CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Wednesday, April 12, 2006

6th-last for Tax Freedom Day, a growing state budget,
and no tax rollback again


Tax Freedom Dayģ will fall on April 26 in 2006, according to the Tax Foundationís annual calculation using the latest government data on income and taxes.

ďTax freedom will come three days later in 2006 than it did in 2005,Ē said Tax Foundation President Scott A. Hodge, ďand fully 10 days later than in 2003 and 2004

Tax Foundation News Release
April 12, 2006
America's Tax Freedom Day Arrives April 26th in 2006,
Three Days Later Than 2005


The House proposed yesterday boosting state spending by 5.7 percent, an increase designed to help cities and towns and to stem a stream of property tax overrides that has riled constituents across the state.

School officials and budget analysts were unsure yesterday whether the House's $25.27 billion plan would bring much relief. They said public schools, as well as cities and towns, are still recovering from crushing budget cuts from 2002 to 2004....

Overall, school systems would receive a nearly 3 percent increase in Chapter 70 funding, the basic state aid for education, or $91.4 million more than the current fiscal year. Towns and cities could add to school aid with $158 million from lottery revenues, a result of the Legislature removing a cap on lottery aid, lawmakers said...

The Massachusetts Association of School Superintendents and the Massachusetts Teachers Association vowed to lobby for more aid....

The House ignored several of Romney's initiatives, including merit pay for teachers and lowering the income tax rate. Spokesman Eric Fehrnstrom said Romney would press his initiatives with the Legislature.

The Boston Globe
Tuesday, April 11, 2006
House plan hikes spending by 5.7%
Schools, analysts say it's not enough


The House yesterday filed a $25.3 billion budget plan, following Gov. Mitt Romney's $25.1 billion effort filed in January.

The good news in the House budget - no tax or fee hikes, but a boost in spending on local aid, school aid and higher education - a sign of improving times....

As for what's missing? Any sign of a tax cut, of course. House Speaker Sal DiMasi and Ways and Means Chairman Bob DeLeo say the economy is nowhere near the point of justifying the tax rollback. So barring a collective coming-to-their-senses (we won't hold our breath), another year will pass with the will of the voters unfulfilled....

And the House still dips into the state's rainy-day fund to the tune of $275 million, a figure lower than last year by half but still curious, given the overall boost in state revenues.

A Boston Herald editorial
Tuesday, April 11, 2006
Back to business on Beacon Hill


The $25.3 billion spending plan unveiled by the House Ways and Means Committee yesterday reflects the increase in revenues over the last two years, but does not embark on many initiatives in keeping with the modest rate of economic growth in Massachusetts....

Despite the growth in revenue, the committee would take $275 million from the rainy-day fund, the state's reserve for emergencies. DeLeo is confident that revenue growth will more than replenish this contribution. But the need for rainy-day money shows the wisdom of the committee decision not to lower the income tax from 5.3 to 5 percent, as the governor recommends. This would cost the state almost $700 million a year when fully implemented. The state has too many commitments to afford this luxury.

A Boston Globe editorial
Tuesday, April 11, 2006
Cautious budget


Itís almost Tax Day, and once more, the good liberals of Massachusetts have gone missing.

Yet again they are refusing to pay their state income taxes at the old, more compassionate higher rate, when all it would take is the mere stroke of a pen, to hand over to the commonwealth more money ... for the children.

And now the liberals have a new cause.

Itís for ... the ... illegal .. aliens....

Here are the latest numbers from the state Department of Revenue: So far in this 2006 tax season, 2,094,301 residents have filed tax returns.

Of those 2,094,301, exactly 527 have opted to pay higher taxes.

That works out to approximately one-fortieth of 1 percent of all Massachusetts taxpayers. And yet, in the 2000 election, when the question of cutting the state income tax rate was on the ballot, more than 1 million residents voted not to cut their own taxes.

But given a chance to pay voluntarily, 99.9 of those no doubt very sincere pro-tax liberals have vanished, opting instead to enjoy the tax cut they ostensibly opposed.

The Boston Herald
Wednesday, April 12, 2006
Itís time for liberals to pony up, or shut up
By Howie Carr


Chip Ford's CLT Commentary

The Washington-based Tax Foundation today issued its annual Tax Freedom Day report, and again Massachusetts is one of the last to celebrate.  We Bay Staters don't stop working full-time for government until May 2, while nationally Tax Freedom Day this year falls on April 26, making us the 6th-latest state in the nation.  We'll be issuing a news release later today, and reminding the House when it soon begins debating the budget it released on Tuesday.

