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CLT UPDATE
Wednesday, July 10, 2013
Need a Savings Account?
Sign up with EBT
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Nearly 1,800 welfare recipients are carrying
taxpayer-funded food stamp balances on their EBT cards in excess of
$1,500 — with one account topping $12,000 — the latest twist in a
state welfare scandal that now has a former Massachusetts inspector
general
calling for a sweeping probe.
A Herald review of a seven-month tally of EBT
accounts also showed 37 welfare recipients have separate cash
balances in excess of $1,500 — with one of more than $4,600. Unlike
food stamps, which are federally funded, these payments are paid for
by state taxpayers....
The Herald review comes
after state Rep. Shaunna
O’Connell paid $800 to pry the welfare data on sky-high benefit
balances from the state Department of Transitional Assistance after
a store owner in Pittsfield sent her a receipt showing a customer’s
alarming $7,000 EBT balance....
“It’s even worse than I thought it was going to
be, what we’ve seen at this point,” O’Connell said, adding she needs
more time to dig deeper into the numbers. “Once again, this is the
tip of the
iceberg.”
Less than two hours after
delivering the data to
O’Connell’s office, officials at the Department of Transitional
Assistance announced new rules to curb high balances. However,
those officials denied the timing of the new initiatives was meant
to blunt outrage over these
bloated EBT balances.
The Boston Herald
Wednesday, July 10, 2013
Latest EBT scandal:
Hoarding handouts... including $12,088 in 1 food stamp account
Gov. Deval Patrick said his administration wants
answers behind the soaring EBT card balances some Bay State welfare
recipients are carrying around, but cautioned that not every bloated
account is a red flag for fraud.
“That certainly raises questions that people who
are eligible for these benefits, in many cases the poorest of the
poor, having an accumulated balance raises issues,” Patrick said
today, citing one example of a long hospital stay as an explanation
behind why someone built a big balance. “There are all kinds of
explanations. But the point is to get an explanation and make sure
it’s a sound one.” ...
The review of the data came after state Rep.
Shaunna O’Connell paid $800 to look at seven months worth of EBT
data, and prompted one former inspector general to call for a full
review of the income of those receiving state assistance.
The high balances raise questions of why those
squirreling away funds even need the help, but they also could
signal possible fraud.
The Boston Herald
Wednesday, July 10, 2013
Gov. says he wants answers on sky-high EBT card balances
When it comes to food stamp balances, some Bay
State welfare recipients could stock a city block of refrigerators.
A Herald survey of food stamp and cash accounts turned over to state
Rep. Shaunna O’Connell (R-Taunton), left, shows some bloated
entries:
The Boston Herald
Wednesday, July 10, 2013
Loading up on benefits
The state launched a new initiative on Tuesday
that will eliminate high balances on EBT cards and suspend federal
nutritional assistance benefits that are not being utilized, as
officials continue a crackdown aimed at saving taxpayers’ money and
protecting benefits for those who really need them.
“I was given a mandate from the Governor to do a
top to bottom review of the agency and make changes to improve the
way we do business,” said Stacey Monahan, commissioner of the state
Department of Transitional Assistance, on Tuesday, in a statement.
The Boston Globe
Wednesday, July 10, 2013
State will eliminate high balances on EBT cards
Welfare recipients who accumulate high balances
on their electronic benefit transfer cards will have those cards
shut down under new state rules.
Cash assistance recipients with balances above
$1,500 will be notified to see if they still need assistance, and
EBT cards with balances exceeding $2,500 will be closed, Stacey
Monahan, commissioner of the Department of Transitional Assistance,
announced Wednesday. The move, she said, would ensure that only
clients who truly need benefits receive them.
The DTA will also begin contacting recipients of
the federal Supplemental Nutrition Assistance Program with balances
greater than $5,000 to ensure they still need the benefits....
Patrick has not yet said whether he plans to
approve a budget amendment that would require photo identification
on all EBT cards.
Associated Press
Wednesday, July 10, 2013
New welfare rules target high EBT card balances
Consumers would get a break in the amount of
sales tax they pay on cell phone purchases under a bill recommended
Tuesday by the Committee on Revenue.
