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CLT UPDATE
Monday, March 25, 2013
Tax hikes: Which ones, by how much?
|
Richard A. Davey, the state’s transportation
secretary, has done a lot of traveling in the last few weeks. He’ll
tell you that himself, as he did at a Department of Transportation
meeting earlier this month.
“North Andover, Woburn, Arlington, Hyannis,”
Davey began. “Medford, Worcester, Framingham, Fall River, Wakefield,
Burlington, and Plymouth.”
Since Governor Deval Patrick announced in January
his plan to use new tax revenue to inject $13 billion into the
state’s transportation system over the next decade, Davey has been
crisscrossing the state.
His message: There’s something in the governor’s
bill for everyone....
Of course, Davey’s campaign to sell the funding
plan around the state has had its critics, perhaps none more biting
than the Marblehead-based Citizens for Limited Taxation. A
recent post on the organization’s website calls the efforts “a
dog-and-pony show lining up interests who thrive off government
spending.”
Barbara Anderson, the group’s executive
director, said Patrick’s and Davey’s efforts to inspire enthusiasm
in Massachusetts residents is part of a plan to raise expectations
of how much taxes could rise, so a more modest increase would come
as a relief.
“If they do something less than that, we’re all
supposed to be incredibly grateful,” Anderson said.
Anderson argues the campaign has not convinced
voters, and has instead targeted transportation advocacy groups who
do not adequately represent the views of most Massachusetts
residents.
“They go to every little group, and every little
group is added to their long list of supporters who want a tax
increase,” Anderson said, “even if some of these groups might be
three AARP members in the far corner of the state.”
Promising large-scale products like South Coast
Rail and trains from Boston to Springfield, she said, are gifts that
may shore up support in communities outside of Boston, but will
probably become mired in bureaucracy before they ever become a
reality.
“You have a better chance of getting on a train
to Hogwarts,” Anderson said, “than getting on a train to Fall
River.”
The Boston Globe
Sunday, March 24, 2013
Richard Davey hits road to pitch transportation plan
Massachusetts Gov. Deval Patrick has an
off-putting habit of talking down to the very people he’s trying to
talk into forking over more of their hard-earned money.
Whenever the governor is attempting to schmooze
Bay State taxpayers into opening their wallets — which is frequently
— he casts himself as the smartest guy in the room, the one who gets
it and who has been trying ever so patiently to explain things to
the rubes who just refuse to understand.
Like when Patrick was stumping in 2009 for a
19-cents-per-gallon hike in the state’s gas tax — which would have
made ours the highest in the nation — he told an audience in
Haverhill that “grown-ups” understand we “can’t have something for
nothing.” At the time, the state budget was something around $28
billion — which is a whole lot of “nothing.”
Patrick rolled out his condescending attitude
again in 2011 when he said we need to have “an adult conversation”
about raising revenues to fund improvements to the state’s aging
transportation infrastructure.
Now Patrick is again trying to con Massachusetts
taxpayers out of their money — $1.9 billion this time, which he
plans to raise largely by hiking the state income tax rate from 5.25
percent to 6.25 percent while dropping the sales tax to 4 percent.
Even as Democratic leaders of the Legislature are scuttling away
from Patrick’s revenue proposals like crabs along the tide line, the
governor proclaims he thinks the $1.9 billion figure is the “right
number” to fund his transportation and education plans.
This time, Patrick isn’t messing around. He’s
rolling out the big guns on which Democrats depend when they really
need to extract more money from the citizenry — kids, or as they are
known in political hack-speak, “utes.”
So much for adult conversations.
Last week, the governor appeared on the
Statehouse steps surrounded by 100 teenagers affiliated with a
coalition of youth groups and advocates calling itself “Youth of
Massachusetts Organizing for a Reformed Economy,” or “YMORE.” Their
mission, according to their press release, is “to raise teen voices
for fair revenue.” Word to the wise: “Fair” never means “less.”
As they surrounded the governor, the young people
held signs, some with one-word slogans such as “compassion,”
“equity” and “courage.”
These impressionable young people are trained to
parrot whatever their mentors in the advocacy industry tell them.
Then they are marched off to serve as props for Democratic
politicians trying to sell their latest brand of “progressive”
pablum. ...
An Eagle-Tribune editorial
Sunday, March 24, 2013
Patrick loses interest in ‘adult conversation’ as he rolls out the
kids
With the economy recovering and state finances
stabilizing, many in the business community expected a relatively
quiet session on Beacon Hill this year. But those expectations were
dashed when Governor Deval Patrick proposed $1.9 billion in tax
increases — including about $500 million in new corporate taxes — to
help pay for education, transportation, and other state programs.
Those proposed increases — which have particular
implications for the high tech, real estate, and retail industries —
top the policy agenda for business advocacy groups. But they are far
from the only issues that could have far-reaching effects on the
Massachusetts business climate and economy.
