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CLT UPDATE
Monday, January 28, 2013
Gov's tax hikes, spending spree expands
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For two weeks, it seemed like Governor Deval
Patrick’s proposed tax hikes might never stop coming.
First, he announced a plan to raise the income
tax in his annual State of the Commonwealth speech. The next day, he
put a gradual gas tax hike on the table, along with higher transit
fares and tolls, and detailed dozens of tax deductions he wants to
revoke. News of taxes on candy and soda, with added taxes on
cigarettes, were only revealed to be part of his $1.9 billion tax
package a week after he introduced it.
The massive tax proposals leaked out in a steady
drip that puzzled some observers, who saw him trying to soften the
blow of a complex plan, but also prolonging a controversial
discussion.
“I don’t think the rollout has helped the
governor at all. He’s kept tax increases on the front page for days
on end,” said Jim Stergios, executive director of the Pioneer
Institute, a conservative think tank.
Others saw political value in giving taxpayers a
bite to digest at a time, lest they choke on the news.
“I think strategically it was a small advantage
to release the details incrementally. It did blunt a jaw-dropping
reaction to the scope of the tax increases that is now slowly
catching up with the public,” said Jeff Berry, a political science
professor at Tufts University.
Even in its incremental rollout, though, Berry
said he thinks the tax plan is overly ambitious and unlikely to be
embraced by the Legislature....
The tax plan the governor proposed is complicated
not only because it asks residents to support public investment with
nearly $2 billion more in new taxes, but also because it would make
the tax code more progressive, shifting the burden away from
low-income taxpayers by lowering the sales tax and raising personal
exemption rate.
The way the governor unveiled his tax proposals
put heavy emphasis on the positives of progressive tax structure and
public investment, but skimped on the details of how it would impact
individual taxpayers and corporations, said Michael Widmer,
president of the business-funded watchdog group the Massachusetts
Taxpayers Foundation.
For instance, he noted, the governor aims to
revoke 44 tax deductions that currently give taxpayers breaks on
everything from child care to business lunches.
As the fine print came into focus, it became
clear that the tax exemptions affect not just obscure tax filers,
but “the great majority of individuals in the state,” Widmer said.
For instance, Patrick proposed eliminating a
state deduction of up to $2,000 that Massachusetts taxpayers are
currently allowed to deduct for their contributions to the Social
Security system.
The Boston Globe
Sunday, January 27, 2013
Slow rollout of tax hikes raises questions
By now, everyone knows that Patrick, the governor
of “generational responsibility,” wants to impose what is likely the
largest tax hike in state history, save for those heady colonial
days when taxes didn’t exist, and then they did.
For a mere $1.9 billion, Patrick told lawmakers
and the public that by saying yes they could almost have it all:
universal early childhood education, less highway congestion, a T
that runs later into the night, and commuter rail service to New
Bedford, Cape Cod, Springfield and New York City....
Patrick has always favored a graduated income
tax, which is prohibited by the state’s constitution. His plan is
basically the next best thing, a combination of tax increases,
decreases, deductions and exemptions that he says at the end of the
day will cost the lower-to-middle class less, and those earning
$50,000 a year or higher progressively more.
Two years before a statewide election when most
lawmakers will put their names back on the ballot, the governor’s
shoot-the-moon gambit on taxes begged the question of timing and
whether there is ever a moment when tax increases are a popular bet
to make.
State House News Service
Friday, January 18, 2013
Weekly Roundup – "On kind of a swing"
This goal is a back-door graduated income tax,
and we would expect a court challenge to reject it as
unconstitutional. If the governor wants a graduated tax, he and the
Legislature should put it on the ballot; voters can then say no
again, as they did in 1972, 1976, and 1994.
The Boston Globe
Monday, January 21, 2013
Letter to the editor
Graduated income tax wouldn’t fly with voters
By Barbara Anderson
Did the governor neglect to mention he plans
to raise highway tolls, MBTA fares, and fees at the Registry of
Motor Vehicles — and establish a process by which those fees
would go up every five years from now until eternity?
And the gas tax — wait, he didn’t mention the
gas tax? It would be indexed to inflation, going up next year
and forevermore. That wouldn’t be the worst idea if it weren’t
coupled with every other money-grubbing scheme Team Patrick
could think of.
And in case it wasn’t clear enough in
Patrick’s speech he really does plan to “restructure the tax
code” to create more “fairness.”
In plain English, that means he plans a
back-door attempt to impose a “progressive” tax structure that
would squeeze more out of higher-income earners — the direct
version of which is forbidden by the state Constitution.
A Boston Herald editorial
Monday, January 21, 2013
More to tax story
The tax plan Governor Deval Patrick proposed
this week would eliminate a flurry of personal tax breaks – from
deductions for business lunches and charitable contributions to
obscure provisions sparing taxes on settlements with coal miners
and septic system upgrades. Administration and Finance officials
stressed that under the governor’s plan, all taxpayers would see
their personal exemption rate doubled – meaning many wouldn’t be
taxed on the first $8,800 they make – and that they aim to
simplify the tax code and eliminate special treatment for
subsets of taxpayers.
Among the tax breaks that would remain
untouched, though, are the earned income tax credit for
low-income people, which costs the state about $132.3 million a
year, and a film production tax credit that helps about 50
filmmakers save an average of $52,000 a year.
The Boston Globe
Saturday, January 19, 2013
Tax breaks proposed for elimination
During his annual "State of the State" speech
on Wednesday, Patrick caught nearly all legislators off balance
when he asked them to approve a sweeping bill to raise the
income tax from 5.25 percent to 6.25 percent, or 19 percent,
while cutting the sales tax from 6.25 percent to 4.5 percent.
The next day, Patrick's top fiscal aides
outlined other proposals by the governor to raise revenues,
including one that would link the state's 23.5-cent-a-gallon gas
tax to inflation, meaning an additional 3.6 cents per gallon
would tacked on by 2021. The governor also is calling for 10
percent fee increases every five years at the Registry of Motor
Vehicles, starting in 2015 and five percent toll increases every
two years starting next year.
The Springfield Republican
Monday, January 21, 2013
Massachusetts legislators appear more receptive this year to new
taxes and fees
Patrick’s sweeping plan would raise the state
income tax from 5.25 percent to 6.25 percent while cutting the
sales tax from 6.25 percent to 4.5 percent. The plan would also
eliminate 45 personal tax deductions worth $1.3 billion
annually, including deductions for T passes, college
scholarships, and dependents under age 12. Some corporate tax
benefits would be eliminated, while the governor would also
raise fares and tolls on the MBTA, the Massachusetts Turnpike,
and other roads.
If approved, Patrick’s plan would result in
higher taxes for about 50 percent of the state’s residents, with
the largest increases on high-income households. Taxes would be
lower for households with annual incomes below $38,000, but
higher for people earning more, with the biggest average
increases for those earning more than $103,000 annually.
The Boston Globe
Tuesday, January 22, 2013
Economists split on wisdom of Patrick’s tax plan
Some cite promise for business; others see risk to growth
Coupled together with other tax code reforms,
such as the elimination of some personal and corporate tax
deductions and the doubling of the personal tax exemption, the
administration says it can give the state a fairer tax code with
enough new revenue to support strategic investments.