The bill (H 2583), filed by Rep. Denise Garlick
(D-Needham), would prevent sales taxes from being collected on the
full value of a cell phone if consumers get a discounted rate
because their purchase is bundled with a wireless service agreement.
Rep. Jay Barrows (R-Mansfield) is a cosponsor of Garlick’s bill and
has been waging an effort to advance the legislation on Beacon Hill.
Cell phone carriers often offer deep discounts on
the price of cell phones if consumers sign service agreements at the
time of purchase, but customers in Massachusetts still pay the
state’s 6.25 percent sales tax on the phone’s full value, which can
be hundreds of dollars higher than what they pay at the register.
The committee, chaired by Rep. Jay Kaufman and
Sen. Michael Rodrigues, voted unanimously to recommend passage of
the bill to the full Legislature, as amended by the committee.
State House News Service
Tuesday, July 9, 2013
Committee okays bill to limit sales tax to discounted phone prices
A bill designed to raise $500 million in new
taxes for the state includes a controversial tax on some computer
transactions, a measure critics say could devastate businesses, but
supporters insist is nothing to worry about....
“Nobody knows what this bill will do,” said tax
activist Barbara Anderson of Marblehead, who raised the alarm
about this in
her Salem News column earlier this year.
But Rep. John Keenan, D-Salem, who voted for the
measure, said criticisms of the tax on computer transactions are
unmerited.
“Almost 30 other states have a similar tax,” he
noted. “It is not intended to be a tax on computer services.” ...
Anderson compares the new tax to a nearly
disastrous tax on services passed by the Michael Dukakis
administration in the 1990s, but overturned under Gov. William Weld
before it could even go into effect. Yet, as she signaled concern
about the impact of the computer tax as early as April, she got no
response from the business community until it was set to pass.
Michael Widmer of the Massachusetts Taxpayers Foundation, a business
group, then called it the worst tax he had seen in 20 years.
“It could have a devastating impact,” Anderson
said. “Nobody knows how it works.” In two years, Anderson predicted,
multiple businesses will have to close or leave the state, and
“they’ll all be saying, ‘Oh, my God, how did this happen?’”
The regret could start, she indicated, about the
time cancer researchers realize they have to pay a tax to upgrade
their databases.
Anderson shrugs off Keenan’s explanations,
suggesting that as concerns are rising about the impact of the tax,
legislative leaders are putting out talking points to feed to
reporters. “They’re saying what someone told them to say,” she
suggested. They won’t really know what the bill does, she said,
until it’s put into effect.
The Salem News
Saturday, July 6, 2013
Tax plan draws concern
State legislative leaders drew another line in
the sand yesterday amid their tax showdown with Gov. Deval Patrick,
forcing him to play his hand on the already past-due state budget
before voting on his amendment to re-up an already $500 million tax
plan.
Speaker of the House Robert A. DeLeo and Senate
President Therese Murray say they’re still pushing their membership
to shoot down Patrick’s proposal to add a gas tax in 2017 if
officials cut tolls west of Boston from the Mass. Turnpike.
The Boston Herald
Tuesday, July 9, 2013
Robert DeLeo, Therese Murray get tough with Deval Patrick
Hold votes till he signs off on budget
With a dispute over long-term transportation
financing putting the state budget in jeopardy 10 days into the new
fiscal year, Gov. Deval Patrick signaled Wednesday that without
revenue in place it would be unprecedented for him to sign the
Legislature’s $34 billion spending plan that relies in part on
tax-raising legislation that’s still unresolved.
“I’ve never yet signed a budget that wasn’t in
balance. I can’t see signing a budget that depends on revenues from
a different bill that is not done yet,” Patrick told reporters. “So
how we do that we’re trying to sort out right now. We have a pretty
good idea of the direction we’re going in. I’ll talk more about that
on Friday.”
Friday is Patrick’s deadline to act on the
budget. He can sign it, veto portions of it, or send parts or all of
it back with amendments. House Speaker Robert DeLeo and Senate
President Therese Murray have decided to wait for Patrick to take
action on the budget before taking up his amendment to the $500
million tax bill. Under the amendment, which DeLeo and Murray
oppose, a gas tax increase, estimated at up to 5 cents a gallon,
would be triggered if turnpike toll revenues dip below 2016 levels
for any reason.