Lawmakers will also decide how much to spend on
the state’s aging transportation system and how to finance it; how
to reconcile the state’s universal health care law with a similar
federal law without boosting costs for thousands of small businesses
here; and whether to overhaul the state’s unemployment insurance
system.
The Boston Globe
Sunday, March 24, 2013
Proposed tax increases a concern for Mass. businesses
Governor Patrick deserves credit for producing a
budget proposal that not only lays out the choices, but is flexible
enough to serve as a template for reasoned compromise. The governor
released his plan about four months before the budget was due to be
finished, and invited all citizens, not merely the usual actors on
Beacon Hill, to participate in the debate.
The governor’s plan includes four components: A
sizable funding increase for transportation; a guarantee of
early-childhood education for low-income toddlers; a sizable
increase in Mass. grant funding for income-eligible college
students; and a dramatic reordering of state income-tax deductions
to make it more progressive — that is, less burdensome to low-income
people and more so to those earning above $62,000.
Not all of these plans are equally necessary.
A Boston Globe editorial
Sunday, March 24, 2013
Patrick’s ambitious tax plan offers basis for compromise
Gov. Deval Patrick’s latest education plan is all
about new spending — much of it with no strings attached. But
administration officials, as they rush from one staged rally with
their tax hike boosters to another, don’t particularly like it when
critics point that out.
Just ask the Massachusetts Business Alliance for
Education, which has raised a legitimate concern — that Patrick’s
plan to spend $1 billion more on education over the next four years,
fueled
by a massive increase in taxes, lacks sufficient
accountability measures and isn’t the ironclad guarantee of success
the administration is painting it to be....
A Boston Herald editorial
Sunday, March 24, 2013
Test of a tax plan
Almost a decade after the Big Dig’s
completion, the toxic legacy of the bloated highway project
still haunts the state. Debt from Central Artery-related
projects gnaws away at the MBTA’s budget, forcing fare hikes and
service cuts; residual public distrust over the mishandling of
the project undercuts efforts to build political support for
roads and bridges.
It is time, though, to move on. The state is
making progress at reform....
As the Legislature weighs the transportation
plan against the education components of Patrick’s plan, the
need to catch up on overdue transportation investments should be
the most urgent....
Lawmakers can’t let the ghost of the Big Dig
continue to thwart the state’s needs forever....
Raiding the capital budget for salaries was
merely a symptom of the profligate Big Dig culture. Lawmakers
should certainly never forget the lessons of that debacle. But
nor can they let its ghost continue to thwart the state’s needs
forever.
A Boston Globe editorial
Monday, March 25, 2013
Transportation needs are clear; reforms help justify funding
hike
Every time we turn over the rock that is Gov.
Deval Patrick’s $2 billion tax hike plan, another foul smell
emerges.
This time we have the Massachusetts Taxpayers
Foundation to thank for analyzing what the governor’s plan calls
a tax on “custom modifications to software and other computer
services,” expected to bring in $265 million in new revenue a
year. Currently software is taxable but computer services are
not. But, the governor’s office insists, “with the migration of
software first to the ‘web’ and now to the ‘cloud,’ the line”
between the two is becoming “untenable.” And so, in the spirit
of “fairness” he wants to tax the beejesus out of both.
A Boston Herald editorial
Monday, March 25, 2013
Taxing even the cloud
The Telegram & Gazette
Editorial cartoon by David Hitch
Sunday, March 17, 2013
The Boston Herald
Editorial cartoon by Jerry Holbert
Sunday, March 24, 2013
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Chip Ford's CLT
Commentary
Gov. Patrick's administration road show to
promote his huge $1.9 Billion tax hike hasn't been noticed by only
us (as referenced in yesterday's Boston Globe report ("Richard Davey hits road to pitch transportation plan").
It's becoming actually a laughingstock across the state; a blatant
political campaign right down to staged rallies and using "the
children" as his human shields.
In our Memo to the Legislature (Mar. 12
— "The
Tax Hike Circus Comes to Town") we wrote:
"Taking the lead from President Barack Obama,
our governor is running his own permanent political campaign, a
dog-and-pony show lining up interests who thrive off government
spending entirely funded by taxpayers.
"He has spent weeks now campaigning among his constituency:
Those who live off and benefit most from the largess of
Massachusetts taxpayers. His efforts are intended to encourage
them to rally for more from productive taxpayers to support
their self-interests.
"Meanwhile, we productive taxpayers who pay already too much of
what we earn to support their comforts are too engaged in
working and surviving to attend rallies, public circuses for the
entertainment of those at the State House – even in defense of
our own survival interests...."
It doesn't appear to be helping his cause very
much — in fact may have backfired as it
becomes a bigger and bigger joke among legislators and the public at
large.
Note that both the House and Senate leadership
have been keeping a safe distance from his toxic stew; a smorgasbord
of tax and fee hikes accompanied by an abundant side order of the
elimination of popular tax deductions. It's becoming clear that Gov.
