CLT UPDATE
Tuesday, April 28, 2009
House Dems hike sales tax 25% for $900 million more
108 Reps give taxpayers middle-finger Beacon Hill salute
The House defied Gov. Deval Patrick
Monday and delivered a narrowly veto-proof, 108-51 majority behind
Speaker Robert DeLeo's proposed 25-percent increase to the state's
five-cent sales tax.
After several hours of vote-counting and tense negotiations with members
reluctant to endorse a broad-based tax hike that House officials would
bring in $900 million next fiscal year, DeLeo carried the first major
test of his speakership, in the face of Patrick's last-minute threat
appeared to imperil the increase....
The 108-vote total behind the sales tax came after hours of
representatives responding to DeLeo's invitations to discuss the vote in
his office. The House needs two-thirds of the members to override a
gubernatorial veto....
Debate on the House floor became emotional at times, with lawmakers
arguing over whether more harm would be done to the state by a higher
tax or by preserving the House budget committee's cuts.
"I stand with the children of the Commonwealth," said Rep. Ruth Balser
(D-Newton), arguing the new state revenues would prevent deeper cuts to
human services and education. "I'm not going to ask them to tighten
their belts." ...
[Rep. Daniel Webster, R-Hanson] said the state should not hit up
taxpayers to sustain Beacon Hill's urges.
"We are asking them to pony up more because we have an insatiable
appetite to spend, spend, spend," said Webster.
State House News Service
Tuesday, April 28, 2009
House challenges Patrick
with $900 million boost to sales tax
House lawmakers approved a sales tax hike last night by a
veto-proof margin, capping a dramatic showdown with Governor Deval Patrick after
he threatened to veto the broad-based tax increase.
House Speaker Robert A. DeLeo won his first political victory with the 108-to-51
vote, persuading lawmakers to sign onto his plan to increase the sales tax from
5 percent to 6.25 percent. The vote also heightens the tension among top Beacon
Hill Democrats, who have had sharp disagreements over how to solve the state's
budget crisis....
Patrick opposes the plan and sent an ultimatum to all 200 members of the
Legislature yesterday afternoon, promising to veto the increase unless lawmakers
first enact transportation, ethics, and pension law changes he has sought.
The Boston Globe
Tuesday, April 28, 2009
House OK's hike in Mass. sales tax
Tally enough to override Patrick's threatened veto
A bruising budget brawl on Beacon Hill ended with House
lawmakers approving a sales tax hike, as House Speaker Robert DeLeo won a
potentially veto-proof margin over Gov. Deval Patrick’s objections.
The House voted 108 to 51 to raise the state sales tax 25 percent to 6.25 cents
on every dollar, casting their ballots at 11 pm before calling it a night. The
Senate still must approve the tax boost before it goes to the governor.
The new speaker only narrowly secured a two-vote margin to override Patrick’s
threatened veto, and had to sway freshmen lawmakers to carry the day.
The Boston Herald
Tuesday, April 28, 2009
House gives OK to sales tax hike
Lobbyists lingered in the State House yesterday, stopping
lawmakers in the halls and urging them to reject tax hikes. On the other side of
the issue, advocates for the homeless and mentally ill marched with union
officials, filling the corridors with chants of "Raise Revenues! Stop the cuts!"
...
The advocates for social services spending - also well organized, but louder -
said they did not particularly care what taxes were increased to save programs.
"We're not calling for a specific proposal," said Carl Nilsson, spokesman for
Neighbor to Neighbor, a group of 20 organizations that represent low-income
families. "We're urging legislators to raise significant revenue in the fairest
way possible." ...
Judy Meredith, a longtime human services lobbyist, also took a fresh approach
with onemassachusetts.org, a website that urges residents and advocates to
contact their legislators and organize their friends through Facebook and
Twitter.
"We're doing a virtual rally," Meredith said.
The Boston Globe
Tuesday, April 28, 2009
Lobbyists voice opinions at House during tax debate
Business groups yesterday rallied around Gov. Deval Patrick’s
threatened veto of a proposed sales tax by the Massachusetts House.
“We need to have reform before any new revenues,” said Brian Gilmore, a
spokesman for the Associated Industries of Massachusetts. He said AIM was
“pleased” by Patrick’s threat to veto a sales tax hike to 6.25 percent from 5
percent without any reforms within the transportation system.
“We’re thankful for the governor standing up for consumers and Main Street
merchants,” said Jon Hurst, president of the Retailers Association of
Massachusetts, which yesterday warned that thousands of jobs could be lost if
consumers flock to no-sales-tax New Hampshire to buy items.
Hurst said a sales tax increase, which House supporters said would raise $900
million, would “drive a final stake through the heart of Main Street
Massachusetts.”
The Boston Herald
Tuesday, April 28, 2009
Boston business groups pleased
Deval Patrick plans to veto sales tax hike
It would warm our hearts to be able to anoint Gov. Deval
Patrick as the new champion of beleaguered taxpayers, given his very public
break with lawmakers yesterday over an increase in the sales tax.
It’s just too good to be true....
Yes, lawmakers have been slow to act on reforms and good for the gov for calling
them out. He’s also right to question a sales tax hike. Unfortunately his goal
in prodding lawmakers to act is so that he can justify his own “targeted” tax
hikes, putting those same jobs and those same taxpayers at risk.
A Boston Herald editorial
Tuesday, April 28, 2009
Mixed messages
Yes, Gov. Deval Patrick - together we can!
You keep having days like you did yesterday, throwing down on the DeLeo Tax Hike
Express, and we can keep “reform before revenue” alive....
Look, I know you have a stack of other taxes you want to raise - in particular a
19-cent-per-gallon punch in the face of every driver in Massachusetts. And if
the Legislature does the usual difference splitting - dump the reforms but keep
the tax hikes - I have doubts that you’ll hang tough....