The Massachusetts House of Representatives has proposed a $25.27 billion state budget for next fiscal year, an increase of $1.37 billion (5.7%) over last year's budget. And -- surprise, surprise -- the state still "can't afford" to finally roll back the income tax to 5 percent, even eighteen years after it was "temporarily" increased to cover a $12.6 billion budget back then.

Spending will double with next year's budget over spending in FY'89 when the "promise" was made to raise the income tax rate only "temporarily"; a promise that still hasn't been kept. It will have increased by almost $3 billion just since 59 percent of the voters in 2000 mandated that the income tax rate be rolled back to 5 percent.

The Legislature "froze" the voters' rollback mandate in 2002, until the economy recovers. Last year there was a budget surplus of more than a billion dollars, and another billion dollar surplus is expected this year.

Still, the state "can't afford" to obey and respect the voters' mandate, the Legislature still thumbs its collective nose at the outcome of a lawful vote and the majority of voters who cast it.

The Legislature even intends to raid the state's burgeoning "rainy day fund," again well over a billion dollars and mounting, for $275 million so it can spend more.

Where are all those liberals, the 41 percent who vehemently opposed our tax rollback ballot question, the ones who insisted ad nauseam that they "didn't need or want it"?  So far only 527 of them have contributed a whopping total of $51,223 using  CLT's voluntary tax check-off  on their income tax returns. We did it just for them so they too could be winners even in losing. It turns out that all but 527 tax-and-spenders are just like us:  they too really needed and wanted more of their money after all -- and are keeping it in growing numbers.

At least we were and remain honest about our needs and wants, and who that money really belongs to.

Chip Ford


Tax Foundation
April 12, 2006

News Release

America Celebrates Tax Freedom Dayģ
America's Tax Freedom Dayģ Arrives April 26th in 2006,
Three Days Later Than 2005


Tax Freedom Dayģ will fall on April 26 in 2006, according to the Tax Foundationís annual calculation using the latest government data on income and taxes. (Click here to read the full study).

ďTax freedom will come three days later in 2006 than it did in 2005,Ē said Tax Foundation President Scott A. Hodge, ďand fully 10 days later than in 2003 and 2004 when a combination of slow income growth and tax cuts caused Tax Freedom Day to arrive comparatively early, on April 16.Ē

However, 2006ís Tax Freedom Day is still considerably earlier than it was in 2000, when the economic boom, the tech bubble and higher tax rates pushed tax burdens to a record high, and Tax Freedom Day was postponed until May 3.

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The Boston Globe
Tuesday, April 11, 2006

House plan hikes spending by 5.7%
Schools, analysts say it's not enough
By Maria Sacchetti and Andrea Estes, Globe Staff


The House proposed yesterday boosting state spending by 5.7 percent, an increase designed to help cities and towns and to stem a stream of property tax overrides that has riled constituents across the state.

School officials and budget analysts were unsure yesterday whether the House's $25.27 billion plan would bring much relief. They said public schools, as well as cities and towns, are still recovering from crushing budget cuts from 2002 to 2004.

House leaders said that although revenues are up, they need to use money from reserves to balance the budget and could not propose a huge increase. They said billions have been spent on public schools, and spending is increasing, but they need to cover pay raises, debts, and other initiatives such as child care and higher education.

"We have to deal with reality," House Speaker Salvatore F. DiMasi said at a State House press conference yesterday. "We make the choices, and hopefully the public will understand that."

The House blueprint would also boost spending in several areas, including $25 million to reduce residents' water and sewer bills; $21.2 million for community policing grants; and $42 million in salary and benefits for court employees, including $14 million in pay raises for judges and court clerks.

But it was school spending that drew the most attention yesterday.

Overall, school systems would receive a nearly 3 percent increase in Chapter 70 funding, the basic state aid for education, or $91.4 million more than the current fiscal year. Towns and cities could add to school aid with $158 million from lottery revenues, a result of the Legislature removing a cap on lottery aid, lawmakers said.

"It's not nearly enough. It's really putting tremendous pressure on the towns," said Peter Holland, school superintendent in Belmont, where a property tax override failed last week, possibly forcing layoffs in the 3,800-student district.

The unveiling of the House budget is a key step in the annual budget process that began in January when Governor Mitt Romney filed his plan. The House plan was released by the House Ways and Means Committee and will be debated by the full House starting April 24.

The Senate will unveil its budget plan in coming weeks. Then the two chambers will hammer out a compromise and send it to Romney for approval. He could veto all or parts of it. Typically the process ends before July 1, when the next fiscal year starts.

The House budget proposal includes increases in education, health and human services, housing and public safety. Besides schools and lottery aid, the budget includes $125 million for the new healthcare plan, which aims to extend benefits to nearly all of the state's uninsured.

