The Lawrence Eagle-Tribune
Sunday, January 16, 2000
Major fight looms over income tax rollback
By Nancy C. Rodriguez
Eagle-Tribune Writer
It could be one of the nastiest political battles ever waged in Massachusetts, all
of it over whether taxpayers should get an extra buck or two a day.
The fight is between those who want to roll back the state's income tax to 5
percent, down from its current 5.85 percent, and those who think state lawmakers' plans to
drop it to 5.75 percent are enough. The final showdown will be the Nov. 7 election, when
citizens will cast their votes on a ballot question.
Dollarwise, it would mean about $320 extra a year for wage earners who make
$50,000. New Hampshire residents who work in the Bay State would also get the same tax
cut.
Politically, it is already shaping up as a vicious fight that will only get meaner
as November approaches. But some observers say it could also prove to be a watershed
moment in the political career of Gov. A. Paul Cellucci, who has set the tax fight as his
priority for the year.
Opponents, such as the liberal labor-backed Tax Equity Alliance of Massachusetts,
dismiss it as an ill-advised cut that will translate into little more than "a pizza a
week" to taxpayers at a $1.4 billion expense to schools, the poor and the elderly.
Meanwhile, the tax break's main champion, the conservative group Citizens for Limited Taxation and Government, uses
words like "greedy", "buffoon", and "transparent hypocrite"
to describe TEAM.
Observers say the fight will test Gov. Cellucci's ability to get his way in spite
of a recalcitrant Legislature, which thwarted his attempt's last year to reduce education
spending and has continually portrayed him as an ineffectual leader.
"The governor is putting himself on the line with this one," said state
Rep. Brian S. Dempsey, D-Haverhill, who was one of only five House members to vote for a
roll back last year. "I think there is a danger in that, given the record of the vote
which happened in the House and Senate last year on the income tax issue. This will be a
test of his ability to communicate to the electorate."
Paul A. Melkonian, chairman of the Roll Back Committee for the Republican State
Committee, stops short of calling the issue an all-or-nothing for the governor.
"Nobody wants a defeat. It's a very important initiative to him," Mr.
Melkonian said. "He threw the gauntlet down, and it's down."
Being heard above the clamor of an anticipated 10 other ballot questions will take
some effort. Campaigns to ban dog track racing and to allow Internet companies access to
cable television lines are expected to be pretty heated, with both securing financial
backing from private and non-profit groups.
With Senate President Thomas F. Birmingham, D-Chelsea, vowing to fight the
proposal, and House Speaker Thomas M. Finneran, D-Boston, remaining doubtful about
lowering the rate without doing the same to spending, it is likely the issue is headed for
the Nov. 7 referendum.
The Legislature has until the first Wednesday in May to pass the petition into
law. If it doesn't, supporters need to collect an additional 9,517 signatures to have the
question put on the ballot in November.
But while other ballot propaganda mills are months away from beginning their
grinding, Gov. Cellucci and the State Republican Committee have been off and running for
months, pushing an initiative they need to win.
Early on they partnered with CLT, giving a needed boost to an organization that
almost folded after failing to get the required signatures two years ago to move the
petition forward. They dedicated web sites to the initiative, and a few months back Gov.
Cellucci came up with a $100,000 retainer to hire a professional signature gathering
company from Nevada to insure his item got the needed 57,100 signatures by Dec. 31 to make
it before the Legislature. The move brought criticism from TEAM, who claimed it tainted
the citizen petition process.
How much the Republicans have spent so far to get their way won't be know until
Roll Back Committee files financial disclosure forms this month with the secretary of
state.
Locally, other Republicans also have been brought in to push the question,
including Essex County Sheriff Frank G. Cousins, and Republican fund-raiser and State
Committeewoman Dorothy P. Early of Haverhill, who organized the governor's inaugural.
State Rep. Kevin L. Finnegan, R-Newburyport, also has been active in the campaign.
TEAM stymied CLT's petition two years ago by questioning the validity of
signatures. For their part, TEAM charged supporters with putting children at risk by
taking away money that could be spent on fixing schools.
TEAM Executive Director James R. St. George agrees the fight could get nastier, if
for no other reason than the fact the governor has made it so important.
"It's essentially his only agenda item," Mr. St. George said. "He's
had a pretty bad first year, and he is trying to get off the mat.
"This is all he has going," Mr. St. George added. "The problem is
the initiative he picked on here is one the public doesn't really want. The question is
who is going to be successful at defining the message. If the message is: 'Give us a tax
cut,' they're going to win. If people hear that a tax cut has implications, that there is
a connection between taxes you pay and the quality of life, we're going to win."
Keeping up with the governor's fund-raising ability may be the most difficult
part, he said.
"We're going to do everything we can to stay as even as it gets," Mr.
St. George said.
Gov. Cellucci argues the rate reduction will help create between 20,000 and 50,000
jobs because it will decrease the burden in small businesses. At the same time, it will
decrease labo costs, and make the state more attractive to businesses looking to
locate here.
With the state flush with money -- $3.2 billion in trust fund and rainy day
accounts -- the state can afford to keep its promise and pay for programs, supporters say.
They point to a national study done recently by the Center for Budget and Policy, a
liberal think tank in Washington, D.C., which found Massachusetts was one of eight states
that could weather a recession.
Opponents say it would hurt state spending making it impossible to fix schools and
bridges in good economic times. They also point to $1.3 billion in taxes slashed over the
past two years.
While a supporter, Rep. Dempsey said he does see momentum being the biggest
problem for the governor. There is not an urgency among voters on the issue, he said.
"People aren't angry because of the economy and that hurts their cause at
this time," he said. "I think it will be a battle. I honestly don't think it is
the top third or fourth priority in the electorate's mind. I hear more about education and
health care."
Rep. Dempsey thinks the state can do both -- keep its promise to reduce the rate
and also deal with education and public safety.
"I think there is a danger in having too much money in government. Now we run
into a situation where we can't pass a budget and new things are being created all the
time," he said. "We're going to have programs that have been funded that people
are going to expect us to continue to fund."
Meanwhile, Mr. St. George said his group is gearing up for its own campaign. It is
rebuilding the grassroots coalition from two years ago, including community, housing and
religious organizations and business people.
"It's going to be a big campaign," Mr. St. George said. "That would
be the technical description."
The key will be to fill in the gap, and let people realize it's not just a tax
cut, he said.
"It's going to cost you. You save in taxes, but when it comes to schools and
public safety you're going to pay," he said.
Barbara Anderson, CLT's executive director, said the argument for her, with or without the political angst of the
governor, has always been the same.
"The big argument for us, and I really think
the key issue here, is they promised this would be temporary, just for the life of those
bonds when they voted it in 1989," Ms. Anderson said. "I think at this
particular point of time, you have to hold your politicians to some standard because there
is no limit to how low they will go. They said it was temporary. They should keep their
word. The world is ready for a revolution in standards."
Ms. Anderson calls opponent's claims that the money will be
used for bridges and schools a sham.
"They have to keep that reason to justify
raising taxes. They deliberately neglect improvements on things," she said. "The
fact is the state is funding everything it wants to and has enough to fund more if it
wants to. It's not that the state needs the money.
"But I still think the bottom line is they
promised it would be done," she added. "If they are not forced to do it they
will lie to us and break promises again and next time it will be a lot more serious than a
pizza a week."
