CITIZENS   FOR  LIMITED  TAXATION  &  GOVERNMENT

 

CLT Update
Friday, November 9, 2001

Disgust, outrage mount over Tax Rollback ambush


In the News Today:

Leaders hike taxes at their own peril

Don't freeze the tax cut

The Statehouse of Public Betrayal

Mass. pols believe democracy flawed

Voter ire seen in tax cut delay
Wary lawmakers could be key in overriding a veto

Tax cut repeal divides state's top Democrats

Top WMass legislators support tax-cut delay

The budget gap


The Boston Herald
Friday, November 9, 2001

Leaders hike taxes at their own peril
A Boston Herald editorial

Should we even be surprised that our legislative leaders are prepared -- even eager -- to trash the income tax cuts approved by the voters of Massachusetts just one year ago?

Is there no end to their arrogance?

First House Speaker Tom Finneran managed -- thus far successfully -- to override the will of the voters on the issue of Clean Elections, also passed last November [sic - November of 1998].

Then this week Senate President Tom Birmingham raised the issue of freezing the next installment of the income tax cut in the wake of a weakening economy and slowing revenues. Halting this round of the tax cut would put $200 million back in state coffers in the current fiscal year. Of course, another way of saying that is that halting the tax cut would take $200 million out of the pockets of Massachusetts citizens.

Retailers are already worried about what kind of Christmas shopping season to expect. The outlook isn't a pretty one. Consumer confidence is already low. So what's a legislator to do? Well, pick the pockets of taxpayers for another $200 million, that's what!

In fact, Birmingham even went so far are to draw up a list of $200 million in programs and projects that could be restored, if only fellow lawmakers would agree to ignore the expressed will of the voters. Finneran has proposed a variation, an economic "trigger" likely to have the same result.

Acting Gov. Jane Swift has made it clear she would veto any effort to freeze or roll back the tax cut. That means the House and Senate leaders would have to come up with two-thirds of their members politically dim-witted enough to go along with this scheme -- a scheme that would sound the beginning of a long and angry battle with voters.

Legislators should know now that if they take on this fight, they do so at their political peril.

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The MetroWest Daily News
Friday, November 9, 2001

Editorial
Don't freeze the tax cut

A year ago, when Massachusetts voters gave themselves an income tax break, the state treasury was awash in surpluses.

Proponents of Question 4, most prominently Gov. Paul Cellucci and then-Lt. Gov. Jane Swift, promised there would be no loss in state services should the referendum be adopted. That was then.

This is now: Massachusetts lawmakers, already four months late adopting a state budget, are trying to cope with a deficit pegged at $1.4 billion and growing. In typical fashion, the legislative leadership is crafting the budget in secret. Democrats caucused in secret meetings Wednesday, with most of them leaving those meetings in peak hand-wringing mode.

There will be budget cuts, they all say, generally described, as with all budget cuts, as "painful." How painful? They aren't saying. What will be cut? Apparently that's none of the public's business.

What Senate President Tom Birmingham and House Speaker Tom Finneran have been willing to make public is the prospect that the phased income tax cuts approved by the voters may have to be frozen to avoid all these unspecified painful cuts.

On paper, they can perhaps make that case. But this is more than a matter of dollars and cents. The overriding issue is whether the Legislature has any respect for the electorate. The House has already thumbed its nose at the voters by attempting to kill the Clean Elections Law adopted by a lopsided margin in 1998. For the politicians to use a revenue shortfall as an excuse to overturn a tax cut measure enacted by the voters a year ago raises the Legislature's notorious arrogance to a new level.

Freezing the next phase of the income tax cut will only raise $200 million, a small part of the growing deficit. Fortunately, during the fat years now ending, the state set aside about $2.3 billion in various "rainy day funds." Here's that rainy day. The state should tap those accounts, spend the tobacco suit settlement fund on health care needs and cut spending where possible, but keep its hands off the tax cut.

After years of budget expansion, a year of contraction ought to be something the state can handle. If the Legislature believes deficits will be a continuing problem, let it stand up and vote for more taxes. If lawmakers want to freeze income tax cuts, let them put their proposal on next year's ballot and convince the voters to change their minds.