State House News Service
Wednesday, July 10, 2013
Patrick can't see signing budget reliant on $$$ from unresolved bill
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Chip Ford's CLT
Commentary
After months and months of stalling, after every
dodge imaginable, the state has finally released information
long-sought by
State Rep.
Shaunna O'Connell (R-Taunton).
When the Freedom of Information Act didn't work,
when the state's Department of Transitional Assistance held her
request hostage for $800, Chip Faulkner, Barbara Anderson, I and
many others made modest out-of-pocket personal contributions to Rep.
O'Connell's campaign committee to help finance the ransom (See: CLT
Update, Jun. 13, "Turning
and turning in the widening gyre").
When the state got around to releasing last night
that which should not have required a ransom to free, it already had
"a plan" ready to go to ameliorate the firestorm Rep. O'Connell's
request was sure to ignite.
And Governor Patrick had his excuses all lined
up.
Now we know why the big holdup!
One EBT cardholder has a running balance of over
$12,000, with many comfortably sitting on over $1,500, in
their private welfare savings accounts funded by you and me.
No wonder DTA did everything in its power not
to release this information.
As the old American Express Card ad went,
"Membership has its privileges"!
So now we know that some taxpayer-funded handout
recipients have better savings plans than do many of us who provide
for them.
"Sunlight is said to be the best of
disinfectants," wrote U.S. Supreme Court Justice Louis D. Brandeis
in 1913. Well Ole Sol has now been shined like a laser beam on this
abuse of taxpayers.
“There are all kinds of explanations," Gov.
Patrick excused. Who among us would expect anything more out of him?
What I found perhaps most distressing, when doing
my early-morning daily news search, was finding that the Boston
Globe made no mention whatsoever of how this abuse was uncovered.
The Globe report by Haven Orecchio-Egresitz made it sound like the
state itself uncovered this scandal. The AP did no better in
its report.
If it wasn't for the dogged work of Rep
O'Connell, the Boston Herald, Howie Carr, and we ransom-payers, this
scandal would still be buried deep within the Department of
Transitional Assistance's files.
Some sort of critical mass is getting closer . .
.
*
*
*
*
In CLT's collective institutional memory since
1978, there has never been a state budget dependent upon tax
increases not yet adopted. Never mind that those taxes come
from a "transportation bond bill" that taxes things utterly not
transportation-related: such as cigarettes and computer
services. It has simply never happened before.
We warned about this back in mid-May ("Focus,
despite 'overwhelming' distractions"):
The $500 million tax hike for the
separate transportation bond bill is still working its
way through the conference committee, yet both the House
and Senate budgets are based upon its passage. The tax
hike is still being pushed, despite the Department of
Revenue pulling in $510 million above what was
anticipated last year, the "benchmark." The state took
in over half a billion of our dollars more than it
expected — but still Bacon Hill needs to hike our taxes
by an additional half a billion dollars?
Now — suddenly
— Bacon Hill is straining for a
resolution.
A budget based on . . . the unknown . . . based
on more revenue despite unexpected revenues in its coffers.
Are you ready for Election 2014 yet?
Right now, nothing less than tossing out the
tax-borrow-and-spenders who "represent" you will work.
We pay these people very well to represent us.
Couldn't any of "us" do a better job? Are there not better
candidates for the job out there? Isn't almost anyone
better than most of them?
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Chip Ford |
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The Boston Herald
Wednesday, July 10, 2013
Latest EBT scandal:
Hoarding handouts... including $12,088 in 1 food stamp account
By Chris Cassidy and Matt Stout
Nearly 1,800 welfare recipients are carrying taxpayer-funded food
stamp balances on their EBT cards in excess of $1,500 — with one
account topping $12,000 — the latest twist in a state welfare
scandal that now has a former Massachusetts inspector general
calling for a sweeping probe.
A Herald review of a seven-month tally of EBT accounts also showed
37 welfare recipients have separate cash balances in excess of
$1,500 — with one of more than $4,600. Unlike food stamps, which are
federally funded, these payments are paid for by state taxpayers.
