CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Tuesday, May 2, 2006

Record revenue reported for Tax Freedom Day in Mass.


Massachusetts set a record for April tax collections and receipts with just two months left in this fiscal year are running $837 million above the benchmarks used to build this year's budget.

The Department of Revenue reported Monday that tax collections in April totaled $2.215 billion, up $198 million or 9.8 percent over April 2005.

At a press conference on another matter, Gov. Mitt Romney, who will elaborate on budget and tax matters at a press conference Tuesday, said the new numbers should make it easier for the state to embrace an income tax cut and increases in education and local aid....

Romney later said, "We’ve certainly never had an April with $2.2 billion or anywhere near that, and there’s just no longer an excuse for not returning to the taxpayers the tax rate they voted for."

State House News Service
Monday, May 1, 2006
Romney: Record April tax take
should bode well for education, tax cuts


Revenue collections for April totaled $2.215 billion, breaking the largest single monthly record set last April, Revenue Commissioner Alan LeBovidge announced today....

Year-to-date revenues were $224 million above the new benchmark for the first 10 months of fiscal 2006. Revenues now are trending $837 million above the original benchmark of $17.448 billion set last spring.

"Personal income tax payments with returns and estimated payments, on personal income are driving the numbers upward," LeBovidge said.

Commonwealth of Massachusetts
Department of Revenue
Monday, May 1, 2006
April revenues set record, total exceeds $2.2 billion


Nothing goes to the heart of the relationship between government and the citizenry more than taxes and spending. In this election year, pressures to make new funding commitments after four years of fiscal retrenchment will compete with calls for tax relief.

Taxpayers in Massachusetts devote more money to state and local services than in most other states. In 2002 (the last year for which complete data are available), the Bay State ranked eighth in the country in total revenue generated by state and local taxes and fees per capita, 11.2 percent above the national average and ahead of every New England state except Connecticut ...

Massachusetts gets more of its government revenue from personal income taxes than most states do .... On a per-capita basis, the Bay State ranked third in reliance on income taxes in 2002 ...

Reliance on property taxes is also high here, and growing relative to the nation as a whole. Massachusetts ranked eighth in property tax per capita in 2002 ...

In 2002, Bay State taxpayers paid 13.2 percent of personal income in taxes and fees to state and local governments ...

The return to fiscal stability will also renew calls for tax relief. Several of the tax increases and tax-cut revocations passed in 2002 (including a reduction in the personal exemption) are already being phased out according a pre-set schedule, but some (restoration of the charitable-gift deduction passed by voters in 2000) are not due until 2014. Much political attention will be paid to the question of cutting the personal income tax rate from 5.3 percent to 5 percent, a reduction mandated by voters in 2000 but suspended as part of the 2002 tax package.

The Eagle-Tribune
Sunday, April 30, 2006
Reliance on income, property tax is high,
but so is demand for revenue

By MassInc Staff


"You find out where all the bodies are buried within the line items," said [Sen. Mark Montigny, D-New Bedford]. "You find out that even in the budget crisis that we have now come through and grown out of, when everyone is telling you – as they will today in this building – that there’s no money or that there’s not enough money, just simply say 'Save it from someone else.'" Montigny said there is "plenty of money" to pay for the council’s agenda. "It just means you have to sacrifice and say 'no' to other priorities that are less important and if you just look at the 1,200 line items, there’s a lot of them."

State House News Service
Monday, May 1, 2006
Senator gives seniors tips on lobbying,
says there's "plenty of money"


Spending and taxes continue to command attention this week as an enlarged House annual spending plan moves from the House to the Senate, and the state gets the latest snapshot of its tax collection picture.

Last week, the House wrapped up its annual proceedings after adding $190 million in new spending to the $25.3 billion budget endorsed by its Ways and Means Committee....

Senate leaders have already indicated they intend to propose more Chapter 70 education aid than either Gov. Mitt Romney or the House....

While job growth is weak in Massachusetts, it's clear that as the election approaches and tax revenues continue to rebound, the Legislature is in full-on spending mode.

Senate leaders are scheduled to release their budget proposal on May 24, Senate President Robert Travaglini said Friday. Travaglini also indicated bills dealing with seat belt law enforcement and access to needles without prescriptions are on the Senate agenda.