Patrick reached for too much too soon with nothing at risk to
himself but "his legacy." Legislators have a two-year shelf life;
they must run for re-election in a mere twenty months. They
recognize who will bear the blame when voters are feeling the pain
of even more lost income. In its Weekly Roundup on Friday, the State
House News Service reported:
"[House Speaker Robert] DeLeo, by those
around him, is said to be deeply conflicted, not just on how
much revenue he can ask taxpayers to shoulder and from where it
should come, but also what those votes will mean for his
membership come election time next year." ... "It’s usually at
this point that Senate President Therese Murray tends to get
antsy, and orders her Ways and Means chairman to advance
something, anything, that senators can vote up or down – okay,
up.... That’s not the case, yet."
The Globe is applauded by the “progressive”
liberal choir, but we hope not reaching other readers. The statewide
ridicule of the Governor’s plan should cause its demise, but we fear
that less dramatic tax hikes are still in the works in the House and
Senate: they’re trying to decide which ones, how much they can take
from us and still get re-elected.
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Chip Ford |
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The Boston Globe
Sunday, March 24, 2013
Richard Davey hits road to pitch transportation plan
By Martine Powers
Richard A. Davey, the state’s transportation secretary, has done a
lot of traveling in the last few weeks. He’ll tell you that himself,
as he did at a Department of Transportation meeting earlier this
month.
“North Andover, Woburn, Arlington, Hyannis,” Davey began. “Medford,
Worcester, Framingham, Fall River, Wakefield, Burlington, and
Plymouth.”
Since Governor Deval Patrick announced in January his plan to use
new tax revenue to inject $13 billion into the state’s
transportation system over the next decade, Davey has been
crisscrossing the state.
His message: There’s something in the governor’s bill for everyone.
Patrick’s plan and a critical mass of political will has presented
an opportunity to put the state’s roads, bridges, and public transit
systems on solid footing for generations to come, proponents say.
While it appears the Legislature will fund some, but not all, of
Patrick’s proposed projects, what ends up on the cutting-room floor
may be a direct product of how well Davey and other transportation
officials are able to deliver their message. Their aggressive
outreach efforts have reached the feverish tone of an all-out
election campaign, and has a Twitter hashtag: #ChooseGrowth.
“It’s really unprecedented,” said Michael Widmer, president of the
Massachusetts Taxpayers Foundation, on Davey’s crusade. “In all my
years, I don’t recall such a single-minded campaign by a nonelected
state official.”
Some critics view the campaigning as a political ploy meant to
convince residents with far-fetched transportation promises.
But others, like Marc Draisen, believe Davey’s strategy makes sense.
Draisen, executive director of the Metropolitan Area Planning
Council, an organization focused on city planning and
transportation, said taxpayers need to be convinced that their tax
dollars will translate into meaningful improvements — especially in
a state still stinging from the legacy of the Big Dig and
mistrustful of massive, costly transportation projects.
“They’ll go anywhere to talk about this subject,” Draisen said.
“We’ve heard their basic line over and over: We can’t afford the
transportation system we have, much less the transportation system
we want.”
Davey must boil down an elaborate, 63-page report into simple
selling points, tailor-made for each community he visits.
In Northampton: Want better regional bus service? Tell your
representative you want tax increases.
In Stockbridge: Want a train running from the Berkshires to New York
City? Ask your legislators for tax increases.
And in late January, at a transportation forum for the Metro-West
region, Davey came prepared with numbers on how each town could
tackle more bread-and-butter road repairs and pothole fixes.
A Wayland selectman in the audience raised his hand, asking how his
town would benefit.
“I happen to have a Wayland statistic in front of me — how about
that?” Davey said, prompting chuckles. Wayland’s funding for road
projects, he said, would more than double to $700,000 per year.
And when Southborough’s economic development officer asked what his
town stands to gain, Davey had an answer for him, too. Last year,
Davey said, the town got $231,000 for road and bridge projects.
With Patrick’s plan, he said, the town would receive $650,000 per
year.
“This is not just transportation dollars that are going to evaporate
into the air,” Davey said. “These are specific projects and specific
resources that we are going to deliver.”
Other transportation officials have also worked to deliver the
message. After a frayed cable caused a large span of the Green Line
to shut down on one of the coldest mornings of the year, Beverly A.
Scott, MBTA general manager, asked technicians to save a portion of
the frayed wire.
“I am going to take it on the road with me,” she said.
Sure enough, she appeared on TV a few days later, the corroded,
mangled cable in hand.
“Literally, when you have something as old as this . . . the old
girl just gave out,” Scott told Fox 25’s Doug “VB” Goudie . “You
can’t sit up and have 5 or 6 billion dollars in terms of deferral of
maintenance and infrastructure, and just have the expectation that
these systems are going to operate with no additional investment.”