“There should be an investigation by the
administration and an
investigation by all of the law enforcement agencies — including the
IG’s office — to look at the question of integrity with the income
reporting of people on welfare who
receive food stamps,” former
Inspector General Gregory Sullivan, now of the Pioneer Institute,
told the Herald. “Massachusetts, in my view, has a very poor
system.”
The Herald review comes
after state Rep. Shaunna O’Connell paid
$800 to pry the welfare data on sky-high benefit balances from the
state Department of Transitional Assistance after a store owner in
Pittsfield sent her a receipt showing a customer’s alarming $7,000
EBT balance.
Among the shocking totals in the DTA data:
• Of the state’s 550,000 food stamp,
or SNAP, recipients, 1,794
have balances of more than $1,500, and another 45 are carrying more
than $5,000.
• One balance in March hit $12,088, the highest from any of the
seven months of data the Herald reviewed.
• For those receiving state taxpayer-funded cash assistance, one EBT
cardholder had a $4,622 balance, and another $4,320.
On average, state households receive $230 a month in food stamps and
$450 in cash assistance, meaning some of these EBT cardholders are
going months, even years, without using their accounts.
“It’s even worse than I thought it was going to be, what we’ve seen
at this point,” O’Connell said, adding she needs more time to dig
deeper into the numbers. “Once again, this is the tip of the
iceberg.”
Less than two hours after
delivering the data to
O’Connell’s
office, officials at the Department of Transitional
Assistance
announced new rules to curb high balances. However, those officials
denied the timing of the new initiatives was meant to blunt outrage
over these
bloated EBT balances.
For those receiving cash assistance from the state, officials will
now close EBT accounts exceeding a $2,500 balance and expunge all
accounts not used for 90 days. Officials said they also will contact
all those with more than $1,500 on EBT cards, asking them to call
DTA to explain their cash kitty.
As a federally administered program, there is no limit to how high
SNAP accounts can soar. But DTA officials plan to deactivate any
account not used after six months and then erase the balances after
12 months of no use. When balances reach $5,000, only then will
caseworkers start a case review.
DTA Commissioner Stacey Monahan refused a Herald
request for an
interview last night but said in a statement that high balances are
“inconsistent with the department’s goal of helping vulnerable
individuals meet their most basic and immediate needs, and that’s
why we are taking this action.”
O’Connell scoffed at the welfare agency’s new rules, calling them
“one sorry excuse” for
reform.
“If you’re letting people accumulate thousands of dollars,” she
said, “that flies in the face of any kind of genuine concern about
fraud and any actual real reform.”
Joe Dwinell contributed
to this report.
The Boston Herald
Wednesday, July 10, 2013
Gov. says he wants answers on sky-high EBT card balances
By Matt Stout
Gov. Deval Patrick said his administration wants answers behind the
soaring EBT card balances some Bay State welfare recipients are
carrying around, but cautioned that not every bloated account is a
red flag for fraud.
“That certainly raises questions that people who are eligible for
these benefits, in many cases the poorest of the poor, having an
accumulated balance raises issues,” Patrick said today, citing one
example of a long hospital stay as an explanation behind why someone
built a big balance. “There are all kinds of explanations. But the
point is to get an explanation and make sure it’s a sound one.”
The Herald reported today that nearly 1,800 people have food stamp
balances on their EBT cards exceeding $1,500, including one topping
$12,000, while dozens of others receiving cash assistance have
similar sky-high accounts.
The review of the data came after state Rep. Shaunna O’Connell paid
$800 to look at seven months worth of EBT data, and prompted one
former inspector general to call for a full review of the income of
those receiving state assistance.
The high balances raise questions of why those squirreling away
funds even need the help, but they also could signal possible fraud.
Patrick said the discovery prompted the Department of Transitional
Assistance to install new guidelines, including closing cash
accounts exceeding $2,500 or those inactive for 90 days. But as a
federally administered program, food stamps have no limits on
balances, and state officials said they can only deactivate an
inactive account after six months and expunge it after 12.
Officials will also begin to review food stamp cases after they
exceed $5,000, but that measure has already drawn scrutiny as being
too lax. Food stamps can’t be converted into cash and can only be
used for food.
“I think you know it was our administration that surfaced those
issues and is working to get those balances down,” Patrick said.
But the governor dodged a question on what particular issues about
the high EBT balances most concern him, only saying, “All the ones
you’d expect.”
