Associated Press
Tuesday, April 30, 2002
On eve of tax debate,
lawmakers weigh hikes vs. service cuts
By Steve Leblanc
BOSTON (AP) The question for House lawmakers no longer seems to
be whether to raise taxes, but where and by how much.
On the eve of what could be the most impassioned tax debate
in a decade, Democratic House leaders were polling members on three key questions.
How much new money does the state need? What kind of tax
hikes are best? How should the money be spent?
Without new taxes, the House won't be able to restore $1.5
billion in cuts proposed in a budget plan unveiled last week, House Speaker Thomas Finneran said.
House leaders are expected to present members with a revenue
package on that will rely on a mix of cuts and new taxes.
Liberal lawmakers are also expected to offer a tax package
including a penny hike in the sales tax, a 75 cent increase in the cigarette tax and a flat capital gains tax.
The House budget plan released Thursday cut a wide swath
through state services, rolling back spending on education, human services, local aid and dozens of state agencies.
Faced with growing support for continued spending, tax foes
are stepping up their opposition.
The budget crisis is being manufactured by Finneran as an
excuse to hike taxes, anti-tax activist Barbara Anderson said.
If lawmakers had spent more carefully during the 1990s, they
wouldn't have expanded programs they can no longer afford, she said.
"There may be a spending crisis for those accustomed to
billion-dollar annual spending increases, but there certainly is no fiscal crisis," Anderson said.
The voices of tax opponents have largely been drowned out on
Beacon Hill by advocates of programs targeted for cuts.
Leaders of several religious charities on Monday urged the
Legislature to raise taxes by $1.5 billion to preserve services for the elderly, children and mentally ill.
"We believe that government has a responsibility to provide
a basic safety net for its most vulnerable citizens," said Nancy Kaufman, head of the Jewish Community Relations Council
of Greater Boston.
Thousands of human service activists plan to descend on the
Statehouse on Tuesday. Organizers will set up three "cell phone lobbying centers" to allow those who can't get inside
the building because of tightened security to call lawmakers.
On Tuesday, four police organizations will begin running
radio ads urging support for lawmakers who vote to raise taxes to help support public safety.
While those calling for higher taxes have been more visible,
tax opponents say they are gaining ground slowly.
House Republican Leader Francis Marini, R-Hanson, said
lawmakers should use more of the state's reserve fund and allow casino gambling and slot machines before hiking taxes.
"We ought not to raise taxes, that's what got us into this
problem in the first place," said Marini. "By this logic, every time there is a recession we need to increase taxes."
The Republican Society plans to distribute 2,000 audio
training tapes to GOP candidates and activists to help them make the case against taxes.
House members are scheduled to meet Tuesday in a closed-door
caucus to discuss taxes. The public debate could begin later Tuesday or Wednesday.
Finneran will try to block lawmakers from linking tax hikes
to specific programs during the debate by asking them to agree only to vote on ways to increase revenues and not how to
spend the extra money.
Although Finneran has avoided making specific recommendations, some tax proposals are
gaining momentum, including higher cigarette taxes, a freeze in the income tax
rollback and a flat capital gains tax.
Sorting through the tax options could prove a daunting task.
Lawmakers will likely want some assurance about how the money will be spent.
Topping the list for many lawmakers is education and local
aid.
The tax package to be offered by liberal lawmakers would
bring in about $1.2 billion and still require some cuts, according to State Rep. James
Marzilli, D-Arlington.
The momentum clearly seems to be on the side of Democrats.
Even Marini conceded that the House will likely vote to raise taxes. He's hoping to round up the one-third needed to
sustain any veto by acting Gov. Jane Swift.
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The Worcester Telegram & Gazette
Tuesday, April 30, 2002
Interest groups lobbying for higher taxes
By Shaun Sutner
Telegram & Gazette Staff
BOSTON-- As lawmakers readied for a historic tax vote, the
state's powerful teachers union wheeled out its heavy artillery in favor of tax increases.
In a $1.4 million television ad campaign that started over
the weekend, the Massachusetts Teachers Association advocates hiking taxes to head off what it says would be crippling cuts
to education funding.