Stephanie Pollack, associate director at Northeastern University’s
Dukakis Center for Urban and Regional Policy, said the campaign
efforts could be criticized for focusing too heavily on grandiose
new projects — expensive investments like the South Coast Rail —
rather than the roughly 80 percent of the plan that will go toward
bridge and road repair, paying off debts, and much-needed transit
maintenance.
“In transportation, there is a long history of attracting support
for new revenue by promising shiny new things and ribbon-cuttings,”
Pollack said. “There probably was a bit of an emphasis on what
[transportation officials] perceived would make people excited.”
Davey said he believes people are willing to pay more for better
transportation opportunities — and according to research, he might
be right.
A poll released March 14 by MassINC , a nonpartisan research group,
estimated that just more than 60 percent of voters would be willing
to pay $50 per year to fund long-term fixes for roads and public
transportation, based on polls and focus groups over the past six
months.
Of course, Davey’s campaign to sell the funding plan around the
state has had its critics, perhaps none more biting than the
Marblehead-based Citizens for Limited Taxation. A recent post
on the organization’s website calls the efforts “a dog-and-pony show
lining up interests who thrive off government spending.”
Barbara Anderson, the group’s executive director, said
Patrick’s and Davey’s efforts to inspire enthusiasm in Massachusetts
residents is part of a plan to raise expectations of how much taxes
could rise, so a more modest increase would come as a relief.
“If they do something less than that, we’re all supposed to be
incredibly grateful,” Anderson said.
Anderson argues the campaign has not convinced voters, and has
instead targeted transportation advocacy groups who do not
adequately represent the views of most Massachusetts residents.
“They go to every little group, and every little group is added to
their long list of supporters who want a tax increase,” Anderson
said, “even if some of these groups might be three AARP members in
the far corner of the state.”
Promising large-scale products like South Coast Rail and trains from
Boston to Springfield, she said, are gifts that may shore up support
in communities outside of Boston, but will probably become mired in
bureaucracy before they ever become a reality.
“You have a better chance of getting on a train to Hogwarts,”
Anderson said, “than getting on a train to Fall River.”
The Eagle-Tribune
Sunday, March 24, 2013
An Eagle-Tribune editorial
Patrick loses interest in ‘adult conversation’ as he rolls out the
kids
Massachusetts Gov. Deval Patrick has an off-putting habit of talking
down to the very people he’s trying to talk into forking over more
of their hard-earned money.
Whenever the governor is attempting to schmooze Bay State taxpayers
into opening their wallets — which is frequently — he casts himself
as the smartest guy in the room, the one who gets it and who has
been trying ever so patiently to explain things to the rubes who
just refuse to understand.
Like when Patrick was stumping in 2009 for a 19-cents-per-gallon
hike in the state’s gas tax — which would have made ours the highest
in the nation — he told an audience in Haverhill that “grown-ups”
understand we “can’t have something for nothing.” At the time, the
state budget was something around $28 billion — which is a whole lot
of “nothing.”
Patrick rolled out his condescending attitude again in 2011 when he
said we need to have “an adult conversation” about raising revenues
to fund improvements to the state’s aging transportation
infrastructure.
Now Patrick is again trying to con Massachusetts taxpayers out of
their money — $1.9 billion this time, which he plans to raise
largely by hiking the state income tax rate from 5.25 percent to
6.25 percent while dropping the sales tax to 4 percent. Even as
Democratic leaders of the Legislature are scuttling away from
Patrick’s revenue proposals like crabs along the tide line, the
governor proclaims he thinks the $1.9 billion figure is the “right
number” to fund his transportation and education plans.
This time, Patrick isn’t messing around. He’s rolling out the big
guns on which Democrats depend when they really need to extract more
money from the citizenry — kids, or as they are known in political
hack-speak, “utes.”
So much for adult conversations.
Last week, the governor appeared on the Statehouse steps surrounded
by 100 teenagers affiliated with a coalition of youth groups and
advocates calling itself “Youth of Massachusetts Organizing for a
Reformed Economy,” or “YMORE.” Their mission, according to their
press release, is “to raise teen voices for fair revenue.” Word to
the wise: “Fair” never means “less.”
As they surrounded the governor, the young people held signs, some
with one-word slogans such as “compassion,” “equity” and “courage.”
These impressionable young people are trained to parrot whatever
their mentors in the advocacy industry tell them. Then they are
marched off to serve as props for Democratic politicians trying to
sell their latest brand of “progressive” pablum.
It’s a pity no one has the “courage” to tell these young people the
truth: The politicians they so willingly serve are bankrupting their
futures. There is no free lunch. Someone, someday will have to pay
for all the marvelous programs and initiatives purchased today with
borrowed or squandered money. Guess who, kids!
Massachusetts is struggling to claw its way out of a recession. The
state’s tax-supported debt is among the highest in the nation. Its
pension system is woefully underfunded. Yet Patrick wants to raise
taxes on every wage-earner in the state not to reduce debt or meet
prior commitments but so he can spend $1.9 billion per year more.
