A CLT NEWS ADVISORY
TUESDAY, APRIL 16
is tax filing day in Massachusetts
At 2:00 pm in front of the State House, Citizens for Limited
Taxation will celebrate the income tax rollback that was adopted 59-41 percent by voters in November 2000.
The first phase of the rollback gives taxpayers a 5.6% rate
on the 2001 income tax form that is filed by Tuesday for tax year 2001.
Unless assaulted by the Legislature later this month, the
current (second) phase of the rollback gives taxpayers a 5.3% rate for the present 2002 tax year, which will be evident
when they file next year, April 2003.
The final phase of the rollback will fully restore the tax
rate to its historic 5% beginning next January and into the future.
CLT will visually present the calendar of tax rollback
events. Invited guests include Governor Swift, who has promised to veto any changes in the rollback, or an executive branch
representative; legislators who voted for the rollback and have promised to vote for its
preservation; and gubernatorial candidates and candidates for lieutenant governor in the
2002 election who actively supported or did not oppose the rollback and who support the
voters' mandate to finally return the rate to 5% by 2003.
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The Boston Globe
Friday, April 12, 2002
State Senate opens spigot in bond bill
By Frank Phillips and Rick Klein
On the eve of a Beacon Hill meeting to seek solutions to the
state's fiscal crisis, state senators yesterday loaded up a $900 million environmental bond bill with local pet projects,
allowing them to direct millions of dollars to dredge ponds, fund local zoos and parks, and repair
seawalls, beaches, and skating rinks.
The bond legislation, which needs House approval before it
goes to Acting Governor Jane Swift, is primarily designed to provide money to address serious environmental issues facing
the state, including $50 million to deal with suburban sprawl.
But through language tucked into the bill, and through some
50 amendments added on the floor yesterday, the Senate turned the legislation into an opportunity for lawmakers to return
to their districts and trumpet their accomplishments in funding favored projects.
One amendment - offered by Democratic senators Cheryl
Jacques of Needham, Susan Fargo of Lincoln, and Cynthia Stone Creem of Newton - seeks $250,000 for a hydrologic
study on a golf course in Weston. Senator Therese Murray, a Democrat from
Plymouth, offered an amendment for $100,000 for repair to Monument Park in Plymouth and another
$100,000 for an aquatic plant harvester for the town.
The splurge cut across party lines. Senator Bruce
Tarr, a Gloucester Republican, called for $2.5 million to restore seawalls in the historic fishing town, while Senate minority
leader Brian Lees of East Longmeadow - who will participate in today's budget conference - targeted $2
million for a zoo in Springfield and another $500,000 for Treetop Park.
The huge flurry of amendments was still being sorted out
yesterday, and even Senate leaders were not clear on what projects had passed and what had not.
But such a spending spree may damage the legislative
leaders' credibility, as they warn of tight times and fiscal austerity measures and prepare the public for possible tax
The Senate action came just 24 hours before Swift meets with
Senate President Thomas F. Birmingham, House Speaker Thomas M.
Finneran, and other legislative leaders to deal with a budget deficit that threatens to grow to $2 billion next year.
To be sure, the $919 million is not out of the state's
operating budget, but rather is from bonds floated to pay for capital projects. But the bill's approval coincides with
renewed attention to the fiscal problems on Beacon Hill. Amid reports of plans to raise hundreds of
millions of dollars from taxes and cut social programs and raise tuitions, the House is
expected to release its budget plan later this month and the Senate will follow shortly
Senate Ways and Means Chairman Mark C. Montigny - who
included $2 million for the Buttonwood Zoo in his New Bedford district - said that issuing bonds for environmental
projects is even more important in an economic downturn. Long-term planning can't wait for
a fiscal rebound, he said.
"You can't just shut down these urgent preservations of our
natural resources," said Montigny, a New Bedford Democrat. "It's not only a prudent use, but an urgent use of
bonding authority at this crucial time."
Montigny noted that the bill approved yesterday wouldn't
immediately increase state operating costs. Spending on bonds - where the state borrows money for projects - is
controlled by the Swift administration, which only authorizes the spending of
about $125 million on environmental bond projects every year.
"Not one dime of taxpayer money gets spent today," Montigny
said. "It's up to the administration to pick and choose the priorities and fit them in the cap."
