The Boston Globe
Sunday, October 5, 2008
It's time for a 'blunt budget ax'
By Jeff Jacoby, Globe Columnist
When it comes to stopping
Question 1 - the ballot initiative to abolish the Massachusetts income
tax - the defenders of the status quo will spare no rhetorical expense.
Months ago, Governor Deval
Patrick called the prospect of Massachusetts without an income tax "a
dumb idea" reminiscent of Darfur. The National Education Association,
one of the public-employee unions bankrolling the Vote No campaign,
condemns Question 1 as "reckless." Michael Widmer, head of the
business-backed Massachusetts Taxpayers Foundation, labels it "a
calamity." To the Globe's editorial board, it's "a blunt budget ax."
Equally scathing is the Berkshire Eagle's description: "devastating . .
. simplistic . . . cynical . . . a recipe for disaster." Robert Haynes,
president of the state AFL-CIO, foresees "the end of the Commonwealth of
Massachusetts as we know it."
To their credit, most of
the measure's opponents have steered clear of the incendiary type of
language used by Frederick Rushton, the Worcester city councilor who has
slammed Question 1 as an "urban lynching by statute." But there are
still four weeks until Election Day, and the anti-repeal forces will not
lack for energy or imagination in making sure their message is heard.
If only they had put a
fraction of that energy and imagination into making sure our message was
heard.
Yes, Question 1 is a "blunt
budget ax." As a last resort, that is sometimes the only tool that can
get a job done. For years Massachusetts taxpayers have been seeking tax
relief by more temperate means. And what have patience and moderation
gotten us?
In 2000, tired of waiting
for Beacon Hill to repeal the "temporary" tax hikes of 1989-90, we voted
overwhelmingly for a phased rollback of the income tax to its
traditional rate of 5 percent. But the Legislature froze the rollback at
5.3 percent six years ago, and there it has remained to this day.
We voted to make charitable
contributions tax-deductible. Lawmakers repealed the deduction. Incensed
after they raised taxes by $1.2 billion - "the largest tax increase in
state history," the Globe called it - 45 percent of us voted for a 2002
ballot measure to scrap the income tax. "A wake-up call," the pundits
dubbed it, but the liberal power structure that dominates Massachusetts
didn't wake up. It merely turned over and resumed dreaming of new ways
to mulct the taxpayer.
Time and again, the voters'
restraint has been repaid with disdain by a political class that seems
to believe there is no higher or better use for our money than a
government expenditure. Nothing has penetrated the politicians'
indifference to the frustration and anxiety of so many Massachusetts
residents. Maybe a blunt budget ax will get their attention.
Every few years Beacon Hill
wails that it is facing a "fiscal crisis" or threatened by a "budget
shortfall" that will mean "painful" or "devastating" cuts in government
spending. Just last week, Governor Deval Patrick's office promised
"hundreds of millions of dollars" in reduced outlays this fiscal year.
And yet, somehow, the state budget continues to bloat: It was $22
billion in 2005, $23 billion in 2006, $25 billion in 2007, and $26
billion in 2008. The fiscal 2009 budget adopted in July - the one
Patrick now claims he will cut unilaterally - totaled $28.2 billion. But
if anything in Massachusetts is certain, it is that when the books close
on the current fiscal year, state spending will have gone up by hundreds
of millions of dollars, not down.
To those who feed at the
Bay State's public trough, the rest of us exist primarily to pay taxes.
Their need for more of our income is always a given. The notion that we
might need it more than they do never seems to cross their minds. For
six years, we have watched the Legislature swell state spending by a
billion dollars or more every year. Yet the voter-mandated income-tax
rollback remains "frozen" at 5.3 percent.
Enough is enough. It's not
our job to answer to the politicians and their allies in the
public-employee unions. It's their job to answer to us. For years we've
pleaded for tax relief and fiscal responsibility; for years those pleas
have been dismissed. It's clear that nothing will change unless we force
it to. It's equally clear that only one thing will force that change: a
vote for Question 1 on Nov. 4.