“As a result, the system would move somewhat
closer to a flat-tax structure, where people at all income
levels pay the same share of their income in taxes — and away
from the current, markedly regressive structure,” a MassBudget
analysis of the plan determined.
State House News Service
Wednesday, January 23, 2013
Budget gaps lurk behind Patrick's push for new spending, higher
taxes
Governor Deval Patrick today proposed a $34.8
billion state budget that increases funds for transportation and
education, as well as aid to cities and towns, while at the same
time calling for a major hike in taxes....
The Patrick administration also revealed
today that a $1.9 billion package of income tax increases and
other revenue-raising measures the governor unveiled last week
included new or higher taxes on candy, soda, and cigarettes....
Patrick unveiled his plans for a major tax
hike last week, in his State of the Commonwealth speech. The
proposal, if approved, would raise taxes on about 50 percent of
residents, beginning in January 2014, with the biggest increases
on upper-income earners.
The heart of the plan would hike the income
tax from 5.25 percent to 6.25 percent while cutting the sales
tax from 6.25 percent to 4.5 percent. It would also double the
personal income tax exemption, eliminate 45 income tax
deductions (for T passes, college scholarships, and dependents
under 12, among other items) and tie the gas tax to inflation,
ensuring gradual increases at the pump. Three corporate tax
breaks would be eliminated. MBTA fares, Turnpike tolls, and
Registry fees would also increase periodically.
Patrick said the plan was aimed at making the
tax code simpler, fairer and more progressive, while raising
enough money to put the financially ailing transportation system
on a path toward long-term stability.
The Boston Globe
Wednesday, January 23, 2013
Patrick proposes $34.8b budget
Candy, soda, tobacco, and bottles of water
and sports drinks are all in Gov. Deval Patrick's crosshairs as
announced another $2 billion tax wish list in his $34.8 billion
proposed fiscal 2014 budget at the State House this
afternoon....
The plan unveiled today includes an
additional $1.2 billion from tax changes that Patrick proposed
last week including a hike in the income tax rate from 5.25
percent to 6.25 percent and a cut in the sales tax from 6.25
percent to 4.5 percent.
Patrick last week proposed increasing the
income tax, tying the gas tax to inflation and hiking RMV fees,
tolls and MBTA fares as part of a proposed $2 billion in
transportation improvements and additional education spending.
Patrick is also recommending increasing the
cigarette excise tax by an additional dollar, bringing the total
tax to $3.51 per pack.
The Boston Herald
Wednesday, January 23, 2013
Candy, butts, soda, water: Gov's latest tax targets
To create more jobs in Massachusetts Gov.
Deval Patrick just needs to reach deeper into taxpayers’
wallets. That was his bizarre message yesterday as he unveiled a
spending proposal for next fiscal year that positively blows the
doors off previous budgets.
Fueled by a massive increase in taxes that he
dreams of seeing enacted, Patrick is proposing to spend $34.8
billion to run state government next year — roughly a 7 percent
increase over the budget he signed last July.
If this document were to survive legislative
negotiations as is, it would represent a nearly 40 percent
increase in state spending since 2007. Taxpayers can chew on that when in the future they are required to pay a state
sales tax on a bottle of ginger ale or a package of M&Ms....
While he’s bellied up to the revenue bar,
Patrick apparently figures he’ll order one of everything on the
menu. Yes, the sales tax would go down. But income taxes would
go up (and 45 deductions would disappear), there would be new
taxes on candy and soda, a higher tax on cigarettes, the bottle
bill (a de facto tax) would be expanded to include bottled water
and sports drinks and even vacation rentals would now be slapped
with the hotel tax. Higher Registry fees, Turnpike tolls and
MBTA fares are also in the offing.
A Boston Herald editorial
Thursday, January 24, 2013
Gov gorges on taxes
Beacon Hill leaders already were getting an
earful from constituents about Gov. Deval Patrick’s proposed
income tax hike before he announced a new wave of taxes
yesterday on sugary snacks, tobacco and even water in his budget
for the coming fiscal year.
“I told him there were a lot of emails in,
saying that people’s Social Security has gone up, the cost of
daycare, the cost of food,” Senate President Therese Murray told
the Herald yesterday. “And they’re very concerned about an
increase in the income tax.”
She estimated her office has already received
at least 100 emails railing against the proposed 6.25 percent
income tax hike.
The Boston Herald
Thursday, January 24, 2013
‘Very concerned’ about tax hike
Pols say angry constituents are giving them an earful about
gov’s plan
Citizens for Limited Taxation is
already threatening a petition to repeal any increase that might
be approved by the Democratic majority on Beacon Hill, and the
debate that would ensue could be just what the doctor ordered
for ailing Bay State Republicans.
Patrick denies that Massachusetts already has
the fourth-highest per-capita tax burden in the nation, but CLT
Executive Director and fellow Salem News columnist Barbara
Anderson says those figures come right from U.S. government
sources. Higher taxes, whether on incomes or gasoline, will be a
tough sell here even in the age of Obama II.
The Salem News
Friday, January 25, 2013
Choosing sides on taxes
By Nelson Benton
The Worcester Telegram & Gazette
Tuesday, January 22, 2013
Editorial cartoon by David Hitch
The Boston Herald
Wednesday, January 23, 2013
Editorial cartoon by Jerry Holbert
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Chip Ford's CLT
Commentary
Gov. Patrick's Fiscal Year 2014 budget
— $34.8 billion —
submitted last Wednesday, proposes to increase state spending by 6.9
percent ($2.3 billion) over this year's spending of $32.5 billion.
The Boston Herald reports that this is a spending increase of nearly 40
percent since 2007 when he first took office.
According to the Boston Herald, "That's an
increase that Patrick said is consistent with pre-recession
budgets." That's not very reassuring; the state was spending too much
back then too, which got it into this mess once again when
the cyclical economy inevitably stalls. Apparently Massachusetts needs to have baseline
spending, always increasing by leaps and bounds.
Gov. Patrick feels that the recession the rest of
us are still enduring is over — so it's time
to break out and let the good times roll again, spend on every boondoggle on his
wish-list just as wildly as during the good old days of the bubble
economy. Just send the
bill to us taxpayers.
Funding his wild spending spree is simple: Just
raise every tax, fee, and toll productive taxpayers pay then add a
bunch more — while sheltering from harm
"the least fortunate among us" who pay no or barely any taxes but
the sales tax. He proposes to lighten that one tax burden on
his Chosen Few constituency.
Still not enough, he proposes to eliminate tax
deductions, such as for: dependent children under twelve, the Social
Security tax, charitable contributions, the capital-gains exemption
on the sale of a home, adoption fees, college scholarships, and 39
more.
Stripping away these deductions, we're told, will
bring into the state's coffers an additional $1.9 billion every year
— but that's still not enough to
pay his additional $2.3 billion of new spending. It leaves him $400
million short.
To fund his pie-in-the-sky budget, His
Excellency the Governor also intends to raid the state's $1.2
billion "rainy day" fund for an additional $400 million and there we
go — voilŕ his budget is balanced!
Sen. Bruce Tarr (R-Gloucester), Senate Minority
Leader, stated the rational obvious: “Even with an exhaustive effort
to raise revenue through new taxes, tax increases and changes to the
tax code, it’s astonishing that this budget proposal also has to
take $400 million from the stabilization fund and borrow against
future receipts to meet the burdens of its expansive new spending.”
