CLT
UPDATE
Tuesday, March 28 2006
Revenue gouging while spending spikes
With all of the talk on Beacon Hill these days
focused on sweeping health care proposals and tax cuts, it may seem that
the state treasury is awash in tax revenues.
Democratic lawmakers are proposing an ambitious plan to offer health
insurance coverage to 200,000 people, at a cost of $1 billion within
three years. There are also proposals to give a $400 million boost to
state colleges and universities over the next seven years, and to spend
$335 million to stimulate the state's economy.
Gov. Mitt Romney, whose own budget blueprint for fiscal 2007 would
increase state spending by $1.3 billion, has called for a $225 million
tax cut through lowering the income tax rate from 5.3 percent to 5
percent....
"Clearly, revenues are growing strongly. But the concern is that
employment growth is very sluggish," said Michael Widmer, president of
the Massachusetts Taxpayers Foundation....
The state raked in $1.2 billion more in tax revenues than expected in
the fiscal year that ended June 30, 2005.
As of March 1 of this year, according to the state Department of
Revenue, the state's total revenues are $879 million, or 9.2 percent,
above the previous year....
Barbara Anderson of Citizens for Limited Taxation, who is
usually at odds with the taxpayers foundation on many issues, agreed
with Widmer that Beacon Hill may be relying too heavily on the wrong
types of revenues.
However, Anderson said that the best way to avoid another fiscal crisis
is through tax cuts rather than new spending.
"The only way to prevent another downturn is to let the taxpayers have
back more of their money," Anderson said. "If they've got an extra $800
million, they can easily afford a rollback."
The Fitchburg Sentinel & Enterprise
Wednesday, March 22, 2006
Fiscal thing
Reluctant as Democratic lawmakers are to part with any tax
once it is on the books, they ought to follow Gov. Mitt Romney's advice and
scrap the assessment levied against those companies that provide health
insurance for their employees....
However, Romney rightly points out that while they're contemplating a new fee on
the estimated 5,400 businesses that don't provide their employees with
insurance, lawmakers should also consider eliminating the $62 annual fee paid by
those who do.
Taxing those companies progressive enough to subsidize insurance premiums for
their employees never made sense in the first place. It makes less so now that
the Legislature is considering more than quadrupling the fee for companies with
no insurance plan of their own....
But as Citizens for Limited Taxation pointed out in a recent release,
"There can be no justification for taxing the responsible employers, who are not
part of the problem, to support the bad debt/free care pool. This is the same
wrong-headed concept as the Massachusetts nursing home tax, that taxes
self-payers $10.99 a day for the privilege of not being a burden on the Medicaid
system."
Unfortunately, the attitude on Beacon Hill is never to try to do more with less.
It's always to grab more when you can ...
An Eagle-Tribune editorial
Wednesday, March 22, 2006
Responsible employers can't catch a break here
Our governor is about to face a telling choice on healthcare.
Will he show a little of his father's famous mettle? Or will this issue prove
another episode in The Amazing Adventures of Mitty Mouse?
That choice will come over the bill being hammered out by a Beacon Hill
conference committee. The compromise that broke a long legislative logjam calls
for an assessment of $295 per worker to be paid by firms with 11 or more
employees that don't offer health insurance....
But Romney is worried that if he OK's the bill in its
entirety, he could be accused of raising taxes. Helping stoke Romney's political
anxiety is Americans for Tax Reform, whose president, Grover Norquist, has made
himself a force in deciding fiscal policy for skittish GOP presidential
hopefuls. Norquist thinks that if the new business assessment is imposed, Romney
should reject legislative efforts to continue a $62-per-employee fee currently
paid by firms that do provide health insurance -- a levy that raises $160
million annually for the state's free-care pool. Citizens for Limited
Taxation, meanwhile, is urging the governor to oppose both assessments.
