CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Thursday, April 27, 2006

The New Socialism meets a cool welcome


Bay State businesses cast a gimlet eye on a Senate plan to give workers up to 12 weeks of paid family time off, saying it would make an already tough business climate even harder to navigate....

But business leaders worried that the leave plan was too inflexible and didnít take into account how difficult it can be to replace some workers temporarily.

"There are a number of issues. Productivity is one and the flexibility impaired by an employee on leave, especially in a small business setting and dropping in and out of the work force, thatís a real cost," said Robert Ruddock, Associated Industries of Massachusetts general counsel.

Small businesses are especially worried about being forced to grant three months off to employees, said Bill Vernon, state director of the National Federation of Independent Businesses.

"This is just something where government just doesnít need to be involved," he said. "These issues are worked out by small businesses every day all year long all across the state of Massachusetts."

Small business employers are also concerned that the plan is a "bait and switch," he said. "It starts as an employee-paid program and it becomes an employer-paid program."

The Boston Herald
Wednesday, April 26, 2006
Businesses wary of leave plan:
Travaglini floats measure


Oh, I get it. Senate President Robert Travagliniís combo family-leave and family tax-cut plan is intended to introduce a new two-tiered system of state services and taxes, i.e. those who donít have kids will work harder while others take paid family-leave and they get to pay more in taxes. What a benefit! This utopia, I tell you. Itís going to be great! FYI, Trav: The NYT is on to you. Keep the crowing lower. P.S. - Favorite straight-faced quote from Trav on his plan to pay people not to work: "There isnít any lost productivity."

The Boston Herald
Wednesday, April 26, 2006
'Mr. Travaglini crowed'
By Jay Fitzgerald


I just did some math on Senate President Travagliniís 'most generous' paid family-leave proposal. Follow me:

At a maximum $750 per week payment, recipients would receive a total of $9,000 if they take the full 12 weeks of paid leave offered by our most generous senate president.

But if the final tax is $2 per worker every week, that would mean a $104 annual payment per worker. Thus it would take 86.5 years for someone to pay back $9,000 that he or she took out of the system. Put another way: it would take 86.5 workersí annual tax payments to fund just one person taking 12 weeks of paid leave.

This is indeed 'generous' ó on behalf of those who are transferring their wealth to subsidize other people.

The Boston Herald
Thursday, April 27, 2006
'Mr. Travaglini crowed,' Part II
By Jay Fitzgerald


More than 50 school construction projects slated to cost more than the state agreed to pay may apply for $150 million in loans if they are willing to sacrifice extras to save money, School Building Authority officials said yesterday.

The loan program, led by Treasurer Timothy P. Cahill, outraged city and town officials, who say the state is reneging on a promise to cover their costs....

To qualify, schools must have started construction between 2005 and 2007, explain why they are over budget, and find ways to cut costs. The 30-year loans would be granted at 2 percent interest, less than half the current rate....

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association ... expressed outrage that the authority is now reviewing construction projects that had been approved by the Department of Education

But state officials say the Argenziano school followed a troubling statewide trend that led to schools larger than state regulations dictated, driving up costs....

At least one school project on the list, at Worcester's North High School, has already sliced $9 million from its budget by making changes such as scrapping a planned greenhouse and reducing the planned size of the school auditorium and gym.

"It would be nice if kids had a greenhouse if they were studying botany and biology," said James Caradonio, Worcester's school superintendent.

"But we certainly didn't need to do it."

The Boston Globe
Thursday, April 27, 2006
Loans offered for school projects
Towns say state is reneging on deal


The high price of gasoline is the talk of the nation. But there is little talk about government's piece of the action -- the revenue collected from federal and state gas taxes.

Why not temporarily roll them back? ...

Government levies include a federal 18.4 cents-a-gallon tax on gas; and the states tax on top of that. In Massachusetts, the gas tax includes a 21-cents-a-gallon excise tax and a 2.5-cents-a-gallon fee to reimburse gas stations for environmental cleanup....