Sen. Tarr, how else can he finance this
pipe dream of unconscionable government expansion but to
squeeze ever more out of productive citizens and rob everything not
nailed down, to satisfy and pleasure the Takers constituency?
More Is Never Enough (MINE) and never will be.
The Campaign for Our Communities
January 16, 2013
The Campaign for Our Communities Applauds Governor
Patrick's Call
for Greater Investment in Massachusetts Communities,
Economy
The Campaign for Our Communities today announced its
strong support for Governor Deval Patrick's call for new
revenue to invest in education, transportation and
economic development. The Governor's plan would raise
$1.9 billion through an increase in the income tax to
6.25% and the lowering of the sales tax to 4.5%.
"We strongly support Governor Patrick's commitment to
increase investments in excellent schools, reliable
transportation systems and a strong economy that
provides good jobs. These investments are needed to
ensure that Massachusetts continues to be a great place
to live, work and raise a family," stated Andi Mullin,
Director of the Campaign for Our Communities.
The Campaign for Our Communities was formed to improve
the quality of life for Massachusetts families and to
help build a strong future for our state. The coalition,
which includes over
120 organizations, believes in the need to make
smart investments in people and communities. To fund
those investments, it supports tax reforms that will
raise new revenues while holding down increases for low
and middle income families.
If you don't know who or what this "Campaign" is all about
— and who benefits from higher
taxes on productive citizens, see:
CLT Update — Feb.
5, 2012
CLT
vs. 'Campaign for Our Communities' —
Want to choose sides?
When you get there, make sure to scroll down to
the bottom of the page!
As you can see, we've been warning about this
coming for a long time.
The barbarians are now storming the gate.
Taxpayer, it's time to man the barricades!
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Chip Ford |
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The Boston Globe
Sunday, January 27, 2013
Slow rollout of tax hikes raises questions
By Stephanie Ebbert
For two weeks, it seemed like Governor Deval Patrick’s proposed tax
hikes might never stop coming.
First, he announced a plan to raise the income tax in his annual
State of the Commonwealth speech. The next day, he put a gradual gas
tax hike on the table, along with higher transit fares and tolls,
and detailed dozens of tax deductions he wants to revoke. News of
taxes on candy and soda, with added taxes on cigarettes, were only
revealed to be part of his $1.9 billion tax package a week after he
introduced it.
The massive tax proposals leaked out in a steady drip that puzzled
some observers, who saw him trying to soften the blow of a complex
plan, but also prolonging a controversial discussion.
“I don’t think the rollout has helped the governor at all. He’s kept
tax increases on the front page for days on end,” said Jim Stergios,
executive director of the Pioneer Institute, a conservative think
tank.
Others saw political value in giving taxpayers a bite to digest at a
time, lest they choke on the news.
“I think strategically it was a small advantage to release the
details incrementally. It did blunt a jaw-dropping reaction to the
scope of the tax increases that is now slowly catching up with the
public,” said Jeff Berry, a political science professor at Tufts
University.
Even in its incremental rollout, though, Berry said he thinks the
tax plan is overly ambitious and unlikely to be embraced by the
Legislature.
“I think he’ll be lucky to get half of what he wants,” said Berry.
“It’s clearly a negotiating ploy.”
The Patrick administration has already hinted at compromise, noting
that the proposal is more of an initial pitch than a final offer.
“The governor knew he was taking on a tough conversation when he put
the proposal out there. What he was hoping to do was to start a
conversation about what do people want to invest in and what’s the
best way to pay for it,” said Patrick’s chief of staff, Brendan
Ryan.
He suggested that the governor is more attached to the principle of
increasing investment and opportunity and less wedded to the
specifics of each tax increase.
“The administration doesn’t have a corner on all the right ideas,”
Ryan added. “The reaction has been as good as we could have hoped in
terms of having a real serious conversation.”
Alex Zaroulis, a spokeswoman for the Executive Office for
Administration and Finance, said the administration did not want to
overwhelm voters with details in the initial announcement.
“We wanted to be able to have a longer discussion, get people
understanding what we’re talking about, get feedback from people,”
she said.
Some of Patrick’s supporters in his liberal base assert that by
focusing on what he wants to do with the money — improve
transportation and education programs — Patrick helped lay the
groundwork to forge support for the tax increases.
“I was actually just remarking on this, that I think they have done
a really excellent job of rolling this out,” said Sonia Chang-Diaz,
a Democratic state senator from Boston. “I hear him talking a lot
about the *why* of this.”
Chang-Diaz expressed support for the package, even as she
acknowledged that she hasn’t fully digested how it could affect her
constituents.
“I’m just glad we’re having this conversation,” she said. “A
conversation that starts with telling some truths, albeit unpopular
ones, about what it takes to make a successful state.”
The tax plan the governor proposed is complicated not only because
it asks residents to support public investment with nearly $2
billion more in new taxes, but also because it would make the tax
code more progressive, shifting the burden away from low-income
taxpayers by lowering the sales tax and raising personal exemption
rate.
The way the governor unveiled his tax proposals put heavy emphasis
on the positives of progressive tax structure and public investment,
but skimped on the details of how it would impact individual
taxpayers and corporations, said Michael Widmer, president of the
business-funded watchdog group the Massachusetts Taxpayers
Foundation.
For instance, he noted, the governor aims to revoke 44 tax
deductions that currently give taxpayers breaks on everything from
child care to business lunches.
As the fine print came into focus, it became clear that the tax
exemptions affect not just obscure tax filers, but “the great
majority of individuals in the state,” Widmer said.
For instance, Patrick proposed eliminating a state deduction of up
to $2,000 that Massachusetts taxpayers are currently allowed to
deduct for their contributions to the Social Security system.
That change would come on top of increases to the federal payroll
tax that took effect earlier this month.
Widmer suggested that such specifics are being deliberately
downplayed by the governor, who is focusing on the tax plan’s higher
goals.
“When you have something and you’re taking it away from 3 million
tax filers,” he said, “then that’s not going to be popular.”
State House News Service
Friday, January 18, 2013
Weekly Roundup – "On kind of a swing"
By Matt Murphy
Hours before Gov. Deval Patrick addressed the state on live
television, the Seer of Barre made a prediction, "The governor does
have, and he's a good leader, a propensity to throw long.” Sen.
Stephen Brewer was right, and somewhere in Swampscott, Charlie Baker
was muttering, “I told you so,” under his breath.
By now, everyone knows that Patrick, the governor of “generational
responsibility,” wants to impose what is likely the largest tax hike
in state history, save for those heady colonial days when taxes
didn’t exist, and then they did.
For a mere $1.9 billion, Patrick told lawmakers and the public that
by saying yes they could almost have it all: universal early
childhood education, less highway congestion, a T that runs later
into the night, and commuter rail service to New Bedford, Cape Cod,
Springfield and New York City.
Earlier in the week, a jacketless Transportation Secretary Richard
Davey stood before an anxious crowd at UMass Boston - lacking only a
black turtleneck and light-blue jeans – to declare, "The current
system we have today we cannot afford.” He then explained that
projects like South Coast rail and the Green Line extension don’t
actually have a funding source without new revenue, something
Republicans have been saying for years.
