CLT Update
Wednesday, June 6, 2001

A sales tax increase on greased skids?

"Charles Rasmussen, Finneran's press secretary, said yesterday that a corresponding hike in the state sales tax could create adequate revenue to allow cities and towns to lower property taxes."

[full report below]

How stupid do they think we are? Increase the sales tax with a promise to "allow" municipalities to lower their property taxes -- it "could" create adequate revenue? Finneran is kidding ... right? Either that, or he's been hanging around his flock of sheep for too long.

Speaker Finneran has inserted in the House budget the formation of "a special commission" on which he would sit. This means that it's important to him, and you know what that means.

The income tax in Massachusetts was initially instituted to take the pressure off property taxes: property taxes remained and now we have both. Then came the 3 percent sales tax, sold as a means of taking the pressure off the property tax: then we had property taxes still third highest in the nation, an income tax, and a 3 percent sales tax - which soon climbed to 5 percent.

Now Finneran wants to increase it again ... but he promises this time -- cross his heart -- it will take the pressure off the property tax, honest! He means it this time, you know.

Again Lucy is setting up the football, and again we shout "Look out, Charlie Brown!"

Chip Ford

The Boston Herald
Tuessday, June 5, 2001

Finneran mulling tax hikes to fund education
by Cosmo Macero Jr.

House Speaker Thomas M. Finneran is strongly considering a plan that would redefine how Massachusetts pays for education, including a possible hike in the state's 5 percent sales tax to relieve the crushing burden of local property taxes.

The dramatic move has been quietly building steam behind the scenes on Beacon Hill, with specific attention paid to dedicating a portion of sales tax revenues for direct school funding.

"I find this very intriguing," Finneran said yesterday, in a statement released to the Herald. "I'm always open to new ideas and suggestions. And I'm intrigued by this idea."

Property owners in Massachusetts carry the brunt of the school funding burden through taxes levied at the local level. But Finneran, motivated by a sales tax program enjoying success in Michigan, has called for a high-powered commission to develop alternatives that would shift the load more evenly onto all taxpayers.

Charles Rasmussen, Finneran's press secretary, said yesterday that a corresponding hike in the state sales tax could create adequate revenue to allow cities and towns to lower property taxes.

"If you're taking away from property taxes, then it would be an increase (in sales taxes)," Rasmussen said. He cautioned that a sales tax hike would only be viable if it's "offering relief in other areas."

But a sales tax increase may be critical to making the plan work, since 20 percent of all sales tax revenues are already dedicated to funding the Massachusetts Bay Transit Authority.

"That the voters of Michigan chose this funding method (for schools) makes it worthwhile to do further investigation," Finneran said.

Still, even with support from the powerful House speaker, the proposal is likely to prompt fierce debate on several fronts.

Acting Gov. Jane Swift is firmly against any tax increases at the state level -- most recently coming out against a proposed 50-cent per pack hike in the state's cigarette tax.

Moreover, liberal Democrats are almost certain to decry any sales tax hike as regressive -- particularly when cast against proposed relief for those who are affluent enough to own property.

The House budget for fiscal 2002 calls for a special commission, on which Finneran would sit, charged with "reviewing the current practice of using the property tax to fund education and seeking alternative sources of funding to provide a dedicated stream of revenue."

The panel, if approved in House-Senate budget negotiations and approved by Swift, would tap the most influential public officials and Beacon Hill power brokers to literally reinvent the process of funding schools.

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