A Legislature that can't finish its work on time, that makes its most important decisions in secret and that is in the process of strangling campaign finance reform in order to save comfortable incumbents from the inconvenience of having to face a challenge is in no position to substitute its will for the will of the voters.

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The Lowell Sun
Thursday, November 8, 2001

The Statehouse of Public Betrayal
By Jim Campanini

Politics may never have been a noble endeavor on Beacon Hill, but at least it has generally been honorable and respectable.

During the Dukakis years, dissident Democrats kept the governor on his toes by threatening alliances or forging them with Republicans. That led to compromise with the administration.

And when George Keverian was House Speaker, legislators could agree to disagree without fear of losing committee assignments or funding for pet projects. Debates were passionate and emotionally charged, filled with colorful speeches and insightful ideas. Even the dullards were accorded respect: it took courage to stammer out a proposal in front of a massed gallery of media, constituents and visitors.

But not anymore. No debates. No discussion. No dissent.

It's fair to say that on Nov. 8, 2001, the Massachusetts Statehouse is closer to a dictatorship than a democracy. Legislation is enacted behind closed doors. Legislators are meek, indistiguishable, drone-like. They vote as they are told.

Political honor? At best, it's unrecognized among a majority of the 200 duly elected legislators who've ceded their individual principles and voice to the collective, run by House Speaker Thomas Finneran and Senate President Thomas Birmingham. The leadership does it all. Rarely do rank-and-file Democrats and Republicans get the chance to broker a ground-breaking initiative or hammer out a concensus-building compromise. To these lightweight 'less-islators,' political honor isn't an umbrella policy; whatever honor exists simply covers Finneran and Birmingham, as in "don't cross" the two Toms, but fails to extend to colleagues and constituents sold out on a routine basis.

The lessislators, of course, are held hostage. With everything funneled through the top, they must go with hat in hand to Finneran and Birmingham to get their projects funded.

The lessislators' motto? "We go along to get along."

Government watchdog Barbara Anderson says she's never seen it this bad.

"You used to be able to lobby individual legislators on issues, but now they don't even listen," said the executive director of Citizens for Limited Taxation. "They take their marching orders from the top. The power is all in one or two people."

In the "Tom-Tom" form of government, barely a day goes by without a betrayal of the public trust.

Ken White, executive director of Common Cause, says only a "miracle or disaster" will change the Legislature.

While my faith is strong, I don't think legislative reform is high on God's list of miracles. As for disaster, I can't conceive of anything worse than the betrayals that have already occurred, or are in the offing. Consider these gems:

  Clean Elections Law -- Never in the history of the Commonwealth has the public's will been damned in such despicable fashion. Approved by a 2-1 margin in a 1998 statewide referendum, the law now stands a better chance of being enacted on Pluto than in the Bay State. Why? It will generate competition for public office -- a scary thought for incumbents. (Note: In the 2000 election, 92 percent of Mass. legislators ran unopposed for re-election). Finneran disdains the law, has punished legislators supporting it, and is withholding $23 million to launch it. Several lawsuits have been filed to uphold the 1998 vote, but it appears Clean Elections is doomed for the 2002 election cycle, when Massachusetts will be electing a governor.

•  Income Tax RollBack -- Approved in a 2000 statewide referendum, Birmingham is lining up support to freeze the next round of reductions designed to put more money into the wage earner's pocket. He's blaming it on the recession. But isn't any voter-approved ballot initiative sacred in Massachusetts?

The income tax rate is scheduled to drop from 5.6 percent this year to 5.3 percent in January, and then to 5 percent in January 2003. But don't count on it. Birmingham says a "temporary freeze" will generate $200 million for programs that otherwise would have to be cut.

For those with a short memory, in 1989 the Legislature raised the income tax rate to a peak of 6.25 percent and called it a "temporary tax." It stayed that way until the 2000 referendum.

•  State Budget -- It was due July 1 for fiscal year 2002, but it's now five months late. For the 13th time in 15 years, the full-time Legislature has failed to meet its deadline. It's an abomination. Legislators are paid $50,000 a year, and up, to do the people's business, and the budget is their most fundamental task. Yet they can't complete it on time. Why? Once again, Finneran and Birmingham have shut everyone out and monopolized the process. Each wants control. Needless to say, they find it hard to agree on the direction of a one-way street: does it run north-south or east-west?