Buried in the governor’s plan to hike the state income tax to 6.25
percent and lower the sales tax to 4.5 percent are other ideas to
take a nickel here and a quarter there, including periodic MBTA
fare, turnpike toll and RMV fee increases and a gas-tax tied to
inflation. What do taxpayers get in return? Better education that
leaves no four-year-old behind, and a safer, more accessible network
of public transportation.
While this, on its own, would have made for a newsy enough week, Lt.
Gov. Timothy Murray thickened the stew with an announcement on
Friday that he would not run for governor in 2014, a startling
surprise though not necessarily a contradiction to his remarks in
November that he “would like to be governor.” ...
To look at any single proposal would be wrongheaded, Patrick’s team
insisted in the days following his State of the Commonwealth
address. One must think instead about the whole picture and how each
tax code change fits together like a puzzle, they said.
Patrick has always favored a graduated income tax, which is
prohibited by the state’s constitution. His plan is basically the
next best thing, a combination of tax increases, decreases,
deductions and exemptions that he says at the end of the day will
cost the lower-to-middle class less, and those earning $50,000 a
year or higher progressively more.
Two years before a statewide election when most lawmakers will put
their names back on the ballot, the governor’s shoot-the-moon gambit
on taxes begged the question of timing and whether there is ever a
moment when tax increases are a popular bet to make.
On that question this week there was agreement from Mr. Patrick and
Ms. Jennifer Nassour: never.
“There is no good time to raise taxes,” Patrick said in his speech,
joking after he delivered the line that he knew while practicing the
speech that this would be the moment a hush fell over the chamber.
He was right, but he broke the ice.
Nassour, the former GOP party leader who spent her evening doing
color commentary on NECN, came to a similar conclusion. So why now?
Because it’s not 2010, when Patrick the candidate said he had no
plans to raise broad-based taxes? Because it’s 2013 and there’s not
an election this year and Patrick has no plans to put his name
before Massachusetts voters? Because Patrick is running out of time
to advance the spending heavy policy agenda he laid out before he
was elected the first time but which got jammed by the recession?
Because it’s been almost a generation since Mass. voters demanded a
5 percent income tax rate, only to see its dip stall at 5.25
percent, and all he really has to do is convince Bob [DeLeo] and
Terry [Murray], who may be leaving soon, and they can do the rest?
In other words, it’s his legacy window, a fact not lost on the early
opponents of his plan: "This is about taxpayers funding the Deval
Patrick legacy project, and quite frankly I don't think the
taxpayers want to or can afford to,” House Minority Leader Brad
Jones said.
You know you’ve done something big on taxes when you’ve coaxed the
Boston Herald editorial page into endorsing a modest gas tax
increase. And as any student of state politics can attest, maybe
that’s been his plan all along. Throw the Hail Mary in the first
quarter, and celebrate when you win on a game-ending field goal.
Don’t forget, Patrick meets regularly, and privately, with House
Speaker Robert DeLeo and Senate President Therese Murray so they
have plenty of opportunities to discuss the best way to shepherd a
tax hike into the end zone.
Unlike health care, gay marriage or casino gambling before it,
Patrick’s push for the largest state tax increase in recent memory
will demand a level of leadership and coercion the governor has
never needed, or tried, to effectuate.
He seems to know it, too, finishing his week with visits to
Worcester, Haverhill, Lynn and Quincy, not coincidentally the homes
of legislative leaders whose support he will need to sell the full
Legislature on his vision.
"To say, "Hell no, we won't go,' isn't necessarily a good vetting
process," said Sen. Brewer, the recipient of a Patrick visit on
Friday to tout investments in infrastructure.
Rep. Patricia Haddad, a Somerset Democrat and top deputy to House
Speaker Robert DeLeo, summed up perfectly the corner Patrick has
backed legislators into.
"It's hard not to think they're great ideas, but I do have to worry
what it means for the people in my district. We have a (higher)
unemployment rate than anywhere in the state, but we're the ones who
want the South Coast rail so badly, so I'm on kind of a swing,"
Haddad said.
The question is how many will jump.
The Boston Globe
Monday, January 21, 2013
Letter to the editor
Graduated income tax wouldn’t fly with voters
In “More
hikes in Patrick’s blueprint” (Page A1, Jan. 18), you cited
Citizens for Limited Taxation’s reaction to Governor Patrick’s
proposed income tax rate increase, and wrote that the group “said it
is clear that Patrick is now trying to ‘tax the rich’
disproportionately.”
The reason we say this is that the governor’s budget director, Glen
Shor, said, as you paraphrased, that “the goal is to push more tax
burden onto higher-income earners and reduce it for those earning
less.”
This goal is a back-door graduated income tax, and we would expect a
court challenge to reject it as unconstitutional.
If the governor wants a graduated tax, he and the Legislature should
put it on the ballot; voters can then say no again, as they did in
1972, 1976, and 1994.
Barbara Anderson
Executive Director
Citizens for Limited Taxation
Marblehead
The Boston Herald
Monday, January 21, 2013
A Boston Herald editorial
More to tax story
In the friendly confines of the House chamber last week Gov. Deval
Patrick was all about the big picture. He can fix the state’s
troubled transportation system and make bold new investments in
education if lawmakers will simply go along with an increase in the
income tax (which many of those in attendance already support) and —
bonus! — a cut in the sales tax.
It wasn’t until the next day that Patrick dispatched his team of
budget experts to begin detailing the full, ugly extent of the
burden that his plan represents for taxpayers, drivers, MBTA
passengers and, well, nearly every man, woman and child in the
commonwealth.
Did the governor neglect to mention he plans to raise highway tolls,
MBTA fares, and fees at the Registry of Motor Vehicles — and
establish a process by which those fees would go up every five
years from now until eternity?
And the gas tax — wait, he didn’t mention the gas tax? It would be
indexed to inflation, going up next year and forevermore. That
wouldn’t be the worst idea if it weren’t coupled with every other
money-grubbing scheme Team Patrick could think of.
And in case it wasn’t clear enough in Patrick’s speech he really
does plan to “restructure the tax code” to create more “fairness.”
In plain English, that means he plans a back-door attempt to impose
a “progressive” tax structure that would squeeze more out of
higher-income earners — the direct version of which is forbidden by
the state Constitution.
As administration officials explained, the changes in the tax code,
which include the doub
ling of the personal exemption along with the
elimination of 45 personal tax exemptions, will ensure wealthier
people pay more.
“It takes a tax code that right now imposes a higher effective tax
rate on lower-income tax filers, and a lower effective tax rate on
higher-income tax filers, and flips that,” Administration and
Finance Secretary Glen Shor said.
Hey, points for honesty. But those words may come back to haunt Shor
when — if legislators are actually stupid enough to go along — this
scheme to soak “the rich” ends up in court.
The Boston Globe
Saturday, January 19, 2013
Tax breaks proposed for elimination
By Stephanie Ebbert
The tax plan Governor Deval Patrick proposed this week would
eliminate a flurry of personal tax breaks – from deductions for
business lunches and charitable contributions to obscure provisions
sparing taxes on settlements with coal miners and septic system
upgrades. Administration and Finance officials stressed that under
the governor’s plan, all taxpayers would see their personal
exemption rate doubled – meaning many wouldn’t be taxed on the first
$8,800 they make – and that they aim to simplify the tax code and
eliminate special treatment for subsets of taxpayers.
