CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Thursday, December 22, 2005

Teachers union funding further exposed


Tax revenue growth is likely to slow to between 5 percent and 5.7 percent in each of the next two fiscal years, down from the 7.1 percent growth in the fiscal year that ended June 30, according to testimony yesterday by state Revenue Commissioner Alan LeBovidge, Michael J. Widmer of the Massachusetts Taxpayers Foundation, and David Tuerck of the Beacon Hill Institute at Suffolk University....

Although he offered the same revenue prediction as the other witnesses, Tuerck struck the most optimistic tone, saying he remains "cautiously bullish on the state economy."

"Although Massachusetts lags the national economy, we see strong growth in state tax revenue through the rest of fiscal 2006," Tuerck testified. "State tax revenue will fall off a bit during fiscal 2007, but will nevertheless reflect the continued underlying strength in the state economy." ...

This fall, recent increases in tax revenues led the House and Senate to pass multimillion-dollar spending bills that include construction projects, government salaries, and dozens of local projects. Combined with proposals to expand healthcare coverage, the Legislature is on track to add as much as $1 billion in new spending.

Final versions of the healthcare proposals and spending bills are still being negotiated by state lawmakers....

The fiscal 2006 budget totals about $24 billion....

In 2000, voters approved a gradual lowering of the income tax rate, which was 5.85 percent at the time, to 5 percent. But in the depths of the state's fiscal crisis in 2002, the Legislature froze the rate at 5.3 percent. In a full year, the tax cut might cost as much as $600 million.

At yesterday's hearing, Widmer said, "I don't see how we can afford a $600 million tax cut." He pointed out that even though the projected increases for fiscal 2006 and fiscal 2007 translate into about $1 billion in additional money each year, most of those dollars will be consumed by inflation and the growth in unavoidable expenses such as Medicaid, school aid, and pension costs.

The Boston Globe
Tuesday, December 13, 2005
Tax revenue slowdown in forecast
State's plans for spending could suffer


Warning that the financial health of the city is at stake, Boston Mayor Thomas M. Menino said the state has to stop taking so much money from Boston and warned business leaders in a speech yesterday that their well-being is at risk....

Menino asked the executives at the Fairmont Copley Plaza ballroom to lean on Beacon Hill to help Boston and other cities rely less on property taxes by finding new ways to pay for government. Without relief, budget cuts could come as soon as the next budget is submitted in April, he told reporters after his speech.

"The cost of government goes up. We have to make some very difficult decisions," he said....

Barbara Anderson of Citizens for Limited Taxation said fiscal discipline, not more state aid, is needed. She singled out mayors and selectmenís dealings with municipal unions as a key budget-buster.

"If it were a matter of more local aid and a cut in property taxes that would be great. But instead, itís more local aid, spend the local aid. More property taxes, spend the taxes because spending is so much fun," she said.

The Boston Herald
Wednesday, December 14, 2005
Mayor says stateís bleeding city dry:
Slams tax-to-aid ratio


Barbara Anderson, executive director for Citizens for Limited Taxation found the figure appalling.

She laughed, saying, "$107,000 for the police to police the police who are picketing because they don't have a contract. What a zoo. It's insane."

The Boston Herald
July 7, 2004
Police pickets cost city $107G in cop OT

The Boston Globe
June 10, 2004
Mayor pressured from all sides

The Boston Globe
June 11, 2004
Union coalition thwarts mayor -
Stymies efforts to divide, conquer


Our I-Team investigates a Christmas present from the politicians on Beacon Hill. Itís not going to you, but to one very powerful industry in Massachusetts. And itís already cost you millions. I-Team reporter Joe Bergantino investigates the reasons why Beacon Hill is about to approve another tax break for the stateís racing industry....

Barbara Anderson, Citizens for Limited Taxation: "It makes no sense at all why the stateís involved in any way whatsoever in anything having to do with racing." ...

Barbara Anderson, Citizens for Limited Taxation: "I think it really comes down to whoís got the clout on Beacon Hill and for some reason, the racing industry has always had more clout than all those other businesses that are going out of business every day."

One possible reason why is the large amount of money the racing industry hands out to lawmakers.

The I-Team added up at least $99,000 in contributions from big wigs in the racing industry to legislators on Beacon Hill since 2002.

CBS4 News
Thursday, December 15, 2005
I-Team Investigates Tax Break For Racing Industry


Romneyís pledges to cut state spending without cutting essential services, find $2 billion in waste and reverse $1 billion in prior tax hikes were unrealistic from the start, said Michael Widmer, president of the budget watchdog group Massachusetts Taxpayers Foundation.

"Budgets have been balanced without raising the state income or sales tax," Widmer said. "But we raised corporate taxes more than any other state, and we raised fees heavily. There have been broad spending cuts, and clearly essential services have been cut."

Widmer said there was no way Romney could have delivered on all of his promises.

"There was very little savings from reform or finding waste," he said. "The rhetoric overshot the reality, not an uncommon part of campaigning."