“Which is why we’re combing through these relatively small number of
high balances to make sure we get adequate explanations,” he said.
Chris Cassidy contributed to this report.
The Boston Herald
Wednesday, July 10, 2013
Loading up on benefits
When it comes to food stamp balances, some Bay State welfare
recipients could stock a city block of refrigerators. A Herald
survey of food stamp and cash accounts turned over to state Rep.
Shaunna O’Connell (R-Taunton), left, shows some bloated entries:
FOOD STAMPS (SNAP)
$12,088 was the highest single balance
$10,970 was the next-highest food stamp balance
$9,239 was third highest
1,794 recipients had balances exceeding $1,500
550,000 people are on food stamps in Massachusetts
$230 is the average monthly SNAP allowance per household
WELFARE CASH
$4,622 was the highest single balance
$4,320 was next
37 recipients had balances exceeding $1,500
83,009 people collect welfare cash
$450 is the average monthly cash allowance per household
Related:
Your Tax Dollars at Work: Food stamp benefits
Your Tax Dollars at Work: Welfare cash benefits
The Boston Globe
Wednesday, July 10, 2013
State will eliminate high balances on EBT cards
By Haven Orecchio-Egresitz
The state launched a new initiative on Tuesday that will eliminate
high balances on EBT cards and suspend federal nutritional
assistance benefits that are not being utilized, as officials
continue a crackdown aimed at saving taxpayers’ money and protecting
benefits for those who really need them.
“I was given a mandate from the Governor to do a top to bottom
review of the agency and make changes to improve the way we do
business,” said Stacey Monahan, commissioner of the state Department
of Transitional Assistance, on Tuesday, in a statement. “The fact
that some clients are accumulating high SNAP [Supplemental
Nutritional Assistance Program] or cash balances is inconsistent
with the department’s goals of helping vulnerable individuals meet
their most basic and immediate needs, and that’s why we are taking
this action.”
According to the latest data, collected in March, the average
account balance of those receiving cash assistance is $25.21, but
six accounts were in violation of the DTA regulatory requirements
and have electronic benefits transfer (EBT) card balances over
$2,500, Monahan said.
Under the new cash assistance reform that was unveiled Tuesday, the
small percentage of clients who are currently exceeding the $2,500
asset limit will have their accounts immediately closed, and no
balances will be allowed to go over the limit in the future,
according to Monahan.
The policy change will affect those who are receiving benefits under
the Transitional Aid to Families with Dependent Children program or
Emergency Aid to the Elderly, Disabled and Children plan.
The department will also expunge cash benefit balances on accounts
that have been inactive for 90 days, the commissioner said.
House Speaker Robert A. DeLeo is pleased with the new restrictions,
according to his spokesman, Seth Gitell.
“Speaker DeLeo welcomes moves to make sure these benefits go only to
those in need as well as those included in the Legislature’s recent
budget and supplemental budget, such as photos on EBT cards, the
Bureau of Program Integrity and asset task force,” Gitell said
Tuesday night.
As for federal SNAP benefits, the policy change will suspend all
accounts that have been inactive for six months, and require the
recipients to request reinstatement. Those who are reinstated will
be subjected to increased case management, according to Monahan.
A majority of SNAP recipients with a balance over $7,000 are elderly
residents with an instinct to save, she explained. But now, in order
to ensure that recipients are still in need of benefits, and that
they are not experiencing any barriers to accessing the funds,
caseworkers will reach out to those with balances over $5,000 and
conduct case reviews.
State Auditor Suzanne Bump released an audit in May that said
hundreds of people may have fraudulently collected welfare or
illegally sold food benefits for cash.
Legislation that would require photos on EBT cards is on the
governor’s desk awaiting his signature.
Associated Press
Wednesday, July 10, 2013
New welfare rules target high EBT card balances
Welfare recipients who accumulate high balances on their electronic
benefit transfer cards will have those cards shut down under new
state rules.
Cash assistance recipients with balances above $1,500 will be
notified to see if they still need assistance, and EBT cards with
balances exceeding $2,500 will be closed, Stacey Monahan,
commissioner of the Department of Transitional Assistance, announced
Wednesday. The move, she said, would ensure that only clients who
truly need benefits receive them.