State House News Service
Advances - Week of May 1, 2006


A primary enforcement seat belt law passed already in the House by a vote of 76-74. Breaking with his GOP predecessors, Romney says he supports primary enforcement. Senate President Robert Travaglini bumped the issue to the top of his priority list and promised a vote as soon as this week.

This is not a debate about whether you should wear seat belts. You should. It is not a debate about whether lives will be saved if seat belt use increases. They will (a whopping 23 people, by one count.)

This is a debate over the proper role of government in regulating individual behavior that impinges on the rights and freedoms of no one else....

I've run out of room to list other ways government at all levels unnecessarily limits freedom....

But you don't have to lean libertarian to stand up and just say no to this particularly intrusive expansion of government power. Do so by contacting Senate President Robert Travaglini's office at 617-722-1500 (Robert.Travaglini@state.ma.us) and Gov. Mitt Romney at 617-725-4000 (www.mass.gov, click on the "contact governor" link).

The Boston Herald
Tuesday, May 2, 2006
Government's role not always in driver's seat
By Virginia Buckingham


Chip Ford's CLT Commentary

Today -- May 2, 2006 -- is Tax Freedom Day in Massachusetts, the 6th-latest in the nation.  This is emancipation day for us state taxpayers when we start keeping what we earn, the first day of the year when every cent you make doesn't go entirely to government.  We in Taxachusetts have spent the past 122 days working entirely and only to fund and support government; it's taken every cent we've made since January 1st.  Starting today, we begin to keep what we earn all to ourselves and our families at last.

Governor Romney, Lt. Governor Kerry Healey, and Barbara Anderson will host a "Tax Freedom Day" news conference at the Hampshire House this afternoon at 3:00 pm.  I'll be there too, taking photos of the benchmark celebration.

On the very eve of our state's belated "Tax Freedom Day," the Massachusetts Department of Revenue announced a record-shattering tax surplus for last month, "$198 million or 9.8 percent, over last April ... an increase of $1.148 billion or 8.2 percent" in year-to-date collections.  Gov. Romney asserted, "We’ve certainly never had an April with $2.2 billion or anywhere near that, and there’s just no longer an excuse for not returning to the taxpayers the tax rate they voted for."

But the excuses will surely follow as day follows night, count on it.  According to the tax-and-spenders, there's never a good time to roll back the 5.3 percent income tax to its historic 5 percent, as mandated by 59 percent of the voters in 2000.  There will always be some lame excuse:  either "we're in an economic downturn and must 'freeze' it for a while," or "we must cautiously wait and watch, maybe next month" or simply, "the state can't afford it" as we heard throughout the Roaring '90s with its billion-dollar annual surpluses and spending binges.

And the Bacon Hill Spending Spree is in full swing -- the pols are again squandering another billion-dollar annual surplus, our tax overpayment.  Already the House has added an additional $190 million to its initially proposed $25.3 billion FY'07 budget (which was already $1.37 billion, a 5.7 percent increase, over this year's spending), and the Senate is expected to see that and raise it by a few hundred million or so more when it soon takes up its own proposed budget.

One senator, addressing a group of activist seniors at the State House yesterday to lobby for more spending on their pet programs, advised them: "'. . . when everyone is telling you -– as they will today in this building -– that there’s no money or that there’s not enough money, just simply say "Save it from someone else."' Montigny said there is 'plenty of money.'"

Okay, senator, "Save the excuses for someone else."  We know there's plenty of money -- almost another billion dollars of our tax overpayments this year alone.  No more insulting excuses for ignoring the voters' tax rollback mandate.  Roll it back now:  There is "plenty of money."

"Ah, let duh good times roll again!" is the attitude in the Democrat-dominated Legislature as history repeats itself.  "Screw dose idiot taxpaying voters, whadda dey gonna do, trow us outta office? Hah, dat'll be the day! Dey like pain, got use'ta it."