If there were any real taxpayer advocates, we wouldn’t have to count on Governor
Gas Tax to get our backs. But we don’t have any real friends. All we’ve got is
the Massachusetts Taxpayers Foundation.
Calling Michael Widmer’s MTF a “taxpayer organization” is like calling a pride
of lions “gazelle rights advocates.” In order to give DeLeo cover, they’ve come
up with this spin that Massachusetts has “the lowest sales tax of the 45 states”
that collect it.
A 10-second Google search found 16 states with sales tax rates lower than our 5
percent. North Carolina’s is 4.5 percent, for example, and Colorado’s is 2.9
percent.
How can they call it “lowest in the nation?” By calculating the sales tax
adjusted for income. According to MTF, since we earn more, our 5 percent is
lower than Colorado’s 2.9 percent.
The Boston Herald
Tuesday, April 28, 2009
Gov’s a hero at least for now
By Michael Graham
The Massachusetts Miracle in the late '80s, with annual
revenue growth averaging 13 percent from 1984 to 1987, was followed by the
high-tech bubble burst. Revenue growth slipped to 4.3 percent in fiscal years
'88 and '89, and declined by 4.4 percent in 1990.
That was a real financial crisis....
From 1991 to 2008, program spending increased from $9 billion to $28 billion,
more than double the rate of inflation ...
We have reached the end of the inexorable pendulum-like cycle of government
change, from the social investment of Governors Sargent and Dukakis, to the
fiscal conservatism of Weld/Cellucci/Swift/Romney, and now back to the demand
for social investment under Patrick. New revenues are needed, and that means
taxes need to be increased.
The Boston Globe
Tuesday, April 28, 2009
Taxes need to be raised in Massachusetts
By Steve Crosby
Across the Commonwealth, employers are making painful
decisions to curtail expansion plans, defer critical expenditures, and drop
product or service lines to focus on core businesses. AIM surveyed 145
Massachusetts employers during February and found that 46 percent had conducted
a layoff or were preparing to do so. They are turning to pay freezes (55
percent), reduced work hours (42 percent), and altered staffing plans (86
percent).
A significant number are also instituting a salary reduction program, and many
are modifying their retirement plans. Three-quarters are seeking ways to stave
off increases in employee contributions to health-insurance premiums - which
also involves hard decisions.
Private-sector employers - and employees - simply do not see state and local
government facing up to choices like this....
The state has failed to address, even in good times, its structural budget
deficit; and rather than reduce fiscal uncertainty it has transferred it to
taxpayers.
The Boston Globe
Tuesday, April 28, 2009
The public deserves reform
By Richard C. Lord
The House plan to raise the state sales tax could create some
short-term relief for commuters anxious about toll hikes and MBTA fare increases
in the coming year, but it would do little to halt the larger crisis that has
made transportation a top issue on Beacon Hill, advocates and observers say....
Transit riders have had a harder time getting lawmakers' attention than
motorists who pay tolls to drive on the Pike....
In 2000, the T began taking in one cent of every taxable dollar in the state, a
system designed to give the authority enough money to pay its own bills forever
and cover its existing debt, then more than $2 billion....
In 2007, a bipartisan commission that studied the transportation problem
recommended a higher gas tax, as well as moderate toll increases and MBTA fare
hikes, to raise a total of nearly $20 billion in unmet needs over the next two
decades.
The Boston Globe
Tuesday, April 28, 2009
Plenty of problems still down the road
House plan won't solve long-term transit-fund crisis
Paul McCann, the former executive assistant to the BRA
director, retired in 2005 with a $97,000-a-year public pension. But he never
really left. Last year, he earned $162,000 in consulting fees on top of his
retirement pay despite a state law prohibiting retired employees from collecting
more in total income than the original position pays....
If state lawmakers are serious about reforming public pensions, they will close
this tap before it pollutes the public's trust in government any further.
A Boston Globe editorial
Tuesday, April 28, 2009
Retirees run amok - again
Chip Ford's CLT
Commentary
In his Boston Globe op-ed column today defending
higher taxes, Steve Crosby wrote: "From 1991 to 2008, program
spending increased from $9 billion to $28 billion, more than double the
rate of inflation ... Typically, governments spend at least all that
they collect ... New revenues are needed, and that means taxes need to
be increased."
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Click above
rollcall vote for a larger image
CLICK HERE for a printable PDF version |
That says it all.
"We're urging legislators to raise significant
revenue in the fairest way possible," crowed Carl Nilsson, spokesman for
the Gimme Lobby. Translation: Hike taxes through the stratosphere
any way you must, just gimme more.
Judy Meredith, leader of the Gimme Lobby's
ONEMassachusetts, called the $900 million sales tax hike "neither
adequate nor balanced," and asserted that it wasn't enough -- because
More Is Never Enough (MINE)!
"I stand with the children of the Commonwealth," said
uber-liberal Rep. Ruth Balser (D-Newton). You just knew they had to "do
it for the children" sooner or later, right?
The Boston Globe reported: "Transit riders have had a
harder time getting lawmakers' attention than motorists who pay tolls to
drive on the Pike.... In 2000, the T began taking in one cent of every
taxable dollar in the state, a system designed to give the authority
enough money to pay its own bills forever and cover its existing debt."
Do they ever stop to consider-- dare I say
appreciate? -- that motorists also pay the gas tax, which also
subsidizes their cheap ride?
And Michael Graham has sure got the so-called
Massachusetts Taxpayers Foundation's number! As we've been saying
for years, Michael Widmer and his MTF do and have done nothing but run
cover and interference for the tax-and-spend crowd.
Last night the House voted 108-51 to hike the state
sales tax by 25 percent, for a start. The House returns today "to
discuss additional revenue amendments," according to the State House
News Service.
Gov. Patrick delivered a
letter to each representative warning that he'd veto a sales tax
hike, causing the House leadership to recess the session and bend arms
to get a veto-proof majority before taking the vote, late last night.