Barbara Anderson, president of Citizens for Limited Taxation, credits Romney with bringing a no-nonsense business to state government. She said candidate Romney could not have known how difficult it would be to accomplishment things on Beacon Hill.

"When people from the business sector run for governor, they really have no idea how bad it is on Beacon Hill until they come in and experience it," Anderson said. "I think they confidently say they can change the tone, and then they find out what itís really like and they do the best they can. I think Romney did the best he could."

Romneyís unfulfilled promises - such as lowering the state income tax rate to 5 percent - remain goals for the future, Anderson said.

"He hasnít backed off from that, heís still trying," she said. "Heís been great on taxes."

The Patriot Ledger
Friday, December 16, 2005
Political promises easier to make than keep:
Romney delivers on some - not all - campaign pledges


Although the state's revenue picture has brightened, North of Boston residents won't get the Legislature to implement a voter-approved rollback of the state income tax to 5 percent anytime soon.

Taxpayers authorized the rollback in 2000. The Legislature reduced the income tax rate from 5.95 percent to 5.3 percent before halting when the recession hit. A report last week that state revenues will increase next year, but at a slower pace than in this year, has many area lawmakers saying they would like to see any new money go toward helping cash-strapped cities and towns, rather than a tax cut....

A recent Massachusetts Taxpayers Foundation report found that local aid ó money the state sends to communities ó was cut 3.9 percent to $4.97 billion from fiscal year 2002 to fiscal year 2005....

To some Statehouse spending watchdogs, like the conservative Beacon Hill Institute, the state can afford the tax cut. To others, like Massachusetts Taxpayers, the question balances on whether it is fiscally responsible. Michael Widmer, the group's president, warned the state's finances aren't strong enough for a tax cut....

If taxpayers want the income tax cut promised them, they may have to get on the phone with their representatives in the Statehouse. It was pressure from constituents angry over getting slapped with a retroactive capital gains tax that got the Legislature to act quickly. [State Rep. Arthur J. Broadhurst, D-Methuen] suggested that might be called for again.

"The public has to put pressure on us," Broadhurst said.

The Eagle-Tribune
Sunday, December 18, 2005
Income tax reduction unlikely anytime soon


Massachusetts property owners will get socked with another sizable increase in property taxes next year, just as their home values are leveling off and other household costs -- from heating bills to gas prices -- continue to increase.

The median property tax bill for single-family homes in most of Massachusetts will be $3,262 in 2006, 6.4 percent more than last year and up 42 percent from the 2000 tax bills, according to a Globe examination of 239 of the state's 351 cities and towns. Most of the new tax rates will go into effect in bills that go out Dec. 31.

The reasons behind the tax increases vary by community. In some cases, it is because residential property values are increasing faster than those of commercial property. In others, residents have voted to increase their property taxes to pay for school improvements or to avoid laying off firefighters and police officers....

The Boston Globe
Sunday, December 18, 2005
Property taxes still on rise in Mass.
State's median bill will top $3,000


Chip Ford's CLT Commentary

In the last CLT Update on Dec. 12th ("Teachers unions' corrupting power exposed") it was reported by The Boston Globe that an "examination of campaign finance records has found that the [Massachusetts Teachers Association] pumped $341,849 into last year's legislative elections. That figure amounts to more than six times as much as any other group gave last year."

In my Commentary that day, I reminded:

During the 2000 ballot question campaign to roll back the income tax to 5 percent, the teachers unions alone kicked in what the Boston Herald called "a staggering $800,000" to defeat it. (See: "Teachers unions have paid $800G to defeat Question 4," Nov. 3, 2000) When the state teachers union can't extract enough from its own members, it just taps into its national parent union for however much more it needs. On Oct. 25, 2000, the State House News Service reported "The Massachusetts Teachers Association gave $425,000, of which $350,000 came from its parent union, the National Education Association."

Back during the 2000 ballot campaign for the Income Tax Rollback, that $350,000 contribution from the NEA was first exposed by Mike Antonucci, who runs the Education Intelligence Agency and provides weekly e-mail updates to his subscribers, of which I am one.  In the past two weeks, Mike has revealed more of this incestuous relationship, which dovetails with The Boston Globe's exposť.

According to the EIA "Communiquť" of Dec. 19 ("NEA's Annual Labor Organization Disclosure Report Ė Part Two, Contributions, Grants and Political Expenditures"):

Last week, EIA reported on the salary portion of the 2004-05 labor organization financial disclosure report (LM-2) filed by the National Education Association. This analysis concentrates on contribution, grants, political expenditures, and other outlays made by the union during the year....

First, I list the money that went to NEA state affiliates last year for various ballot and legislative initiatives, as well as other grants with a political aim. Remember, these are all expenditures from NEA's national budget from September 2004-August 2005, and do not include whatever expenditures were made by the state affiliate itself, or by NEA after August 2005....

