CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Wednesday, May 3, 2006

Tax Freedom Day news conference:
the media massages the message


A day after the state set a new record for monthly tax collections, Governor Mitt Romney and Lieutenant Governor Kerry Healey used the occasion of Tax Freedom Day in Massachusetts to call on the Legislature to roll the income tax rate back to 5 percent.

According to the Washington, D.C.-based Tax Foundation, which computes Tax Freedom Day each year, Massachusetts residents must work a week longer than the average American to meet their overall tax burden. The National Tax Freedom Day was April 26, but Massachusetts residentsí total tax burden was not fulfilled until today....

"It may be Tax Freedom Day, but thereís no reason for celebration in Massachusetts," Romney said. "Next year, Iíd like to see Tax Freedom Day in Massachusetts arrive a little bit earlier and the way to make that happen is by reducing the income tax rate to 5 percent."

Said Healey: "With state tax receipts continuing to exceed projections, now is the perfect time to honor the will of the voters and roll the state income tax back to 5 percent. We can afford to return more money to the people who have earned it. Letís give a boost to family budgets across Massachusetts."

Barbara Anderson, executive director of Citizens for Limited Taxation, which placed the rollback on the 2000 ballot, highlighted the fact that it has been 17 years since the "temporary" income tax increase was passed to address an earlier fiscal crisis. "With record state revenues, Tax Freedom Day 2006 is a great day to demand the restoration of our traditional five percent income tax rate," she said.

The Commonwealth of Massachusetts
Executive Department
May 2, 2006
News Release: Amid record revenues,
Romney and Healey renew call for tax cut


The Legislature's tax revenue estimates for the current fiscal year could wind up falling $1.5 billion short of reality, Gov. Mitt Romney said Tuesday as he renewed demands for legislators to comply with the voter-approved income tax rollback to 5 percent.

Echoing remarks made earlier in the day by his administration's top budget official, Romney said tax revenues are on pace to exceed the fiscal 2006 forecasts of $17.1 billion, which shaped last year's budget deliberations, and to outdistance his own, more optimistic predictions by up to $1.1 billion.

"How can one continue to argue that we're in fiscal crisis and that we can't afford to do what the citizens voted for us to do? I think that argument is hollow and it is time for our Legislature to take action to do what the citizens voted for ... and what leaders in both parties have called for," Romney said.

Earlier, the rollback supporters found an ally in a member of the Democratic Senate leadership.

Sen. Mark Montigny, co-chair of the Committee on Bonding, Capital Expenditures and State Assets, and the former chair of the Ways and Means committee, said he'd grown frustrated explaining how Beacon Hill manages its finances.

"We can't even have a straight-faced conversation with constituents about spending because they think it all goes into that corrupt hole," the New Bedford Democrat said....

Romney's press conference at the Hampshire House on Beacon Street was timed to the state's "tax freedom day," the date in the calendar when average taxpayers have earned enough to fulfill their tax burdens. Romney cited statistics reporting that Bay State residents must work nearly a week longer than the national average to rake in the equivalent of their tax payout, which includes federal, state, and local taxes.

Senate Minority Leader Brian Lees (R-E. Longmeadow) promised to "fight" in the Senate for the tax cut's inclusion in the budget. Lees said support for the income tax rollback had gathered steam, pointing to former Senate President Thomas Birmingham's comments last October that the Legislature should cede its opposition to lower taxes in light of the electorate's 2000 referendum vote.

State House News Service
Tuesday, May 2, 2006
Romney: Tax revenues may beat estimates
by $1.5 billion


Asked about the gas tax by a reporter at a press conference arraigned by Romney to renew his call for a state income tax cut, Healey, a Republican candidate for governor, said she disagreed with Romney's opposition to a temporary waiver of the gas tax....

The two found common ground on the familiar issue of rolling the state income tax rate from 5.3 percent to 5 percent. Voters approved the cut in 2000, but the lawmakers froze it at 5.3 percent as the state's finances collapsed.

Romney said lawmakers can no longer make that argument. In April, the state saw its largest collection of taxes in a single month ever.

"I don't know how anyone can argue that Massachusetts continues to endure a fiscal crisis," he said....

Noah Berger, executive director of the Massachusetts Budget and Policy Center, disagrees with the tax cut, saying the state should put money back into services first.

"As the economy begins to recover, perhaps the state should reverse the damage done by the last round of tax cuts before enacting another very expensive tax cut," he said.