The Boston Globe
Sunday, October 5, 2008
At Cradle of Liberty,
activists rally around antitax message
By Peter Schworm
More than 250 activists
rallied at Faneuil Hall yesterday, hoping to build support for a
proposal on the November ballot that would abolish the state income tax.
Supporters of Question 1,
which would eliminate the 5.3 percent tax, denounced government spending
as wasteful and said the national financial crisis and slumping economy
make it increasingly important to ease the burden on taxpayers.
"I'd rather see the people
keep their money than sending it to Beacon Hill," said Gerry Cardillo,
62, of Easton. "State spending is out of control."
Critics of the proposal
said eliminating the tax would create a fiscal disaster and force
drastic cuts to state services.
"It's no exaggeration to
say it would have devastating consequences," said Michael J. Widmer,
president of the Massachusetts Taxpayers Foundation, a business-backed
budget watchdog group. "The scale of the lost revenue, and the cuts that
would ensue, are breathtaking."
If approved, the ballot
measure would reduce tax collections by an estimated $12.5 billion, or
about 40 percent of the budget, while saving the average taxpayer about
$3,700 a year.
The activists are waging
their campaign as the state is already tightening its belt. Governor
Deval Patrick said Thursday that Massachusetts would have to make
substantial budget cuts because of lagging tax collections amid the
ongoing financial crisis.
Yet people at the rally,
including one man who held a sign that proclaimed "Bail Out Mass.
Taxpayers," said they were far more concerned about their own budgets.
"In this economy,
everybody's tight," said Ben Maitland-Lewis, 25, a small business owner
from Brighton. Led by the Committee for Small Government, the campaign
faces strong opposition from education groups, unions, and many business
and political leaders, who say the measure is fiscally reckless.
Carla Howell, the
committee's chairwoman and a former Libertarian gubernatorial candidate,
said the tax cut would leave the state with $35 billion, and that the
state could cope by streamlining operations and reducing waste. Howell
said ending the income tax would also jump-start the economy, create
jobs, and make the state "a magnet" for families and businesses.
While Howell and other
speakers whipped up the crowd inside Faneuil Hall, supporters outside
distributed T-shirts and bumper stickers to passersby, urging them to
lobby for the measure in the next few weeks by contacting their friends
and family.
Some in the crowd were
torn. Dan Goldstein, 35, a physician's assistant from Natick, said he
worried that the measure would lead to cutbacks that could threaten his
brother's job as a public schoolteacher. At the same time, he said,
taxpayers deserve a break.
"I know there's a lot of
mismanagement, but I haven't made up my mind yet," he said.
The measure calls for
cutting the tax rate in half next year and abolishing it the following
year. It would also end the tax on interest and dividends for those
living on an annuity, and end a capital gains tax on house, business,
and stock sales.
Nine other states have no
income tax - Alaska, Florida, Nevada, New Hampshire, South Dakota,
Texas, Tennessee, Washington, and Wyoming, according to the Internal
Revenue Service.
In 2002, a similar ballot
measure gained 45 percent of the vote, a level of support that stunned
many political observers.
The Massachusetts Taxpayers
Foundation will release a study tomorrow that concludes that Question 1
would result in 70 percent budget cuts for the bulk of state government,
including human services, environmental programs, prisons, courts,
colleges and universities, and aid to cities and towns, Widmer said.
But yesterday, many said
they believed the measure had a solid chance of passing. Many voters,
they said, are struggling financially and are angry at a state
government they consider unresponsive to their concerns.
Near the end of her speech,
Howell waved a state tax form in the air, then to loud applause lowered
it slowly into a shredder on the stage. When the shredder didn't work,
the audience called out for her to tear it up herself. She did, pausing
for dramatic effect between rips.
The Gloucester Times
Saturday, October 4, 2008
Times are hard; don't make it worse with Question 1
By Peter Meade
Massachusetts residents
will soon be reading and hearing a lot more about Question 1, the
referendum question on the fall ballot that would eliminate the state
income tax.