Massachusetts Teachers Association:  $255,000

Thanks to EIA, at least now we know where much of the teachers union's lobbying and campaign funds came (and come) from, what we mere taxpayers are up against, and why property taxes keep climbing year after year.

*                         *                         *

At this point, what more can I say about Michael Widmer and his so-called Massachusetts Taxpayers Foundation that hasn't already been said here, often?  Here he goes again, predicting that the sky's falling, the state still can't afford a tax cut despite more billion-dollar revenue surpluses all over again.  After a decade or two of this Johnny-One-Note he's getting awfully predictable, and tiresome.  Let me simply refer you back to the CLT News Release of Jan. 22, 2002 ("So-called Mass. Taxpayers Foundation: How accurate is it ... this time? CLT challenges MTF: Put last two decades of revenue projections on your website").  With that kind of miserable track record, how can anybody still take Widmer and MTF seriously?  Unless they want to.

Obviously the Beacon Hill Institute doesn't, and won't stand down in its defense of average taxpayers.  News accounts of BHI's comments at the House Ways and Means Committee hearing on Dec. 12 were rather underplayed.  But fortunately you can read for yourself BHI's news release in its entirety and obtain a copy of its report.

*                         *                         *

Boston Mayor Tom Menino is crying poor-mouth again, still.  He's another who's become predictable and tiresome.  Remember when he gave away the store to the firefighters' union when he was running for reelection a few years back and they'd been dogging his campaign?  Next, the policemen's union capitalized on that political cave-in during Menino's upcoming claim-to-fame, the Democrat National Convention in Boston last July, to squeeze him and city taxpayers for yet more, again.

Hey Bostonians, welcome aboard.  When you wonder why your property taxes are skyrocketing, pushing you out of your homesteads, stop and thank the public employees unions!  That's who the rest of us have been thanking for years, decades.

Chip Ford


The Boston Globe
Tuesday, December 13, 2005

Tax revenue slowdown in forecast
State's plans for spending could suffer
By Scott S. Greenberger, Globe Staff

The state's recent surge in tax revenues will probably slow in the next two years, according to economic forecasters who testified on Beacon Hill yesterday, dampening expectations of a big spending spree and the income tax cut sought by Governor Mitt Romney.

Tax revenue growth is likely to slow to between 5 percent and 5.7 percent in each of the next two fiscal years, down from the 7.1 percent growth in the fiscal year that ended June 30, according to testimony yesterday by state Revenue Commissioner Alan LeBovidge, Michael J. Widmer of the Massachusetts Taxpayers Foundation, and David Tuerck of the Beacon Hill Institute at Suffolk University.

Though their growth is slowing, the state's collections for the current fiscal year, which ends June 30, will be large enough to trigger a modest expansion of state personal income tax exemptions, revenue officials disclosed yesterday. The larger exemptions, required by a law enacted in 2002, will save individual taxpayers about $15 and couples about $29. Now couples will be able to deduct $7,700, up from $7,150, and individuals will be able to deduct $3,850, up from $3,575.

Yesterday's assessment is closely watched on Beacon Hill, where lawmakers and Romney are already preparing the new state budget for fiscal year 2007, which begins July 1. It carries additional weight this year, because many political observers say that Romney is readying a run for president in 2008 and his stewardship of the state's economy could be a factor in his campaign.

The economic forecasters attributed the projected slowdown to weak job growth, lower corporate profits, and a recently approved measure granting up to $275 million in refunds to 157,000 investors who paid capital gains taxes in 2002. Massachusetts lost jobs in August, September, and October.

"We are only one-sixth of the way back to where we were at the highpoint at the beginning of 2001," Widmer said, referring to the 207,000 jobs the state lost during the recession. "The state's fiscal affairs remain tight." Income taxes make up the bulk of the state's revenue.

A fourth witness, economist Alan Clayton-Matthews of the University of Massachusetts at Boston, declined to make a revenue prediction, but cautioned that "our economy is growing slowly, and it doesn't show any signs of accelerating."

"In the face of slow employment growth, a population and brain drain, a sharp spike in energy costs, volatile consumer confidence, a housing market on the verge of collapse, rising federal budget deficits, trade deficits, and interest rates, perhaps it's good news that the economy is still growing at all," Clayton-Matthews told state lawmakers and budget writers.

Although he offered the same revenue prediction as the other witnesses, Tuerck struck the most optimistic tone, saying he remains "cautiously bullish on the state economy."

"Although Massachusetts lags the national economy, we see strong growth in state tax revenue through the rest of fiscal 2006," Tuerck testified. "State tax revenue will fall off a bit during fiscal 2007, but will nevertheless reflect the continued underlying strength in the state economy."

To be sure, yesterday's predictions would have been welcome in 2001, when the state's revenue plunged by more than 14 percent. But the predicted 5 percent growth rate is also a far cry from the 10 percent annual growth rates of the late 1990s.