The TV spots come as the House of Representatives prepares
to debate and possibly vote later this week on proposed tax and fee hike increases to close much of a $2 billion-plus
deficit projected for fiscal 2003. Taxes have not been raised in Massachusetts since 1990.
"I don't think we can sit by and see how this plays out,"
said Stephen E. Gorrie, president of the MTA. "We have to do something that is bold and provides the resources we need."
Proposals with the most support appear to be freezing the
income tax at 5.3 percent, raising the cigarette tax by 50 cents, halving the $4,400 personal exemption and taxing capital
gains at the same rate as income.
The MTA is also urging consideration of increasing the tax
on alcohol and adding a penny to the sales tax.
The budget proposed by House Speaker Thomas M.
Finneran, D-Boston, makes deep cuts into most areas of state government.
Mr. Finneran has said the only way many of the cuts will be restored is by raising taxes and fees.
The union's messages, which are running until May 12 in
major media markets across the state, join a chorus of calls for new taxes from groups ranging from human service advocates
to business organizations.
Interest groups have been lobbying and protesting at the
Statehouse in recent weeks to show lawmakers, usually leery of raising taxes, that they will have political support if they
come out for new levies.
While union officials have been fairly explicit about what
taxes they think are necessary, the TV spots are more "atmospheric," MTA spokeswoman Laura Barrett said.
The first ad in the series, known as "Find the Will," is
meant to spread the message that the state faces a $3 billion deficit over two years caused by the recession and previous tax
cuts. Educational improvements over the last decade, such as lowering class sizes, will be undone
without new tax revenues, according to the union.
"Smaller classes, it's how they really learn," a narrator
says. "So we made a promise, an investment, and some real progress. But now that progress is being threatened, even
reversed.
"There'll be no new teachers and classrooms. Just drastic
cuts, courses canceled, teacher layoffs," the ad continues. "We can find the funds to protect their future. All we need now is
the will."
Amid all the pro-tax sentiment, the voices of anti-tax
activists are being swamped. Even Republicans who are usually vocal about their opposition have been muted.
Chip Ford, a spokesman for Citizens for Limited
Taxation,
said the budget deficit has been exaggerated. He maintained that freezing the tax rollback approved by voters in 2000 would
really be a tax increase.
The CLT is threatening to run sticker campaigns against
incumbents who vote for new taxes.
"If they cave into this sky-is-falling, scorched-earth,
doom-and-gloom foolishness, there will be a price to pay in November," Mr. Ford said.
But most participants in the budget debate appear headed
down the road to new taxes....
Administration officials have been pushing a budget strategy
that avoids new taxes. Some observers speculate, however, that if lawmakers agree to Gov. Jane M. Swift's revenue
proposals, she would not strongly oppose freezing the rollback.
Ms. Swift yesterday released an analysis of the fiscal 2003
budget showing that a $1 billion revenue shortfall remains, even after measures she and legislative leaders agreed upon.
She proposed making up most of the remaining gap by drawing
more from reserves and tobacco funds and by trimming Lottery payouts. The leftover shortfall of about $300 million
could be erased by allowing slot machines at racetracks, according to some Republicans.
"In order to have a balanced budget, I don't think it's
necessary to go to taxpayers to ask for more," said state Rep. Karyn E. Polito, R-Shrewsbury. "We have reserve accounts and
non-tax revenues to meet the budget shortfall."
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The Boston Globe
Tuesday, April 30, 2002
Finneran studies $1b in tax hikes
Capital gains, tobacco among revenue targets
By Rick Klein
Globe Staff
House Speaker Thomas M. Finneran and his deputies are
finalizing a package of tax increases that would pump about $1 billion into the budget next year. A freeze of the income
tax rate, a cigarette tax hike, a capital gains tax increase, and a repeal of the deduction for
charitable contributions are emerging as the proposals most likely to prevail.
Those four measures, when combined with a tax amnesty
proposal that enjoys broad bipartisan support, would generate about $900 million, nearly half the $2 billion budget gap
the state faces in fiscal 2003, which begins July 1.
