State House News Service
Senate Session -
Wednesday, May 24, 2006
The Senate convened at 11:06 am, Sen.
RECESSES: The Senate recessed immediately. Sen.
Moore said the time for returning would be left to the call of the
RETURNS: The Senate returned at 11:26 am, Sen.
Travaglini presiding. . . .
FISCAL 2007 BUDGET: Question came on a Ways and
Means amendment substituting S 3 for the House-approved fiscal 2007
budget. The Senate Ways and Means budget totals $25,434,192,006. . . .
TAX ROLLBACK: Lees amendment 10 tax rollback
three-year plan REJECTED
TAX ROLLBACK TIED TO LOCAL AID: Question came on Lees amendment
11 tax rollback. Senators and staff flocked to the rostrum for a large
Sen. Panagiotakos and Havern offered an amendment to the
Sen. Panagiotakos said this amendment decreases the income tax
rate to 5.0 when fiscal 2002 local aid levels are reached for Chapter
70, additional assistance and the Lottery. It would be 5.2 percent in
fiscal 2007, 5.1 in fiscal 2008 and 5.0 for fiscal 2009. This would
cost $325 million in fiscal 2008 and $517 million in fiscal 2009.
We thought it was prudent to use the same trigger
as last year. In this budget we have reached those levels for Chapter
70 and the lottery but not for additional assistance.
The Senate has been very, very proactive in tax
cuts over the last few years. We did an investment tax credit, a sales
tax holiday, R&D tax credit transfer, a low-income housing credit, a
computer tax deduction, a second sales tax holiday, heating and energy
relief, motion picture industry tax credits and increasing personal
exemptions and the Peterson case.
The economy is not kicking up the way it was in the
90s. We do want to get the income tax reduced. The important thing is
we have hospitals and schools and local cities and towns crying out
for more revenue to provide services we need them to provide. Until we
get to those numbers, especially with local aid, itís imprudent to go
right from 5.3 to 5.0.
Sen. Tisei said this is the same amendment Sen. Tarr and myself
filed last year that the Senate ended up supporting. I would love to
see it reduced immediately. There are a lot of cities and towns going
through some difficult times. This budget does an awful lot for
communities to get them back on their feet. You do have a lot of
communities that are not at the 2002 level that do need to get back
there. There are still police, fire and teachers being laid off.
Our partners in government need to be able to get
back on their feet and get healthy and not increase property taxes
every year and cut back on things that really are essential services.
Sen. Tisei requested support for a roll call. It was there.
Sen. Tarr said this amendment moves us down the path toward
reducing the income tax and responding to all the individual interests
and the people who pay the bill through their taxes.
This is an innovative mechanism that evolved in
this chamber and which I hope will spread to our colleagues in the
other chamber. We are balancing municipal interests and the
constituency we all serve, the taxpayers.
This is a bipartisan effort and I think itís one
where we will be in good stead in terms of tax policy and the
prosperity of the Commonwealth.
Sen. Montigny said itís not often that I echo anyone to my
right here. I will not cede this issue to the Republicans but thank
them for their cooperation.
We will get to 5.0. The best way to do it is
reasonably and responsibly and in a bipartisan way.
During the gubernatorial campaign, there might be
revisionist history from the Republican nominee and our candidates.
This majority in the Senate with the House brought responsible and
extensive tax cuts forward through the 90s. Revenue were exceedingly
strong and we look at ways to cut taxes in progressive ways and we cut
them by billions of dollars.
The governor at the time after working to cut
billions of dollars decided that in the middle of a revenue crisis Ė
revenues literally fell off a cliff Ė the governor said donít worry we
can cut this rate and we wonít hurt local aid or health care and your
property taxes wonít go up.
Every member of the Senate has listened to people
affected adversely, particularly middle class taxpayers. If you look
at the triggers in this amendment, I think we have done the right
thing. If you look at revenues now, we are not out of the woods if you
look at the cuts but we are doing very well and if the trends
continue, we are going to see a significant surplus in this fiscal
year and next fiscal year. That is the time you restore essential
programs and return this money to the taxpayers. The responsible place
to do tax-cutting policy is in this body and our sister branch and to
do it in a responsible way.
Sen. Brown said the voters spoke loud and clear with respect to
reducing the income tax. I am not necessarily happy with the amendment
but will support it. Anything is better than nothing at this point.
Being a business owner, more money in peopleís
pockets begets more money in the stateís coffers. To move on for
today, I want to congratulate the meeting of the minds to get this
done in some respect. I am disappointed we didnít adhere to the will
of the voters.
Sen. Lees said itís a little bittersweet here. This is a little
bit of a chicken way out of this. At least we have a vote in this
chamber. This is better than nothing.
The Republicans are all on board on this. I think
the voters are getting a little bit angry seeing record revenue and if
we do not do something now Ė this is a baby step as opposed to a step
in my mind Ė when can we be trusted?
They took a vote and it was overwhelming. I donít
understand how you can say to the voters of your district we donít
care what you think.
We will be ruled out of order on some amendments.
This is a baby step, not a real big step. I disagree with some
organizations out there.
In this case, CLT is absolutely right to be
steadfast. I am not their poster child. They pick on me more than
anyone in this chamber and thatís fine. People lined up to lower the
income tax. Record amounts of income are coming in and we ought to do
it. I donít like that we added the word inflation.
Itís bittersweet but we will take any victory we
can take. At least we are getting somewhere.
Sen. Creedon of Brockton said this is really a crowning
achievement and a tribute to his bipartisanship. The senator from
Quincy and I have been greatly concerned about the impact of the
property tax on the elderly. We agreed that another amendment was
better than ours. The amendment here really gets at the heart of the
matter. I urge our conference committee to be fierce in their defense
of this amendment.
Sen. Morrissey said MTF is non-partisan and down the middle.
They recently said in regard to the governorís plan to get to 5
percent there are concerns about the stateís ability to manage the
$700 million impact of this cut.
This addresses those concerns. They note that state
finances are getting stronger. It may be possible to provide relief
sooner than under the 2002 law and this amendment does that. It also
provides fiscal protections. Many of us have amendments that spend
money. They take money away from potential tax relief. Last year we
spent more than $100 million on tax relief. We have to be mindful of
striking that balance.
Sen. Murray said she hopes the amendment is adopted. We have to
remember that this does it in the right way by not harming anybody or
programs or services or the North Shore hit very hard by storms.
Some stabilization money is going to have to come
out. About 45 bridges and roads must be reconstructed. About 10,000
people will have to get money from FEMA. Their homes have been
destroyed. This is the right way to do this. Be cautious that there
are going to be a lot of requests for monies in the stabilization fund
with these natural disasters that are afflicting us, including the one
last year in the western part of the state. There are a lot of people
Sen. Tolman said we have to get to 5 percent in a responsible
manner. We have done that with this amendment. We make sure important
programs are in place and donít just take $700 million in the budget.
It troubles me when people say we donít respect the
votersí will. We have to do that while using our judgment.
Municipalities have talked about one thing: more local aid. We are
acting very responsible. I applaud all parties for reaching a
BY A ROLL CALL VOTE OF 39-0, AMENDMENT
Amendment, as amended, ADOPTED.