This fall, recent increases in tax revenues led the House and Senate to pass multimillion-dollar spending bills that include construction projects, government salaries, and dozens of local projects. Combined with proposals to expand healthcare coverage, the Legislature is on track to add as much as $1 billion in new spending.

Final versions of the healthcare proposals and spending bills are still being negotiated by state lawmakers.

Legislative budget writers and Thomas H. Trimarco, Romney's new budget chief, will use yesterday's testimony to settle on an official revenue prediction for fiscal 2007, the first step in a budget process that will last until next summer. Next month, Romney will unveil his budget proposal. The fiscal 2006 budget totals about $24 billion.

Trimarco told reporters after the hearing that the administration will have to be cautious in light of the revenue projections. In a phone interview later in the day, he emphasized that Romney is committed to cutting income taxes, but he opened the door to the possibility of a policy shift.

"The governor is clearly going to take a hard look at the tax cut issue. He's committed to it, but he also recognizes that a significant tax cut was accomplished with the Peterson case," Trimarco said, referring to the refunds of capital gains taxes. "That will be taken into consideration as we deal with the tax issue going forward."

For 18 months, Romney has been urging the Legislature to reduce the state income tax to 5 percent. In 2000, voters approved a gradual lowering of the income tax rate, which was 5.85 percent at the time, to 5 percent. But in the depths of the state's fiscal crisis in 2002, the Legislature froze the rate at 5.3 percent. In a full year, the tax cut might cost as much as $600 million.

At yesterday's hearing, Widmer said, "I don't see how we can afford a $600 million tax cut." He pointed out that even though the projected increases for fiscal 2006 and fiscal 2007 translate into about $1 billion in additional money each year, most of those dollars will be consumed by inflation and the growth in unavoidable expenses such as Medicaid, school aid, and pension costs.

Trimarco agreed that much of the new money is already spoken for.

"The cautionary tale is that we have a lot of fixed 'budget-busters,' fixed costs that are already built in," he said.

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The Boston Herald
Wednesday, December 14, 2005

Mayor says stateís bleeding city dry: Slams tax-to-aid ratio
By Kevin Rothstein


Warning that the financial health of the city is at stake, Boston Mayor Thomas M. Menino said the state has to stop taking so much money from Boston and warned business leaders in a speech yesterday that their well-being is at risk.

Menino said city taxpayers send $8 to the state for every $1 that returns as aid.

"Thatís not a fair share," and it has jeopardized city finances, he said.

"Donít take my word that the situation is serious, that it is on the verge of threatening our ó your ó business success. Do your own assessment. And then commit to the solutions, even if theyíre hard to swallow," Menino told the audience at the Greater Boston Chamber of Commerce breakfast.

Menino asked the executives at the Fairmont Copley Plaza ballroom to lean on Beacon Hill to help Boston and other cities rely less on property taxes by finding new ways to pay for government. Without relief, budget cuts could come as soon as the next budget is submitted in April, he told reporters after his speech.

"The cost of government goes up. We have to make some very difficult decisions," he said.

Menino didnít endorse specific new taxes, though he has endorsed a 1 percent meals tax and a 10 percent surcharge on parking garage fees.

"Iím looking for a new structure, a new source of revenue for our cities. Iím looking for certainty," he said.

A spokeswoman for Gov. Mitt Romney could not be reached yesterday evening. But citing a state surplus, Romney has proposed cutting the state income tax rate to 5 percent from 5.3 percent.

Barbara Anderson of Citizens for Limited Taxation said fiscal discipline, not more state aid, is needed. She singled out mayors and selectmenís dealings with municipal unions as a key budget-buster.

"If it were a matter of more local aid and a cut in property taxes that would be great. But instead, itís more local aid, spend the local aid. More property taxes, spend the taxes because spending is so much fun," she said.

Another item on Meninoís budget wish list: closing a loophole that lets some telecommunications companies take a pass on property taxes. Closing that would save homeowners about $200 a year each and commercial properties 2 percent, he said.

He also praised Massport for chipping in an extra $3 million in payment to the city in lieu of taxes, an increase of about 25 percent.

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CBS4 News
Broadcast: Thursday, December 15, 2005
I-Team Investigates Tax Break For Racing Industry

Joe Bergantino
Reporting


Our I-Team investigates a Christmas present from the politicians on Beacon Hill. Itís not going to you, but to one very powerful industry in Massachusetts. And itís already cost you millions. I-Team reporter Joe Bergantino investigates the reasons why Beacon Hill is about to approve another tax break for the stateís racing industry.

Horse racing and dog racing in Massachusetts. They are probably not businesses you would choose to invest in.

Income is declining and competition is increasing. But thanks to the politicians here in the legislature you are an investor in the racing industry to the tune of at least eleven million dollars since 2002.

Barbara Anderson, Citizens for Limited Taxation: "It makes no sense at all why the stateís involved in any way whatsoever in anything having to do with racing."

So how did it happen?