By all means, let’s have an adult conversation. Let’s send the kids
home and talk about the wisdom and propriety of a state spending
away its future and making promises it can never keep.
The Boston Globe
Sunday, March 24, 2013
Proposed tax increases a concern for Mass. businesses
By Jay Fitzgerald
For much of the past several months, local businesses have had their
eyes on Washington, as Congress and the Obama administration faced
off in one showdown after another. But as federal officials lurch
from fiscal cliffs to sequesters to debt ceilings, big issues with
big stakes for Massachusetts businesses are being debated in the
Legislature.
With the economy recovering and state finances stabilizing, many in
the business community expected a relatively quiet session on Beacon
Hill this year. But those expectations were dashed when Governor
Deval Patrick proposed $1.9 billion in tax increases — including
about $500 million in new corporate taxes — to help pay for
education, transportation, and other state programs.
Those proposed increases — which have particular implications for
the high tech, real estate, and retail industries — top the policy
agenda for business advocacy groups. But they are far from the only
issues that could have far-reaching effects on the Massachusetts
business climate and economy.
Lawmakers will also decide how much to spend on the state’s aging
transportation system and how to finance it; how to reconcile the
state’s universal health care law with a similar federal law without
boosting costs for thousands of small businesses here; and whether
to overhaul the state’s unemployment insurance system.
Here are some of the issues that businesses groups are closely
monitoring this session:
High tech tax blues. Of the governor’s proposed $500 million in new
corporate taxes, more than half would come from applying the state
sales tax to customized software and computer and data processing
services, which are now exempt.
Tech firms say the tax would make their products less competitive at
a time when global competition is fiercer than ever. They also say
such a tax couldn’t come at worse time. Many firms do work for the
Defense Department and other federal agencies, and their contracts
could be cut or eliminated as automatic federal budget reductions
know as the sequester go into effect.
“It’s a really bad idea,” said Chris Anderson, president of the
Massachusetts High Technology Council, an industry group in Waltham.
“This is not a good time to destabilize the [tech] business
climate.”
Anderson added that taxing computer services could open the door to
broaden the sales tax to a wide range of business and professional
services, from accounting to consulting.
Home-sale capital gains taxes. Under state law, homeowners don’t
have to pay taxes on the first $500,000 in capital gains that they
realize from the sale of primary residences. The governor wants to
eliminate that exemption to raise up to $285 million in new
revenues, according to estimates by the Massachusetts Taxpayers
Foundation, a business financed research group in Boston.
Rob Authier, chief executive of the Massachusetts Association of
Realtors, said raising the capital gains taxes could discourage many
people from putting their homes on the market, undermining the
housing market when it has only recently begun to rebound from the
collapse of the housing bubble several years ago.
There’s already a shortage of homes on the market, which is holding
back the housing recovery, analysts say. “This proposal came as a
real shocker to us,” said Authier.
The governor’s other proposals to eliminate a septic system repair
credit (up to $15 million) and lead-paint removal credit ($3
million) could also add costs to buying a home and slow sales,
Authier said.
Candy, soda, and tobacco. Patrick has proposed offsetting an
increase in the state income tax to 6.25 percent from 5.25 percent
by cutting the state sales tax to 4.5 percent from 6.25 percent. But
Patrick would also apply the sales tax to sodas and candy, and raise
taxes on tobacco products.
Those proposals have retailers divided.
Jon Hurst, president of the Retailers Association of Massachusetts,
said larger retailers – such as electronics, appliance, and
furniture stores — welcome an overall cut in the tax, which they say
would make their products more competitive with retailers in nearby
states.
But he noted that proposals could harm small grocers in border
communities who must also compete against nearby retailers in other
states, particularly New Hampshire.
“We have such a broad, diverse membership that different members
have different attitudes toward the governor’s plans,” said Hurst.
Unemployment insurance overhaul. Massachusetts provides some of the
most generous unemployment benefits in the country and businesses
pay some of the highest unemployment insurance premiums.
For years, the business community has called for the Legislature to
reduce some of those benefits to lower costs and make businesses
here more competitive. And for years, lawmakers have resisted such
changes, amid vehement opposition from organized labor.
House Speaker Robert DeLeo recently signaled that he’s open to some
change in order to reduce costs to employers, although he didn’t
provide details.
Business groups have subsequently proposed a number of changes,
including reducing the number of weeks unemployed workers can
collect benefits to 26 weeks from 30, which would bring
Massachusetts’ rules in line with most other states. That and other
changes could save employers, who now pay an average $745 a year per
worker for unemployment insurance, as much as $260 million in
one-time and annual savings, according to Associated Industries of
Massachusetts, the state’s largest employers’ group.
A spokesman for the AFL-CIO of Massachusetts, the state’s largest
labor organization, declined comment until specific proposals are
unveiled by lawmakers.