First term Rep. Jonathan Hecht (D-Watertown) "said he had been elected
last September without facing a Republican opponent," The State House
News Service reported. "'Perhaps that will change after this vote,'
Hecht said, drawing laughs from colleagues."
They laugh in our faces, the voters -- their
employers -- toss us the middle-finger Beacon Hill salute! This must
change come the 2010 elections! It's past time they learn to respect us,
the people who allow them to represent us from time to time.
How did your alleged representative vote? Was he or
she one of the soon to be notorious 108 who think you're not taxed
enough and don't care what you think anyway, or one of the 51 who stood
up for us taxpayers? The 108 may be notorious today, but we intend to
make this endangered species extinct in the next election.
No Re-Election for
Taxhikers!
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Chip Ford |
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State House News Service
Tuesday, April 28, 2009
House challenges Patrick
with $900 million boost to sales tax
By Jim O'Sullivan and Gintautas Dumcius
The House defied Gov. Deval Patrick Monday and delivered a narrowly
veto-proof, 108-51 majority behind Speaker Robert DeLeo's proposed
25-percent increase to the state's five-cent sales tax.
After several hours of vote-counting and tense negotiations with members
reluctant to endorse a broad-based tax hike that House officials would
bring in $900 million next fiscal year, DeLeo carried the first major
test of his speakership, in the face of Patrick's last-minute threat
appeared to imperil the increase.
The package, which drew 35 Democratic opposition votes, calls for $275
million to fund transportation spending and $200 million to blunt the
$424 million local aid cut in the House budget committee draft.
House leaders said that even with the new revenue, still subject to
Senate approval, their budget still relies on $1.2 billion in cuts to
help close an estimated $3.6 billion budget gap next year.
Patrick, who has proposed a battery of new taxes left ignored by the
Legislature, sought Monday to position himself as opposed to new taxes
until significant reforms in transportation, ethics, and pension rules
had become law. His early-afternoon letter to the entire Legislature
appeared to take senior lawmakers by surprise.
"Honestly, I haven't even read the letter," House budget chief Charles
Murphy told reporters after the vote, which closed at 10:58 p.m. "I
heard about the letter. Some people weren't terribly happy about it. But
the fact of the matter is, we've got 160 people who were elected
individually in their own districts making their own adult decisions,
and I would suggest it was a responsible decision, based on the
circumstances."
Murphy added, "The governor, you know, he can do whatever he does.
That's great … The governor's doing his own thing."
Patrick's threat Monday was his first outright promise to veto a sales
tax bill unless lawmakers ratify his reform proposals as well, although
he said last Friday he was "very skeptical of a sales tax," which many
see as regressive because it does not factor income levels. Patrick has
urged a 19-cent gas tax hike, which would generate just under $500
million per year, according to estimates, to help close a projected
20-year, $20 billion transportation infrastructure deficit.
House leaders said the sales tax bump would likely preclude a gas tax
vote.
The first day of House budget debate was perhaps the tensest between the
House and Executive Branch since DeLeo took the gavel in January,
leading to a closely watched roll call vote on the speaker's proposal
two minutes before midnight.
Rep. Frank Smizik (D-Brookline), noting that he agreed with Patrick's
preference for a higher gas tax over a higher sales taxes, said Patrick
was reprising his campaign rhetoric pillorying Beacon Hill mismanagement
and turning lawmakers into targets of his promised reelection bid.
"I think he's trying to run against us for next term," Smizik, an early
Patrick backer in the 2006 campaign, told the News Service. "I think
he's doing it again."
Patrick on Monday forwarded to his political email list the letter he
sent earlier in the day to the 200 members of the Legislature
threatening to veto a sales tax increase unless there was satisfactory
action on pension, transportation, and ethics reforms, the latter of
which he said has seen "no action at all" in the Senate.
In the forwarding message to his supporters, Patrick wrote, "I ask that
you forward this email to all of your friends, family, and colleagues so
that they too can be informed of this very important issue facing our
state."
DeLeo has said the House would take up next month Patrick's legislation
allowing municipalities to raise their own taxes on meals, lodging, and
telecommunications equipment.
A spokesman for Senate President Therese Murray said she would not
inject herself into House deliberations.
"Everything with the exception of the income tax is on the table," said
the spokesman, David Falcone. "This is the time for the House to
finalize its budget recommendations, and we're going to respect that
process."
Pressed for Murray's preference, Falcone said, "She hasn't indicated
what the preference would be, if any. Obviously, we're looking at
everything."
The 108-vote total behind the sales tax came after hours of
representatives responding to DeLeo's invitations to discuss the vote in
his office. The House needs two-thirds of the members to override a
gubernatorial veto. With former Speaker Salvatore DiMasi's seat vacant
and the chamber's membership number 159, securing a veto override would
require 106 members. By the time the budget works its way back to the
House, that seat will likely be filled, meaning the override threshold
would rise to 107 votes.
Debate on the House floor became emotional at times, with lawmakers
arguing over whether more harm would be done to the state by a higher
tax or by preserving the House budget committee's cuts.
"I stand with the children of the Commonwealth," said Rep. Ruth Balser
(D-Newton), arguing the new state revenues would prevent deeper cuts to
human services and education. "I'm not going to ask them to tighten
their belts."
Rep. Matthew Patrick (D-Falmouth) said,"We have gone beyond cutting the
budget to the bone and we are now contemplating complete amputation of
programs."
Opponents of the tax increase said the impact on the state's economy
would be devastating, and pointed to a Beacon Hill Institute report that
suggested 10,000 job losses under the higher rate.
"It is the mom-and-pop stores that are going to bring us out of the
recession, and they're the ones that you're going to go after," said
Rep. Bradford Hill (R-Ipswich), who held up pictures on the House floor
of business that had closed recently in his district.