Among the tax breaks that would remain untouched, though, are the
earned income tax credit for low-income people, which costs the
state about $132.3 million a year, and a film production tax credit
that helps about 50 filmmakers save an average of $52,000 a year.
Take a look at a
sortable table showing the tax breaks Patrick has proposed for
elimination and, where available, the average amount a taxpayer is
now saving on the deduction:
Sources: Massachusetts Executive Office for Administration and
Finance, Department of Revenue Tax Expenditure Commission;
Tax Expenditure Budget, Fiscal Year 2013
The Springfield Republican
Monday, January 21, 2013
Massachusetts legislators appear more receptive this year to new
taxes and fees
By Dan Ring
Gov. Deval L. Patrick's groundbreaking plan to raise nearly $2
billion in new annual taxes to pay for transportation and education
may not survive as it stands, but it could prompt more moderate tax
and fee increases this year in a changing political climate on
Beacon Hill, state legislators said.
During his annual "State of the State" speech on Wednesday, Patrick
caught nearly all legislators off balance when he asked them to
approve a sweeping bill to raise the income tax from 5.25 percent to
6.25 percent, or 19 percent, while cutting the sales tax from 6.25
percent to 4.5 percent.
The next day, Patrick's top fiscal aides outlined other proposals by
the governor to raise revenues, including one that would link the
state's 23.5-cent-a-gallon gas tax to inflation, meaning an
additional 3.6 cents per gallon would tacked on by 2021. The
governor also is calling for 10 percent fee increases every five
years at the Registry of Motor Vehicles, starting in 2015 and five
percent toll increases every two years starting next year.
Rep. Stephen Kulik, a Worthington Democrat who has been
vice-chairman of the House Ways and Means Committee, which handles
tax bills, said legislators might be receptive to a mix of new
revenues, including toll increases and fare increases at the MBTA in
Greater Boston, to raise money for transportation. Kulik said
legislators are willing to look very carefully and thoroughly at the
governor's plan and decide what is fiscally prudent and politically
possible. He said there may be room for compromise.
While Kulik said he is not a fan of raising the gas tax, because it
disproportionately affects Western Massachusetts, he said he does
believe the state needs to spend more on transportation.
Patrick plans to include the proposed tax increase in his version of
the state's estimated $32 billion budget for the fiscal year
starting July 1. Patrick will submit the budget on Wednesday.
Legislators appear more willing to raise taxes or fees this year.
Last year, House Speaker Robert A. DeLeo, whose chamber would start
a debate on tax proposals, ruled out any new taxes and fees. DeLeo
blocked passage of Patrick's modest plan to raise $260 million in
new taxes and fees such as charging the sales tax on candy and soda.
After Patrick's speech on Wednesday, DeLeo told reporters the
governor "gave us a lot of food for thought" with his proposed $1.9
billion tax increase. DeLeo said nothing "could pass or fail" based
on what Patrick said at the Statehouse.
Sen. Michael R. Knapik of Westfield, the ranking Republican on the
Senate Ways and Means Committee, said the reality is that the public
cannot take the shock of a tax increase on the scale proposed by the
governor. Knapik noted that the state's unemployment rate still is
6.7 percent and that Greater Springfield lost about 1,000 jobs over
the past 13 months.
"I don't think a $2 billion tax increase is a prudent way to go in a
state waiting for the recovery to kick in," Knapik said. "The
governor's proposal is too ambitious, too much of a stretch for the
economy of Massachusetts to absorb."
Knapik said he would oppose an increase in the income tax. Knapik
noted the state raised the state's sales tax by 25 percent from 5
percent to 6.25 percent in 2009.
"There is plenty of places to go for modest revenue," Knapik said.
"That's the key -- modest revenue and more reforms."
Patrick's plan would make the state's tax policy more progressive by
reducing taxes on many people who earn less and raising taxes on
those who earn more. A cut in the sales tax might help lower income
people because the sales tax takes a bigger percentage of their
income. Patrick would also double personal exemptions, which might
also boost lower wage earners.
Patrick's proposed cut in the sales tax would mean a loss of $1.1
billion a year. The increase in the income tax and elimination of a
corporate deduction and a couple of other tax increases on
corporations would raise about $3 billion, providing a net increase
in state tax revenues of $1.9 billion a year.
Patrick said he would dedicate all proceeds from the sales tax to
transportation improvements, school construction and other public
infrastructure. Patrick released a report last week that said the
state needs an additional $1 billion a year to maintain and improve
transportation in the state.
Patrick said he would fund education improvements with the money
raised from the increase in the income tax.
Rep. William M. Straus, a Mattapoisett Democrat and co-chairman of
the Joint Committee on Transportation, said it is "very fluid" now
on Beacon Hill when it comes to raising revenues for transportation
and how best to do it.
Straus said he would not rule out raising the gas tax or other
revenues. Straus said he would support a guarantee that the money be
used for transportation and that the funds be spent in a
geographically fair way. Straus said he is concerned that Patrick's
plan does not provide a guarantee that additional revenues would be
restricted to transportation.
Straus said revenues should be raised from people who either use or
benefit from the transportation being provided.
"There is no choice on raising revenues that is popular," Straus
said. "That is a given."
Rep. Benjamin Swan, a Springfield Democrat and member of the
speaker's leadership team, said the governor's proposal is starting
a much-needed debate on ways to raise taxes to pay for human
services, education, local aid and other services. Swan said the
state has been skimping on services for too long.
"We do need funds," said Swan, a member of the House Ways and Means
Committee. "We need an increase in revenues."
Swan said that legislators are more open to hiking taxes and fees
this year. Swan said he believes some kind of plan to raise revenues
will be passed and that he will support it.
"We expect leadership in both the House and the Senate to be more
receptive this session," Swan said. "I feel fairly positive we will
do something."
Sen. James T. Welch, a West Springfield Democrat, said he is still
sifting through the numbers of the governor's proposed overhaul of
the state's tax system.
Welch said Patrick laid out priorities -- education and
transportation -- that every legislator sees as important. Welch
said he doesn't know if a tax increase will be approved, but he said
there will be a serious discussion about potential tax changes.
"His main goal was to get a conversation started," Welch said.
"Certainly people are talking about it."
Patrick, a two-term Democrat who is not running for re-election next
year, on Thursday and Friday began visiting different cities and
towns to sell his plan to top legislators, business and community
leaders.
John S. Baick, professor of history at Western New England
University in Springfield, said that Patrick may be at the forefront
of a new era that is starting after decades of conventional wisdom
that taxes are dangerous. Democrats across the nation and in
Massachusetts are at least trying to start a discussion about the
need for a progressive approach to raising revenues, he said. The
president just won a partial victory with approval of higher federal
taxes on the wealthy, Baick said.
Patrick picked a couple of top issues -- education and
transportation -- to benefit from possible tax increases, he said.
"It has been the era of Ronald Reagan," Baick said. "Is it going to
be something new?"
Material from the State House News Service and the Associated Press
was used.
The Boston Globe
Tuesday, January 22, 2013
Economists split on wisdom of Patrick’s tax plan
Some cite promise for business; others see risk to growth
By Megan Woolhouse
It’s Massachusetts’ version of the federal tax debate that bitterly
divided Congress: Will tax increases of the kind recently proposed
by Governor Deval Patrick help or hurt the local economy?