Today is the deadline for filing election papers; this evening they'll learn if they have any challenges to their "birthright" as a "professional legislator," whether they'll need to look over their shoulder and prepare for a fall campaign.  Not that this makes much if any difference in Massachusetts.  For proof, just look at the last election in 2004, when the Republicans strenuously fielded a full slate of good challengers but were routed in November, even lost a few seats.  "Idiot taxpaying voters" indeed: 59 percent of them voted for the tax rollback, then voted to reelect the arrogant pol who stuck a finger in their eyes.  Go figure. . .

The feeding frenzy will begin in earnest for those who learn tonight that they've been anointed with another free ride, another two-year term without breaking a sweat or tapping their campaign coffers.

Some still ponder why Massachusetts is behind only New York this year in losing population at such a steady clip.  My bigger questions are:  Why are we Number Two in the nation behind New York, and how soon before we get back to Number One (2005) with this "distinction" as well?

Chip Ford


State House News Service
Monday, May 1, 2006

Romney: Record April tax take
should bode well for education, tax cuts


Massachusetts set a record for April tax collections and receipts with just two months left in this fiscal year are running $837 million above the benchmarks used to build this year's budget.

The Department of Revenue reported Monday that tax collections in April totaled $2.215 billion, up $198 million or 9.8 percent over April 2005.

At a press conference on another matter, Gov. Mitt Romney, who will elaborate on budget and tax matters at a press conference Tuesday, said the new numbers should make it easier for the state to embrace an income tax cut and increases in education and local aid.

During the economic doldrums earlier in the decade, Romney said, optimistic projections held that revenues eventually would grow at 4.5 to 5 percent. "That’s what we forecast as the best likely outcome. Instead to see revenue growth at 9, 9.5, almost 10 percent, we’re very, very encouraged. And that allows us to do some of the things that we’ve been talking about, and that is: invest more in our schools, support our cities and towns with better local aid, and of course carry out a first-in-the nation, landmark, health care proposal to get all of our citizens insured."

Romney later said, "We’ve certainly never had an April with $2.2 billion or anywhere near that, and there’s just no longer an excuse for not returning to the taxpayers the tax rate they voted for."

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Commonwealth of Massachusetts
Department of Revenue
Monday, May 1, 2006
April revenues set record, total exceeds $2.2 billion


Revenue collections for April totaled $2.215 billion, breaking the largest single monthly record set last April, Revenue Commissioner Alan LeBovidge announced today.

The monthly collections increased by $198 million or 9.8 percent, over last April. Year-to-date revenue collections totaled $15.078 billion, an increase of $1.148 billion or 8.2 percent. Receipts for April were $123 million above the monthly benchmark, based on January's revised full-year estimate of $18.158 billion.

Year-to-date revenues were $224 million above the new benchmark for the first 10 months of fiscal 2006. Revenues now are trending $837 million above the original benchmark of $17.448 billion set last spring.

"Personal income tax payments with returns and estimated payments, on personal income are driving the numbers upward," LeBovidge said. "The numbers are net of sending back nearly $900 million in refunds this tax season."

Income tax collections for April totaled $1.695 billion, an increase of $170 million or 11.1 percent from last April. Withholding tax collections totaled $637 million, an increase of $26 million or 4.2 percent. Sales and use tax collections were $333 million, up $14 million or 4.5 percent. Corporate and business tax collections in April were $52 million, an increase of $14 million or 35.8 percent over last April.

Year-to-date income tax collections were $8.592 billion, an increase of $616 million or 7.7 percent over last year at this time. Year-to-date withholding tax collections were $6.800 billion, up $358 million or 5.5 percent over last year. Sales and use tax collections for the first 10 months of fiscal '06 were $3.332 billion, up $133 million or 4.1 percent over the same period last year. Year-to-date corporate and business tax collections were $1.733 billion, an increase of $450 million or 35.1 percent over last year at this time.

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The Eagle-Tribune
Sunday, April 30, 2006

Reliance on income, property tax is high,
but so is demand for revenue
By Staff of MassINC


Today through this November's gubernatorial election, Forum will feature a series of occasional articles prepared by the staff of the Massachusetts Institute for a New Commonwealth (MassINC) on issues affecting the Bay State. The Boston-based, nonpartisan research and educational institute is celebrating its 10th anniversary this year.