When it comes to weighing
this issue, it is worth remembering an old saying: "Don't believe
everything you read (and hear)."
In the weeks ahead, you'll
be told that Question 1 would magically put thousands of dollars in your
pocket and that somehow it would create jobs. You might also be asked to
believe that if the referendum passes, there will be no negative impact
- no jolt to critical services for children, senior citizens and working
families.
When these arguments are
presented, remember the wisdom of that old saying.
I can tell you that voting
no on Question 1 is the only sensible choice. In fact, a "no" vote is
the only way we can keep our state on the right track. As a local civic
leader, I know that Question 1 is a reckless proposal - an idea that was
put forward without regard to its consequences.
You don't have to look very
hard to see what eliminating the income tax would do or what it would
mean; the impact will be severe, and it will be felt right away.
Question 1 will cost your community millions of dollars in lost revenue
- money that now goes to the senior center, to the schools and to the
ambulance and 911 programs. We know for a fact that ambulance response
times will be longer, that the senior center's hours will be curtailed
and that we will have to lay off teachers, putting more students in
every class.
Guy Oliviera from New
Bedford knows the impact Question 1 will have on seniors. "This is just
reckless," he says. "Seniors are all on fixed incomes or limited
budgets. Our property taxes will go up. Services are going to be
eliminated. If this is passed, we are all in peril."
From a broader perspective,
Question 1 - a binding law that would take effect at the beginning of
next year - would cost the Commonwealth $12.7 billion, nearly 40 percent
of the state budget. Imagine if the company you work for was forced to
make a 40 percent cut. Or imagine having to cut 40 percent of your own
household budget overnight.
It would cause chaos. And
chaos is what will result if we fall victim to the false lure of
Question 1.
I know these are difficult
economic times. Times are certainly tough now. Question 1 would make
them worse.
Question 1 would put our
neighborhood public schools at risk. In addition to larger class sizes,
there would be cuts in after-school programs and more school closings.
Question 1 would mean fewer police officers and firefighters and more
unsafe bridges, broken roads and potholes. Environmental protection and
public transportation would suffer. Public higher education would cost
more, meaning fewer Massachusetts students have access to our state
colleges, our community colleges and the University of Massachusetts.
That's not the rhetoric of
some special interest group. It's the reality for our communities.
So when you hear the people
supporting Question 1 say they will give you thousands of dollars and
create jobs, remember that you can't believe everything you read or
everything you hear.
Times are tough, but
Question 1 would make them much, much worse.
Peter Meade is chairman
of the "No on Question 1" campaign in Boston.
The Cape Cod Times
Monday, October 6, 2008
Tax-cutting measure stirs voter passions
By David Kibbe, Ottaway Newspapers
Six years ago, a barely
regarded ballot question to abolish the state income tax nearly passed,
shocking the state's political establishment.
The income tax question is
back on the ballot this fall, but this time, it isn't sneaking up on
anyone.
Question 1 would abolish
the state's 5.3 percent income tax, taking away $12.5 billion, or nearly
40 percent of the $28.2 billion budget that Gov. Deval Patrick signed in
July.
The income tax would be cut
by 50 percent in 2009 and eliminated in 2010. It would save the average
taxpayer $3,700 when fully in place.
Labor unions are pouring
millions of dollars into an effort to defeat Question 1. The state's
business community is saying it would be a disaster. Statehouse leaders
are warning of severe budget cuts if it passes.
Dispute over budget
figure
Question 1 supporter Carla
Howell argues that state spending is actually $47.3 billion, counting an
ever growing number of "off budget" accounts like the MBTA, the
Massachusetts Turnpike Authority and School Building Assistance.
Howell, who was the
long-shot Libertarian Party candidate for governor in 2002, said $12.5
billion can be cut from the budget by targeting waste that is "marbled"
throughout the state budget. She said schools and other local services
don't have to be touched, calling them a "very small percentage" of the
overall amount.