Four years ago, our legislature decided to give back millions of tax dollars collected from the racing industry. The purpose? To increase what are called the purses, the amount of money that goes to horse and dog owners, trainers and breeders.

State Representative Dan Bosley heads up the legislatureís economic development committee.

Rep. Dan Bosley, D-1st Berkshire: "If we can spend more money on purses, we can attract a better horse and a better horse attracts a better gambler."

In other words, attract more gamblers who would spend more money at the tracks. But has the tax break worked?

Take a look at the numbers. Dollars bet on live racing in Massachusetts are down about 30% since 2001.

Gamblers are going elsewhere, on line and across state lines. The tax break designed to boost the racing industry hasnít worked.

So why, you might ask, is the legislature likely to extend that tax break for another four years?

Rep. Dan Bosley: "Because without the tax break, the industry is going to die completely."

Joe Bergantino: "How can you say that for certain?"

Rep. Dan Bosley: "Well, that is only based on our conversation with the horse race industry."

Joe Bergantino: "Well what else do you expect them to tell you?"

Rep. Dan Bosley: "Well, itís not just the track owners."

You get the picture.

Barbara Anderson, Citizens for Limited Taxation: "I think it really comes down to whoís got the clout on Beacon Hill and for some reason, the racing industry has always had more clout than all those other businesses that are going out of business every day."

One possible reason why is the large amount of money the racing industry hands out to lawmakers.

The I-Team added up at least $99,000 in contributions from big wigs in the racing industry to legislators on Beacon Hill since 2002.

State Rep. Dan Bosley is among the many recipients.

Joe Bergantino: "What role does that plan in the decision making that is going on here?"

Rep. Dan Bosley, D-1st Berkshire: "I take contributions. I say thank you very much from anybody that gives them to me. But I donít, I donít quite frankly know who half those people are."

Either way, a tax break for the tracks looks to some like the equivalent of throwing the industry an expensive bone to bide time while the legislature figures out whether it will allow slot machines down the road.

Boston College professor Father Richard McGowan is a racing industry expert.

Rev. Richard McGowan, Boston College: "In the short run it makes a lot of sense. In the long run, I donít think itís going to, it is not going to save the industry."

Bottom line: State lawmakers are likely to say yes to extending the multi-million dollar tax break for the tracks at a time when those dollars could be used for schools, roads or health care. Does it make sense? On Beacon Hill critics say not a lot does.

The House could vote as early as tomorrow to extend the tax break for the racing industry. The Senate has already approved it.

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The Patriot Ledger
Friday, December 16, 2005

Political promises easier to make than keep:
Romney delivers on some - not all - campaign pledges
By Tom Benner, State House


In announcing his decision not to seek re-election, Gov. Mitt Romney said he had delivered on most of the promises he made during his 2002 campaign.

He said the few still outstanding are within reach.

His conclusions are debatable.

The Republican took office on a pledge to reform Democrat-controlled Beacon Hill, to run government like a business and to balance the budget without raising taxes - indeed, he promised to lower taxes in his first term in office.

The multimillionaire venture capitalist and former Winter Olympics chief also promised a better quality of life, from more plentiful jobs and more affordable housing to easy-to-read road signs.

While there have been no broad-based tax hikes since Romney came into office, there was $500 million in new or increased user fees and cuts to state aid that forced local property tax hikes.

Romneyís pledges to cut state spending without cutting essential services, find $2 billion in waste and reverse $1 billion in prior tax hikes were unrealistic from the start, said Michael Widmer, president of the budget watchdog group Massachusetts Taxpayers Foundation.

"Budgets have been balanced without raising the state income or sales tax," Widmer said. "But we raised corporate taxes more than any other state, and we raised fees heavily. There have been broad spending cuts, and clearly essential services have been cut."

Widmer said there was no way Romney could have delivered on all of his promises.

"There was very little savings from reform or finding waste," he said. "The rhetoric overshot the reality, not an uncommon part of campaigning."

Barbara Anderson, president of Citizens for Limited Taxation, credits Romney with bringing a no-nonsense business to state government. She said candidate Romney could not have known how difficult it would be to accomplishment things on Beacon Hill.

"When people from the business sector run for governor, they really have no idea how bad it is on Beacon Hill until they come in and experience it," Anderson said. "I think they confidently say they can change the tone, and then they find out what itís really like and they do the best they can. I think Romney did the best he could."

Romneyís unfulfilled promises - such as lowering the state income tax rate to 5 percent - remain goals for the future, Anderson said.

"He hasnít backed off from that, heís still trying," she said. "Heís been great on taxes."

Similarly, business owners didnít necessarily take Romney at his word when he said he would travel the country encouraging companies to relocate to Massachusetts. But they expected - and got - someone to run government in a businesslike fashion, said Brian Gilmore, executive vice president of public affairs for the Associated Industries of Massachusetts.

"It wasnít bloodless, but budgets were done relatively on time and generally balanced," Gilmore said.