Nothing goes to the heart of the relationship between government and the citizenry more than taxes and spending. In this election year, pressures to make new funding commitments after four years of fiscal retrenchment will compete with calls for tax relief.

Taxpayers in Massachusetts devote more money to state and local services than in most other states. In 2002 (the last year for which complete data are available), the Bay State ranked eighth in the country in total revenue generated by state and local taxes and fees per capita, 11.2 percent above the national average and ahead of every New England state except Connecticut, according to the Massachusetts Taxpayers Foundation (MTF).

Massachusetts gets more of its government revenue from personal income taxes than most states do, and less from sales and excise taxes. On a per-capita basis, the Bay State ranked third in reliance on income taxes in 2002, behind New York and Maryland. At a rate of 5 percent, the Massachusetts sales tax is in the middle of states that tax purchases, but it exempts more necessities (food, clothing) than other states do. The Bay State also prohibits local sales taxes, which are common elsewhere in the United States. As a result, Massachusetts ranks 44th in revenue generated per capita by sales and excise taxes.

Reliance on property taxes is also high here, and growing relative to the nation as a whole. Massachusetts ranked eighth in property tax per capita in 2002, up from 10th in 1992, with revenue from property taxes rising from 25 percent above the national average in 1992 to 40 percent above in 2002.

As a share of personal income, however, the state and local tax burden in Massachusetts, where incomes are high, is relatively low, and has been falling in relation other states. Massachusetts was 47th in 2002, down from 43rd in 2000, 37th in 1992, and 17th in 1981. (MTF estimates that tax increases passed in 2002 in response to the state's fiscal crisis would have moved us up to 46th.)

In 2002, Bay State taxpayers paid 13.2 percent of personal income in taxes and fees to state and local governments, down from 15.3 percent in 1992. Total tax burden per $1,000 of personal income dropped from 6.6 percent below the national average in 1992 to 13.4 percent below in 2002.

Health care, local aid put pressure on state budget

How these revenues (plus federal and other funds) get spent by state and local governments has changed substantially over the last decade or so. In the 1990s, the state committed to a substantial expansion of aid to local schools as a result of the Education Reform Act of 1993, with school aid rising from 10 percent of the state budget in fiscal 1992 to 15 percent in 2001, much of it going to the poorest communities with the neediest children.

Rising health care costs have also claimed an increasing share of state spending, especially since the recession, and consequent revenue shortfall, struck in 2001. As the state budget grew from $22.8 billion in fiscal 2001 to $28.2 billion proposed by Gov. Romney for fiscal 2007 (an actual decline of 0.5 percent in real dollars), Medicaid and other types of health-care assistance for the poor grew from 21 percent of the state budget to 27 percent — an increase of 25 percent in inflation-adjusted dollars. Over the same period, non-school aid declined by 18 percent, adjusted for inflation; even school aid, which was partially protected from cuts, fell 5 percent in real terms, according to MTF.

But municipal government was feeling the squeeze even before this recent drop in local aid. Ever since the passage of Proposition 2½ in 1980, property taxes — the principal source of revenue for local government — have been limited to 2.5 percent of total property value, and annual increases in the overall property tax levy limited to 2.5 percent (not counting property tax revenue from new growth). Some 3,600 overrides to exceed the Prop. 2½ limits for operating funds have been placed on local ballots since 1983, with 40 percent gaining approval, along with two-thirds of roughly 3,000 proposed debt exclusions, which exempt capital projects from these limits.

Overall, per-capita, local-source revenue for municipalities grew at a rate of just 2 percent per year, adjusted for inflation, from 1985 to 2004, according to the Municipal Finance Task Force chaired by Sovereign Bank New England Chairman John Hamill; and overall municipal spending has grown 1.3 percent per year after inflation from 1987 to 2004. Spending on schools rose from 46 percent of local budgets in 1987 to 50 percent in 2004, while fixed costs (including health insurance for municipal employees) and debt service increased from 13 percent of municipal spending to 19 percent. On the other hand, public works spending fell from 15 percent of local budgets to 9 percent.

The Municipal Finance Task Force and MTF have both called for a fixed system of revenue sharing, with 40 percent of state tax revenue dedicated to supporting local services, in place of the current local aid system, which is determined annually. When fully phased in, this system would provide $1 billion more in aid to municipalities.