The DTA will also begin contacting recipients of the federal
Supplemental Nutrition Assistance Program with balances greater than
$5,000 to ensure they still need the benefits.
"The fact that some clients are accumulating high SNAP or cash
balances is inconsistent with the department's goal of helping
vulnerable individuals meet their most basic and immediate needs,
and that's why we are taking this action," said Monahan.
According to data provided by the state welfare agency for the month
of March, about 83,000 households in Massachusetts received cash
assistance and the average monthly benefit per household was $450.
The average cash balance during the month was $25.21, the DTA said,
and 99.8 percent of recipients had balances of less than $1,000 on
their cards.
Thirty-seven households reported balances above $1,500 and six
exceeded $2,500, according to the data.
"People who are eligible for these benefits are in many cases the
poorest of the poor, so having an accumulated balance certainly
raises issues," Gov. Deval Patrick told reporters Wednesday.
But Patrick also added that there could be explanations for a higher
than normal balance, such as a lengthy hospital stay for a
recipient.
Officials said the new policy of shutting down cards with the high
balances was consistent with DTA regulations requirements that limit
countable assets for welfare recipients to under $2,500.
The SNAP program, formerly known as food stamps, does not prohibit
clients from accumulating high balances, but accounts that are
inactive for six months will be now moved offline.
SNAP benefits cannot be converted to cash and can only be used to
purchase household food.
Lawmakers have been pushing for EBT reforms in response to several
recent reports critical of the system, including a state audit in
May that found millions of dollars in questionable payments to
people who were dead or otherwise ineligible for benefits. Patrick
disputed the scope of that report, but he has ordered his
administration to take immediate steps to end fraud and abuse.
Patrick has not yet said whether he plans to approve a budget
amendment that would require photo identification on all EBT cards.
State House News Service
Tuesday, July 9, 2013
Committee okays bill to limit sales tax to discounted phone prices
By Matt Murphy
Consumers would get a break in the amount of sales tax they pay on
cell phone purchases under a bill recommended Tuesday by the
Committee on Revenue.
The bill (H 2583), filed by Rep. Denise Garlick (D-Needham), would
prevent sales taxes from being collected on the full value of a cell
phone if consumers get a discounted rate because their purchase is
bundled with a wireless service agreement. Rep. Jay Barrows
(R-Mansfield) is a cosponsor of Garlick’s bill and has been waging
an effort to advance the legislation on Beacon Hill.
Cell phone carriers often offer deep discounts on the price of cell
phones if consumers sign service agreements at the time of purchase,
but customers in Massachusetts still pay the state’s 6.25 percent
sales tax on the phone’s full value, which can be hundreds of
dollars higher than what they pay at the register.
The committee, chaired by Rep. Jay Kaufman and Sen. Michael
Rodrigues, voted unanimously to recommend passage of the bill to the
full Legislature, as amended by the committee.
The committee also voted to recommend a Sen. Barry Finegold bill (S
1337) that would allow taxpayers to check a box on their state tax
returns to make a contribution to the Financial Literacy Trust Fund
used to support programs to help students, immigrants and others
learn about how to manage their finances.
The Revenue Committee held a hearing on Monday focused on 30 bills
relating to the creation or expansion of tax exemptions or credits
for senior citizens. The Massachusetts Municipal Association urged
lawmakers not to approve any changes in this area that are not a
local option for cities and towns.
Charles Stefanini, legislative counsel to the Massachusetts
Assessors Association, urged lawmakers considering proposals to
expand property tax breaks for seniors that every dollar discounted
must typically be paid by another taxpayer living in the community
to continue to support schools and services.
The Salem News
Saturday, July 6, 2013
Tax plan draws concern
By Alan Burke
A bill designed to raise $500 million in new taxes for the state
includes a controversial tax on some computer transactions, a
measure critics say could devastate businesses, but supporters
insist is nothing to worry about.
As of yesterday, the bill had been passed by the Legislature and was
sitting on Gov. Deval Patrick’s desk awaiting his signature. The
bill hasn’t been signed because the governor thinks it fails to
increase the gas tax enough (it boosts the tax by 3 cents, with the
increase tied to inflation) to compensate for revenues likely to be
lost when some Turnpike tolls are eliminated. It also increases
taxes on tobacco products.