Obamacare mandates. Federal regulators have served notice that they
intend to implement new health insurance rules under the Patient
Protection and Affordable Care Act, known as Obamacare.
But some of those rules clash with current state laws, including how
insurers set premiums for small businesses and their workers, via
rating factors such as the age of covered employees. Lora Pellegrini,
president of the Massachusetts Association of Health Plans, said the
net effect of the federal changes could be unspecified premium
increases for many small business owners and the 640,000 employees
their plans cover.
If federal regulators refuse to budge, there’s technically nothing
that Massachusetts lawmakers can do to overrule those specific
decisions. But if premiums rise as a result of Obamacare, political
pressure could build on state lawmakers to eliminate some mandated
services to lower costs.
Transportation improvements. There’s widespread consensus that the
state needs to come up with more money to address operating deficits
at the Massachusetts Bay Transportation Authority and pay for
highway and other projects elsewhere in the state.
The Patrick administration has pegged the number at nearly $1
billion per year and proposed financing the work with the income tax
increase.
But business groups and many lawmakers say if higher taxes are
needed, the state should increase the gas tax, which is dedicated
for transportation. The state’s gas tax, now 23.5 cents per gallon,
hasn’t been raised since 1991.
The Massachusetts Taxpayers Foundation has proposed a 9-cent
increase in the gas tax and an average $10 increase in various
vehicle registration fees to raise $800 million per year for
transportation projects by 2018.
John Regan, executive vice president at Associated Industries of
Massachusetts, said his and other business groups tentatively
support a gas tax increase. “But it can’t be a blank check,” he
said. “We have to know where the money is going.”
The Boston Globe
Sunday, March 24, 2013
A Boston Globe editorial
Patrick’s ambitious tax plan offers basis for compromise
Far too often in public life important choices get reduced to sound
bites, tradeoffs between interest groups, or ideological reflexes.
Only rarely do political leaders challenge the community to look at
the full picture, to engage in a rigorous discussion about the
connection between today’s choices and tomorrow’s results — to think
bigger, but also pay closer attention to the details: How the bills
will be paid, which outcomes are desired, how progress can be
measured.
Governor Patrick deserves credit for producing a budget proposal
that not only lays out the choices, but is flexible enough to serve
as a template for reasoned compromise. The governor released his
plan about four months before the budget was due to be finished, and
invited all citizens, not merely the usual actors on Beacon Hill, to
participate in the debate.
The governor’s plan includes four components: A sizable funding
increase for transportation; a guarantee of early-childhood
education for low-income toddlers; a sizable increase in Mass. grant
funding for income-eligible college students; and a dramatic
reordering of state income-tax deductions to make it more
progressive — that is, less burdensome to low-income people and more
so to those earning above $62,000.
Not all of these plans are equally necessary. Some of Patrick’s tax
proposals place a heavier burden on the middle class in order to
help those one rung lower on the income ladder. But there should be
no question that Patrick has his priorities in order: Even those
investments that might appear to be discretionary — items that can
be put off for a better day — are closely tied to the state’s
economic future. This isn’t a politician’s wish list.
The plan shouldn’t be viewed as an up-or-down, all-or-nothing
proposition. The Legislature, sensibly, has begun a rigorous review,
leaving nothing off the table. But there is still time for many more
voices to be heard, and the final product will, by necessity, be
born of a spirit of compromise. Over each of the next four days, we
will address a key aspect of Patrick’s proposal on its own merits,
to provide a frame for the debate. Hopefully, the state’s leaders
can then find agreement on a spending plan that addresses at least
the most urgent of Patrick’s priorities — transportation — and his
most transformative — the guarantee of early education for
low-income children.
The plan shouldn’t be viewed as an up-or-down, all-or-nothing
proposition.
While the state’s transportation agencies have been combined in a
dramatic restructuring, and efforts have been made to cut costs by
removing redundancies, there have been fewer like-minded reforms in
public higher education. The state’s community colleges and
universities have had their state aid cut severely in recent years.
But their request for more taxpayer support would be more acceptable
if they had already exhausted the alternatives — such as limiting
aid for students who stay beyond four years, and finally
centralizing the administrative functions of the nation’s most
decentralized university system.
These cost-cutting measures could bring down costs for most students
without the hundreds of millions of dollars in additional funding
that Patrick proposes.
By contrast, there is no viable alternative for the T’s debt-laden
operating budget, or to fund long-planned priorities such as the
Green Line extension into Somerville. And there are no dollars
available to take advantage of new technologies to enable
self-propelled, diesel-powered railcars to run on commuter-rail
tracks, thereby providing more convenient service at a lower cost.
There is no similar breakdown or looming threat to require an
expansion of early-childhood education. That’s why some people on
Beacon Hill are simply willing to put it off for another day. That
would relieve a little pressure on today’s budget, but at the cost
of a generation of toddlers who are already falling behind their
peers. Studies show that learning gaps are apparent as early as 24
months, meaning that when disadvantaged children finally get to
school, many lack the skills to succeed. Then, teachers end up
spending more time on students who are unprepared than on those who
are ready to learn.