"It really is all about
government waste," Howell said.
The business-backed
Massachusetts Taxpayers Foundation, which opposes Question 1, said total
state spending, including off-budget accounts, is $32 billion. Howell
cites a figure in a state report, but the foundation says she is double
counting some accounts, among other errors.
Michael Widmer, president
of the foundation, insists the scenario would be bleak should Question 1
pass. He said state finances would be reduced to "junk bond status."
"It would have a very, very
direct impact for most people in terms of local government services,"
Widmer said. "My belief is that over time, you'd see escalating pressure
on the property tax, either more overrides or possibly even a statewide
property tax."
Widmer said the property
tax falls disproportionately on lower- and middle-income families.
"The income tax is a fairer
tax because the wealthier pay a heavier share of it," he said.
Howell led the effort to
put the question on the ballot both times. Her Committee for Small
Government will be widely outspent.
The committee has raised
$371,000, while the union-backed Coalition for Our Communities has taken
in $1.59 million.
"Their advertising budget
is ominous, but they have a tough sell," Howell said. "They have to
convince people to part with their hard-earned money for politicians and
special interests on Beacon Hill who have been wasting that money,
handing it out in sweetheart deals and spending it on failed and flawed
programs."
Will of the voters
The ballot question would
become law if it passes. But the Legislature has ignored the will of the
voters before. It refused to fund Clean Elections and froze the last
phase of an income tax rollback that was supposed to drop the rate to 5
percent.
Political observers say
there would be too much pressure on the Legislature to not implement the
cuts if the measure passes.
Barbara Anderson, of
Citizens for Limited Taxation, which put the tax rollback on the
ballot in 2000, has endorsed Howell's effort.
"If the politicians won't
keep their promise of 5 percent, then let's go for zero," Anderson said
in a memo to CLT members.
The 2002 ballot question
drew unexpected support, and was barely defeated, 48 percent to 40
percent. Another 12 percent of voters cast blanks.
This time, the state's
three top political leaders Patrick, House Speaker Salvatore DiMasi,
and Senate President Therese Murray have been quick to call for its
defeat. Murray, D-Plymouth, said the loss of income tax revenue would
have "devastating consequences."
"There would be no local
aid, no money for schools or police or fire going to cities and towns,"
she said.
Steve Crawford, a spokesman
for the Coalition for Our Communities, which opposes Question 1, said
the budget would have to be cut back to 1995 levels.
Local vs. State taxes
Nine states have no income
tax New Hampshire, Alaska, Florida, Nevada, South Dakota, Tennessee,
Texas, Washington and Wyoming.
But many of those states
have unique revenue sources: Alaska gets 82 percent of its revenue from
oil; Nevada gets 17 percent of its budget from gaming taxes; and Florida
is heavily reliant on tourism.
Most of those states rely
more on local taxes than Massachusetts, according to the Massachusetts
Taxpayers Foundation. Some also have higher sales and property taxes
than the Bay State.
New Hampshire had a median
home property tax of $4,390, second highest in the nation, in 2007,
according to The Tax Foundation, a nonprofit research group in
Washington, D.C. Massachusetts' median home property tax was $3,328,
sixth highest in the country.
New Hampshire also ranked
second in property taxes as a percentage of income, at 5.99 percent,
while Massachusetts was ninth, at 4.07 percent, according to The Tax
Foundation.
"Anyone in Massachusetts
who owns a home in New Hampshire or has friends in New Hampshire has
heard them complain about the high property taxes," Crawford said.
Howell dismisses such
comparisons, saying opponents use selective statistics to obscure an
obvious point: Massachusetts is a high-tax state.
Counting both local and
state taxes as a percentage of per capita personal income, Massachusetts
ranked 23rd in the country this year, at 9.5 percent, while New
Hampshire was 46th, at 7.6 percent, according to The Tax Foundation.
Far from devastating
Massachusetts, Howell said, Question 1 will reinvigorate it.