Budget analysts said it was a good sign that the House was restoring lottery aid to cities and towns, but predicted it would take years to make up for devastating cuts. "They are under a real squeeze," Michael Widmer, president of the Massachusetts Taxpayers Foundation, said of the communities.

The House tinkered with the state funding formula for schools, proposing to take into account property values and the level of affluence, based on income, of a town when deciding how much it could pay for schools.

The plan could bring relief to towns that contend that soaring property values make them appear wealthier than they are. The House plan would also gradually ensure that each school system gets at least 15 percent of its budget from the state. Currently 67 of the 330 school systems, many of them wealthy, receive less.

The 3 percent increase in state aid to school systems proposed by the House is less than the governor's plan, which calls for a 5 percent boost. The Massachusetts Association of School Superintendents and the Massachusetts Teachers Association vowed to lobby for more aid.

"I'm very disappointed," said Thomas Scott, executive director of the superintendents association. "I expected a lot more coming out in this budget proposal."

DiMasi accused Romney of coming up with a larger number by using "gimmicks and smoke and mirrors."

The House ignored several of Romney's initiatives, including merit pay for teachers and lowering the income tax rate. Spokesman Eric Fehrnstrom said Romney would press his initiatives with the Legislature.

Viriato Manuel deMacedo of Plymouth, a Republican member of the Ways and Means Committee, said he and other House members will seek to add $72 million in local aid to the budget when debate begins.

In the area of higher education, the House proposes boosting funding for state colleges and universities by more than $60 million, or 7 percent, according to the state Board of Higher Education.

The budget would provide a $27.9 million increase for the University of Massachusetts system and $34.7 million increase for state and community colleges, according to the House proposal.

But the higher education budget would still be adjusted for inflation below where it was in fiscal year 2001, according to an analysis by the nonpartisan the Massachusetts Budget and Policy Center.

Stephen Tocco, chairman of the Massachusetts Board of Higher Education, said the board was disappointed not to receive more.

Sarah Schweitzer of the Globe staff contributed to this report.

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The Boston Herald
Tuesday, April 11, 2006

A Boston Herald editorial
Back to business on Beacon Hill


Amid all the health care hoopla, it's easy to overlook the fact that lawmakers still have a multi-billion dollar budget to attend to.

The House yesterday filed a $25.3 billion budget plan, following Gov. Mitt Romney's $25.1 billion effort filed in January.

The good news in the House budget - no tax or fee hikes, but a boost in spending on local aid, school aid and higher education - a sign of improving times. And the House builds on last year's major achievement that limited "outside sections" - a sort of self-imposed ban on making mischief.

Like Romney, the House lifts the cap on Lottery proceeds that go to cities and towns; mayors and selectmen have been crying foul over the diversion of those funds for years. And a modest change in the amount some state employees pay for their health insurance doesn't go far enough, but it's a start.

As for what's missing? Any sign of a tax cut, of course. House Speaker Sal DiMasi and Ways and Means Chairman Bob DeLeo say the economy is nowhere near the point of justifying the tax rollback. So barring a collective coming-to-their-senses (we won't hold our breath), another year will pass with the will of the voters unfulfilled.

The House also proposes spending $72 million less than Romney on Chapter 70 aid to public schools. DeLeo insists Romney's budget relies on false assumptions to finance a 5 percent increase, while the House believes only a 3 percent increase is affordable.

And the House still dips into the state's rainy-day fund to the tune of $275 million, a figure lower than last year by half but still curious, given the overall boost in state revenues.

The House budget rounds out with $200 million to help pay for the new health care reform bill, and with good reason, health care has been capturing all the headlines. But lawmakers still have their day jobs, and a responsible, balanced budget is at the heart of it. With some work, the House plan could be a step in that direction.

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The Boston Globe
Tuesday, April 11, 2006

A Boston Globe editorial
Cautious budget


State budgets are slaves to the economy. The $25.3 billion spending plan unveiled by the House Ways and Means Committee yesterday reflects the increase in revenues over the last two years, but does not embark on many initiatives in keeping with the modest rate of economic growth in Massachusetts.

Extra revenue allowed the committee to redress one of the most unfair elements of the last three budgets -- the diversion of some lottery revenues to the state. The committee was right to follow Governor Romney's recommendation that the full $920 million raised from the lottery go to local needs. The state has balanced its last few budgets in part by limiting aid to cities and towns and grabbing some of the lottery money.

The committee wants to pare $72.2 million from the governor's request for additional school aid to local communities. It would still raise the aid by $91 million over the current allotment and it proposes adjusting the formula to answer the objections of some communities.