"Here we are facing a recession and the Legislature hasn't had a single debate or discussion about the most important issue facing the Commonwealth -- the budget. It's all done in secret," said White, of Common Cause.

Finneran wants to chop $1 billion off the original $22.9 billion House budget proposal. Programs facing elimination include local aid to parochial schools, senior citizens prescription programs, highway improvements and childhood services initiatives. Birmingham wants cuts, too, but is obliged to keep as much spending intact as possible since he's running for governor (See above, under Income Tax Rollback).

In the meantime, the state is sitting on $2.3 billion in a rainy day fund and receives $300 million annually from the federal tobacco lawsuit settlement. Why isn't this money being used to offset revenue losses? Even a voter initiative calling for an answer to the question isn't any guarantee we'd get one. But try asking your local rep.

•  Congressional Redistricting -- In July, Finneran single-handedly sabotaged the gubernatorial ambitions of Congressman Marty Meehan with his proposal to eliminate the 5th District. The speaker didn't involve redistricting committee members in the debate, forging the plan in secret. Although Massachusetts didn't lose a congressional seat under the 2000 federal census, Finneran's plan pitted two incumbent Democrats -- Meehan and 6th District Rep. John Tierney -- in a race to survive. Even state party officials called it absurd. A lot of valuable time that could have been spent formulating a state budget was wasted on Finneran's fiasco.

•  House Redistricting -- Reaching the height of arrogance, Finneran again kept all in the dark before disclosing a new map eliminating several districts held by incumbents, including three female legislators considered thorns in his side. Rep. Carol Cleven of Chelmsford, an eight-term Republican, saw her district carved up among four legislators. Chelmsford, a town of 34,000, lost its century-old political identity in a flick of Finneran's pen.

Two days before the proposal was disclosed, Cleven, responding to rumors, asked Finneran if her district would be impacted, to which the speaker replied, "You've got nothing to worry about."

Once the plan was made public, Finneran hid from the media for three days. The House voted overwhelmingly to sell out Cleven, an independent thinker, to give the speaker his spoils.

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The Boston Herald
Friday, November 9, 2001

Mass. pols believe democracy flawed
by Thomas Keane Jr.

Will the overwhelming defeat of the Community Preservation Act tax surcharge in Boston -- as well as its defeat in a number of other surrounding towns -- provoke any soul-searching?

It should. Once again, the people have spoken. Once again, those who claim to represent the people seem dramatically out of step with them.

Organizers for the surcharge -- Question 1 in Boston -- collected 43,000 signatures in September from Boston residents to put the measure on the ballot.

Irony No. 1: Only 30,000 people ended up voting for the thing.

Irony No. 2, of course, is that virtually every politician, community organization and do-gooder group in the city was staunchly in favor of the tax surcharge. Everyone, it seemed, backed Question 1 -- everyone, that is, except the voters.

Neighborhood groups in Dorchester, Brighton, Chinatown, and East Boston all urged a yes vote. Residents in those communities rebuffed them, saying no by large margins.

Labor unions were foursquare behind the new tax. Nevertheless, voters in labor-dominated neighborhoods like South Boston were more than 2-1 against.

Mayor Thomas Menino, challenger Peggy Davis-Mullen, most of the City Council and a bevy of state reps and senators all said they backed the new tax. Yet only 32 percent of voters agreed.

That's right, 32 percent. That's not a loss. That's a slap in the face.

CPA at first seemed an irresistible deal. It was a tax hike, but it largely exempted homeowners. It promised matching funds from the state as well. Many, including me, early on predicted it would pass.

However, as time passed -- and especially after the Sept. 11 terrorist attacks -- voters grew wary of increasing taxes in the midst of a recession. The proponents, sounding like Sally Struthers pitching for donations to feed a family of four for a year, argued it would cost the "average" homeowner just $1.48 a month. It sounded disingenuous. Someone, after all, would have to pay real money for the surcharge to raise its predicted $15 million annually.

Just as important, voters seemed distrustful of the way the tax worked: a dedicated pool of money, managed by an appointed body, spent to buy other people housing. Accountability seemed weak; there was a hint that the real beneficiaries would be developers, not those in need.