"People will start moving
to this state and staying in the state and opening up businesses in this
state," she said. "We'll be far friendlier to businesses and jobs. It
will save a lot of families from home foreclosures and bankruptcies
because the high tax burden that they bear is putting many of us over
the edge."
Comparative tax burdens
Local taxes in
Massachusetts make up 39 percent of the tax burden, a figure that's less
than most states that don't have an income tax.
Alaska - The oil industry
accounts for more than 80 percent of state tax revenue, including
severance taxes and corporate income taxes on petroleum. Local taxes are
24 percent of total revenue.
Florida - Florida has a 6
percent sales tax, and collects five times more than Massachusetts in
sales tax revenue with three times the population, because of tourism.
Local revenues make up 57 percent of the state's total tax burden.
Nevada - The state has a
6.5 percent sales tax rate, and gets 17 percent of its revenue directly
from gaming. Local taxes make up 50 percent of the burden.
New Hampshire - The state
has no income or sales tax, but has one of the nation's highest property
tax burdens, based on several measurements. New Hampshire's median home
property tax - $4,390 - ranked second in the nation in 2007, according
to The Tax Foundation. By percentage of home value, it was fourth in the
nation. Local taxes are 47 percent of the tax burden.
South Dakota - This state
has the lowest tax levy in the nation. But adjusted for population, it
collects twice as much in sales taxes as Massachusetts. Local taxes are
46 percent of the burden.
Tennessee - Local taxes
account for 56 percent of all revenue. The state has a sales tax of 5.5
percent on food and 7 percent on merchandise, clothing, and services,
including software, amusements and repairs. Local taxes are 56 percent
of its tax burden.
Texas - The state has a
sales tax rate of 6.25 percent. Local revenue makes up 55 percent of all
taxes. Gas and oil taxes raised nearly $3 billion in 2007. Local taxes
are 55 percent of the tax burden.
Washington - The state has
a sales tax rate of 6.5 percent, and taxes on services like insurance,
construction, software, security and amusements. Washington ranks first
in sales tax burden, collecting roughly double what Massachusetts does
with a similar population. Local taxes are 49 percent of the tax burden.
Wyoming - With the smallest
population of any state, Wyoming gets 40 percent of its revenue from
severance taxes on minerals and 40 percent from general and selective
sales taxes. Local taxes are 44 percent of the burden.
Sources: Analysis of
U.S. Census data by The Massachusetts Taxpayers Foundation and The Tax
Foundation.
The Boston Globe
Sunday, October 5, 2008
Who needs state taxes?
By Yvonne Abraham, Globe Columnist
Come November, those
stinking state taxes could be history.
Libertarian Carla Howell
has a heroic proposal on the ballot that would nix the Massachusetts
income tax. Pull $12.6 billion from the state budget, she reckons, and
those money-grubbing bums on Beacon Hill will shape up real quick.
They'd have to, wouldn't
they? Because - poof! - half their revenues would be gone.
Not a moment too soon, I
say. I mean, geez, all they do up there on Beacon Hill is take my money.
And what do I get in return? Big Dig overruns. Giant pensions for public
employees. Pricey police details.
In fact, 41 cents of every
state dollar is wasted, according to Howell. She gets this figure not
from budget experts - or experts of any kind - but from randomly
selected voters asked for their own estimates. And that's good enough
for me.
Anyway, what better way to
persuade the pols to stop squandering my money than to withhold it from
them entirely? And I could really use the cash in these trying times.
Howell says the initiative will return an average of $3,600 to every one
of us. Yay!
OK, well, not everybody
would get $3,600. If you earn $50,000 or less, like two thirds of the
state, you would average just $850 back. But I make more than that. And
the lucky dogs who earn $100,000 or more, will get an average windfall
of $16,000.
And as Howell says, "How
much more good would that money do left in the hands of the people who
earned it?"
Exactly. So, instead of
funding ridiculous enterprises like public education, roads and bridges,
prisons, courts, healthcare, police, and fire departments, I could use
the money for something that benefits me.
For example, an enormous
flat-screen TV.