Republicans praised the $27.44 billion Ways and Means draft as prudent,
and decried what they said was a last-minute proposal that had not
undergone the legislative vetting process. Rep. Daniel Webster predicted
that boosting the budget's bottom line would result in midyear spending
reductions, like those the state has undertaken in three rounds this
year. Webster said the state should not hit up taxpayers to sustain
Beacon Hill's urges.
"We are asking them to pony up more because we have an insatiable
appetite to spend, spend, spend," said Webster (R-Hanson).
Some advocates said the sales tax proposal was improperly designed. Judy
Meredith, a human services advocate leading a push for significant tax
increases, called the House plan "neither adequate nor balanced,"
arguing that the revenue would not be enough and that lower-income
residents would be disproportionately affected by the higher rate.
Members joked about the electoral risks in backing higher taxes.
Endorsing the tax hike in his maiden speech, Rep. Jonathan Hecht
(D-Watertown) said he had been elected last September without facing a
Republican opponent.
"Perhaps that will change after this vote," Hecht said, drawing laughs
from colleagues.
Several categories of goods are exempt from the sales tax, including
food, clothing, periodicals, event tickets, utilities such as gas or
electricity, residential phone services, transportation, and services
like accounting and legal assistance, and car repairs.
The House returns Tuesday to discuss additional revenue amendments, then
take up local aid proposals.
The Boston Globe
Tuesday, April 28, 2009
House OK's hike in Mass. sales tax
Tally enough to override Patrick's threatened veto
By Matt Viser
House lawmakers approved a sales tax hike last night by a veto-proof
margin, capping a dramatic showdown with Governor Deval Patrick after he
threatened to veto the broad-based tax increase.
House Speaker Robert A. DeLeo won his first political victory with the
108-to-51 vote, persuading lawmakers to sign onto his plan to increase
the sales tax from 5 percent to 6.25 percent. The vote also heightens
the tension among top Beacon Hill Democrats, who have had sharp
disagreements over how to solve the state's budget crisis.
"We've got 160 members . . . making their own adult decisions,"
Representative Charles A. Murphy, the House chairman of the Ways and
Means Committee, told reporters after the vote. The governor, he added,
"can do whatever he does. That's great."
Patrick opposes the plan and sent an ultimatum to all 200 members of the
Legislature yesterday afternoon, promising to veto the increase unless
lawmakers first enact transportation, ethics, and pension law changes he
has sought.
The governor sent his threat in a letter as the House was preparing to
debate DeLeo's plan, which could raise $900 million in new revenue to
help avoid steep budget cuts.
Patrick said he did not believe that the public will support the House
plan without bigger changes on Beacon Hill, including curbing pension
abuses and tightening ethics codes.
"I don't believe that we can go to the public and ask for any
broad-based tax increase unless we get meaningful outcomes on the reform
measures that are pending," Patrick told reporters yesterday afternoon.
It was a rare moment of open discord between party allies. It forced
DeLeo and his leadership team to retreat behind closed doors through
much of the day to muster 107 votes, the two-thirds required for an
override.
Senate leaders, who also would need to sign onto the House's tax
increase, were conspicuously silent on the subject. Senate President
Therese Murray declined to comment. Her spokesman repeated Murray's
previous comments that she has not ruled out any tax increase, except
for a hike in the income tax.
Several lawmakers accused Patrick of posturing in advance of a 2010
reelection bid. "I think this is him kicking off his campaign,"
Representative David Flynn, a Bridgewater Democrat, said in an
interview. "It's usually the thing to do, run against the Legislature."
Patrick's veto warning was part of an eventful day full of political
intrigue, behind-the-scenes negotiations, and Democratic infighting. The
chants of protax advocates thundered through the State House corridors,
even as lobbyists, hoping to preserve funding for various causes, stood
in the hallways hoping to catch a few minutes with lawmakers.
At one point Patrick tried to avoid reporters and slip into his office
by an alternate, fourth-floor office, only to be tracked down.
The debate was the first major political test for DeLeo, who took over
from Salvatore F. DiMasi in January. DeLeo's promise to hold a free and
open debate on the House floor was jettisoned as, in private meetings,
he sought to persuade Democratic lawmakers to buck the governor. Late in
the afternoon, DeLeo still had not found enough votes, and the House
recessed for several hours, according to Democratic House members who
did not wish to be identified.
Debate on the issue began around 8 p.m. and lasted for about three
hours.
DeLeo also did not emerge to make any public statements, even after the
vote last night, temporarily ceding the public debate and the strategic
advantage to Patrick.
"I've always been about reform before revenue," Patrick told reporters
yesterday. "But it's more than that. It's change before revenue, and I
want that change. And so, by the way, do the people of the
Commonwealth."
DeLeo wants to dedicate about $275 million of the new revenues that
would be raised by the sales tax increase to transportation. Under the
speaker's plan, that would avoid the need for a gas tax increase of 19
cents per gallon proposed by Patrick. DeLeo's plan would result in just
half the revenue, however, dismaying transportation advocates, who say
it is not enough to solve chronic transportation funding problems.
In recent days, Patrick has grown increasingly impatient with the
Legislature, chiding lawmakers for not adopting his transportation
changes, separate pension and ethics changes, and for ignoring his
proposal to tax candy and alcohol.
With his new tactics, Patrick predicted yesterday that "we will get to a
good result."
The governor surprised many lawmakers by e-mailing them his letter at
12:31 p.m., just before they went to the House floor to debate the $27.4
billion budget.
The letter was later sent to his political supporters through his
campaign committee.
"I ask that you forward this e-mail to all of your friends, family, and
colleagues, so that they too can be informed of this very important
issue facing our state," Patrick wrote in the e-mail.
Two of Patrick's possible gubernatorial rivals oppose the sales tax
increase.
"While I recognize the need for revenue, raising taxes of any kind
during a recession is a bad idea," Treasurer Timothy P. Cahill, who has
not ruled out challenging Patrick, said in a statement.
Christy Mihos, who has declared he will run as a Republican, also
opposes increasing the sales tax.