If House members decide they need to raise more revenues,
they're likely to take up a tax increase on alcoholic beverages, a proposal to repeal corporate tax breaks, an
increase of 1 percentage point in the sales tax, or a reduction in the personal income tax exemption, House
leaders say. They could also vote to increase the income tax to 5.6 percent or
more from its current rate of 5.3 percent.
"It'll be presented as, 'Here are the list of options, and
what do you guys like best?'" said Paul C. Casey, a Winchester Democrat and the House Taxation Committee chairman.
"We're aiming high in terms of putting choices out there. ... It's still fluid."
The House debate on the proposals, which would be the first
major tax increases in a decade, is expected to begin tomorrow. Yesterday, Finneran met privately with small groups
of members in his office to gauge support for various tax increases. He'll
huddle with Democratic leaders this morning and could present the tax plan to members as soon as this
afternoon.
"They want to come up with a consensus plan," said Charles
Rasmussen, a Finneran spokesman. "You can't buy a vote on taxes. People have to know they're doing it for the
right reasons."
Advocates on both sides of the issue turned up the heat on
legislators yesterday. A half-dozen religious leaders, representing Jewish social service groups, Catholic Charities,
and the Boston-based Black Ministerial Alliance, came to Beacon Hill to call for $1.5 billion
in new taxes to restore funding that House leaders are recommending cutting from health
care, human services, and housing benefits. "We're at a critical point in our state," said Nancy
K. Kaufman, executive director of the Jewish Community Relations Council of Greater
Boston. "The only way we are going to be able to prevent these cuts is
if they're willing to raise the new revenue."
More advocacy groups are planning to take to the State House
today in a series of coordinated rallies. Several thousand protesters, representing groups that fight for health
care, immigrants' rights, and a range of services for the elderly and the disabled, are expected
on Beacon Hill as the House prepares for debate.
House Republicans, meanwhile, are vowing to make the case
that new taxes are not needed. They say they'll offer nontax revenue options, like tapping more of the state's annual payout
from a settlement with tobacco companies and reducing the amount the state pays in lottery
prizes.
"If you're looking for what we can do to stop it, probably
nothing," said assistant minority leader Bradley H. Jones Jr., a North Reading Republican. "But we can certainly make the
case that it's not necessary. The speaker and Ways and Means Committee have made this
problem appear worse than it really is."
Finneran has released a $21.8 billion budget proposal for
next year that includes $1.5 billion in cuts to state services. The speaker says those cuts will be implemented if taxes are
not raised.
The antitax group Citizens for Limited Taxation and
Government is warning that it will ask the voters to overturn any major tax hikes that are approved this year.
Chip Ford, the
group's operations director, said that if the income tax rollback approved at the ballot box in 2000 is
undone by lawmakers, they will put it back on the ballot in 2004. "We'd
do it again on principle alone if nothing else," Ford said. "A lot of the Legislature has not had to take tough
votes on taxes before. This is the first time that many of them have ever had
to confront deficits, and we'll show them that taxes are the wrong way to do it."
Finneran is working to build a coalition of members who will
support a package of new taxes. It's a difficult proposition, given that two-thirds of legislators will be needed to override
gubernatorial vetoes. Acting Governor Jane Swift's has signaled some willingness to accept a
freeze of the income tax rate, but would likely veto other hikes.
House leaders would like to bundle taxes into one bill, to
keep the coalition together, and minimize the number of tax votes that members have to take.
This morning, Finneran and his closest advisers will set a
target revenue number - essentially, the amount in new taxes they think will be necessary for next year. They could aim as
high as $1 billion to $1.5 billion in new taxes, which would allow the major cuts planned for
education and health care programs to be reversed, said state Representative Kevin W.
Fitzgerald, a Mission Hill Democrat who is polling members on taxes for
Finneran.
What taxes are pursued depends in large part on how much
money House members feel they should aim for, Fitzgerald said. "Depending on what the number is, we'll either reach those
second- and third-tier taxes or we won't," he said.