The most controversial part of the bill would extend the state’s
6.25 percent sales tax to a variety of technological services.
“Nobody knows what this bill will do,” said tax activist Barbara
Anderson of Marblehead, who raised the alarm about this in
her Salem News column earlier this year.
But Rep. John Keenan, D-Salem, who voted for the measure, said
criticisms of the tax on computer transactions are unmerited.
“Almost 30 other states have a similar tax,” he noted. “It is not
intended to be a tax on computer services.”
Importantly, Keenan said, the tax leaves the average consumer out of
the mix. It doesn’t tax repairs on your home computer, for example,
and it won’t be levied when you upgrade your PC with a second hard
drive. Nor does it tax so-called “cloud services.”
Instead, he said, the tax will impact computer system design and is
aimed more at businesses. “This is a tax on computer products,” said
Keenan. “If someone is working on software for you and they upgrade
it. ... If someone is creating a new product for you, yeah, you
would pay a tax on that.” He expects the measure to earn the state
about $100 million.
Keenan said he’s heard from constituents in the computer business
inquiring about the law, but stresses the intention is to ease the
impact on computer-centered businesses. “Technology is important to
our economy,” he said.
Asked if he would be sympathetic to the governor’s plea for more
money, Keenan said, “We did everything we thought we could ... in
this rather difficult economy.” Much of the new tax money is aimed
at covering the state’s transportation costs.
Anderson, however, has less patience with the governor’s complaints.
“The last I heard he was sulking,” she said.
Anderson compares the new tax to a nearly disastrous tax on services
passed by the Michael Dukakis administration in the 1990s, but
overturned under Gov. William Weld before it could even go into
effect. Yet, as she signaled concern about the impact of the
computer tax as early as April, she got no response from the
business community until it was set to pass. Michael Widmer of the
Massachusetts Taxpayers Foundation, a business group, then called it
the worst tax he had seen in 20 years.
“It could have a devastating impact,” Anderson said. “Nobody knows
how it works.” In two years, Anderson predicted, multiple businesses
will have to close or leave the state, and “they’ll all be saying,
‘Oh, my God, how did this happen?’”
The regret could start, she indicated, about the time cancer
researchers realize they have to pay a tax to upgrade their
databases.
Anderson shrugs off Keenan’s explanations, suggesting that as
concerns are rising about the impact of the tax, legislative leaders
are putting out talking points to feed to reporters. “They’re saying
what someone told them to say,” she suggested. They won’t really
know what the bill does, she said, until it’s put into effect.
The Boston Herald
Tuesday, July 9, 2013
Robert DeLeo, Therese Murray get tough with Deval Patrick
Hold votes till he signs off on budget
By Matt Stout
State legislative leaders drew another line in the sand yesterday
amid their tax showdown with Gov. Deval Patrick, forcing him to play
his hand on the already past-due state budget before voting on his
amendment to re-up an already $500 million tax plan.
Speaker of the House Robert A. DeLeo and Senate President Therese
Murray say they’re still pushing their membership to shoot down
Patrick’s proposal to add a gas tax in 2017 if officials cut tolls
west of Boston from the Mass. Turnpike.
But DeLeo said they’re not at the “stage” to begin talking veto
overrides, although past votes on the tax plan in the House show
legislators could get enough. The House will vote July 17, and the
Senate the next day — long after Patrick’s deadline this week to
sign off, slash or amend parts of this fiscal year’s $34 billion
budget.
“I don’t see a real boatload of support for either a gas tax or a
toll hike,” DeLeo said yesterday of House membership. “I would have
to say the amendment in its present form is unacceptable. So I don’t
know what we can do besides straight rejection.”
Patrick’s office declined to comment yesterday, and a spokeswoman
referred back to remarks he made last week when he signaled he’d
seek out support in the Legislature.
Patrick has repeatedly said he won’t sign a bill that doesn’t
eventually kick transportation spending north of $800 million, a
level he said the state can’t reach if officials nix the tolls and
the $135 million in revenue they generate.
“I’m not going to pretend like an $800 million bill is one if it
isn’t. I’m not going to go along, to play along with that,” Patrick
told reporters.