And much like the federal debate, economists disagree. Some support
the governor’s plan, lauding it for creating jobs and making the
state more attractive to businesses, while others object to raising
taxes on the heels of federal tax increases.
“I think it’s really positive in terms of the impact it will have,”
Northeastern University economist Alan Clayton-Matthews said of
Patrick’s proposal, citing the benefits of a better-educated
workforce.
But Brian Bethune, an economics professor at Gordon College in
Wenham, disagreed, saying tax increases would hamper economic
growth.
This is “one of the worst ideas I’ve heard in a long time,” Bethune
said.
Patrick’s sweeping plan would raise the state income tax from 5.25
percent to 6.25 percent while cutting the sales tax from 6.25
percent to 4.5 percent. The plan would also eliminate 45 personal
tax deductions worth $1.3 billion annually, including deductions for
T passes, college scholarships, and dependents under age 12. Some
corporate tax benefits would be eliminated, while the governor would
also raise fares and tolls on the MBTA, the Massachusetts Turnpike,
and other roads.
If approved, Patrick’s plan would result in higher taxes for about
50 percent of the state’s residents, with the largest increases on
high-income households. Taxes would be lower for households with
annual incomes below $38,000, but higher for people earning more,
with the biggest average increases for those earning more than
$103,000 annually.
Workers at every income level recently received a small hit to their
paychecks when Congress allowed a temporary decrease in federal
payroll taxes to lapse. The tax reduction had meant about $822 a
year in savings for taxpayers earning between $50,000 and $75,000 a
year.
The federal government also recently increased the top tax rate for
married couples earning more than $450,000 and individuals earning
above $400,000; Massachusetts has a higher proportion of high-income
taxpayers than most other states.
Both the national and state economies are growing at a slow pace.
Although Massachusetts weathered the 2008 recession better than the
nation, largely due to the strength of its technology industry, a
slowdown in exports and uncertainty about US fiscal policy have
weighed on growth. Unemployment inched up to 6.7 percent in
December, compared to 6 percent in May. The US unemployment rate was
7.8 percent.
Patrick proposed using the $1.9 billion in new tax collections for a
major public works program, including building or modernizing
schools, roadways, and rail lines, as well as to stabilize the
finances of the troubled Massachusetts Bay Transportation Authority.
Clayton-Matthews said the state economy is expected to improve in
2013, and that Patrick’s proposal will help, giving the state a
“modest” short-term boost thanks to increased spending on public
works and education that will create jobs. The biggest benefits,
however, will be long term, he said, arguing that a fixed-up
infrastructure and stronger education system will make the state
more attractive to businesses.
Clayton-Matthews said unemployment in Massachusetts remains highest
for those who hold a high school education or less, and the state
will need qualified workers in preparation for an onslaught of
retirements among baby boomers.
“That impacts higher [worker] productivity, which helps us attract
business, higher incomes and lower the rate of poverty,” he said.
Bethune argued that Patrick’s plan would take money out of the
private sector and into the public, where the benefits may not be
seen for years. He said such a “tax-and-spend program” comes at a
time when Massachusetts leaders should be focused on job creation.
“If the Massachusetts economy was moving along, I’d say maybe this
would work,” Bethune said. “The focus should be on an environment
that creates more innovative enterprises.”
Patrick’s plan also comes as Congress debates significant cuts to
federal spending, particularly to defense and research programs that
are a large part of the Massachusetts economy. Economists at the
University of Massachusetts have said if the cuts outlined by
Congress are enacted, the state could lose 50,000 or more jobs in
the next several years.
Patrick Armstrong, an economist at Moody’s Analytics, a West
Chester, Pa., forecasting firm, said the governor’s plan could have
a “modest negative impact” on the state’s economy, but would not
derail it or send it into a recession.
Although it could slow consumer spending in the short term, “a
bigger risk is the longer term,” he said, is that “Massachusetts is
already a high-cost-of-living place.”
Associated Industries of Massachusetts, the state’s largest business
group, issued an initial review of the governor’s proposal last week
in which it worried the tax rate increases would make it more
difficult for employers in key industries to retain engineers,
software programmers, and other high-income employees if they are
recruited by businesses in states with lower tax rates.
AIM also said the proposal poses risks to some types of smaller
businesses that pay taxes at individual tax rates.
“Debate about taxes and the appropriate funding of government
remains a touchstone of Massachusetts politics,” it said, “as the
need to fund roads, bridges, public safety, and education tugs
against the specter of ‘Taxachusetts’ choking the life out of the
economy.”
State House News Service
Wednesday, January 23, 2013
Budget gaps lurk behind Patrick's push for new spending, higher
taxes
By Matt Murphy
Gov. Deval Patrick on Wednesday will present his annual spending
plan, the stage for which was largely set last week when he revealed
plans to pursue an ambitious reform of the state’s tax code that
would net the state $1.9 billion in new revenue to be spent on
transportation and education.
Many questions remain unanswered for cities and towns wondering at
what level local aid will be funded. And for all the talk about
taxes and new investments, some analysts suggest the state could be
facing a more than $1 billion gap next year between revenues and
funding needed to maintain existing levels of service across state
government.
“It’s a fabulous budget,” Patrick said Tuesday evening, telling
reporters eager for a preview they would have to wait. The governor
is planning a 12:30 p.m. press conference at the State House to
detail his fiscal 2014 budget plan, which will then undergo a long
review before the House Ways and Means Committee.
Patrick also suggested he would file another mid-year spending bill
for fiscal 2013 on Wednesday that will include additional funding to
help district attorneys and other agencies deal with the expense of
relitigating cases compromised by state chemist Annie Dookhan.
Patrick previously requested $30 million from the Legislature, but
said he expected that figure to grow.
The Patrick administration and legislative leaders agreed earlier
this month that state tax collections will grow 3.9 percent in
fiscal 2014 and hit $22.33 billion. But even with that $838 million
increase in revenue, the Massachusetts Budget and Policy Center
projects a $1.28 billion budget gap that would need to be closed
after accounting for cost growth of existing services and the
reliance on one-time revenue and savings in the current budget.
The budget gap identified by the center would seem to contradict
Patrick, who said in his State of the State speech last week that
“the structural deficit is gone.” House Minority Leader Brad Jones
called the statement from the governor “false” after the speech. “He
wants to have a debate about facts? That’s factually inaccurate,”
Jones said.
Secretary of Administration and Finance Glen Shor said Patrick was
referring to past budgets that have been “structurally balanced”
even if they relied on one-time resources that were “not excessive”
and “appropriate within our long-term financing plan.”
Shor said the administration would address the budget gap Wednesday
when it unveils its full budget proposal, and said last week the
administration was counting on $1.1 billion in new revenue for
fiscal 2014 from its tax reform proposal in the first year.
While the estimated budget gap does not anticipate new revenue from
Patrick’s tax proposals, the governor has largely earmarked that
revenue for new spending on transportation infrastructure, and
expansion of early education and additional state funding for
community colleges and universities.
Patrick, in his State of the State address last Wednesday, called
for a hike in the state income tax to 6.25 percent, and a
simultaneous decrease in the sales tax to 4.5 percent.
Coupled together with other tax code reforms, such as the
elimination of some personal and corporate tax deductions and the
doubling of the personal tax exemption, the administration says it
can give the state a fairer tax code with enough new revenue to
support strategic investments.