Associated Press
Tuesday, May 2, 2006
Romney, Healey part ways
on rollback of state gas tax


Chip Ford's CLT Commentary

The Library Room of the Hampshire House was packed with members of the media yesterday afternoon at 3:oo pm as the governor's news conference began; reporters and cameras surrounded us.  Governor Romney spoke first, followed by Lt. Governor Healey, Barbara Anderson, House Minority Leader Brad Jones (R-North Reading) and Senate Minority Leader Brian Lees (R-East Longmeadow).  All called for an income tax rollback now, specifically in light of the surplus state revenue (our tax overpayments) pouring in and piling up again (See yesterday's CLT Update, "Record revenue reported for Tax Freedom Day in Mass.").

The Boston Herald had no report of the news conference; the Boston Globe carried a limited version of the Associated Press report, "Healey, Romney at odds on gas tax rollback."  The full AP report was titled "Romney, Healey part ways on rollback of state gas tax," but at least it mentioned the purpose for which the news conference was called.

Only the State House News Service published a report that accurately reported our news conference, which is why it's so worthwhile that CLT -- and anyone who needs to know what's happening on Beacon Hill -- subscribes to its service.

And why it's important that we be there, where and when it happens, so that we can report to you.

Both state Representative Brad Jones and state Senator Brian Lees stressed that it's very important that your state rep and senator hear from you, personally.  They agreed that -- though they don't believe it -- they've heard over and over again from their "colleagues" in the Legislature that it's not a hot issue, that none have heard from their constituents that this is an important issue.  To succeed, our allies need a groundswell of pubic opinion, now.

The next move to finally roll back the income tax rate all the way, to keep the 17-year old promise to return to 5 percent and to respect disgusted voters' 2000 mandate, comes in the state Senate, very soon.  If you're going to act -- if you want to see this happen -- now is the time to find and call your state senator.

Act now, or forever hold your peace.  They need a "groundswell"?  Well then let's give it to them -- or live with a permanent tax hike forever.

For more photos or enlargements of the news conference
CLICK HERE

Chip Ford


The Commonwealth of Massachusetts
Executive Department
May 2, 2006

News Release
Amid record revenues, Romney and Healey renew call for tax cut


A day after the state set a new record for monthly tax collections, Governor Mitt Romney and Lieutenant Governor Kerry Healey used the occasion of Tax Freedom Day in Massachusetts to call on the Legislature to roll the income tax rate back to 5 percent.

According to the Washington, D.C.-based Tax Foundation, which computes Tax Freedom Day each year, Massachusetts residents must work a week longer than the average American to meet their overall tax burden. The National Tax Freedom Day was April 26, but Massachusetts residentsí total tax burden was not fulfilled until today.

The Tax Foundation estimates the average Massachusetts taxpayer must work four months and a day to pay their full tax burden of $16,427. So, on May 2, Massachusetts taxpayers stop working to pay their taxes and start working for themselves. The Foundationís annual study includes all federal, state and local taxes.

"It may be Tax Freedom Day, but thereís no reason for celebration in Massachusetts," Romney said. "Next year, Iíd like to see Tax Freedom Day in Massachusetts arrive a little bit earlier and the way to make that happen is by reducing the income tax rate to 5 percent."

Said Healey: "With state tax receipts continuing to exceed projections, now is the perfect time to honor the will of the voters and roll the state income tax back to 5 percent. We can afford to return more money to the people who have earned it. Letís give a boost to family budgets across Massachusetts."

"Itís been almost six years since voters across the state overwhelmingly told us to roll the income tax back to 5 percent," said House Minority Leader Bradley H. Jones Jr. "With state tax revenues continuing to exceed expectations, there is no excuse for the Legislature to continue delaying action. The time has come for us to carry out the peopleís wishes and put a plan in place to get us back to 5 percent."

Yesterday, the Department of Revenue reported that tax collections in April totaled $2.215 billion, a new monthly record. Year-to-date revenues are now exceeding the original benchmark set last spring by $837 million.

"That money does not belong to the government," Romney said. "Thatís the taxpayersí money and we can clearly afford to let them keep it."

In 2000, voters overwhelmingly passed a referendum to reduce the income tax rate to 5 percent, but the Legislature froze the rate at 5.3 percent in the midst of a fiscal crisis. Now that the crisis is over, the Legislature should honor the will of the voters.

Barbara Anderson, executive director of Citizens for Limited Taxation, which placed the rollback on the 2000 ballot, highlighted the fact that it has been 17 years since the "temporary" income tax increase was passed to address an earlier fiscal crisis. "With record state revenues, Tax Freedom Day 2006 is a great day to demand the restoration of our traditional five percent income tax rate," she said.

###

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State House News Service
Tuesday, May 2, 2006

Romney: Tax revenues may beat estimates by $1.5 billion
By Jim O'Sullivan


The Legislature's tax revenue estimates for the current fiscal year could wind up falling $1.5 billion short of reality, Gov. Mitt Romney said Tuesday as he renewed demands for legislators to comply with the voter-approved income tax rollback to 5 percent.