Romneyís cuts in state spending on local aid to balance the state budget have forced local property taxes to hit the roof, said Geoff Beckwith, executive director of the Massachusetts Municipal Association.

"There certainly is an increased reliance on the property tax, itís the highest itís been in the last 25 years," Beckwith said. "Thatís a direct result of the local aid cuts that occurred during the fiscal crisis."

On education, many Romney initiatives remain unfulfilled: merit pay for teachers, full-day kindergarten for poorly performing schools and lifting a cap on the number of charter schools.

But Romneyís pushes to limit bilingual education to one year of English immersion and to create merit-based college scholarships were successful.

Many educators blame Romney for cuts in local aid to schools.

"Even though he spoke about the importance of education, his legacy so far is that we have seen a reduction in resources for education funding," said Catherine Boudreau, president of the Massachusetts Teachers Association, the stateís largest union.

Housing advocates say Romney has fallen far short of his pledge to double housing starts and spark new construction of affordable housing.

"We never thought it was a realistic campaign proposal, to double housing starts," said Aaron Gornstein, executive director of Citizens Housing and Planning Association. "The state doesnít have control over local building permits and zoning, they are administered locally."

John McDonough, executive director of Health Care for All, said health care advocates had few expectations for Romney, and even derided him for saying he could use Republican connections in Washington to increase the stateís reimbursement rate on its share of federal taxes.

"I remember his health care platform being unimpressive and unrealistic," said McDonough, who campaigned for Romneyís Democratic rival, Shannon OíBrien.

But McDonough said he is impressed by Romneyís consolidating 15 Health and Human Services agencies, and he is equally impressed that the governor is championing health insurance for all state residents.

"Would we have expected that a Republican governor coming in would make one of his centerpiece issues trying to get health care insurance for everyone? No, but he did it," McDonough said.

On the environmental front, Romney promised to use "smart growth" principles to encourage new building in established areas and away from undeveloped spaces. Environmentalists credit him with encouraging smart growth, but say he has drastically cut funding to maintain and expand state parklands and recreational facilities.

"We can do a lot better," said Jack Clarke, a lobbyist with the Massachusetts Audubon Society. "Massachusetts has a great legacy of conservation, but we donít see an appreciation or an understanding of that legacy by this governor."

Romney delivered on a promise to revamp the Sagamore Rotary, the congested gateway to Cape Cod. He also saw to improved road signs and a "traffic busters" squad that tries to clear accident scenes that cause traffic backups.

Romney failed, however, in his effort to fold the Massachusetts Turnpike Authority into the state highway department.

On campaign ethics, Romney failed to find a way to fund the Clean Elections law, a voter-approved public finance system to reduce the influence of special interests on elections. The law has since been repealed.

As a candidate, Romney said he would protect a womanís right to choose, but abortion rights supporters feel betrayed, said Melissa Kogut, executive director of NARAL Pro-Choice Massachusetts.

As he tailored his views for a more national audience, Romney said heíd like to see the landmark decision legalizing abortion overturned.

"Now he describes himself as pro-life and thatís a very clear reversal and very fast," Kogut said.

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The Eagle-Tribune
Sunday, December 18, 2005

Income tax reduction unlikely anytime soon
By Edward Mason, Staff writer


Although the state's revenue picture has brightened, North of Boston residents won't get the Legislature to implement a voter-approved rollback of the state income tax to 5 percent anytime soon.

Taxpayers authorized the rollback in 2000. The Legislature reduced the income tax rate from 5.95 percent to 5.3 percent before halting when the recession hit. A report last week that state revenues will increase next year, but at a slower pace than in this year, has many area lawmakers saying they would like to see any new money go toward helping cash-strapped cities and towns, rather than a tax cut.

Rep. William Lantigua, D-Lawrence, said the state revenue report showed it would be "premature" to lower the income tax rate.

While overall tax receipts were up this year, they failed to match last year's 7 percent clip. Lantigua said lawmakers should wait for at least two consecutive years in which income growth exceeds the previous year before rolling back taxes.

"Until we know for sure what the trend is, and not just an estimate, we should keep it the way it is," Lantigua said.

And if there is a surplus, Lantigua argues, it should be socked away in the state's rainy day fund. During the budget crisis of the early 2000s, the state spent down a $2.3 billion fund to $640 million. Without that money, social service cuts would have been worse, Lantigua argued. Right now, the fund stands at $1.7 billion.

Like Lantigua, Sen. Susan C. Tucker, D-Andover, wants to beef up local aid to cities and towns before cutting taxes.

"My goal is to get more local aid into suburban communities," Tucker said. "They are up against the wall fiscally."

A recent Massachusetts Taxpayers Foundation report found that local aid ó money the state sends to communities ó was cut 3.9 percent to $4.97 billion from fiscal year 2002 to fiscal year 2005. Andover, for instance, saw its share of local aid drop 19 percent during that period.