“As a result, the system would move somewhat closer to a flat-tax
structure, where people at all income levels pay the same share of
their income in taxes — and away from the current, markedly
regressive structure,” a MassBudget analysis of the plan determined.
The analysis, however, also suggested that Patrick’s spending
proposals, particularly with regard to education, would serve
largely to make up for resources lost during the recession that
prompted budget cuts at all levels of government.
Patrick last week said he planned to use some of the new revenue to
invest in early education, extended school days, college tuitions
grants, and increased funding for community colleges and UMass.
MassBudget said the proposed new investment of $131 million in early
education and care in fiscal 2014 — which would grow to $350 million
over four years — would take several years to eclipse the high-water
mark reached in 2001. According to the center, early education took
a cut of $174 million between fiscal 2001 and fiscal 2012.
The governor’s budget proposal would still leave early education
with less funding than in 2001.
While the governor has described his plans for Chapter 70 funding as
a $226 million increase for local school districts next year,
MassBudget also estimates that $167 million would be needed to meet
existing needs that reflect enrollment growth and the increased cost
of providing existing services. That would leave $59 million to fund
expanded services.
In addition, the $152 million in additional funding Patrick plans to
make available for higher education in fiscal 2014 will still leave
overall public higher education funding short of pre-recession
levels.
Patrick’s push for new taxes to pay for education and transportation
investments means major choices for lawmakers: risk agreeing to new
taxes amid a weak recovery and face potential political consequences
or reject tax hikes and leave state government without the capacity
to make major investments in popular programs and projects.
Michael Widmer, president of the Massachusetts Taxpayers Foundation,
said he had not done his own analysis of the fiscal 2014 budget gap,
but said he had read the MassBudget and Policy Center report and
“generally concurs” with their findings.
“Are we depending on too much one time money in fiscal 2013?
Absolutely. So it’s setting us up for a very difficult fiscal 2014,”
Widmer said.
The reliance on one-time revenue was compounded in late 2012 when
sluggish revenue growth prompted the administration to revise its
estimates downward by more than half a billion dollars, and proposal
to close a $540 million budget gap with a blend of cuts, savings and
a $200 million draw from stabilization.
The original fiscal 2013 budget already depended on $350 million
from the “rainy day” fund, and Widmer said it will be important that
next year’s budget not deplete the account further after lawmakers
worked to build it back up post-recession to over $1.2 billion.
“We can use a little bit of our rainy day fund but we better keep it
pretty close to a billion. We’ll see what they use tomorrow,” Widmer
said.
The Boston Globe
Wednesday, January 23, 2013
Patrick proposes $34.8b budget
By Michael Levenson and Noah Bierman
Governor Deval Patrick today proposed a $34.8 billion state budget
that increases funds for transportation and education, as well as
aid to cities and towns, while at the same time calling for a major
hike in taxes.
Patrick said the vast majority of programs would not see cuts under
his budget, though some of the increases proposed would not satisfy
the programs’ supporters.
The Patrick administration also revealed today that a $1.9 billion
package of income tax increases and other revenue-raising measures
the governor unveiled last week included new or higher taxes on
candy, soda, and cigarettes.
The goal of the entire plan, Patrick said, was to boost investment
in areas that, he said, are important to the state’s economy.
“It’s a growth budget,” he said.
Michael Widmer, president of the Massachusetts Taxpayers Foundation,
a business-backed budget watchdog group, said of the ambitious tax
plans, “He’s really rolled the dice. This is a very aggressive
budget.”
Patrick unveiled his plans for a major tax hike last week, in his
State of the Commonwealth speech. The proposal, if approved, would
raise taxes on about 50 percent of residents, beginning in January
2014, with the biggest increases on upper-income earners.
The heart of the plan would hike the income tax from 5.25 percent to
6.25 percent while cutting the sales tax from 6.25 percent to 4.5
percent. It would also double the personal income tax exemption,
eliminate 45 income tax deductions (for T passes, college
scholarships, and dependents under 12, among other items) and tie
the gas tax to inflation, ensuring gradual increases at the pump.
Three corporate tax breaks would be eliminated. MBTA fares, Turnpike
tolls, and Registry fees would also increase periodically.
Patrick said the plan was aimed at making the tax code simpler,
fairer and more progressive, while raising enough money to put the
financially ailing transportation system on a path toward long-term
stability.
He said the people left out in the frigid weather today due to a
shutdown of the Green Line “totally get” the need for more
transportation spending.
The increases on candy, soda, and cigarettes were also in the
proposal outlined last week but weren’t highlighted at the time by
the administration.
Critics have said the taxes would make an already high-cost state
even costlier and raise taxes for spending on a smorgasbord of
transportation projects beyond what is necessary to fix the
debt-ridden MBTA. Taxes will dominate debate on Beacon Hill this
year, but will not be the only point of contention. The state faces
a significant budget deficit of $1.2 billion, according to the
Massachusetts Budget and Policy Center, a liberal research group.
Some estimates have put the gap a bit lower, closer to $1 billion.
The gap shows how Massachusetts has not recovered fully from the
recession and its aftermath, which stunted growth in tax
collections.
Over the [ast several years, Patrick and the Legislature have
papered over budget gaps in part by taking money from the state’s
emergency reserve fund and other one-time sources. So far this year,
Patrick has withdrawn $350 million from the “rainy day fund,” and
has asked for legislative authority to withdraw another $200
million, which would leave $1.2 billion in the fund.
Patrick’s newest budget would take another $400 million from the
fund. But money added back in would leave it with $1 billion by July
2014, which state budget analysts contend is a healthier balance
than most states have.
Patrick’s budget is likely to change significantly before it becomes
law in time to start the new budget year on July 1. Last year, he
proposed many initiatives that the House and Senate scuttled when
they released and debated their own versions of the budget. The
House and Senate ultimately agree on a compromise budget, which is
then sent to the governor’s desk for his signature.
Among those Patrick ideas that were jettisoned last year were plans
to close a state prison and merge the Parole Board with the
Probation Department. Patrick also sought $260 million in new
revenues last year, including new or higher taxes on candy, soda and
cigarettes, none of which made it into the final $32.2 billion
budget that he signed.
This year, the political debate around taxes has shifted. With
lawmakers not facing elections in November, House and Senate leaders
have indicated they will consider at least some tax increases,
though possibly not at the level Patrick has proposed,
The Boston Herald
Wednesday, January 23, 2013
Candy, butts, soda, water: Gov's latest tax targets
By Chris Cassidy
Candy, soda, tobacco, and bottles of water and sports drinks are all
in Gov. Deval Patrick's crosshairs as announced another $2 billion
tax wish list in his $34.8 billion proposed fiscal 2014 budget at
the State House this afternoon.
Among the tax highlights:
• The cigarette excise tax would be hiked by $1 to $3.51 per pack.
Taxes on cigars and smokeless tobacco would also increase.
• The state would essentially expand the bottle bill to include
water bottles and sports drinks on deposits.
• Candy and soda would no longer be exempt from the state sales tax.
"This is a plan to grow jobs," Patrick insisted about his push to
hike taxes. "I do not submit this proposal lightly."
The new budget proposal would increase state spending by 6.9 percent
over the current fiscal year. That's an increase that Patrick said
is consistent with pre-recession budgets.