The Boston Herald
Tuesday, April 28, 2009
House gives OK to sales tax hike
By Hillary Chabot and Edward Mason
A bruising budget brawl on Beacon Hill ended with House lawmakers
approving a sales tax hike, as House Speaker Robert DeLeo won a
potentially veto-proof margin over Gov. Deval Patrick’s objections.
The House voted 108 to 51 to raise the state sales tax 25 percent to
6.25 cents on every dollar, casting their ballots at 11 pm before
calling it a night. The Senate still must approve the tax boost before
it goes to the governor.
The new speaker only narrowly secured a two-vote margin to override
Patrick’s threatened veto, and had to sway freshmen lawmakers to carry
the day.
“It’s clear (Patrick’s) trying to scuttle the sales tax because he wants
a gas tax instead, and there isn’t enough support to pass a 19-cent gas
tax,” said state Rep. Joseph Wagner (D-Chicopee), chairman of the
transportation committee, before the vote was taken.
DeLeo - whom one lawmaker said was trading earmarks for votes in an
effort to avoid a politically embarrassing early budget loss - had just
more than 100 votes just hours before the final tally, said several
lawmakers close to the negotiations.
Patrick delivered a letter to all 200 lawmakers right before the House
began to debate DeLeo’s plan that dealt a roundhouse political blow to
the new speaker and left his leadership team reeling as they began the
first day of budget deliberations.
While lawmakers expressed surprise, Patrick briefed both DeLeo and
Senate President Therese Murray of his intentions Sunday, and reached
out to them again yesterday before he dispatched the letter.
DeLeo’s hike would raise an additional $900 million, of which $275
million would go to fund transportation needs and $200 million would go
toward cities and towns.
Patrick, who wants a 19-cent increase in the gas tax as well as higher
levies on booze and candy, said he would reject any budget that doesn’t
include them.
“I don’t believe that we can go to the public and ask for any
broad-based tax increase unless we get meaningful outcomes on the reform
measures that are pending,” Patrick told reporters yesterday afternoon
as House lawmakers remained in deep negotiations.
Some rank-and-file members were annoyed at Patrick’s missive, which he
later forwarded to supporters via his political committee.
State Rep. Denise Provost (D-Somerville) said she didn’t appreciate, “my
initial communication from the governor being a scolding.”
“I’m not going to get all huffy about it, but I’m not impressed either,”
Provost said.
Several lawmakers, some of them Patrick supporters, said the governor’s
actions indicate he’s running for re-election, once again positioning
himself as a reformer against the Legislature.
The Boston Globe
Tuesday, April 28, 2009
Lobbyists voice opinions at House during tax debate
By Andrea Estes
Lobbyists lingered in the State House yesterday, stopping lawmakers in
the halls and urging them to reject tax hikes. On the other side of the
issue, advocates for the homeless and mentally ill marched with union
officials, filling the corridors with chants of "Raise Revenues! Stop
the cuts!"
The targets of their fervor: state representatives who began debating
yesterday whether to help solve the state's recession-induced budget
crisis by increasing the state sales tax to 6.25 percent from 5 percent.
"We had perfect attendance of all the special interests," said
Representative John Quinn, Democrat of Dartmouth.
Business groups, restaurants, healthcare companies, and unions were all
represented. The state's retailers argued against the sales tax hike,
which represents a 25 percent increase in the tax, saying it would be
disastrous for businesses crippled by the recession and would send
customers fleeing north.
"Consumers will have other options," said Jon Hurst, president of the
Retailers Association of Massachusetts, which represents 3,100
businesses. "They can go to New Hampshire or go online, where nothing is
taxed.
"This doesn't make common sense," he said. "We're urging the governor to
veto this."
James Klocke, executive vice president of the Greater Boston Chamber of
Commerce, said his group's members were lobbying against a sales tax
hike, instead favoring an increase in the gas tax of 25 cents a gallon.
"We think the most pressing financial need is on the transportation
front," Klocke said. "The gas tax would be dedicated to both the
prevention of a toll increase and fixing the MBTA's finances."
The House's sales tax plan was not the only subject of intense lobbying,
as House members were reviewing hundreds of amendments filed by
individual lawmakers. The Massachusetts Restaurant Association, for
example, came to oppose moves to allow local communities to impose meals
taxes.
"I don't want to see restaurants singled out," said Peter Christie, the
group's president. "You'll see me kicking and screaming if they go to a
local-option tax."
The advocates for social services spending - also well organized, but
louder - said they did not particularly care what taxes were increased
to save programs.
"We're not calling for a specific proposal," said Carl Nilsson,
spokesman for Neighbor to Neighbor, a group of 20 organizations that
represent low-income families. "We're urging legislators to raise
significant revenue in the fairest way possible."
The registered lobbyists spoke in hushed tones in the hallways outside
the House and Senate chambers, texting on their cellphones during lulls
in the conversation. Many refused to say whom they represented.
"I have clients who are concerned about the safety net," said one, who
did not want to be quoted by name. "They're concerned about what is
happening. All you can do is try to get in front of the decision-makers
and make your case."
James Barry, a legislative agent for the Boston Police Patrolmen's
Association, said he was looking for money to restore funding for the
Quinn Bill, a program that boosts the pay of police officers who receive
college degrees. The House budget cut $52 million for the program.
(The Globe reported last week that the amendment to restore the Quinn
Bill funding, filed by Christopher Fallon, Democrat of Malden, had
enough cosponsors to pass.)
Judy Meredith, a longtime human services lobbyist, also took a fresh
approach with onemassachusetts.org, a website that urges residents and
advocates to contact their legislators and organize their friends
through Facebook and Twitter.
"We're doing a virtual rally," Meredith said.
The Boston Herald
Tuesday, April 28, 2009
Boston business groups pleased
Deval Patrick plans to veto sales tax hike
By Jay Fitzgerald
Business groups yesterday rallied around Gov. Deval Patrick’s threatened
veto of a proposed sales tax by the Massachusetts House.
