never seem to make it there."

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The Daily Collegian
University of Massachusetts
November 30, 2005

Judge rules Bulger entitled to higher pension payment
By Dan O'Brien, Collegian Staff


Former University of Massachusetts president William Bulger won a huge victory in court Monday when a Superior Court judge ruled that his pension must be increased to over $200,000 a year.

Judge Ernest B. Murphy ruled that Bulger must receive a housing allowance and a portion of an annuity in his pension. The housing allowance and annuity had been discounted as perks during Bulger's reign as president of the UMass system.

Murphy's ruling will add roughly $45,000 in annuity payments and a $29,000-a-year housing stipend. Bulger's pension will rise from $179,000 to $208,000 per year.

Bulger's lawyer, Thomas Kiley praised the decision saying to the Boston Globe, his client "has served in positions of great importance to the citizens of the Commonwealth."

The judge's decision has come under fire by several public and private leaders, including Massachusetts Attorney General Tom Reilly.

"I don't believe he's entitled to anything he requested... This sets a precedent that could be very expensive for this state, and we're prepared to appeal this decision," Reilly said in a statement.

UMass originally resisted paying Bulger the additional money in his pension because officials considered the housing and annuity payments as perks.

"He's become a predator on our paychecks, that's the way I can describe Billy Bulger," said Chip Faulkner, associate director of the Massachusetts Citizens of Limited Taxation.

A recent review published in the Boston Herald on Nov. 6 shows several retired state employees making six-figures on their pension plans. The article said that out of all 57 state retirees making six figures, 31 of them are former employees of the UMass system.

"The top 10 highest paid retirees draw between $130,000 and $230,000 a year," the Herald article stated.

"The pension should be based on salary, on pay, and not on perks," Reilly said. "Enough is enough, but unfortunately in this case, enough is never enough."

"I understand how most people think that's an excessive pension, but that's the way it goes," said UMass journalism professor Stephen Simurda. "Bulger is getting a very large pension, but he spent a very long time in service to the state and legislature and here at UMass. And the percentage is based on his earnings over that time and he made a fair amount of money."

"The old argument used to be that with public employees, they earn a relatively low salary, but good benefits," said Faulkner. "What it's turned into now is huge salaries and huge benefits. That's why government costs so much in Massachusetts... That's why we have one of the highest income tax rates in the country."

While Reilly, a Democratic gubernatorial candidate in 2006 also blasted the judge's decision, his potential political rival, Republican Gov. Mitt Romney agreed with his opinion.

Romney called the new additions to Bulger's pension "excessive."

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The Boston Globe
Tuesday, December 6, 2005

A Boston Globe editorial
Christmas in the Senate


Economic development bills should be designed to help 6 million Massachusetts residents, not 40 state senators. The latter appears to be the goal of the economic stimulus bill passed by the state Senate.

State tax revenues are coming in higher than projected, but that's no reason to dole out special projects to help a single district in the guise of economic development.

Perhaps the best-known project is a $55 million package of transportation improvements around Fenway Park. The expansion of the Ruggles and Yawkey commuter rail stations is a sound investment, but the highway enhancements are not so pressing -- and we say this knowing that The New York Times Co. owns 17 percent of the Red Sox.

The Senate slipped in many other goodies, such as $25 million for the CitySquare development in Worcester, $17 million for a highway interchange in Freetown, $5 million to revitalize Quincy center, $3 million for a study of a tunnel under D Street in South Boston, $2 million for flood control in Peabody, $2 million for a cranberry bog renovation program, $1 million for repairs to the Stoughton train station, $4.3 million to build decks over the Mass. Pike for a Back Bay development, $2.5 million for a food distribution facility in Westfield, $1 million for parking improvements in Pittsfield, and $1 million for a bicycle path on Nantucket.

Some of these projects may deserve state aid, though Nantucket can probably afford to enlarge its network of bike paths on its own. But these earmarks should be excised unless senators can show they will have a strong regional economic impact.

The Senate bill also contains an intriguing proposal to allow cities or towns to establish special development districts that could float bonds for infrastructure improvements. Property owners would be assessed special charges to pay off the bonds, sparing municipalities the need to finance improvements directly. The proposal was advanced by Senator Richard Moore, Democrat of Uxbridge, who says the concept has been employed successfully through special legislation for individual projects. However, no hearing has been held on the plan. It needs a thorough airing, not a rush to passage tagged onto a larger bill.

The House version of the stimulus bill avoids the temptation to load up with special projects, and at $336 million it is far less costly than the Senate's $494 million package. Both bills contain worthwhile proposals to further the development of brownfield sites and create a state director of broadband development to promote high-speed Internet access in remote areas. House and Senate conferees are trying to resolve differences between the two versions this month. Legislators should consider it in the cold light of January, after the gift-giving season is past.

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