The plan unveiled today includes an additional $1.2 billion from tax
changes that Patrick proposed last week including a hike in the
income tax rate from 5.25 percent to 6.25 percent and a cut in the
sales tax from 6.25 percent to 4.5 percent.
Patrick last week proposed increasing the income tax, tying the gas
tax to inflation and hiking RMV fees, tolls and MBTA fares as part
of a proposed $2 billion in transportation improvements and
additional education spending.
Patrick is also recommending increasing the cigarette excise tax by
an additional dollar, bringing the total tax to $3.51 per pack.
Patrick said the net tax revenue increase would be dedicated to
paying for transportation and education initiatives, including
increasing local education funding by $226 million over the current
year's budget and boosting how much each school district receives
per child by $25.
That would set total local aid to cities and towns at nearly $5.6
billion — or about 14.6 percent of all state spending, he said.
Patrick's budget includes some earlier proposals he's made including
requiring the sales tax for candy and soda, which are currently
exempt like other food items.
He again proposed capping the state's film tax credit at $40 million
a year. Supporters of the film tax credit say that capping it would
only end up discouraging movies from being made in Massachusetts,
costing the state jobs and tax revenue.
Patrick said any new tax revenue needs to be enough to pay the
state's bills and should be targeted at specific goals. He also said
any changes need to be competitive with tax policies in other states
and fair for taxpayers in Massachusetts.
Patrick last week unveiled an education plan that he said would cost
an additional $550 million in the 2014 fiscal year to pay for
universal access to early education from birth through age 5, fully
fund K-12 education and allow for extended school days in high-need
schools.
The plan would also make college more affordable and let community
colleges expand efforts to provide students with critical skills
training.
Patrick's budget is the first step in a lengthy budget-writing
process.
The Massachusetts House and Senate will review his spending plan and
propose their own budgets before coming up with a final compromise
version to be sent to Patrick for his signature.
The new fiscal year begins July 1.
The Associated Press contributed to this report.
The Boston Herald
Thursday, January 24, 2013
A Boston Herald editorial
Gov gorges on taxes
To create more jobs in Massachusetts Gov. Deval Patrick just needs
to reach deeper into taxpayers’ wallets. That was his bizarre
message yesterday as he unveiled a spending proposal for next fiscal
year that positively blows the doors off previous budgets.
Fueled by a massive increase in taxes that he dreams of seeing
enacted, Patrick is proposing to spend $34.8 billion to run state
government next year — roughly a 7 percent increase over the budget
he signed last July.
If this document were to survive legislative negotiations as is, it
would represent a nearly 40 percent increase in state spending since
2007. Taxpayers can chew on that when in the future they are
required to pay a state sales tax on a bottle of ginger ale or a
package of M&Ms.
Better yet they’ll think of it when they open their paychecks and
notice the larger bite that the state is taking as part of a magical
scheme to “grow jobs and opportunity” in the “near-term.”
While he’s bellied up to the revenue bar, Patrick apparently figures
he’ll order one of everything on the menu. Yes, the sales tax would
go down. But income taxes would go up (and 45 deductions would
disappear), there would be new taxes on candy and soda, a higher tax
on cigarettes, the bottle bill (a de facto tax) would be expanded to
include bottled water and sports drinks and even vacation rentals
would now be slapped with the hotel tax. Higher Registry fees,
Turnpike tolls and MBTA fares are also in the offing.
And even with nearly $1 billion in new tax revenue accounted for
here Patrick would STILL draw $400 million from the rainy-day
account to finance his spending wishes. Fiscal discipline? A distant
memory.
The only good news is that Patrick’s revenue and spending plans at
this point amount to one very expensive suggestion. House
Speaker Robert DeLeo and Senate President Therese Murray must have
the courage to challenge his willful blindness to the burden on
state taxpayers, or have the largest tax increase in state history
on their resumes.
Failing that the rank-and-file must have the courage to stand up to
them and stop this runaway train.
The Boston Herald
Thursday, January 24, 2013
‘Very concerned’ about tax hike
Pols say angry constituents are giving them an earful about gov’s
plan
By Chris Cassidy
Beacon Hill leaders already were getting an earful from constituents
about Gov. Deval Patrick’s proposed income tax hike before he
announced a new wave of taxes yesterday on sugary snacks, tobacco
and even water in his budget for the coming fiscal year.
“I told him there were a lot of emails in, saying that people’s
Social Security has gone up, the cost of daycare, the cost of food,”
Senate President Therese Murray told the Herald yesterday. “And
they’re very concerned about an increase in the income tax.”
She estimated her office has already received at least 100 emails
railing against the proposed 6.25 percent income tax hike.
House Ways & Means Chairman Brian Dempsey (D-Haverhill) used words
such as “aggressive,” “ambitious” and “comprehensive” to describe
Patrick’s budget proposal. He said reps are hearing from both sides
— taxpayers upset about shelling out more as well as advocacy groups
who’d benefit under Patrick’s plan.
“Generally speaking, given the fragile nature of our economy, both
here in Massachusetts and nationally and globally, there continue to
be concerns about the impact, and how that all factors into people’s
everyday lives and their ability to pay the bill,” Dempsey told the
Herald. “We’re mindful of that, we’ll look at all that, and we’ll
spend time to come up with a solid recommendation.”
Among the tax highlights in Patrick’s $34.8 billion proposed fiscal
2014 budget:
• The cigarette excise tax would be hiked by $1 to $3.51 per pack.
• Taxes on cigars and smokeless tobacco also would increase.
• The state would essentially expand the bottle bill to include
water bottles and sports drinks on deposits.
• Candy and soda would no longer be exempt from the state sales tax.
“This is a plan to grow jobs,” Patrick insisted. “I do not submit
this proposal lightly.”
House Minority Leader Brad Jones (R-North Reading) said in a
statement, “Governor Patrick is ready to implement a tax and spend
approach that will not benefit anyone other than the legacy of the
Patrick/Murray administration.”
Senate Minority Leader Bruce Tarr (R-Gloucester) said, “Even with an
exhaustive effort to raise revenue through new taxes, tax increases
and changes to the tax code, it’s astonishing that this budget
proposal also has to take $400 million from the stabilization fund
and borrow against future receipts to meet the burdens of its
expansive new spending.”
The Salem News
Friday, January 25, 2013
Choosing sides on taxes
By Nelson Benton
Gov. Deval Patrick may have put his fellow Democrats in a bind by
proposing a hike in the state income tax rate in exchange for a
slight cut in the sales tax.
Patrick has said he won’t run for re-election in 2014 and insists he
has no plans to seek another elective post. But others seeking
statewide or legislative office will no doubt be expected to declare
themselves on the subject of taxes. And while Patrick’s pal,
President Barack Obama, may have won a second term on a platform of
raising taxes on the wealthy, an across-the-board increase in the
amount that the state takes from workers’ paychecks is another
matter altogether.
Citizens for Limited Taxation is already threatening a
petition to repeal any increase that might be approved by the
Democratic majority on Beacon Hill, and the debate that would ensue
could be just what the doctor ordered for ailing Bay State
Republicans.
Patrick denies that Massachusetts already has the fourth-highest
per-capita tax burden in the nation, but CLT Executive Director and
fellow Salem News columnist Barbara Anderson says those
figures come right from U.S. government sources. Higher taxes,
whether on incomes or gasoline, will be a tough sell here even in
the age of Obama II.
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Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
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