By not following the governor's recommendation, the committee gave itself leeway to provide money for many useful programs. It would allot $25 million to reduce water and sewer bills, add significant new money for early childhood education, increase aid to the higher education system by several million dollars over the governor's request, and create a $1 million reentry program for released prison inmates, to lessen recidivism. These are all good programs, and the higher education increases are still inadequate. In an ideal world, they would not have to compete with local schools for state aid.

The committee chairman, Robert DeLeo of Winthrop, said at a briefing for the Globe yesterday that he consulted with almost all 160 House members before the committee issued its proposals. Before this budget is passed by the House, the leadership should make sure that any items of limited appeal are excised in favor of more education aid.

DeLeo continued a welcome practice from last year -- the virtual elimination of outside sections as a shortcut to policy making. These sections are tagged on at the end of the budget, and for decades they have been a lazy Legislature's device to make major changes in state government without separate hearings. The Ways and Means budget contains 27 outside sections, nearly all of them directly related to the budget and none with great policy implications.

Despite the growth in revenue, the committee would take $275 million from the rainy-day fund, the state's reserve for emergencies. DeLeo is confident that revenue growth will more than replenish this contribution. But the need for rainy-day money shows the wisdom of the committee decision not to lower the income tax from 5.3 to 5 percent, as the governor recommends. This would cost the state almost $700 million a year when fully implemented. The state has too many commitments to afford this luxury.

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The Boston Herald
Wednesday, April 12, 2006

Itís time for liberals to pony up, or shut up
By Howie Carr


Itís almost Tax Day, and once more, the good liberals of Massachusetts have gone missing.

Yet again they are refusing to pay their state income taxes at the old, more compassionate higher rate, when all it would take is the mere stroke of a pen, to hand over to the commonwealth more money ... for the children.

And now the liberals have a new cause.

Itís for ... the ... illegal ... aliens.

In case youíre new here, a few years ago the Legislature tired of all these liberals demanding that everyone pay their "fair share." So when the tax rate was cut, thanks to the voters, to 5.3 percent, a new law was written allowing those voters who were so concerned about the children, the illegal aliens, etc., to pay at the old 5.85 percent rate.

By the way, the solons donít deserve that much credit, because the voters wanted the tax rate cut to 5 percent - the solons "froze" it at 5.3 percent. But still, this voluntary tax increase is a good benchmark to see just how serious the liberals are about "everyone" paying their fair share.

It turns out, for Massachusetts liberals, "everyone" is "everyone else."

Here are the latest numbers from the state Department of Revenue: So far in this 2006 tax season, 2,094,301 residents have filed tax returns.

Of those 2,094,301, exactly 527 have opted to pay higher taxes.

That works out to approximately one-fortieth of 1 percent of all Massachusetts taxpayers. And yet, in the 2000 election, when the question of cutting the state income tax rate was on the ballot, more than 1 million residents voted not to cut their own taxes.

But given a chance to pay voluntarily, 99.9 of those no doubt very sincere pro-tax liberals have vanished, opting instead to enjoy the tax cut they ostensibly opposed.

Whatever happened to doing the right thing? Whatever happened to quoting Oliver Wendell Holmes (or some other rich Yankee with a trust fund) that taxes are the price we pay for civilization?

What about the children?

What about the illegal aliens?

Now, who is going to pick up the tab for the 40,000 illegal aliens - excuse me, "undocumented workers" - who may soon be cut off the state Medicaid rolls just for the mere fact that they are foreign layabouts and criminals? To all of you good Kerry-bumper-sticker-brandishing, Birkenstock wearers in the Peoples Republics of Brookline, Cambridge, Arlington and Lincoln - what about your amigos, your compadres?

If you Daily-Kos reading, Bush-lied-people-died chanting potheads donít pay at the higher rates, itíll be on your hands if they have to ... get a job.

The saddest thing of all is, as the need grows ever greater, after 12, er 16, no, 17 years of Reagan-Bush-Bush, the number of liberal gringos willing to walk the walk is declining with every year.

Can someone say hypocrisy?

Since the voluntary higher-tax program started, the numbers at this point in the tax season have gone from 843 in 2003 to 714 in 2004 to 629 last year to 527.

What is it with these liberals?

Theyíre all for everyone paying their fair share, except when itís their turn to buy a round. Theyíre very worried about illegal aliens who donít pay taxes, period, but they care not a whit about lifelong residents in their hometowns who are being driven out by the higher property taxes. The Archdiocese of Boston rolls out the red carpet for foreign criminals, but gives the bumís rush to citizens who have paid the bills for generations and now only desire to keep their churches open.

And now as the check arrives, as it always does at this time of year, all but 527 liberals in Massachusetts have bolted for the door. Put out an Amber Alert.

What about the children, the illegal-alien children?

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