But after several years of fiscal difficulty, local aid will not be the only category of state spending where pent-up demand will put pressure on the state budget. Public higher education, for instance, was also cut deeply in recent years, with funding down 27 percent in real terms from its peak in 2001 to the proposed 2007 budget. A legislative package is pending that would devote $400 million to beefing up the state colleges and university over several years. And there will be a call for expanded services in areas such as early childhood education, for which the state created a new agency in 2005.

Looking for relief

The return to fiscal stability will also renew calls for tax relief. Several of the tax increases and tax-cut revocations passed in 2002 (including a reduction in the personal exemption) are already being phased out according a pre-set schedule, but some (restoration of the charitable-gift deduction passed by voters in 2000) are not due until 2014. Much political attention will be paid to the question of cutting the personal income tax rate from 5.3 percent to 5 percent, a reduction mandated by voters in 2000 but suspended as part of the 2002 tax package. The tax cut would cost the state $610 million.

There may also, for the first time in the post-Prop. 2½ era, be new calls for property tax relief. As the values of residential properties have risen much more rapidly than those of commercial properties, tax bills for homeowners have been mounting despite Prop. 2½ restrictions. According to the Municipal Finance Task Force, in cities and towns that lack residential exemptions (all but 11 communities), the average single-family tax bill rose from $2,679 to $3,589, or 36 percent, from 2000 to 2005.

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State House News Service
Monday, May 1, 2006
Senator gives seniors tips on lobbying,
says there's "plenty of money"


About 125 seniors rallied here today, demanding a constitutional guarantee to adequate health care and policy changes designed to make sure their access to prescription drugs is not impeded.

Sen. Mark Montigny (D-New Bedford) encouraged senior citizens who traveled to Beacon Hill in buses to anticipate concerns from lawmakers about being able to afford the high cost of the legislative agenda put forward by the Massachusetts Senior Action Council.

The agenda includes advancement of a constitutional amendment guaranteeing adequate and affordable health care, an extension through 2006 of the "first refill" provision under the Medicare Part D prescription program, "full funding" of Prescription Advantage at $68 million, passage of a proposed compromise on nurse "safe staffing" legislation, more funding for home care and housing vouchers, and supports for the personal care attendant industry.

Seniors celebrated the inclusion in this year’s House budget of restoration of dental and eyeglass coverage under MassHealth.

Montigny urged seniors not to settle during face-to-face lobbying for a "kiss on the cheek" or a "handshake" and to force lawmakers to commit to a "yes" or "no" vote on the constitutional amendment.

The former Senate Ways and Means Committee and Health Care Committee chairman said he learned a few things during his stint as the Senate’s chief budget maker.

"You find out where all the bodies are buried within the line items," said Montigny. "You find out that even in the budget crisis that we have now come through and grown out of, when everyone is telling you – as they will today in this building – that there’s no money or that there’s not enough money, just simply say 'Save it from someone else.'" Montigny said there is "plenty of money" to pay for the council’s agenda. "It just means you have to sacrifice and say ‘no’ to other priorities that are less important and if you just look at the 1,200 line items, there’s a lot of them."

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State House News Service
Advances - Week of May 1, 2006
[Excerpt]


Spending and taxes continue to command attention this week as an enlarged House annual spending plan moves from the House to the Senate, and the state gets the latest snapshot of its tax collection picture.

Last week, the House wrapped up its annual proceedings after adding $190 million in new spending to the $25.3 billion budget endorsed by its Ways and Means Committee. It would be inaccurate to call it a debate, as all of the difficult decisions were made outside of public view. The deliberations defied the spirit of openness that House Speaker Salvatore DiMasi committed himself to two years ago, but few members of the House appeared ruffled by the lack of debate and most felt they had a fair chance to argue for their priorities, albeit in a private rather than a public setting.

But even supporters of the process joined detractors in agreeing that the deliberations were long and boring, marked by recesses that lasted hours and featured reps and staff engaging in small talk, waiting for their appointed leaders to deliver "consolidated" amendments.