The voting patterns were telling. The proposed surcharge did best (although not hugely so) in the city's tonier wards: the South End, the Fenway, Jamaica Plain, Beacon Hill and Back Bay. It was crushed in Boston's traditional working- and middle-class neighborhoods: Charlestown, East Boston, Dorchester, Hyde Park, South Boston and West Roxbury. 

That liberal/working class split was apparent outside Boston as well. Malden, Waltham, Saugus and Woburn - all towns with working-class populations - defeated the Community Proservation Act in their local elections. The wealthier communities of Easthampton, Newton and Peabody passed it.

There's a theme here.

A year ago, against the advice of many of the groups who eventually supported the CPA, residents throughout the state voted to reduce the state's income tax. At the same time, and against the advice of incumbent politicians, they also backed public campaign financing, approving the Clean Elections Act.

And the response to that? The Massachusetts's House and Senate have both done everything in their power to thwart the Clean Elections Act. As a result, it now appears that elections next year will be business as usual, despite the voters' will. Moreover, on the day that the CPA was being defeated, Senate President Thomas Birmingham was floating the notion that, last year's vote notwithstanding, any state income tax cut should be postponed.

The voters, we've been told in both cases, didn't understand what they were doing. That, at its heart, has been the rationale for trying to reverse both votes.

It's a new notion in Massachusetts' politics: This democracy stuff is really overrated.

Don't be surprised to hear the same sort of talk about the CPA: Voters didn't know what they were doing. They were fooled by the advertisements. The mayor's people didn't work hard enough. The ballot was too confusing. People really don't know what is good for them.

I don't buy it. Voters understood the CPA, as they understood the state income tax cut and the Clean Elections Act. 

However, it is clear that politicians and various public interest groups did not understand the voters very well.

Voters are skeptical. They are unconvinced that government knows how to spend their money better than they do. They are frustrated by a political process that seems to work for the benefit of insiders instead of the public.

That message was delivered on Tuesday. It should be cause for introspection by a political elite that seems disconnected from the public.

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The Boston Globe
Friday, November 9, 2001

Voter ire seen in tax cut delay
Wary lawmakers could be key in overriding a veto

By Rick Klein
Globe Staff

The 1990 election is weighing heavily on state Senator Susan C. Tucker's mind these days.

That year, she lost her state representative's seat after the Legislature, confronted by the state's collapsing economy, chose to balance the books by raising taxes rather than cutting programs. In every previous election, she said, she had won with handsome margins in all precincts.

So now, as Tucker and her Senate colleagues are being asked to halt the income tax rollback approved by the voters last fall -- taking about $150 away from a typical family -- Tucker said she needs to hear from the people. She is sending a mailing to voters in her district asking what to do.

"We need to assure taxpayers that we are trying everything before reaching into their pockets," said Tucker, an Andover Democrat who was elected to the Senate in 1998 after eight years out of office.

House and Senate leaders yesterday polled their members to gauge support for freezing the rollback, which would put the Democratically controlled Legislature directly at odds with Acting Governor Jane M. Swift -- and holding the bag on a tax increase.

Tucker and a small band of undecided senators could be pivotal in determining whether the Legislature will move to freeze the income tax, which is slated to drop from 5.6 percent to 5.3 percent on Jan. 1. The freeze is emerging as a key issue as leaders scramble to close a $1.4 billion budget gap and to finish a spending plan that is four months overdue.

"Members have to be very careful how they vote," said state Senator Richard T. Moore, an Uxbridge Democrat. "It's a political issue, and it's painful because there's a lot of good programs that are suffering and will suffer."

On one hand, lawmakers would love to save $200 million worth of state programs by keeping the tax rate steady. That money could preserve priorities such as school breakfasts, nursing programs, hospital aid, and drug insurance for senior citizens.

But at the same time, they are mindful of the message voters sent when they overwhelmingly approved the income tax cut last year at the urging of the Cellucci-Swift administration.

"It's an attractive option, especially as someone who worked against Question 4," state Senator Steven A. Tolman, a Brighton Democrat, said of delaying the tax rollback to save state programs. "However, the voters called for it, much like they voted for Clean Elections, and I don't think it's in our best interest as elected officials to continue to thwart the will of the voters."