The Boston Globe
Friday, March 24, 2006
Mitt's nail-biting on healthcare
By Scot Lehigh
Chip Ford's CLT Commentary
How is it that the liberal wolf in "fiscal
conservative" sheep's clothing, Michael Widmer of the so-called
Massachusetts Taxpayers Foundation, gets away with literally crying
wolf? According to him, the state's revenue-gouging will collapse
like the sky in Chicken Little into an instant fiscal crisis if there's
a tax rollback, but not with more than a billion in increased state
spending.
"$1.2 billion more in tax revenues than expected"
last fiscal year, and an additional "$879 million, or 9.2 percent above"
that so far this fiscal year, heading for another billion-plus surplus.
But that's still not enough to keep the 16-year old promise that
the income tax hike would only "temporary." Incredible, simply not
credible. Ridiculous best defines the latest lame excuse for
keeping out money.
Yet the "political scientists," pundits, and
politicians posture and pose over why productive citizens are bailing
out of Massachusetts in droves, like a Diaspora.
Widmer was one of the grand architects of the
$295-per employee "assessment" on small businesses which don't provide
employee health insurance -- a plan which also maintains the
$62-per-worker "assessment" on those responsible companies which do.
"Damned if you do, damned if you don't" was never more operative a
phrase, but this is Massachusetts -- the state with one of the slowest
growth rates in a recovering national economy. Gee, I wonder why
we're not creating jobs quicker?
Regarding the Boston Globe column by Scot Lehigh,
Barbara commented:
"It should be noted that the CLT and Americans for
Tax Reform positions on the new healthcare bill are the same.
Grover Norquist is waiting to see the actual bill before he makes a
determination on how much of it is a new tax. Knowing that it
could come out of committee and be voted on quickly, CLT is trying to
have a preemptive opinion.
"Because Scot Lehigh is often a good columnist, we are surprised at the
tone of this one. I cant imagine why one would quote "mainstream
Massachusetts business leaders" being in favor, without mentioning, a)
that many of these businesses would be the recipients of the new taxes
and, b) the business leaders that are opposed, like Christopher Anderson
of the Mass. High Tech Council, and those that are very ambivalent, like
the National Federation of Independent Business, Associated Industries
of Mass., and the Mass. Retailers Association.
"CLT is ambivalent too, on some aspects of the issue: we have health
insurance (which saves us taxes) and are absolutely opposed to
continuing to pay extra for those who are not insured. But the
ways to get those others insured are problematic too and we know the
system well enough to know that with a new state program, all our taxes
will eventually increase."
See Barbara's column, "Healthcare
Reform: More questions than answers from Beacon Hill," Feb. 19,
2006.
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Chip Ford |
The Fitchburg Sentinel & Enterprise
Wednesday, March 22, 2006
Fiscal thing
By Erik Arvidson, Statehouse Bureau
With all of the talk on Beacon Hill these days focused on sweeping
health care proposals and tax cuts, it may seem that the state treasury
is awash in tax revenues.
Democratic lawmakers are proposing an ambitious plan to offer health
insurance coverage to 200,000 people, at a cost of $1 billion within
three years. There are also proposals to give a $400 million boost to
state colleges and universities over the next seven years, and to spend
$335 million to stimulate the state's economy.
Gov. Mitt Romney, whose own budget blueprint for fiscal 2007 would
increase state spending by $1.3 billion, has called for a $225 million
tax cut through lowering the income tax rate from 5.3 percent to 5
percent.
While the state is pulling in hundreds of millions more in tax revenues
compared to a year ago, budget watchdogs are raising a red flag of
caution to Beacon Hill: Don't spend what you may not have.
"Clearly, revenues are growing strongly. But the concern is that
employment growth is very sluggish," said Michael Widmer, president of
the Massachusetts Taxpayers Foundation. "The increased revenue we're
seeing is driven largely by capital gains and employment bonuses, which
are very volatile sources. We'd feel a lot better about the revenue
growth if it were tied to real employment growth, rather than just the
stock market."