One such amendment, adopted on voice vote and without explanation, tacked the bulk of the large job creation and capital spending bills that the House approved last year onto the budget. Both of those bills have been hung up for months in conference committees.

"At least we'll be able to have a couple of bites at the apple," Rep. Daniel Bosley (D-North Adams) said Friday afternoon.

Senate leaders have already indicated they intend to propose more Chapter 70 education aid than either Gov. Mitt Romney or the House. Details of the Senate's Chapter 70 plan are expected this week.

While job growth is weak in Massachusetts, it's clear that as the election approaches and tax revenues continue to rebound, the Legislature is in full-on spending mode.

Senate leaders are scheduled to release their budget proposal on May 24, Senate President Robert Travaglini said Friday. Travaglini also indicated bills dealing with seat belt law enforcement and access to needles without prescriptions are on the Senate agenda.

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The Boston Herald
Tuesday, May 2, 2006

Government's role not always in driver's seat
By Virginia Buckingham


Fellow citizens, it is up to you. The Legislature and Gov. Mitt Romney are on the verge of taking away one more of your rapidly diminishing freedoms. Your calls, your e-mails, your opposition is the only thing standing in the way of handing police the power to pull you over for whatever reason they choose, under the guise of enforcing the state's seat belt law.

A primary enforcement seat belt law passed already in the House by a vote of 76-74. Breaking with his GOP predecessors, Romney says he supports primary enforcement. Senate President Robert Travaglini bumped the issue to the top of his priority list and promised a vote as soon as this week.

This is not a debate about whether you should wear seat belts. You should. It is not a debate about whether lives will be saved if seat belt use increases. They will (a whopping 23 people, by one count.)

This is a debate over the proper role of government in regulating individual behavior that impinges on the rights and freedoms of no one else.

OK, Massachusetts is no Idaho where all those smallest-government-possible types hang out. But can't we somewhat emulate, if only in protecting our freedom to drive untethered, neighboring New Hampshire?

Consider: In Massachusetts, as a result of either federal, state and local laws, court rulings or a combination of the above, you may not smoke in a restaurant or, as the Supreme Judicial Court affirmed, in a VFW. You not only must leave the state to use a slot machine, you'd better check with a lawyer before holding a Texas Hold 'Em tournament to benefit a charity.

You must have car insurance, homeowner's insurance and soon health insurance. You must read at the bottom of every restaurant menu the unappetizing notion that undercooked food may sicken you. If you want to buy a pack of Sudafed at CVS, you must register your purchase with the clerk. Until recently, if you didn't finish a bottle of wine at a restaurant, it would get poured down the drain. Soon, you can take it home if you package it in something even Harry Houdini couldn't undo, and here, in the cradle of liberty, this counts for progress. You can't buy beer and wine at most supermarkets or mail-order your favorite wine from any vineyard you'd like.

If you want your kid to run around the yard with a sparkler on the Fourth of July or set off firecrackers for your childrens' delight, you'd better hope your neighbors adopt a "don't ask, don't tell" policy.

Your second graders can learn about kings marrying kings in school without your permission while your 16-year-old babysitter may soon lose the privilege of driving, because the Legislature thinks it, not the teenager's parent, can better determine readiness and responsibility.

Your private land can be taken by eminent domain under a better economic use standard determined by the U.S. Supreme Court.

You pay obscene excise taxes every year just for owning a car and tolls for driving on highways you already paid for. And if you haven't gotten to the hardware store for your now mandatory carbon monoxide detector, beware.

Do you happen to be a landlord and want to evict a tenant? Forgive me for laughing at the naivete of assuming you should have the final say over the management of your own investment.

I've run out of room to list other ways government at all levels unnecessarily limits freedom. If you're curious about where you fit on the freedom (and political) spectrum, there's an online quiz I took yesterday, which, not surprisingly, put me in the libertarian camp. Check it out at www.self-gov.org.

But you don't have to lean libertarian to stand up and just say no to this particularly intrusive expansion of government power. Do so by contacting Senate President Robert Travaglini's office at 617-722-1500 (Robert.Travaglini@state.ma.us) and Gov. Mitt Romney at 617-725-4000 (www.mass.gov, click on the "contact governor" link).

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