Insiders say that Senate leaders are perhaps three or four votes short of the two-thirds majority needed to override Swift's promised veto. But observers caution that a number of senators could easily change their minds before a formal poll is taken or a public vote is cast.

House Speaker Thomas M. Finneran has indicated that he won't try to gather support unless the Senate pushes the issue, but House sources say Finneran can get enough votes if he wants. Yesterday, members of the speaker's leadership team polled House members on a proposal to reduce the income tax rate to 5.5 percent next year and base future drops on economic indicators.

Even the Massachusetts Taxpayers Foundation is saying the income tax cut may have to be delayed to avert budgetary disasters.

But the issue appears to be headed nowhere unless two-thirds of senators sign on, despite the announced support of Senate President Thomas F. Birmingham.

Senator Robert A. Antonioni said he can't support a tax freeze unless he knows exactly what programs the move would save. Then, he said, he'd be able to explain it to constituents.

"You've got to show people that you're willing to do all that you can to be conservative and pare the budget before you take money from them," said Antonioni, a Leominster Democrat.

But senators and representatives will probably have to act on the issue with incomplete information. House and Senate leaders are working out their budget cuts behind closed doors, and no one is publicly mentioning programs that could be axed.

Senator Cynthia Stone Creem, the sponsor of a measure to freeze the tax cut, said she hopes her colleagues will lay the situation out in as much detail as they can.

"If we don't freeze, we're going to start taking local aid from medical and AIDS research, from the hospitals," said Creem, a Newton Democrat. "I'm hoping that they will now go out and get their communities to understand."

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The MetroWest Daily News
Friday, November 9, 2001

Tax cut repeal divides state's top Democrats
By John Gregg

As Senate President Thomas Birmingham tries to rally Beacon Hill support to freeze a rollback of the state income tax, three potential Democratic gubernatorial rivals said the voter-approved law should remain intact.

"At a time of uncertainty like this one, I think it would be irresponsible to remove any options from consideration, but I'm not going to reach once again into the taxpayers' wallet at the first sign of trouble," said Newton businessman Steven Grossman, a former Democratic National Committee Chairman. "That is panicking."

"Our first instinct should not be to raise taxes and abandon the will of the people," said former state Sen. Warren Tolman, D-Watertown. "Our first instinct ought to be to tighten our belts a few notches and look at the (state's) rainy-day fund."

And another likely candidate, Treasurer Shannon O'Brien -- a leading Democrat who debated then-Gov. Paul Cellucci to voice her opposition to the tax rollback -- also said the will of voters was clear. Known on the ballot as Question 4, the measure is rolling back the state income tax to 5 percent by 2003. It was approved by 59 percent of voters statewide last year.

"Treasurer O'Brien doesn't believe that freezing the tax cut should be a topic of discussion right now," said her spokesman, Dwight Robson. "After a vigorous debate, the voters supported Question 4, at least in part, Treasurer O'Brien believes, because they didn't trust that the Legislature and the governor (and Massport and the Big Dig) were spending their money wisely."

Birmingham met with Senate colleagues for more than three hours Wednesday, outlining the budget cuts that may be required to close a $1.35 billion budget gap because of the stalled economy.

Lawmakers who favor delaying the tax rollback until the economy recovers argue that it will avoid having to cut $200 million from such politically charged programs as local aid to cities and towns.

Senate Democrats were provided a list of programs that would likely be cut if the tax rollback continues, according to Birmingham spokeswoman Alison Franklin.

"In his capacity as a senator, he looks at the list of $200 million in cuts, sees it hurting local aid, sees it hurting hospitals, and hurting inside the classroom, and that's how he reached his decision," said Franklin. "Those are examples of some programs that would be cut."

Although Grossman, acting Gov. Jane Swift and others have argued the state should tap the state's $2.3 billion rainy-day fund and other reserves, Franklin said such a tactic without the freeze would "dip into reserve funds at levels that are unsustainable in ongoing years."

Swift, a Republican, this week told the News any effort to tinker with the income-tax rollback would trigger "a certain veto" from her.