The state raked in $1.2 billion more in tax revenues than expected in
the fiscal year that ended June 30, 2005.
As of March 1 of this year, according to the state Department of
Revenue, the state's total revenues are $879 million, or 9.2 percent,
above the previous year.
However, a closer look at those figures show that a big chunk comes from
taxpayers making estimated tax payments for income not subject to
withholding, such as stock dividend or interest income, or the sale of
capital assets.
Revenues from estimated income tax payments stood at $1.2 billion as of
March 1, which is up 16 percent, or $179 million, from the same time the
year before.
Also, the state's revenues from corporate and business income taxes are
up a whopping 61 percent, or $368 million, compared to the year before.
"Business taxes are notoriously volatile. It's much less predictable
than any other tax source," Widmer said. "We have companies that are
consolidating because they face cost pressures from global competition.
They are cutting jobs while making very good profits."
The state's job market has never fully recovered from the economic
losses of 2001 and 2002. As of January, the state's unemployment rate
stood at 4.6 percent, but the total number of jobs in Massachusetts is
about 170,000 less than February 2001.
Barbara Anderson of Citizens for Limited Taxation, who is
usually at odds with the taxpayers foundation on many issues, agreed
with Widmer that Beacon Hill may be relying too heavily on the wrong
types of revenues.
However, Anderson said that the best way to avoid another fiscal crisis
is through tax cuts rather than new spending.
"The only way to prevent another downturn is to let the taxpayers have
back more of their money," Anderson said. "If they've got an extra $800
million, they can easily afford a rollback."
Return to top
The Eagle-Tribune
Wednesday, March 22, 2006
An Eagle-Tribune editorial
Responsible employers can't catch a break here
Reluctant as Democratic lawmakers are to part with any tax once it is on
the books, they ought to follow Gov. Mitt Romney's advice and scrap the
assessment levied against those companies that provide health insurance
for their employees.
Speaker Salvatore DiMasi had advocated a 5 to 7 percent payroll tax as a
means of raising the money needed to provide health coverage to an
estimated 500,000 people in Massachusetts who are without insurance. He
was talked out of that blatantly anti-business measure by Senate
President Robert Travaglini, who did agree, however, to a
$295-per-employee "assessment" as an alternative.
However, Romney rightly points out that while they're contemplating a
new fee on the estimated 5,400 businesses that don't provide their
employees with insurance, lawmakers should also consider eliminating the
$62 annual fee paid by those who do.
Taxing those companies progressive enough to subsidize insurance
premiums for their employees never made sense in the first place. It
makes less so now that the Legislature is considering more than
quadrupling the fee for companies with no insurance plan of their own.
Romney has included $200 million in his budget for the next fiscal year
to finance health-care reform, which he says can be accommodated without
any new taxes or assessments. But Travaglini, DiMasi and their
Democratic counterparts remain unconvinced, and insist that expanded
coverage must be financed by a dedicated revenue stream such as the
assessment on employers. (Interestingly, they are not nearly as
concerned with the federal government's threat to pull $395 million in
Medicaid subsidies if a plan for expanded insurance coverage is not in
place by July 1.)
The Legislature has previously refused to go along with the call by the
governor and the voters to reduce the income tax rate from the
current 5.3 percent to 5 percent. So it may be folly to expect that they
would relieve responsible employers of the extra charge they pay to
finance the state's free-care pool.
But as Citizens for Limited Taxation pointed out in a recent
release, "There can be no justification for taxing the responsible
employers, who are not part of the problem, to support the bad debt/free
care pool. This is the same wrong-headed concept as the Massachusetts
nursing home tax, that taxes self-payers $10.99 a day for the privilege
of not being a burden on the Medicaid system."
Unfortunately, the attitude on Beacon Hill is never to try to do more
with less. It's always to grab more when you can in this case an
estimated $48 million more, that would be added to the $160 million
already being paid into the free-care pool by responsible employers and
their insurance carriers.