Indeed, it is all about choices, said Rep. Arthur J. Broadhurst, D-Methuen. While he would like to see a tax rollback, he said, less state revenue means less spending on what people need.

"Look at school funding," Broadhurst said. "You want all your schools built or not? Or (build them) over 20 years?"

The tax-cut debate heated up recently when Attorney General Thomas Reilly, a Democratic candidate for governor, said he supports slashing the income tax to 5 percent if tax receipts remain strong. Reilly's rival for the Democratic nomination, former Justice Department official Deval Patrick, said he wouldn't exclude raising taxes if necessary. The Romney administration backs the tax cut.

The debate also gained momentum when the Legislature held its annual hearing on state revenues, with reports from the Department of Revenue, the Beacon Hill Institute, Massachusetts Taxpayers Foundation and Bay State economists. They estimated revenues will increase between 5 percent and 5.7 percent next year. That would result in as much as $19.1 billion pouring into state coffers. But that won't match the 7.3 percent pace expected this year.

Lawmakers pointed out they have cut people's taxes. This month alone, lawmakers approved a beefed-up property tax credit for seniors. There was $80 million in energy tax credits. And the state will refund some $275 million in capital gains taxes paid in 2002. The refund will occur over the next four years.

Moreover, Rep. Brian S. Dempsey, D-Haverhill, noted that lawmakers have cut taxes when the money was there for services and tax relief. Throughout the 1990s, lawmakers passed tax cuts for businesses and reduced personal income taxes. They only put the brakes on when the recession hit.

To some Statehouse spending watchdogs, like the conservative Beacon Hill Institute, the state can afford the tax cut. To others, like Massachusetts Taxpayers, the question balances on whether it is fiscally responsible. Michael Widmer, the group's president, warned the state's finances aren't strong enough for a tax cut.

"Fiscal year 2007 growth is about $1 billion, but almost all of that will be consumed by Medicaid and other uncontrollable expenditures," Widmer said. "A reduction in the income tax to 5 percent will cost $600 million in revenue, and no one has presented a plan to identify other revenues or program cuts."

If the tenuous economic recovery unravels, lawmakers will be forced to make spending cuts again, including in social services, Lantigua predicted, and it could be worse than before.

"If we do that (a tax cut) today and the economy does not recover, the cuts will be even deeper than before," Lantigua said.

Some North of Boston Democrats want to see a tax cut sooner rather than later. Sen. Steven A. Baddour, D-Methuen, wants a tax cut on the table when the fiscal 2007 budget is debated next spring. Rep. Theodore C. Speliotis, D-Danvers, supports a cut in stages.

The region's Republicans, too, want to see a tax cut. But they are greatly outnumbered in the Legislature.

Rep. Bradley H. Jones, the House minority leader, also wants to talk about it ó just don't take too long. The North Reading Republican thinks the Legislature is on pace to have a serious debate on the rollback by "sometime in the next century."

Jones said that while the revenue gain from this year to next may be down, the state still can expect to take in $2 billion more than in 2006. The money is there to spend and return to the taxpayers.

Though Jones is frustrated at the pace of the rollback, he's willing to do it in stages. He'd support a phase-down, starting with reducing the rate to 5.2 percent this year.

"It's a legitimate compromise," Jones said. "We have needs. But we have to get on this faster."

If taxpayers want the income tax cut promised them, they may have to get on the phone with their representatives in the Statehouse. It was pressure from constituents angry over getting slapped with a retroactive capital gains tax that got the Legislature to act quickly. Broadhurst suggested that might be called for again.

"The public has to put pressure on us," Broadhurst said.

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The Boston Globe
Sunday, December 18, 2005

Property taxes still on rise in Mass.
State's median bill will top $3,000
By Matt Viser, Globe Staff


Massachusetts property owners will get socked with another sizable increase in property taxes next year, just as their home values are leveling off and other household costs -- from heating bills to gas prices -- continue to increase.

The median property tax bill for single-family homes in most of Massachusetts will be $3,262 in 2006, 6.4 percent more than last year and up 42 percent from the 2000 tax bills, according to a Globe examination of 239 of the state's 351 cities and towns. Most of the new tax rates will go into effect in bills that go out Dec. 31.

The reasons behind the tax increases vary by community. In some cases, it is because residential property values are increasing faster than those of commercial property. In others, residents have voted to increase their property taxes to pay for school improvements or to avoid laying off firefighters and police officers.

Homeowners in Sherborn, Burlington, and Chelsea will see double-digit increases next year while several communities near Boston will see average increases of 4.6 percent or less, including Newton, Quincy, and Brookline. The average tax bill in Cambridge will actually drop 2.8 percent, to $5,632.

The state's highest average bill is in Weston, at $12,865, up from 9.3 percent over 2005. The lowest is in North Adams, where the average tax bill will be $1,404, just 2 percent more than 2005.

Bostonians who own single-family homes will see an increase of 9.2 percent in 2006, down from an 11.7 percent jump between 2004 and 2005. The average tax bill for owners of single-family homes in Boston will be $2,750 in 2006.