According to the conservative Tax Foundation in Washington, D.C., federal and state gas taxes "pumped more than $54 billion into federal and state coffers last year alone." Now, it would be nice if those billions were actually used to repair and upgrade US roads and bridges. However, they seem to be going elsewhere -- maybe to Baghdad? A 2005 report card for America's infrastructure issued by the American Society of Civil Engineers found little improvement from the "D plus" issued in 2001. It found that 34 percent of America's roads are in poor or mediocre condition and 27 percent of bridges are structurally deficient or obsolete. In Big Dig-consumed Massachusetts, 71 percent of roads are in poor or mediocre condition, 51 percent of bridges are structurally deficient or functionally obsolete....

Yes, America is addicted to oil. But government is addicted to taxes. Conservation is a two-way street.

The Boston Globe
Thursday, April 27, 2006
Real relief on gas prices
By Joan Vennochi


Chip Ford's CLT Commentary

Reaction from the business community to the ridiculous paid family leave scheme proposed by Senate President Robert Travaglini (Socialist-Boston) has been less than enthusiastic, especially among small businesses.  How can they possibly operate with a revolving-door for temporary hires?

By the way, Boston Globe business columnist Steve Bailey's inclusion yesterday of "mortgage- and rent-protection plan, employee clothing allowance, and Friday Pizza Day" was, I hope, intended as tongue-in-cheek sarcasm taking the proposal to the extreme ("Only in Mass.")  -- though some have taken it for real.  In this climate of New Socialism on Beacon Hill, this is entirely understandable -- it had me guessing too.

Boston Herald business columnist Jay Fitzgerald nailed it right on target in his pithy blog:  "This is indeed 'generous' ó on behalf of those who are transferring their wealth to subsidize other people."  His math is something that apparently Travaglini didn't bother with, and his socialist advisor, Randy Albelda, never cared to mention.

Bill Vernon, state director of the National Federation of Independent Businesses, according to the Boston Herald, got it right too:  "Small business employers are also concerned that the plan is a 'bait and switch,' he said. 'It starts as an employee-paid program and it becomes an employer-paid program.'"  Looking at Fitzgerald's numbers, this is inevitable -- unless the "assessment" burden on working stiffs climbs to match the demand.

*                    *                    *

You do have to love folks like those at the Massachusetts Municipal Association, hypocrites who violate regulations that cost us then complain when the state enforces those regulations.  As if we're supposed to cover their greed in building their Taj Mahal schools, their edifices to tax profligacy, now that they're committed to them?  What unmitigated gall.

*                    *                    *

The price of gas is skyrocketing, the talk of the nation, and the driving public has the politicians' ear these days.  Oh boy, we're going to have a whole new round of congressional hearings -- like this hasn't happened before.  They drag their A-List campaign contributors before one committee or another then pronounce no evidence of price gouging and move on.  Pardon me if I'm not impressed, but some have termed me a cynic and I can't help myself.

In Massachusetts, we drivers are paying 41.9 cents per gallon of gas in taxes, state and federal.  Eliminating those taxes, at least for the immediate future, would drop the going price of near-$3.00 a gallon to $2.58.  This could be accomplished tomorrow with a couple of votes and signatures.  And the pols are trying to convince us that they care, they feel our pain?

*                    *                    *

Let me leave you with a touch of humor just passed to me; god knows we can use it:

RED, WHITE & BLUE

A Dutchman was explaining the red, white, and blue of the Netherlands flag to an American.

"Our flag is symbolic of our taxes. We get red when we talk about them, white when we get our tax bills, and blue after we pay them."

The American nodded. "It's the same in the United States -- only we see stars, too!"

Chip Ford


The Boston Herald
Wednesday, April 26, 2006

Businesses wary of leave plan:
Travaglini floats measure
By Kevin Rothstein


Bay State businesses cast a gimlet eye on a Senate plan to give workers up to 12 weeks of paid family time off, saying it would make an already tough business climate even harder to navigate.

Frank Muscato wondered how he would manage if two of the six specially trained employees in his Carver medical equipment company took time off. He said heís already paying as much in taxes as he earns.

"Itís a productivity issue," said Muscato, owner of the Mayflower Equipment Co. "I canít take somebody off the street and have them work tomorrow."