“We need to have reform before any new revenues,” said Brian Gilmore, a
spokesman for the Associated Industries of Massachusetts. He said AIM
was “pleased” by Patrick’s threat to veto a sales tax hike to 6.25
percent from 5 percent without any reforms within the transportation
system.
“We’re thankful for the governor standing up for consumers and Main
Street merchants,” said Jon Hurst, president of the Retailers
Association of Massachusetts, which yesterday warned that thousands of
jobs could be lost if consumers flock to no-sales-tax New Hampshire to
buy items.
Hurst said a sales tax increase, which House supporters said would raise
$900 million, would “drive a final stake through the heart of Main
Street Massachusetts.”
The Greater Boston Chamber of Commerce, which earlier this year endorsed
a 25-cent gas tax, said the governor was right to “seize the
opportunity” for reform.
The state desperately needs to change its budget, transportation,
pension and health-care agencies and practices before it starts raising
general taxes, said Jim Klocke, executive vice president of the chamber.
House leaders have rejected a gas-tax increase, which Patrick supports,
and favor a sales tax hike as a better way to help plug a huge state
deficit.
The Boston Herald
Tuesday, April 28, 2009
A Boston Herald editorial
Mixed messages
It would warm our hearts to be able to anoint Gov. Deval Patrick as the
new champion of beleaguered taxpayers, given his very public break with
lawmakers yesterday over an increase in the sales tax.
It’s just too good to be true.
Sure, just as the House was beginning debate on the fiscal 2010 budget
(and that 25 percent sales tax hike being pushed by House leadership)
Patrick circulated a letter to lawmakers in which he vowed a veto.
“I have deep reservations about imposing a higher sales tax on people
during these difficult economic times, especially at the risk of costing
the commonwealth jobs and at a time when we can least afford that
trade-off,” the governor wrote.
Amen!
Yes, Patrick vowed to veto a sales tax hike - but largely because
lawmakers have so far failed to OK all of the other tax hikes he has
proposed to help balance the budget and even to finance new programs.
That includes a 19 cent hike in the gas tax, along with new levies on
booze, candy and sugary drinks.
The governor says lawmakers haven’t yet done enough to embrace the
administration’s “reform” agenda, so he will not consider any new
revenue until pension, ethics and transportation reform are fully
enacted.
That sure sounds reasonable.
Heck, it sorta sounds like “reform before revenue” . . .
But just substitute the word “gasoline” for “sales” in that quote above,
and Patrick’s pitch begins to fall apart.
Yes, lawmakers have been slow to act on reforms and good for the gov for
calling them out. He’s also right to question a sales tax hike.
Unfortunately his goal in prodding lawmakers to act is so that he can
justify his own “targeted” tax hikes, putting those same jobs and those
same taxpayers at risk.
The Boston Herald
Tuesday, April 28, 2009
Gov’s a hero at least for now
By Michael Graham
Yes, Gov. Deval Patrick - together we can!
You keep having days like you did yesterday, throwing down on the DeLeo
Tax Hike Express, and we can keep “reform before revenue” alive.
Bobby and his Good Ol’ Boys (“We’ve got both kinds of legislation -
taxing and spending!”) are singing and “cha-ching”-ing the same old
song: Show me the money. I expected that.
What I didn’t expect was for you to call them out.
When I first read Hillary Chabot’s reporting on BostonHerald.com
yesterday, I did an actual double-take. She quoted your letter to the
Legislature: “Without final and satisfactory action on the several
reform proposals before you, I cannot support a sales tax increase and
will veto it if it reaches my desk.”
Did you really write that, Governor? It’s so out of character. So, well
. . . gubernatorial. And I mean that in a nice way.
Look, I know you have a stack of other taxes you want to raise - in
particular a 19-cent-per-gallon punch in the face of every driver in
Massachusetts. And if the Legislature does the usual difference
splitting - dump the reforms but keep the tax hikes - I have doubts that
you’ll hang tough.
But yesterday was a good start and on behalf of every Massachusetts
taxpayer, I hope you prove me wrong.
And it’s about time somebody did something on behalf of the taxpayers.
We keep getting told, for example, that the sales tax hike is only “a
penny or two.” But as the Massachusetts Retailers Association points
out, a 6.25 percent sales tax will cost us an additional $900 million.
That’s 90 billion pennies.
The “up the sales tax” crowd never talks about the gross sales tax cost.
DeLeo’s proposed hike would take more than $4 billion out of our
pockets. Not only is that real money, but as every retailer in a border
town will tell you, that’s $4 billion more than they pay in New
Hampshire.
If there were any real taxpayer advocates, we wouldn’t have to count on
Governor Gas Tax to get our backs. But we don’t have any real friends.
All we’ve got is the Massachusetts Taxpayers Foundation.
Calling Michael Widmer’s MTF a “taxpayer organization” is like calling a
pride of lions “gazelle rights advocates.” In order to give DeLeo cover,
they’ve come up with this spin that Massachusetts has “the lowest sales
tax of the 45 states” that collect it.
A 10-second Google search found 16 states with sales tax rates lower
than our 5 percent. North Carolina’s is 4.5 percent, for example, and
Colorado’s is 2.9 percent.
How can they call it “lowest in the nation?” By calculating the sales
tax adjusted for income. According to MTF, since we earn more, our 5
percent is lower than Colorado’s 2.9 percent.
This is the economic equivalent of calculating the size of my budget by
measuring my wallet. Using Widmer’s “logic,” the cheapest steak in town
is at Abe & Louie’s and every Boston bargain hunter drives a BMW.
When the bad guys are working that hard to raise our taxes, what chance
do we taxpayers have?
That’s why I’m cheering you on today, Governor. We’re still going to get
the shaft, but if we can get some meaningful reform, some fundamental
change - bringing pensions into line with the private sector and
seriously cutting the transportation bureaucracy - it won’t have been
entirely in vain.