Echoing remarks made earlier in the day by his administration's top budget official, Romney said tax revenues are on pace to exceed the fiscal 2006 forecasts of $17.1 billion, which shaped last year's budget deliberations, and to outdistance his own, more optimistic predictions by up to $1.1 billion.

"How can one continue to argue that we're in fiscal crisis and that we can't afford to do what the citizens voted for us to do? I think that argument is hollow and it is time for our Legislature to take action to do what the citizens voted for ... and what leaders in both parties have called for," Romney said.

Earlier, the rollback supporters found an ally in a member of the Democratic Senate leadership.

Sen. Mark Montigny, co-chair of the Committee on Bonding, Capital Expenditures and State Assets, and the former chair of the Ways and Means committee, said he'd grown frustrated explaining how Beacon Hill manages its finances.

"We can't even have a straight-faced conversation with constituents about spending because they think it all goes into that corrupt hole," the New Bedford Democrat said.

Much of the excess revenues, propelled by April's new monthly record for tax collections, "are already spoken for" in pending spending initiatives like a capital supplemental spending bill and dueling economic stimulus packages, Secretary of Administration and Finance Thomas Trimarco cautioned after a hearing on capital expenditures earlier in the day.

Romney's press conference at the Hampshire House on Beacon Street was timed to the state's "tax freedom day," the date in the calendar when average taxpayers have earned enough to fulfill their tax burdens. Romney cited statistics reporting that Bay State residents must work nearly a week longer than the national average to rake in the equivalent of their tax payout, which includes federal, state, and local taxes.

Senate Minority Leader Brian Lees (R-E. Longmeadow) promised to "fight" in the Senate for the tax cut's inclusion in the budget. Lees said support for the income tax rollback had gathered steam, pointing to former Senate President Thomas Birmingham's comments last October that the Legislature should cede its opposition to lower taxes in light of the electorate's 2000 referendum vote.

At the State House hearing, Trimarco said the administration planned to release later this month a 20-year transportation plan, and in June to roll out its five-year capital spending plan.

Several times during the hearing, Montigny decried the state's resource management, and worried that a program geared to control the costs of building and repairing schools could become the next Big Dig in terms of cost overruns and waste.

Trimarco acknowledged "a concern about the" Massachusetts School Building Authority, the quasi-public agency created to vet local requests for state renovation and construction funds, and suggested some school districts are overly ambitious in their funding goals.

"There are several communities that really do believe that they're going to build a Taj Mahal on our nickel and dime," the secretary said.

Montigny went further, saying, "That is the next problem that's sitting there waiting to explode, is the school building assistance thing."

The executive director of the MSBA, Katherine Craven, told the News Service that the school construction spending problems were being processed into the past by her agency.

"I think it already exploded, and we're here to sort of clean that up," Craven said.

A moratorium on all new projects, set in June 2003, will run through June 2007, said Craven, at which point the state is scheduled to reopen for bids with a new, fixed budget of $500 million per year.

Montigny's barbs were not limited to decisions made outside the Legislature. In discussing where some of the excess revenues are marked to be spent, he called a Senate-backed plan to upgrade Longwood and Fenway infrastructure "a $55 million boondoggle for the Red Sox."

And the New Bedford Democrat blistered what he portrayed as a culture that grants lobbyists unseemly influence over efforts to trim from the budget fat that benefits well-heeled interests.

"We somehow never quite get there when the right people are hired to walk into this building and spread the magic," Montigny said, later saying that the State House offered "a full employment program" for lobbyists and lawyers.

"It's a great place to make money," Montigny said.

Trimarco said, and an Executive Office of Transportation spokesman confirmed, that the state plans to release the final version of the long-term transportation plan later this month. The blueprint, which the administration initially announced in March 2005, has undergone nearly a year of oft-contentious public review.

"We are looking at including rail to Worcester, also to New Bedford and Fall River, and there's no question that this is the time, with gasoline prices being what they are Ö and we are looking very closely about expanding commuter rail in the Commonwealth," Trimarco told the committee.

Lt. Gov. Kerry Healey and Minority Leader Bradley Jones (R-N. Reading), both longtime advocates of whittling the income tax rate, joined Romney at the Hampshire House, with Healey, a Republican candidate for governor, splitting from her boss over the question of a temporary suspension of the state gasoline tax.

Romney has pushed for long-range solutions to fuel prices like more energy efficient vehicles.

Healey is concerned about the impact on low-income residents of climbing gasoline prices, she said Tuesday. "I think this is a place where the governor and I may part company," Healey said.