But there are a lot of
people out there trying to spoil this for me.
Mike Widmer, president of
the nonpartisan Massachusetts Taxpayers Foundation, says abolishing the
tax will cripple Massachusetts, hike property taxes, produce massive
unemployment, and cut most state programs by 70 percent.
He claims you couldn't cut
$12.6 billion without wiping out a lot of state services, and even if
you froze all road and bridge repairs, slashed police departments, and
fired all state workers you wouldn't be close.
That's why Howell and I
have no patience for experts. They always want to argue facts and
figures. Why, Howell says we could slash the $12.6 billion and nobody
would even notice. Granted, she can't come up with one specific example
of what she'd cut. But put the state's books online and the public - the
same folks who came up with the 41 percent - will set things straight,
she says.
Now if there are any
bleeding hearts out there worrying about the sick and the homeless, I
say to you, chill. Howell says that after Question 1 passes people will
be donating money all over the place.
Oddly enough, none of the
people Howell interviewed for a nifty video on her website said they
would give any of their savings to charity. And none of the people I
talked to downtown on Friday mentioned it either.
For example, Denis Marcin,
a software release manager who said he supports Question 1, said he
would invest his extra money in the stock market.
"I don't get any benefits
[from the state]," he said, puffing on a pipe near City Hall Plaza. "I
have no kids in school." He said the needy cut off from state services
would "get donations from other places."
If only the folks on Beacon
Hill could be more like he was before he started pulling down six
figures: "When I was a kid, I budgeted money closely, because I didn't
have very much."
That's the spirit, Denis.
Let's teach them a lesson right out of the Book of Howell.
Even if it could bring the
entire state to its knees.
The Boston Globe
Monday, October 6, 2008
Income tax is crucial, report says
By James Vaznis
If voters abolish the state
income tax next month, the state would be forced to slash most agency
budgets by more than 70 percent, according to a report by the
Massachusetts Taxpayers Foundation that is scheduled to be released
today.
Agencies and services that
would experience the highest cuts to compensate for the loss of
approximately $12.5 billion raised annually by the income tax include
State Police, district attorney offices, courts, prisons, state parks,
the Registry of Motor Vehicles, mental health services, and
environmental programs, said Michael J. Widmer, president of the
foundation. Widmer shared highlights of the reports during a telephone
interview yesterday.
"It would be devastating,"
Widmer said. "It would hurt our economy both short and long term in a
huge way."
Some programs, he said,
would have less severe cuts. For instance, he said the state would have
to fund at least three-quarters of current funding for local schools to
cover various constitutional or legal mandates.
Carla Howell, chairwoman of
the Committee For Small Government, which is pushing for the income tax
repeal, said yesterday she had not seen a copy of the report, but
believes the number is false. "Only funny math can come up with that
number," said Howell, who estimates that eliminating the income tax
would force state agencies to cut spending by 27 percent.
WBZ - AM 1030
Friday, October 3, 2008
Should Mass. Get Rid Of The Income Tax?
Voters in Massachusetts
will have a crucial decision to make at the polls in November - and it's
not just the presidential election.
Once again, they'll be
faced with a proposal to get rid of the state income tax - an initiative
that's getting more attention this time around because of the economic
crisis.
It's called Question 1 - a
proposed repeal of the state income tax and capital gains tax.
Supporters say it will take
money out of the hands of Beacon Hill politicians who have done nothing
but waste it for years.
Opponents claim it's a
reckless idea.
"This is throwing a bomb
into government," said Peter Meade, head of the Vote No on 1 Committee.
"If you vote yes, you're voting to increase the tax on your home."
"Your real estate tax will
go up, your services will diminish dramatically,"
he told WBZ's Jon Keller Friday.
Carla Howell, chair of the
Committee for Small Government, which is sponsoring the petition, said
this is about giving money back to the people.
"What we're talking about
is a serious tax cut - $3,700 average each for 3,400,000 workers and
taxpayers in Massachusetts," Howell told Keller in August.