Of the 239 cities and towns examined for this article, the Globe found that 230 of them are increasing their average tax bills in 2006.

The analysis also found that property home values are still increasing, though at a much slower rate than last year, another sign that the Bay State, one of the hottest markets in the country over the past decade, is turning into a buyers' market. The average value of a single-family home is $382,303, which at 8.4 percent more than last year is the lowest increase since 2000, according to the Globe analysis.

Meanwhile, the steady increase in property taxes is frustrating for homeowners who are writing bigger checks at a time when many communities are reducing library hours, cutting teaching positions, and increasing user fees.

The bill on Carole Maconi's 95-year-old Southborough home is increasing only about 3 percent next year. But even that, she says, will add to the financial strain of gassing up her 1997 Chevy and rising heating costs for her and her husband, Roger, who are both in their 70s and living on a fixed income.

"We're not in the poorhouse," she said. "But you almost come to the point where you wonder: when's it going to end?"

The state's Proposition 2Ĺ law, which was approved in 1980, restricts cities and towns from raising the overall tax levy by more than 2Ĺ percent in one year. But a community's tax levy includes everything from commercial and industrial property to single-family homes and condominiums. So although the average single-family home tax bill this year might be increasing by more than 2Ĺ percent, city and town boards could balance that by increasing the tax bill for other property at a slower pace or, in some cases, decreasing it.

The Globe's analysis examined only the tax bills for single-family homes, which make up the largest portion of property tax bills.

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, attributed the property tax increases to a slowdown in local aid from Beacon Hill, along with steady increases in the cost of providing healthcare for municipal employees, and unexpectedly high snow removal costs last winter that helped create a $93 million deficit statewide.

"Cities and towns are more reliant on property taxes now than at any time in the last quarter century," he said. "The only revenue source that cities and towns have control over is property taxes."

The property tax increases and their role in the state's finances have spilled over into the governor's race, prompted by Attorney General Thomas F. Reilly's call for a rollback in the state income tax rate. Democratic hopeful Deval L. Patrick criticized Reilly, arguing that a cut in income taxes would further strain local aid budgets and force cities and towns to continue increasing property taxes.

"I don't think it's honest to say to people that we can afford a tax rollback right now," Patrick told reporters Thursday. "We have cities and towns . . . that are absolutely struggling because local aid has virtually disappeared and property taxes are in many places at an all-time high."

Though Governor Romney and state lawmakers have increased state aid recently, cities and towns still complain about the cutbacks stemming from the fiscal crisis of three years ago. After adjusting for inflation, state aid in 2006 is almost $700 million below 2002, according to a report released last month by the Massachusetts Taxpayers Foundation. As a result, cities and towns have become more reliant on property taxes to fill their coffers.

In 1988, property taxes represented 46.1 percent of total municipal revenues; in 2004, the percentage jumped to 52.9 percent, according to a separate report by the Municipal Finance Task Force, a group of private, public, and academic leaders that called for more local aid.

Some observers say local officials should blame themselves, not the state, for property tax increases. The recent reductions in state aid followed higher state payments during the economic prosperity of the 1990s, and critics say cities and towns have felt pressure to raise property taxes in recent years because they expanded services and signed overly generous collective bargaining agreements during the boom.

Several of the 16 local assessors interviewed by the Globe last week said some cities and towns have reacted to the slowdown in state aid: Budgets have been trimmed and pink slips have been handed out, which, in some cases, has actually helped slow the tax increases because towns need less operating revenue.

"The cities and towns are becoming more conservative because we have to tighten our belt and lay off firefighters, policemen, and teachers," said Richard M. Brescia, chief assessor in Somerville, where the average tax bill in 2006 will be to $2,788, a 7.6 percent increase; tax hikes in recent years have been much higher, approaching 30 percent. "Because of the loss of state aid, we have to be ultra conservative. We're down to the bone."

In Cambridge, the average tax bill will decrease for the first time in 10 years, and city officials sent three letters to residents and put a video on cable TV to explain why.

The decline is driven in large part by a growth in commercial and industrial properties, which took some of the burden off of homeowners, according to Robert P. Reardon, director of the assessing department. The City Council also voted this year to use reserve accounts to pay for budget increases, rather than increase the budget through raising taxes.

"The homeowners were getting crucified each year," said Robert Donnelly, chairman of board of assessors in Malden, where the average single-family bill is increasing by 4.2 percent, to $2,849.

According to the Globe examination, the state's largest percentage tax increase was a 22.7 percent hike in Burlington, where the average homeowner's bill in 2006 will be $3,663. The deepest cut was a 20.9 percent drop in Petersham, located in the center of the state, where the average bill will be $2,452.

The state, which provided most of the property tax figures for this article, relies on a median figure to determine property tax burdens statewide, and uses an average to calculate tax burdens in individual cities and towns.

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