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Associated Press
Tuesday, May 2, 2006

Romney, Healey part ways on rollback of state gas tax
By Steve LeBlanc


Lt. Gov. Kerry Healey said Tuesday she would consider suspending the state's gasoline tax to give drivers a break -- a position that again puts her at odds with Gov. Mitt Romney as she appeals to voters ahead of the fall elections.

Asked about the gas tax by a reporter at a press conference arraigned by Romney to renew his call for a state income tax cut, Healey, a Republican candidate for governor, said she disagreed with Romney's opposition to a temporary waiver of the gas tax.

"I think this is a place where the governor and I may part company. I am very concerned about the impact of higher fuel costs on people's ability to get to work, on their individual budgets," she said. "I would consider the temporary suspension of the gas tax especially if we can't get other tax progress."

Moments earlier, Romney -- who is not seeking re-election, but weighing a campaign for the GOP presidential nomination in 2008 -- said suspending the state's 21-cents-per-gallon state gas tax would only encourage more gas consumption. The state brings in close to $600 million a year from the gas tax.

Romney said drivers have to get used to the fact that prices likely aren't coming down dramatically. He said drivers should pressure auto manufacturers to come up with more fuel- efficient vehicles.

"I am very much in favor of people recognizing that these high gasoline prices are probably here to stay and that the appropriate action for us to take is to find ways to find fuel conservation," he said.

Christy Mihos, an independent candidate for governor, said he also favored waiving the tax.

"People are looking for any relief whatsoever," he said.

Democratic candidate Chris Gabrieli sided with Romney, saying he supports "a long term solution that focuses on renewable energy and reducing our dependence on foreign oil."

Calls to the two other Democratic candidates for governor -- Deval Patrick and Attorney General Thomas Reilly -- were not immediately returned Tuesday.

Asked in a recent debate about whether they would ever cut the gas tax, Patrick said, "I'm in favor of cutting that and any other tax that makes sense." In response to the same question, Reilly said, "I'm in favor of getting any relief I can for average families."

House Republican leader Brad Jones, R-North Reading, plans to file a bill to give drivers a three-month break from the tax this summer.

Healey spokeswoman Amy Lambiaso said there are enough new revenues flowing into the state to plug the hole if the state suspended the gasoline tax.

It's not the first time Healey and Romney have publicly parted ways as she tries to garner support among independent voters and moderate Democrats.

Romney opposes civil unions for gay couples. Healey supports them. He vetoed a bill designed to encourage stem cell research in Massachusetts. She supports stem cell research. Romney tried to exempt Catholic and private hospitals from a new state law requiring that they offer emergency contraception to rape victims. Healey supported the law.

The two found common ground on the familiar issue of rolling the state income tax rate from 5.3 percent to 5 percent. Voters approved the cut in 2000, but the lawmakers froze it at 5.3 percent as the state's finances collapsed.

Romney said lawmakers can no longer make that argument. In April, the state saw its largest collection of taxes in a single month ever.

"I don't know how anyone can argue that Massachusetts continues to endure a fiscal crisis," he said.

Reilly and Mihos have both called for an immediate rollback to 5 percent. Gabrieli has called for a gradual rollback while Patrick has said the state can't afford to cut now.

Noah Berger, executive director of the Massachusetts Budget and Policy Center, disagrees with the tax cut, saying the state should put money back into services first.

"As the economy begins to recover, perhaps the state should reverse the damage done by the last round of tax cuts before enacting another very expensive tax cut," he said.

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The Boston Globe
Wednesday, May 3, 2006

Healey, Romney at odds on gas tax rollback
By Steve LeBlanc, Associated Press


Lieutenant Governor Kerry Healey said yesterday that she would consider suspending the state's gasoline tax to give drivers a break, a position that again put her at odds with Governor Mitt Romney as she appeals to voters ahead of fall elections.

Asked about the gas tax by a reporter at a press conference arranged by Romney to renew his call for a state income tax cut, Healey, a Republican candidate for governor, said she disagreed with Romney's opposition to a temporary waiver of the gas tax.

"This is a place where the governor and I may part company. I am very concerned about the impact of higher fuel costs on people's ability to get to work, on their individual budgets," she said. "I would consider the temporary suspension of the gas tax especially if we can't get other tax progress."

Moments earlier, Romney -- who is weighing a campaign for the GOP presidential nomination -- said suspending the 21-cents-per-gallon state gas tax would only encourage more gas consumption.

"I am very much in favor of people recognizing that these high gasoline prices are probably here to stay and that the appropriate action for us to take is to find ways to find fuel conservation," he said.

Christy Mihos, an independent candidate for governor, said he favored waiving the tax. "People are looking for any relief whatsoever," he said.

Calls to the three Democratic candidates for governor -- Chris Gabrieli, Deval Patrick, and Attorney General Thomas Reilly -- were not immediately returned.

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