Senate President Robert Travagliniís plan introduced to business leaders yesterday would grant up to 12 weeks of paid leave at full salary, capped at $750-a-week. The leave could be used to care for a newborn or adopted child or a sick family member.

The East Boston Democrat said productivity would be helped, not hurt, by the leave, citing MIT Workplace Center and other research.

"There isnít any lost productivity," Travaglini said. "Weíre doing a service for the level of productivity in the Commonwealth of Massachusetts by moving this proposal forward."

Legislation will be filed later this week. But Travaglini said at a breakfast address before the Greater Boston Chamber of Commerce that salaries for people out on leave would be paid out of a fund filled with employee contributions - about $1.50 to $2 a week, and administered by the state.

A doctor would have to certify that a serious medical condition exists requiring leave.

Under Massachusetts law, employers with at least six workers must grant women up to eight weeks of unpaid maternity leave. Federal law provides for 12 weeks of unpaid medical leave for employees of larger companies.

Travaglini also rolled out a pair of family tax cuts. One for families earning less than $75,000 would raise the deduction from $3,600 to $5,000 for one dependent. Another would raise the deduction allowed for day-care expenses from $4,800 to $10,000 for one dependent.

Revenue is strong enough now to pay for the estimated $70 million cost of the cuts, Travaglini said.

But business leaders worried that the leave plan was too inflexible and didnít take into account how difficult it can be to replace some workers temporarily.

"There are a number of issues. Productivity is one and the flexibility impaired by an employee on leave, especially in a small business setting and dropping in and out of the work force, thatís a real cost," said Robert Ruddock, Associated Industries of Massachusetts general counsel.

Small businesses are especially worried about being forced to grant three months off to employees, said Bill Vernon, state director of the National Federation of Independent Businesses.

"This is just something where government just doesnít need to be involved," he said. "These issues are worked out by small businesses every day all year long all across the state of Massachusetts."

Small business employers are also concerned that the plan is a "bait and switch," he said. "It starts as an employee-paid program and it becomes an employer-paid program."

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The Boston Globe
Thursday, April 27, 2006

Loans offered for school projects
Towns say state is reneging on deal
By Maria Sacchetti, Globe Staff


More than 50 school construction projects slated to cost more than the state agreed to pay may apply for $150 million in loans if they are willing to sacrifice extras to save money, School Building Authority officials said yesterday.

The loan program, led by Treasurer Timothy P. Cahill, outraged city and town officials, who say the state is reneging on a promise to cover their costs. The School Building Authority was created in 2004 to control construction spending and pay for more than 400 projects on a waiting list. The projects must be paid off by 2007, when a statewide freeze on new school construction will be lifted.

Katherine P. Craven, the authority's executive director, said the state agreed last summer to pay $1.4 billion more than it had intended for projects on the wait list, driving the total cost to $5.5 billion.

But for more than 50 projects, that money still wasn't enough to help them finish construction, she said, and those projects will have to apply for a loan. To qualify, schools must have started construction between 2005 and 2007, explain why they are over budget, and find ways to cut costs. The 30-year loans would be granted at 2 percent interest, less than half the current rate.

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said the state is not sufficiently covering inflation. And he expressed outrage that the authority is now reviewing construction projects that had been approved by the Department of Education, which ran the school building program before the authority took over.

"They should not hold communities hostage by saying they're not going to honor their past commitments," he said.

Mayor Joseph A. Curtatone of Somerville said he cannot alter the Albert F. Argenziano School, which was to break ground yesterday. The school is $9.2 million over budget because of the soaring cost of construction materials, he said.

"This is just a back-door way for the treasurer to walk away from his commitment to cities and towns," Curtatone said.

"Do we want to cut windows out of classrooms? Should I cut out the gym?"

But state officials say the Argenziano school followed a troubling statewide trend that led to schools larger than state regulations dictated, driving up costs. The Argenziano School provides 183 square feet per student; state rules call for 115 to 135 square feet per student.

State officials said they have the right to review school blueprints.

"We're not just going to be giving this money out to those who refuse to rein in their programs," Cahill said.