Support for early-childhood education crosses the usual political
boundaries. Many conservatives embrace the idea that early
intervention is far cheaper and more effective than the huge amounts
spent on special-ed programs in later grades; if receiving earlier
enrichment enabled even a small percentage of students to bypass
special ed, the state would, on balance, save money. Patrick’s
proposal also would require preschools to adopt rigorous new
standards, essentially transforming daycare centers into learning
centers, which would benefit almost every child in the Commonwealth.
The Legislature should strive to maintain the ambition of the
proposal, while cutting back modestly on its price tag to limit the
tax bite.
Any such bite will feel sharp, especially to families who’ve yet to
feel the benefits of a rebounding economy, but are already feeling
the effects of the end of the federal payroll-tax cut. Patrick’s
plan attempts to shield the most vulnerable families by adding
deductions that benefit those with lower incomes while removing
loopholes that are valuable to those with higher incomes. He calls
for a big increase in the income tax — a full 1 percent, from the
current 5.25 to 6.25 — coupled with a big cut in the sales tax, from
the current 6.25 to 4.5 percent.
But Massachusetts’s sales tax carries so many exemptions that it is
already quite low — 42d out of the 46 states with a sales tax, in
terms of sales-tax revenue as a percentage of income. With food,
clothing, and other necessities exempted, the sales-tax burden falls
more on those buying new cars and luxury consumer goods than on
struggling parents tending to their kids. Without the sales-tax cut,
the Legislature could fund the state’s priorities with a far lower
hike in the income tax while preserving those deductions that are
most important to the middle class. Adding to the gas tax — a
favored alternative for some state representatives — would impose an
immediate burden on lower-income families with long commutes; but
indexing the current tax to inflation — which would mean adding a
penny per gallon every three years or so — would obviate the need
for future tax hikes for transportation funding.
Good government requires a mix of pragmatism and idealism, of rigid
cost management and responsiveness to new opportunities. Patrick has
put forward an impressive agenda; the Legislature now must turn it
into a blueprint. The state government has shown itself to be
capable of major initiatives. Its willingness to rise to the
occasion and take on big challenges — such as education reform and
health care coverage — have made it a model for other states. This
is another opportunity to demonstrate Massachusetts’s capacity for
leadership, to build the physical and programmatic infrastructure
necessary to compete for the next generation of jobs. From the
options that Patrick has spelled out, the Legislature should strive
to find an equitable mix of revenue sources to enact policies that
will put the state on stronger footing for the future.
TOMORROW: A look at the state’s transportation
needs
The Boston Herald
Sunday, March 24, 2013
A Boston Herald editorial
Test of a tax plan
Gov. Deval Patrick’s latest education plan is all about new spending
— much of it with no strings attached. But administration officials,
as they rush from one staged rally with their tax hike boosters to
another, don’t particularly like it when critics point that out.
Just ask the Massachusetts Business Alliance for Education, which
has raised a legitimate concern — that Patrick’s plan to spend $1
billion more on education over the next four years, fueled
by a
massive increase in taxes, lacks sufficient accountability measures
and isn’t the ironclad guarantee of success the administration is
painting it to be.
The MBAE’s concerns have been dismissed by both Patrick and
Education Secretary Matthew Malone, who told the State House News
Service “they’re wrong, and they need to get their facts straight.”
The “investments,” he noted, are indeed “targeted.”
Oh, well in that case ...
Malone also suggested the group is linked to charter school support
— as if that makes their concerns about the plan any less credible.
Malone, a charter school opponent who was superintendent in Brockton
until late last year, clearly hasn’t gotten the memo that this
administration claims to support expanding access to charter
schools.
But back to Patrick’s big education plan.
The governor says he needs $350 million over four years to eliminate
the waiting list for low-income families for pre-school and day
care. He is of course asking families who may be struggling to pay
their own pre-school and day care bills to pay higher taxes to
achieve that end. We suspect those taxpayers might also have a few
reservations about the $60 million they’d have to pay to send
pre-school teachers back to school.
Patrick’s plan also increases state education aid to cities and
towns by $226 million — a straight increase in the current funding
formula, which is where the business group centers most of its
concern since the funds are unrestricted.
The plan also calls for millions to allow for longer school days,
and earmarks much of the new funding for 24 “gateway cities” where
the achievement gap is the highest. Sounds great, until you realize
this is the same administration that has refused to support a
wholesale lifting of the cap on public charter schools, many of
which offer expanded learning time for students. That’s free of
charge, Gov.
We agree with the governor that education is the key to opportunity
and economic success. What we don’t want is a return to the days
when just throwing more money at the system passed for real
“reform.”