The sales tax increase has emerged as an increasingly
popular option after months as a back-burner issue. It offers the potential for a huge sum of money - $750 million - and
could be politically appealing if the extra penny on the dollar is promised for education programs,
which were cut 10 percent in the House Ways and Means budget, Casey said.
State Representative J. James Marzilli Jr., an Arlington
Democrat, said he will present a tax package to his colleagues that would raise $1.2 billion. He would increase the sales tax,
the tax on capital gains, and add 75 cents per pack to the tax on cigarettes.
"The package itself must be balanced and progressive, and
generate sufficient revenues to feed at least some of the appetite for restoring spending," said Marzilli, a leading
member of the House's Progressive Caucus, which clashes frequently with
Finneran.
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The Boston Herald
Tuesday, April 30, 2002
Tax hikes could block ed cut
by Elisabeth J. Beardsley and David R. Guarino
House lawmakers are coalescing around a plan to restore
massive education cuts by freezing - or possibly even reversing - voter-approved income tax cuts.
Speaker Thomas M. Finneran's top lieutenants have been
blitzing rank-and-file members with phone calls since last week, asking how high they're willing to raise taxes and what
they would do with the money.
Time and time again, several House leaders said, members
zeroed in on the income tax rollback, which could raise $220 million if frozen at its current 5.3 percent rate.
Hiking the rate to 5.6 percent or its pre-ballot-question
5.95 percent would raise $685 million and $1.3 billion, respectively.
"I think that's the one that people are most interested in,"
said Majority Whip Lida E. Harkins (D-Needham), who has been polling members.
The consensus, which insiders cautioned is not final, is
emerging as the House girds to begin debating scores of tax hikes tomorrow.
The first such debate in a decade opens on a swath of
scorched earth, after Finneran's budget slashed $1.5 billion from programs.
In private conversations since Friday, House members
detailed their tax-hike preferences to Finneran's leadership team.
The results will be unveiled today, when both Democrats and
Republicans huddle in a closed-door caucus to hammer out an agreement on which taxes to hike - before debate
explodes on the House floor.
Rep. Kevin W. Fitzgerald (D-Boston), a House floor division
leader who has also been making polling calls, reported that members loudly protested the speaker's plan to slash
$320 million from school aid.
When it comes to restoring cuts with newly raised tax-hike
money, "You can tell the common denominator is going to be local aid and Chapter 70 (education)," Fitzgerald said.
While most of the House discussion to date has centered on
freezing the income tax rollback, a shift seems to be occurring as members absorb the magnitude of $1.5 billion in harrowing
cuts.
Fitzgerald said the bulk of the members he polled would go
as far as hiking the rate to 5.6 percent - but only if there were economic triggers to bring the rate back down when the
fiscal crisis eases.
"It's a failsafe for the elected officials," Fitzgerald
said. "Lookit, nobody in an election year wants to raise your income tax."
Many members seem to be leaning toward a tit-for-tat - hike
taxes to pay for education, or some other favored program, said one House leader who conducted polling over the
weekend.
"There's a majority there (for freezing the rollback), but
there's a concern that if they vote for it, they want to know where it's going," the leader said.
But Finneran's inner circle nixed the notion of a quid pro
quo.
"That's designer budgeting," the source said. "That belongs
in the budget debate, where you're able to look at all the needs."
While Finneran's slash-and-burn budget seems to have
softened lawmakers - and galvanized advocates - to tax hikes, resistance remains high as lawmakers ponder wearing their votes
on the campaign trail.
With acting Gov. Jane M. Swift sending mixed signals
virtually every day about whether she'll veto tax increases, House leaders say they're still struggling to find a veto-proof
two-thirds vote on any tax.
But lawmakers won a rousing public vote of confidence from
one of the most vigorous and powerful lobbying groups - police officers.
Four police unions, led by the Boston Police Patrolmen's
Association, launched an unprecedented radio campaign praising pols for having the "courage" to vote for tax hikes.
"Please support your state senator and representative, they
may have to raise taxes to maintain essential services," the ad says.