And that, unfortunately, is what passes for a taxpayer victory in
Massachusetts.
The Boston Globe
Tuesday, April 28, 2009
Taxes need to be raised in Massachusetts
By Steve Crosby
As state policymakers wrestle with the financial crisis, it's worth
remembering earlier fiscal crises and the history that got us here
today.
The Massachusetts Miracle in the late '80s, with annual revenue growth
averaging 13 percent from 1984 to 1987, was followed by the high-tech
bubble burst. Revenue growth slipped to 4.3 percent in fiscal years '88
and '89, and declined by 4.4 percent in 1990.
That was a real financial crisis. Moreover, the Commonwealth had no
rainy day fund; it had to float bonds to cover its day-to-day operating
expenses; its pension obligation was 61 percent unfunded with a $12.2
billion liability, on an annual budget of $9 billion; and it had to
borrow from the federal government to meet its unemployment compensation
obligations.
The result of this crisis was a campaign for governor in 1990 between
two fiscal conservatives, John Silber and Bill Weld. Weld's victory
ushered in 16 years of Republican governors, marked by a governing
philosophy of "no new taxes," and a multitude of tax cuts. Those cuts
today would be worth about $4 billion in tax revenue - almost a 20
percent increase over this year's $19 billion tax collection. (The
actual net tax decrease this year will be about $3 billion, due to
various new taxes and "loophole closings" in the Romney and Patrick
years.)
That additional $3 billion could certainly solve today's fiscal
problems. Were those tax cuts a bad idea? Artificial savings at the
expense of a structural deficit? Not at all.
From 1991 to 2008, program spending increased from $9 billion to $28
billion, more than double the rate of inflation; $16.5 billion was
deposited in the state pension fund, reducing the unfunded liability
from 61 percent to 31 percent; over $3 billion was contributed to the
rainy day fund from budget surpluses; and tens of billions of dollars
stayed in the pockets of Massachusetts taxpayers and businesses.
Typically, governments spend at least all that they collect. The
enormous revenue growth of the mid-'80s led to no savings, a huge
unfunded pension liability, and vastly increased spending. If the tax
cuts had not occurred, the Commonwealth's spending would likely have
matched all the tax revenue the state collected. Nearly two decades of
tight fiscal policy has been an essential brake on state spending, and
an appropriate response to the legitimate concerns of personal and
business taxpayers about profligacy in state government.
But times have changed. Service delivery is genuinely compromised in
vital areas of government. There is also a structural deficit that
probably cannot be made up with spending cuts that the public will
support.
We have reached the end of the inexorable pendulum-like cycle of
government change, from the social investment of Governors Sargent and
Dukakis, to the fiscal conservatism of Weld/Cellucci/Swift/Romney, and
now back to the demand for social investment under Patrick. New revenues
are needed, and that means taxes need to be increased. It should not
occur until pension and health costs for state employees are brought to
standards that are sustainable and fair in today's environment. It
should be done with shrewd phasing, and with full utilization of the
stimulus and rainy day funds.
Two new taxes seem obvious. Cities and towns deserve the right to
increase meals and hotel taxes at their own option. The gas tax has
decreased due to inflation every year since 1991. Simply matching
inflation would increase the gas tax from $.21 per gallon to $.34. An
additional $.12 would enable a real investment in stabilizing the T and
improving our transportation infrastructure, with an environmentally
strategic tax on carbon.
But that is not enough, given the public's commitment to widely
available healthcare, quality pre-K-12 education, and a public
higher-education system accessible to all. Raising the sales tax from 5
cents to 6 cents on the dollar, with certain exemptions, would raise
about $750 million. With appropriate reforms and discipline, that should
be enough for the Commonwealth to meet its legitimate social
obligations. It would also still leave a $2 billion tax-cut legacy.
Steve Crosby, who was secretary of administration and finance for
Governors Paul Cellucci and Jane Swift, is dean of the McCormack
Graduate School of Policy Studies at UMass-Boston.
The Boston Globe
Tuesday, April 28, 2009
The public deserves reform
By Richard C. Lord
Associated Industries of Massachusetts, the state's principal employer
organization, has found itself opposing proposals to raise the gas tax
and sales tax. Its position is that set forth by Governor Patrick
yesterday in a letter to the Legislature: "Before we consider any
broad-based tax increases, we must first regain the public's confidence
in government's ability to steward public funds wisely."
AIM really does believe in "reform first" - its members live it every
day.
Across the Commonwealth, employers are making painful decisions to
curtail expansion plans, defer critical expenditures, and drop product
or service lines to focus on core businesses. AIM surveyed 145
Massachusetts employers during February and found that 46 percent had
conducted a layoff or were preparing to do so. They are turning to pay
freezes (55 percent), reduced work hours (42 percent), and altered
staffing plans (86 percent).
A significant number are also instituting a salary reduction program,
and many are modifying their retirement plans. Three-quarters are
seeking ways to stave off increases in employee contributions to
health-insurance premiums - which also involves hard decisions.
Private-sector employers - and employees - simply do not see state and
local government facing up to choices like this. Of course, cutting
public budgets is unpleasant work, and some decisions - to preserve
investments in education, for example - have been commendable. Pay has
been frozen and furloughs imposed. But we have seen too little
reconsideration of core priorities, too little structural reform, too
much resistance to reining in health insurance costs and to reforming
pensions (at a time when the benefits prevalent in the public sector
have become virtually unsustainable in the private sector).
What we have seen, beyond the bobbing and weaving, is some egregiously
bad fiscal policy, notably a huge increase in business taxes that has
increased the Commonwealth's dependence on highly cyclical revenues and
made its finances more vulnerable to recession, while damaging its
economic competitiveness. The state has failed to address, even in good
times, its structural budget deficit; and rather than reduce fiscal
uncertainty it has transferred it to taxpayers.