Secretary of State William Galvin, another possible Democratic candidate for governor, could not be reached for comment.

Lou DiNatale, a political analyst at the University of Massachusetts' McCormack Institute, said Swift could be trying to win the issue in two ways. She could gain political points by trying to block an attempt to freeze the tax cut, but then have the overwhelmingly Democratic Legislature override her veto and avoid some of the local aid cuts.

"There are Republicans who think there is never a good time to rescind a tax cut, and you'll always pay a political price for it," he said.

Some voters are already angry at the Legislature for failing to fund the voter-approved Clean Elections Law and for dragging out budget talks more than four months into the new fiscal year.

But the Sept. 11 terrorist attacks, and an economy stalling into a recession, may have changed the priorities of many taxpayers who could now be prepared to sacrifice, he said.

"The Democrats (like Birmingham) are betting the public are ready for realistic talk about economic needs and state-funded priorities," DiNatale said.

"I would argue that since 9-11, Clean Elections is no longer an issue, and a tax cut and whether or not the Legislature returns it is not an issue," DiNatale said. "The issues right now are the physical security of the state, the economic conditions of the state, and the state's economy."

Meanwhile, MetroWest lawmakers who lean toward supporting a freeze are trying to "make the case" at the local level, said state Sen. Pam Resor, D-Acton.

"I think the things we are going to have to reach into to make cuts will have a tremendous impact on local government," said Resor. "The $200 million is a small part of the solution, but it's pretty critical to not making those drastic cuts."

And state Sen. Susan Fargo, the Lincoln Democrat who said she is undecided about the freeze, said the budget cuts are "horrifying."

"We're making efforts through op ed pieces and press releases to explain the situation to people, so they hopefully will know as much as we know," Fargo said. "I don't think they realize how much bad shape we are in. When they do, I think (a freeze) will be a more palatable approach."

Framingham Town Manager George King said the tax rollback should be frozen, with that revenue devoted to supplement local aid.

"We need additional avenues of revenue, but we also need revenue that isn't property-tax reliant," said King, who sounded almost incredulous that local aid in the current fiscal year, which is more than one-third done, could be cut.

"I'm concerned that there is no (state) budget as we speak," added Northborough Town Administrator Barry Brenner, who met with Resor yesterday morning. "We're looking for additional state aid, not less."

With the fiscal, economic and security turmoil of the fall, DiNatale said the tax cut may not be as potent a political issue as it has proven for Republicans in the past.

"It's not clear to me that tax policy is going to be the issue around which the next gubernatorial (election) is decided," he said. "I don't know what that issue is yet, but I don't think it's tax policy, and that's what the Ds are betting."

Tolman, the Democratic candidate most closely aligned with the thwarted Clean Elections Law, said he would not automatically veto a tax-cut freeze, but suggested budget cuts and reserve funds could solve the deficit.

"Never say 'never do anything,' but there is a very, very difficult case that has to be made to convince me that you're going to subvert the will of the people, and they haven't made the case yet," Tolman said.

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The Springfield Union-News
Thursday, November 8, 2001

Top WMass legislators support tax-cut delay
By Dan Ring

BOSTON -- Top lawmakers from Western Massachusetts yesterday said they want to stop or slow a cut in the state income tax to save $200 million and prevent reductions in education, health care and other programs.

With the state facing a $1.35 billion deficit in the state budget for this fiscal year, House Speaker Thomas M. Finneran, D-Boston, and Senate President Thomas F. Birmingham, D-Chelsea, met with members to gauge their support for changing terms of the tax cut passed by nearly 60 percent of voters in November 2000.

Senate Assistant Majority Leader Stanley C. Rosenberg, D-Amherst, said he would vote to delay the tax cut, but he wouldn't repeal it. The tax on earned income is scheduled to drop from 5.6 percent to 5.3 percent on Jan. 1, but Rosenberg said that holding the rate at 5.6 percent would save $200 million this fiscal year.

"I don't think that would be unreasonable to avoid cutting local aid, health care and other areas," Rosenberg said.

Rosenberg said the rest of the deficit could be covered by dipping into the $1.8 billion "rainy day" account, reductions in spending and using the surplus from last year.