The Boston Globe
Monday, March 25, 2013
A Boston Globe editorial
Transportation needs are clear; reforms help justify funding hike
Almost a decade after the Big Dig’s completion, the toxic legacy of
the bloated highway project still haunts the state. Debt from
Central Artery-related projects gnaws away at the MBTA’s budget,
forcing fare hikes and service cuts; residual public distrust over
the mishandling of the project undercuts efforts to build political
support for roads and bridges.
It is time, though, to move on. The state is making progress at
reform. A 2009 law consolidated the transportation agencies, and the
organizational culture is changing. In one of the most visible signs
of change, the Turnpike is even phasing out costly toll collectors
in favor of open-road tolling. There is always room to improve, and
the state should never stop seeking savings, but the administration
and MassDOT secretary Richard Davey are taking meaningful steps to
restore public confidence.
Now, as part of his ambitious budget plan, Governor Deval Patrick
has asked the Legislature to approve roughly $1 billion in
additional revenue for the Commonwealth’s roads, bridges, and
transit systems. It would be the biggest infusion of cash into
transportation in years. Most of the funds, though, would just go
toward clearing the backlog of pent-up needs: new cars for the Red
Line and Orange Line, where equipment is decades old and
increasingly unreliable; repairs to roadway bridges across the
state; a new highway viaduct in Springfield; and the long-promised
extension of the Green Line into Somerville.
These are critical investments that will bolster the state’s
competitiveness. A dependable transportation system is key to
attracting and retaining workers, opening up new neighborhoods for
transit-oriented housing, and creating a more environmentally sound
economy. As the Legislature weighs the transportation plan against
the education components of Patrick’s plan, the need to catch up on
overdue transportation investments should be the most urgent.
Patrick has also asked for money for several expansion projects,
with a laudable emphasis on underserved areas. The plan would fund
commuter rail to New Bedford and Fall River, which would link a
struggling region to Boston’s more vigorous economy. He also wants
the state to buy smaller trainsets of self-propelled rail cars
called “diesel multiple units,” which would permit more frequent,
subway-like service on commuter rail tracks near Boston. These DMUs
could improve service on the busy routes through close-in suburbs,
but also on the Fairmount Line through some neglected parts of
Dorchester. Patrick is also proposing passenger rail service to
Springfield and the Berkshires — projects that seem like second-tier
priorities but still hold promise, especially if the state can forge
a partnership with Connecticut to share the costs of rail expansion.
Lawmakers can’t let the ghost of the Big Dig continue to thwart the
state’s needs forever.
Finally, Patrick’s plan would also end one of the more irresponsible
fiscal practices inherited from the Big Dig era. Since the 1990s,
the state has been paying some transportation employees with
borrowed money. MassDOT has already taken steps toward eliminating
that practice. Taxpayers won’t notice any difference when the rest
of the agency’s employees move off the capital budget, but it will
save money in the long run.
Raiding the capital budget for salaries was merely a symptom of the
profligate Big Dig culture. Lawmakers should certainly never forget
the lessons of that debacle. But nor can they let its ghost continue
to thwart the state’s needs forever.
Tomorrow: A look at early childhood education
The Boston Herald
Monday, March 25, 2013
A Boston Herald editorial
Taxing even the cloud
Every time we turn over the rock that is Gov. Deval Patrick’s $2
billion tax hike plan, another foul smell emerges.
This time we have the Massachusetts Taxpayers Foundation to thank
for analyzing what the governor’s plan calls a tax on “custom
modifications to software and other computer services,” expected to
bring in $265 million in new revenue a year. Currently software is
taxable but computer services are not. But, the governor’s office
insists, “with the migration of software first to the ‘web’ and now
to the ‘cloud,’ the line” between the two is becoming “untenable.”
And so, in the spirit of “fairness” he wants to tax the beejesus out
of both.
The Taxpayers Foundation called the tax a “Pandora’s Box” that is so
“unclear and complex” that it would tax everything from a
custom-designed website to cloud computing, data storage, virtually
all computer programming and even health care diagnostics (so much
for health care cost containment).
The proposed tax “targets industries that drive innovation,
productivity and economic growth and makes locating or expanding in
Massachusetts that much more expensive and unattractive for all
businesses seeking to compete in the 21st century,” the Foundation’s
report said.
Associated Industries of Massachusetts noted in a separate statement
to legislators, “Targeting taxes on the tools of efficiency will
throw sand in the gears of an economy already struggling to build up
steam.”
In all, according to AIM, the governor proposes to hit businesses
with about $500 million in new taxes. And that is, of course, on top
of additional costs related to Obamacare.
In attempting to counter the Taxpayers Foundation’s charges, Alex
Zaroulis, spokesperson for the Office of Administration and Finance,
only managed to confirm everyone’s worst suspicions.
“The governor’s proposal makes our tax system fairer by making sure
that business taxes are paid not just by established or declining
industries but by newer, growing ones.”
Precisely. Others would call that “killing the goose that lays the
golden eggs.”
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Citizens for Limited Taxation ▪
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