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The Boston Globe
Friday, April 12, 2002
A Boston Globe editorial
Massachusetts business organizations understand that the
state needs new tax revenue to resolve the budget gap this year and provide adequate funding for government programs next
year. Acting Governor Jane Swift has signaled that she is willing to bend her no-new-taxes
position. Now it is up to the Legislature to devise a financial package that will keep the state
Associated Industries of Massachusetts, the Greater Boston
Chamber of Commerce, the Massachusetts Business Roundtable, and the Massachusetts Taxpayers Foundation differ on
the specifics of such a package. But all agree that it will necessarily
involve a suspension of part of the decrease in the income tax approved by the voters 17 months ago, when it
seemed state government was awash with money.
This page favors a temporary return to the 5.6 percent
income tax rate that was in effect last year combined with an increase in the cigarette tax for health-related programs.
Other taxes might be raised as well, but the income and cigarette levies should be the core of the revenue
Swift, no longer worried about reelection, understands that
an income tax increase must be an element in the package. Legislators should carefully consider two other elements in the
governor's set of proposals - reductions in lottery payouts and in the annual payments to
reduce the unfunded liability in the state pension fund, with the understanding that these may
have adverse fiscal consequences if they last beyond the immediate crisis. Nonetheless,
compromises must be made quickly to earn gubernatorial approval. Hundreds of thousands
of people depend on state programs for the essentials of life, and they should
not be held hostage to an intragovernment standoff.
House Speaker Thomas Finneran, addressing the Greater Boston
Chamber of Commerce this week, agreed with the business groups that as a long-term strategy, the Legislature
should agree to allot a regular portion of each year's revenue to the rainy day
fund. Finneran attributed a large part of the current crisis to the collapse of revenue from the capital gains
tax. He proposed that in the future the Legislature allot only a minimum amount
of money from capital gains taxes for regular, recurring programs. Anything above that would be
considered a windfall to be used for one-time capital expenses.
Both proposals are sensible improvements in budget policy to
prevent another fiscal roller-coaster ride. Before the Legislature can consider long-term issues, it needs to address
the present crisis. The business groups, which represent 7,000 employers throughout
Massachusetts, have provided the outlines of a solution. Only elected officials can write the
law that will bolster the state's finances and safeguard essential programs.
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The Boston Herald
Friday, April 12, 2002
A Boston Herald editorial
Swift's surrender on taxes too early
Why on earth is acting Gov. Jane Swift sending out signals
that she's now open to a tax increase of some kind to help close next year's budget gap?
Pre-emptive concessions discourage allies and encourage
adversaries. It makes new taxes something that the other side doesn't have to fight for and pay a price to achieve. The issue
to be negotiated becomes not "whether" but "how much."
It's reported that Swift's advisers believe a show of
flexibility will prompt concessions from the Democrats who control the Legislature in related areas, such as lowering the
payout ratio of the Lottery. (That case is immensely strong regardless of the budget; payouts are well
above the point that yields optimum revenue for the state.) Maybe so if such
"flexibility" were shown in the offer-counteroffer dialog of closed-door bargaining where everybody
understands that any provision depends on acceptance of all provisions by both
sides. But why tip your hand in advance?
Wouldn't you love to play poker with Swift? She just might
turn up one of the two initial hole cards in seven-card stud in the hope that other players also would turn up one of their
Swift has been dealing with House Speaker Tom Finneran -
who's way more conservative fiscally than most of his fellow Democrats - long enough that one wonders at how little she's
learned about when to hold 'em and when to fold 'em.
Finneran's Ways and Means Committee - the committee is his -
is about to produce a budget without new taxes. It will propose $2 billion in program cuts - if you take it seriously.
Finneran has to negotiate with the spenders in a special way
- in floor debate on every program - before he can think about negotiating with the Senate or the governor. He knows
the advantage of starting with "scorched earth" tactics. After the smoke clears and many cuts
have been restored, the Ways and Means Committee - his committee, remember - will trot
out some tax increases, and they'll be fewer than if Finneran had told
the committee, "Give the liberals something now and maybe they'll go easy on us on the floor."
That's the strategy Swift should have followed up until the
day of the last vote on whether to override a line-item veto. Then she could claim that she'd honored her pledge of no new
taxes and yielded honorably to superior force.
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