Rep. Thomas M. Petrolati, D-Ludlow, a top aide to Finneran, said it may be necessary to postpone the next phase in the reduction in the income tax until Jan. 1, 2003.

"I'm leaning strongly in favor of utilizing that as one of the mechanisms to enable us to be less intrusive in the cuts," Petrolati said.

Another member of Finneran's leadership team, Rep. Joseph F. Wagner, D-Chicopee, said he would support a bill to tie the tax cut to economic indicators. If the economy starts growing again, then the tax cut could proceed, he said.

"The Legislature ... has an obligation ... to act in a financially responsible manner," Wagner said. "I don't intend to put ... education, health care, seniors and infrastructure at risk."

A slowing economy, worsened by the Sept. 11 terrorist attacks, has contributed to the deficit.

Republican acting Gov. Jane M. Swift supports keeping the tax reduction. She said a freeze would be the same as a tax increase and would deny the will of voters. She has said she will veto any freeze or slowdown of the tax cut.

House and Senate leaders said they are not sure they could get the two-thirds support needed in each branch to override a veto.

Swift said yesterday that she would "unilaterally" impose $600 million in budget cuts unless the Legislature makes better progress in solving the fiscal crisis. A House-Senate conference committee is more than four months late in producing a final version of the $22.9 billion budget for the fiscal year that started July 1.

"My reputation is on the line as to how I lead this state out of the fiscal and economic circumstances that we currently find ourselves in," Swift said. "That means making sure the Legislature gets a budget done."

"Members of the state Legislature are entering their 131st day without a budget," Swift said. "We're the only state ... that doesn't have a budget on the table. It's irresponsible. We need to move forward."

Republican lawmakers also said they support allowing the tax cut to proceed as scheduled. Under the law, the income tax would fall to 5 percent on Jan. 1, 2003.

"I would not want to hold the tax cut off," said Rep. Cele Hahn, R-Westfield. "I want the tax cut to go through."

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The Boston Globe
Friday, November 9, 2001

A Boston Globe Editorial
The budget gap

THE MASSACHUSETTS budget impasse does not mean that the state stops spending money. Expenditures are simply based on the least of the three budgets produced by the governor, the House, and the Senate earlier this year.

The people most closely involved in the budget process think these budgets under current conditions would result in deficits of as much as $1.35 billion. The present rate of spending is unsustainable, and the longer it lasts, the deeper will be the eventual cuts.

It is past time for legislative leaders to address the issues at the root of the impasse and devise a solution that judiciously taps state reserves, freezes new programs, roots out waste, and possibly delays the income tax cut. For the new budget to be viable, everyone needs to share the pain.

House Speaker Thomas Finneran and Senate President Thomas Birmingham should decide what to do with the tobacco settlement money, currently about $290 million a year. In good times it should be reserved for a special health care trust fund. With the economy in recession and spending on health care and other social services in jeopardy, it makes sense to allot this money -- for a year or two -- for operating expenses.

The two leaders should also agree to tap part of the rainy day fund, built up to $1.7 billion over the last decade, and the $579 million state surplus from last year. It would be reasonable to allot $500 million for current expenses, keeping $1.8 billion in reserve.

That still leaves more than half the budget gap unfilled. A poor idea is to make up part of the shortfall by raising the cigarette tax to pay for existing health programs. Any increases in this regressive tax ought to be used on smoking cessation and to expand health insurance programs for low-income people.

But more revenue is needed to fill the budget gap. Given the depth of the crisis, it would be sensible to suspend the next two phases of the tax cut. When voters approved the cut last year, the state was running a large surplus. The delay in devising a budget means that nobody outside the leadership really knows the trade-offs involved in keeping to the tax cut schedule. There ought to be public discussions of these choices.

Swift has the power to enact budget cuts on her own, but she lacks the authority to tap the tobacco settlement or the rainy day fund. If the leadership fails to pass a budget that uses some of these resources, the cuts would be as much their responsibility as hers.

Finneran and Birmingham should have learned the lessons of the last fiscal crisis a decade ago, when repeated delays in passing a realistic budget pushed the state toward insolvency. Massachusetts is now the only state to be without a budget for the current fiscal year, already four months old. Legislative leaders ought to learn from the past and be shamed by the present.

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