At least one school project on the list, at Worcester's North High School, has already sliced $9 million from its budget by making changes such as scrapping a planned greenhouse and reducing the planned size of the school auditorium and gym.

"It would be nice if kids had a greenhouse if they were studying botany and biology," said James Caradonio, Worcester's school superintendent.

"But we certainly didn't need to do it."

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The Boston Globe
Thursday, April 27, 2006

Real relief on gas prices
By Joan Vennochi, Globe Columnist


Let them eat cake -- or wait in line for a Prius.

The high price of gasoline is the talk of the nation. But there is little talk about government's piece of the action -- the revenue collected from federal and state gas taxes.

Why not temporarily roll them back? That would provide instant consumer relief -- not the future, fantasy relief suggested this week in Washington.

"Gasoline price increases are like a hidden tax on the working people," President Bush said in a speech that called for a federal inquiry into possible price-gouging, an easing of environmental rules on gasoline production, and a halt to new purchases for the nation's energy reserve.

Bush conveniently ignored one built-in cost: Government levies include a federal 18.4 cents-a-gallon tax on gas; and the states tax on top of that. In Massachusetts, the gas tax includes a 21-cents-a-gallon excise tax and a 2.5-cents-a-gallon fee to reimburse gas stations for environmental cleanup.

Lowering the gas tax is disputed as a disincentive to conservation. However, by that logic, government should do nothing to address the rising gas costs. Just let them rise and conservation will follow -- or, what is the more likely scenario, the rich will drive state-of-the-art hybrids and the poor will hitchhike.

And of course, there is the eternal argument that government needs more taxpayer money to do its job.

According to the conservative Tax Foundation in Washington, D.C., federal and state gas taxes "pumped more than $54 billion into federal and state coffers last year alone." Now, it would be nice if those billions were actually used to repair and upgrade US roads and bridges. However, they seem to be going elsewhere -- maybe to Baghdad? A 2005 report card for America's infrastructure issued by the American Society of Civil Engineers found little improvement from the "D plus" issued in 2001. It found that 34 percent of America's roads are in poor or mediocre condition and 27 percent of bridges are structurally deficient or obsolete. In Big Dig-consumed Massachusetts, 71 percent of roads are in poor or mediocre condition, 51 percent of bridges are structurally deficient or functionally obsolete.

But politicians, including tax-cut-loving Republicans, get twitchy when gas-tax rollbacks are proposed.

Last fall in Massachusetts, when prices started to spike, state Representative Bradley H. Jones Jr., a Republican from North Reading, called for a three-month holiday from the state's gasoline tax. Governor Mitt Romney initially dismissed the idea, calling it "an additional incentive to use gasoline and energy." He later amended his comment to say the proposal made no sense as a long-term solution. This week, Jones proposed to exempt municipalities from the tax when they purchase gas for public vehicles; the proposal was blocked by Democratic legislators. "There is a limited amount we can do at the state level," said Jones. "This was not a panacea or long-term solution. But to ignore the short term is a mistake."

Ignoring the short term is what Bush did in his four-point plan "to confront high gasoline prices." Mary Anne Marsh, a Democratic consultant and Fox News commentator, offers this alternative four-point plan: Call upon Congress to temporarily suspend the federal gas tax; call on governors across the country to temporarily suspend state gas taxes; tell the Saudi Arabian ambassador that the United States wants lower oil prices in return for protecting Saudi production plants; and call in every oil and gas industry CEO and ask them to forgo a percentage of profits for reasons of national security.

When it comes to raising an issue to a national security level, "Republicans do it for lesser things than oil," she said. As for Democrats, she said, those who really want to help working men and women should also support temporary suspension of the gas tax.

All the talk about conservation and hybrid cars ignores some basic facts of life in America. The wealthier, more highly educated consumer has more flexibility to work from a laptop at home -- and more income to purchase the new, more fuel-efficient vehicles. The working poor often commute long distances, often from rural areas and the exurbs, with little access to mass transit. When you clean homes for a living or work in restaurant kitchens, you need a sure way to get to work. Often, the only choice is an older car that runs on too much high-priced gasoline.

Yes, America is addicted to oil. But government is addicted to taxes. Conservation is a two-way street.

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