Romney is right to object.
Return to top
The Boston Globe
Friday, March 24, 2006
Mitt's nail-biting on healthcare
By Scot Lehigh
Our governor is about to face a telling choice on healthcare. Will he
show a little of his father's famous mettle? Or will this issue prove
another episode in The Amazing Adventures of Mitty Mouse?
That choice will come over the bill being hammered out by a Beacon Hill
conference committee. The compromise that broke a long legislative
logjam calls for an assessment of $295 per worker to be paid by firms
with 11 or more employees that don't offer health insurance.
The overall plan, which should embrace much of what Romney has worked so
energetically for in healthcare expansion, would be a signal of
accomplishment for a governor whose legislative record remains meager.
But Romney is worried that if he OK's the bill in its entirety, he could
be accused of raising taxes. Helping stoke Romney's political anxiety is
Americans for Tax Reform, whose president, Grover Norquist, has made
himself a force in deciding fiscal policy for skittish GOP presidential
hopefuls. Norquist thinks that if the new business assessment is
imposed, Romney should reject legislative efforts to continue a
$62-per-employee fee currently paid by firms that do provide health
insurance -- a levy that raises $160 million annually for the state's
free-care pool. Citizens for Limited Taxation, meanwhile, is
urging the governor to oppose both assessments.
On Tuesday, Romney sidestepped my question about whether he would sign
or veto the new assessment.
"We just don't know what it applies to, to whom or what, in what
circumstances," he replied. "That will make all the difference."
Romney does know that any veto would almost certainly be overridden by
the heavily Democratic Legislature. That reality, his camp thinks, means
he could cast a veto that would insulate himself from charges that he
countenanced a tax increase and still claim credit for most of the
healthcare bill once it became law.
Actually, that piece of political theater would be a revealing character
study.
Romney reveres the memory of his father, George, who served from 1963 to
1969 as the popular, effective Republican governor of Michigan. Indeed,
some think Mitt's nascent national campaign is partly an attempt to
realize a dream that eluded his father, who ran unsuccessfully for the
1968 GOP presidential nomination.
George Romney, however, was no slave to the Republican right wing.
His son is fond of recalling his father's courage in taking on his own
party in 1964. At the Republican National Convention that year, the
Michigan governor pushed for a strong civil rights plank. Thwarted, and
objecting to Barry Goldwater's embrace of extremism, he then pointedly
distanced himself from the GOP ticket.
George Romney also battled for years for a state income tax to stabilize
Michigan's shaky finances. Asked in November 1963 how an initial
legislative defeat of his tax plan would affect his national standing,
Romney replied: "I don't know, and I don't care."
Can anyone imagine the Mittster saying something like that these days?
Without Pinocchio immediately accusing him of identity theft, that is?
Since he caught Potomac Fever, Romney hasn't shown much of his dad's
doughty independence. It's been disappointing to watch a man who peddled
himself as a moderate four years ago retrofit his stands to fit the
latest conservative fashion as he tests the presidential waters.
Here's what would make the charade of a veto particularly transparent.
Although antitax groups style themselves as private-sector protectors,
the $295 assessment was actually developed by leaders of the mainstream
Massachusetts business community. Further, those same business leaders
have made it clear they are comfortable continuing the $62-per-employee
assessment. That is, they aren't demanding that the new levy on
nonproviders be offset by eliminating or reducing the free-care
contribution from firms that do offer healthcare.
That being the case, whose interests, exactly, is Romney mulling, beyond
his own?
Reflecting about his father back in 2002, Romney had this to say: "He
did exactly what he thought was right without regard to the political
consequences. I was very close to my dad, and I look at him as a role
model, as a mentor, as a person who I would very much like to be
like.... I can't possibly be as great as he was, but I aspire to be like
he was in many ways."
Here's your chance, Mitt. Demonstrate a little independence. You may
just find it refreshing.
The rest of us certainly would.
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