"What they need to do is
cut the waste from the state government spending, which is out of
control."
Meade said it's not that
simple.
"This is a group of people
saying 'Here's a free lunch.' And what they don't tell you with the free
lunch is breakfast is going to cost you $1,000 and dinner will make you
sick."
"For this state, local aid
is such a significant part of the budget - if you take 40-percent of the
state revenue almost overnight - in 8 weeks - the cities and towns will
be damaged dramatically," Meade said. "That's the ambulance service,
that's the teachers, that's the firefighters."
Howell said it will force
politicians to end the waste to save the services.
"You can't find the waste
until you open up the books. Show us the tax dollars, that's what we're
saying."
"That's how you discover
double-dipping pensions, that's how you discover sign painters making
$100,000 a year
or toll takers making $60,000 a year
you just can't
see the waste until you open up the books."
"They're going to try to
scare voters, but I think a lot of voters realize there's a huge amount
of waste. All we need to do is cut the waste."
Howell said the income tax
repeal got 45-percent of the vote in 2002 and she believes this is the
year it could be approved.
The latest Survey USA poll
conducted last week shows 31-percent of likely voters are certain to
vote yes, 34-percent are certain to vote no, and 35-percent are not
certain how they will vote yet.
The Salem News
Saturday, October 4, 2008
A Salem News editorial
Beacon Hill finally getting the message
Income-tax repeal advocates
may have already scored a victory of sorts. The Patrick administration
last week announced a revenue shortfall of $223 million in the first
quarter of the state's fiscal year, yet there's nary a whisper on Beacon
Hill about trying to make up even part of the difference with new taxes.
Instead, Gov. Deval Patrick
has taken the lead in ordering cuts in spending throughout the executive
branch. It will be interesting to see whether the other constitutional
officers and Legislature follow suit.
Last week's announcement
makes clear that state and local governments cannot he held harmless
from the financial mess with which Washington and Wall Street are
dealing these days. Indeed, Massachusetts is more reliant than many on
taxes on stock-market gains which are an extremely rare commodity these
days.
Some slowing of the economy
was anticipated by Statehouse number-crunchers as far back as last
winter, but as Lt. Gov. Timothy Murray told editors last Thursday, "I
don't think anyone could have predicted what's taken place over the past
two to three weeks."
Murray has been
commissioned by the governor to head up efforts to streamline
government. And those cuts, he acknowledged, will entail some pain
including the likely elimination of some jobs.
Patrick last Thursday said
he will immediately begin seeking to reduce his office's expenses by 7
percent and would like to see all state agencies do the same.
Among his other
initiatives:
Expedite the consolidation
of the state's transportation infrastructure including the dismantling
of the Massachusetts Turnpike Authority;
Restructure the Big Dig
debt; and
Take immediate steps to
reform the state pension system, paying particular attention to benefits
provided MBTA workers which are considered among the most generous and
expensive in the nation.
Murray said capital
spending for new school construction, renovation and expansion of
higher-education facilities, bridge repairs, and the like will not be
affected for the time being. He rightly points out that such projects
tend to have a short-term stimulative effect on the economy; and things
like a strong educational system and reliable transportation network are
essential to the state's long-term prospects as well.
Both Patrick and Murray
also noted that they do not anticipate having to reduce the aid promised
cities and towns at least not right now.
But it would be the height
of irresponsibility for mayors, town managers, city councilors,
selectmen and school board members not to take a hard look at where they
can make cuts.
Similarly, legislators
should be prepared to act either in an emergency session later this year
or in conjunction with budget deliberations next winter, to give both
the governor and municipal officials the tools they need to address a
fiscal crisis which has been building for many years and will not be
fixed without some very tough systemic reforms.
In other words, elected
officials must finally address the soaring cost of public employee wages
and benefits.
Both the administration and
the Legislature realize full well there's no appetite for increasing
taxes at the moment. And while some warn cuts in state aid will force
municipalities to rely more on the property tax for revenue, the fact is
many are already right up against Proposition 2ฝ limits and there's
certainly no appetite for changing those.