We in the business community are not simply naysayers. We have supported
judicious tax increases in the past. We recognize that the Commonwealth
may need new revenues - among other things. We believe, however, that
increasing revenues should be a last resort.
A gas tax increase, as proposed by the governor, can make sense, but
only if it is tied to reform and to a restructuring of state
transportation agencies. (Indeed, until we know the structure and how
the bonding works, we cannot know what kind of revenue is needed.) A
sales tax increase, as the governor says, can be considered only after
"final and satisfactory action on the several reform proposals" now
pending.
What is at issue here is the credibility of government - and not just
within the business community. The governor says that the people of
Massachusetts deserve "real reforms and real change"; legislators are
evidently well aware of (shall we say) a limited tolerance for tax
increases among their constituents. The public, too, wants reform first.
Richard C. Lord is president and CEO of Associated Industries of
Massachusetts.
The Boston Globe
Tuesday, April 28, 2009
Plenty of problems still down the road
House plan won't solve long-term transit-fund crisis
By Noah Bierman
The House plan to raise the state sales tax could create some short-term
relief for commuters anxious about toll hikes and MBTA fare increases in
the coming year, but it would do little to halt the larger crisis that
has made transportation a top issue on Beacon Hill, advocates and
observers say.
"If the public thinks that, 'Oh, this sales tax is going to solve all
the problems,' it won't," said Eric Bourassa, a public transit advocate
for the Massachusetts Public Interest Research Group. "It might improve
the short-term problems, but it might just push them off into the
future."
The House bill would generate about $275 million a year for
transportation, but would leave the specifics on how it will be spent to
future debates, which would probably pit transit riders, turnpike users,
and other interests against each other.
So far, top lawmakers have indicated they are most eager to prevent
about $100 million worth of toll increases on the Massachusetts Turnpike
that would double tolls to $7 for cash-paying passenger cars at the
Sumner and Ted Williams tunnels and raise them substantially elsewhere.
Transit riders have had a harder time getting lawmakers' attention than
motorists who pay tolls to drive on the Pike. Still, the remaining
transportation money in the House plan, if dedicated to the T, could
probably halt, or at least reduce, a fare hike of as much as 30 percent,
as well as severe service cuts that threaten to eliminate weekend
commuter rail runs and reduce the frequency of service on almost every
other bus and subway route. The Massachusetts Bay Transportation
Authority is officially projecting a $165 million deficit next budget
year, but Daniel A. Grabauskas, the general manager, said last week that
the gap is expected to grow larger than that by July 1, when the budget
year begins.
Even if the state stretches the new sales tax money enough to cover that
growing deficit, the bigger problems - most notably, the MBTA's $8.2
billion debt load - would remain unsolved. The state would still have to
borrow $135 million every year to pay for its basic highway maintenance
costs. It would have nothing to give regional bus systems outside Boston
or to cover $68 million a year in needed repairs on the turnpike west of
Route 128.
"It's a start," said Marc Draisen, executive director of the
Metropolitan Area Planning Council. "It's not the end."
Draisen praised House Speaker Robert A. DeLeo for cobbling together
votes to help transportation in what most agree is a very difficult
political environment, given the large volume of state needs and the
weakened economy. But the same poor economy that is hitting taxpayers
and government agencies could diminish how much money the House plan
generates, if spending continues to decline.
MBTA managers know that problem well. In 2000, the T began taking in one
cent of every taxable dollar in the state, a system designed to give the
authority enough money to pay its own bills forever and cover its
existing debt, then more than $2 billion. But even the most conservative
sales tax projections, of 3 percent growth per year, were too
optimistic. In the previous decade, revenue from the sales tax had grown
6.5 percent a year. But after 2000, it grew an average of 1 percent a
year, and the T went further into debt as it paid for expansion projects
required to mitigate the Big Dig's environmental impacts.
If the T plugs next year's operating deficit, it will still need to
borrow about $200 million a year to replace old train cars, rebuild
aging stations, and complete other large-scale repair programs.
In 2007, a bipartisan commission that studied the transportation problem
recommended a higher gas tax, as well as moderate toll increases and
MBTA fare hikes, to raise a total of nearly $20 billion in unmet needs
over the next two decades. The chairman of that commission, Stephen J.
Silveira, said yesterday that the members intentionally chose the gas
tax and other user fees so the public would see a direct connection
between transportation costs and services, rather than simply another
tax. Using more sales tax dollars for transportation would end that
approach.
"OK, I go and I buy my new flat-screen TV, and I pay an extra $25," he
said. "And, what, $6 of that is for transportation?"
The Boston Globe
Tuesday, April 28, 2009
A Boston Globe editorial
Retirees run amok - again
Rage over extravagant pensions has reached the quasi-public Boston
Redevelopment Authority, where a consultant with about 50 years of
service at the agency has had his contract terminated over charges of
double-dipping.
Paul McCann, the former executive assistant to the BRA director, retired
in 2005 with a $97,000-a-year public pension. But he never really left.
Last year, he earned $162,000 in consulting fees on top of his
retirement pay despite a state law prohibiting retired employees from
collecting more in total income than the original position pays.
McCann says the income limits do not apply to the BRA, which is not a
line item in the city budget. But the state Public Employee Retirement
Administration Commission, which oversees 100 local retirement boards,
says the income limits do apply.
In limited circumstances, it can make sense for agencies to rehire
retirees with special skills on temporary contracts. But paying McCann
more than $100 an hour for up to 25 hours per week raises serious
questions about the quality of succession planning at the BRA. It raises
even more questions about a lack of oversight at the BRA. Minimally,
Mayor Menino should give the Boston Finance Commission, which reviews
no-bid contracts, the same power to oversee the quasi-public authorities
that it uses to keep consultant contracts in check at the school,
police, and other city departments.
Obscure, decades-old decisions from the attorney general's office may
also be giving some retirees the go-ahead to milk the system. If state
lawmakers are serious about reforming public pensions, they will close
this tap before it pollutes the public's trust in government any
further.
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