House Republicans, meanwhile, are gearing up to offer a
tax-free alternative to the state's $2 billion budget deficit.
Minority Leader Francis L. Marini (R-Hanson) said he would
offer a plan to raise $1 billion in non-tax revenues - largely by throwing open the doors to gaming, slot machines and
casinos.
"We don't need to raise taxes to solve this problem," he
said.
And liberals want to avoid the politically sensitive income
tax rollback, by adding a penny to the sales tax - for $750 million a year....
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The MetroWest Daily News
Tuesday, April 30, 2002
House weighs service cuts vs. tax hikes
By Michael Kunzelman
BOSTON - As they weigh potential tax hikes this week, MetroWest
lawmakers are looking for assurances from House leaders that the new revenue will be used to offset deep cuts in
local aid.
Many House members from the area expressed support yesterday
for a temporary freeze in the income-tax rollback, at least a 50-cent increase in the tobacco tax and a flat capital gains
tax.
But the legislators also want a written guarantee that the
tax hikes will pay for increased state aid to cities and towns, including funding for local schools.
"I'm not willing to consider anything unless it's tied to
local aid," said state Rep. Paul Loscocco, R-Holliston. "No one wants to see taxes go up, but towns are desperately in need
of that local-aid money, especially in the MetroWest area."
Most of Loscocco's Republican colleagues appear intent on
taking a harder line against tax increases.
Rep. Susan Pope, for one, said she isn't inclined to support
a delay in rolling back the income tax from 5.3 percent.
"That was something the voters voted for," the Wayland
Republican said. "There is no way of saying with certainty that any of that money is going to go back to cities and towns."
Last Thursday, House leaders unveiled a budget plan for
fiscal 2003 that calls for $1.5 billion in cuts in an effort to help close a $2 billion revenue shortfall.
The proposal, which includes a 10 percent reduction in local
aid, also slashes funding for higher education, human services, prisons, community policing and the trial courts.
Today, House Democrats were scheduled to hold a closed-door
caucus to discuss a list of possible tax increases. Debate on the House floor is slated to begin tomorrow.
Besides delaying the income tax rollback and raising the
cigarette tax, state Rep. Deborah Blumer, D-Framingham, expressed support for hiking the gas tax as a way of offsetting
a toll increase on the Massachusetts Turnpike.
"I don't know how much support we will get for that, but
it's certainly on the menu," she said.
Acting Gov. Jane Swift hasn't publicly said whether she
would exercise her veto power if the Legislature tries to freeze the income tax rollback.
Instead of raising taxes, Swift is calling for setting aside
$300 million in additional reserves, saving $274 million in "Lottery reform" and using $146 million from the tobacco
settlement fund.
"The remaining problem is $250 (million) to $350 million and
is where the debate should be focused," the Swift administration wrote yesterday in a "budget summary."
State Rep. Karyn Polito, R-Shrewsbury, said House Republicans plan to draft a plan that
calls for tapping into reserves and other "revenue sources" as an alternative to tax
hikes.
"In my view, it could be the Boston Tea Party all over
again, with taxation without representation," she added. "I feel a personal responsibility to explore all revenue options
before raising taxes."
Lawmakers also are scrambling to protect pet projects that
appear to be on the chopping block in the House.
Rep. James Vallee, D-Franklin, said he plans to file an
amendment earmarking $500,000 for a municipal parking lot in Franklin.
"Money is scarce, but I wouldn't be surprised if there are
earmarkings for particular districts and particular legislators," he said. "After all, this is a political
process."
Among the amendments Blumer plans to file is one that would
restore $350,000 in state funding for the Learning Center for the Deaf in Framingham.
"That, in combination with other cuts in school funding, is
a significant amount of money," Blumer added.
Rep. Karen Spilka, D-Ashland, wants to restore money for
community policing grants, school enrollment growth and the Alternative Dispute Resolution program in the trial courts,
among others.
Echoing a sentiment expressed by many of her colleagues,
Spilka said any freeze in the income tax rollback should be tied to "economic indicators" so that the rollback can be
easily restored.
"I think that would make it more palatable to people," she
said.