The silver lining as far as
those elected officials who almost to a man and woman are urging a no
vote on Question 1 are concerned: The cuts being instituted now make
it less likely a majority will vote yes on Nov. 4.
The Salem News
Monday, October 6, 2008
Question 1: Cut waste? Or cut 'through the bone'?
By Alan Burke
Question 1 on the November
ballot will give voters a chance to eliminate the state income tax.
Ironically, the belief politicians would never allow that may grease the
way for its passage, according to one state representative.
Proponents are arguing that
when it comes to state spending enough is enough, and eliminating an
estimated 40 percent of Beacon Hill's revenue will curb obvious abuses.
"I have witnessed the state
government in action," says Paul Ziolkowski of Beverly, "and I feel
there's a lot of waste and cronyism. ... I feel they could easily cut
back on spending."
Opponents, including a lot
of legislators and local government officials, are predicting dangerous
consequences for all sorts of public services, including police, fire
and schools, if Question 1 passes.
One of those legislators,
state Rep. Ted Speliotis, D-Danvers, concedes that Beacon Hill itself
may have given voters a free pass on this issue. Citizens might approve
Question 1 in the hope of sending an anti-tax message to elected
officials but also in the belief that if it passes none of those
terrible predictions will come true because the Legislature and governor
will quickly move to moderate the measure or even make it null and void.
Speliotis adds a word of
caution to the voters. The Legislature might not behave in the way they
expect. "If the size of the vote is significant (in favor)," he says,
"it's going to be taken a lot more seriously."
Those who expect the
Legislature to undo a yes vote on Question 1 have some history on their
side. Voters used the initiative petition to roll back the income tax in
2000 from roughly 5.8 percent to 5 percent. Beacon Hill stepped in to
halt the process at 5.3. A measure to fund election campaigns with state
money passed in 1998, but the Legislature declined to provide the needed
dollars, effectively overriding the voters' decision.
For his part, state Rep.
John Keenan, D-Salem, says flatly that if Question 1 wins he would be in
favor of undoing it. "If it should pass there is no way I or anybody
else is going to stand for a 40 percent loss in revenues. Something's
going to have to go up."
Passage would mean a loss
of $11 billion for the state, according to Keenan. "Eleven billion
doesn't cut to the bone. It cuts right through the bone." He predicts
losses for schools and other essential services like state highways.
"I couldn't be any more strongly opposed."
The loss of state aid, says
Peabody Mayor Mike Bonfanti, "does have dire consequences." Stressing
that he is not telling people how to vote, Bonfanti calculates what
passage will mean in a city already strapped for cash.
"Losing 40 percent of state
aid," says Bonfanti, "that equates to the Fire Department and Police
Department budgets."
"There is no worse tax to
cut than the income tax," adds Speliotis. "It's the only tax that deals
with the person's ability to pay." Meanwhile, he says, since the 1980s
Massachusetts' tax burden has fallen substantially relative to other
states. "We're no longer Taxachusetts."
One of the organizers in
the campaign to eliminate the income tax, Ziolkowski distributes lawn
signs from his Beverly home. Under the leadership of former Libertarian
candidate for governor Carla Howell, this is the second time the issue
has appeared on the ballot. In 2002, with almost no campaign, it
received 45 percent of the vote.
Ziolkowski is not daunted
by suggestions that any "yes" vote will be made moot by Beacon Hill.
"They will ignore it," he predicts. "But at least the people will have
spoken."
Dennis Corrigan of Boxford,
another supporter of the measure, describes himself as a "tax refugee"
from Canada. He is taken aback by the suggestion that any "yes" vote
will be ignored. "I think that's overbearingly cynical that they would
not listen to the people."
Government is too big,
Corrigan continues, state aid to cities and towns too generous and
examples like police details illustrate the problem. "The proceeds of
the state income tax would be better off in the hands of the taxpayer
than the state government," he says.