“You know we proposed one way to do it. There might be other ways to
do it.”
Murray said she doesn’t intend to let Patrick bend legislators to
his will, though both she and DeLeo said they’re not concerned about
hashing out a budget and tax plan by August, when a temporary budget
runs out.
“The governor has other options, I’m sure, available to him,” she
said.
State House News Service
Wednesday, July 10, 2013
Patrick can't see signing budget reliant on $$$ from unresolved bill
By Andy Metzger and Matt Murphy
With a dispute over long-term transportation financing putting the
state budget in jeopardy 10 days into the new fiscal year, Gov.
Deval Patrick signaled Wednesday that without revenue in place it
would be unprecedented for him to sign the Legislature’s $34 billion
spending plan that relies in part on tax-raising legislation that’s
still unresolved.
“I’ve never yet signed a budget that wasn’t in balance. I can’t see
signing a budget that depends on revenues from a different bill that
is not done yet,” Patrick told reporters. “So how we do that we’re
trying to sort out right now. We have a pretty good idea of the
direction we’re going in. I’ll talk more about that on Friday.”
Friday is Patrick’s deadline to act on the budget. He can sign it,
veto portions of it, or send parts or all of it back with
amendments. House Speaker Robert DeLeo and Senate President Therese
Murray have decided to wait for Patrick to take action on the budget
before taking up his amendment to the $500 million tax bill. Under
the amendment, which DeLeo and Murray oppose, a gas tax increase,
estimated at up to 5 cents a gallon, would be triggered if turnpike
toll revenues dip below 2016 levels for any reason.
Besides the new revenue from the tax bill devoted to transportation,
the fiscal year 2014 budget relies on $183.5 million from the tax
bill for non-transportation spending, according to Senate aides.
“They can do whatever they want, and have, and they can do it with
or without, with or without hearings, with or without data, with or
without facts. We’ve seen that, too,” Patrick said, without
specifying whom he was referring to.
Patrick has said the bill would not succeed, as legislators claim,
in devoting $800 million towards transportation by 2018 because it
does not address the statutory language that could cause turnpike
tolls to come down at that time.
The 2009 transportation reform law decreed that the Massachusetts
Department of Transportation would operate “free of tolls” when all
the turnpike bonds are paid off and the turnpike is “deemed to be in
good condition and repair to the satisfaction of the department.” A
MassDOT spokeswoman said the bonds to fund the western Turnpike will
be “entirely paid off” by 2017.
Legislative officials have argued that the same provision in the law
would allow a future administration to keep the tolls up on the
turnpike from Weston to the New York border, so long as the highway
is not in pristine condition.
The bill approved by the Legislature also encourages MassDOT to
pursue other tolling opportunities that could replace the lost
turnpike toll revenue without further increasing the gas tax,
including border tolls, toll increases in the Boston tunnels and
bridges or high-speed toll lanes on existing highways.
The original Senate bill included language to guarantee that the
western Turnpike tolls remain in operation after 2017, but the
proposal was stripped from the legislation by an amendment sponsored
by Sen. Karen Spilka (D-Ashland) and approved on a voice vote. Many
lawmakers who would prefer to see the tolls come down also oppose
additional gas tax increases, making Patrick’s chosen course a
difficult alternative to sell to legislators, according to leaders.
"Knowing what we've gone through so far, I don't see a real boatload
of support for either a gas tax or a toll hike," DeLeo said this
week.
Patrick and legislative leaders have gone back and forth on how to
fund transportation, including public transit and highways, since
January when Patrick proposed a $1.9 billion tax increase, including
$1 billion for transportation.
“The Senate president and the speaker can do whatever they want,”
Patrick said. “What the public needs to know and what their members
need to appreciate is this $800 million bill is not in fact an $800
million bill.”
Patrick added, “I said I would compromise on $800 million. I said I
would compromise on how that $800 million is made real, but right
now it’s not real and they’re going to have to deal with that. Or if
they send me the bill back in its current form, as I said, I’m not
going to approve it,” Patrick said. Asked if he was talking to
lawmakers, Patrick said, “We’re talking to lots of folks who are
willing to talk, but folks have to talk back.”
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