State House News Service
Advances - Week of May 20, 2002
INCOME TAX CHANGES: Sen. Cynthia Creem (D-Newton) last October
filed legislation freezing the income tax at 5.6 percent and adjusting it downwards, in accordance with the
voter-passed referendum, a year later than anticipated.
The rate has since dropped to 5.3 percent, and the House has
voted to freeze it there.
As the Senate considers that move, and a host of other
House-approved tax hikes, Creem's bill is finally getting a public hearing. Five of her colleagues signed on as sponsors of
her bill last year, including Sens. Linda Melconian, David Magnani, Dianne Wilkerson, Marc
Pacheco and Pamela Resor.
Now that tax hikes and the fiscal 2003 budget are seemingly
inseparable, Thursday's hearing will be less about the future of Creem's bill and more about current Senate thinking on
taxes. Sen. Marian Walsh (D-W. Roxbury) is co-chairwoman of the Taxation Committee.
(Thursday, 11:30 am, Room A-2)
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The Boston Herald
Sunday, May 19, 2002
Budget slugfest brewing:
Senate, House at odds over tax, spend options
by Elisabeth J. Beardsley
A political battle royale over taxing and spending is
shaping up, as Senate leaders begin poring through the newly minted House budget.
Facing deep policy differences and a looming election
season, the penultimate question on many political minds is whether history - in the form of last year's five-month budget
debacle - will repeat itself.
In the Senate, where Senate President Thomas F. Birmingham
is running for governor, budget-writers are sending fervent signals they want to wrap up by July 31, when legislative
sessions end for the year.
"More than ever we should have an on-time budget," said
Senate Ways and Means Chairman Mark C. Montigny (D-New Bedford). "With the revenue crisis we're involved in,
it would send a very positive signal to everyone that relies on this building."
The House's $22.8 billion spending plan for the coming year
relies on $1.065 billion in new tax hikes, while levying $1 billion in spending cuts to address a deficit that exceeds $2
billion.
Montigny said the Senate is considering a tax package of the
same magnitude but which will differ in the details.
Senators frown upon the House plan to reduce personal
exemptions and lean toward hiking the income-tax rate to 5.6 percent, he said. The House plan freezes the income tax at 5.3
percent, the current level.
Unlike the House, which passed a tax bill separate from the
budget, the Senate plans to roll its tax increases into its spending plan. That injects the tax-hike issue into the
negotiating mix.
Disagreement is also emerging over the size of spending cuts
needed to fill a deficit that now approaching $2.4 billion.
The House budget whacks $1 billion from programs, including
top Senate priorities like Medicaid's health care for the poor.
But the Senate budget, to be released in early June, is
likely to include between $700 million and $800 million in cuts, Montigny said.
To make up the revenue difference, senators are turning to
ideas offered by their usual opponent - Republican acting Gov. Jane M. Swift.
Senators seem to like Swift's proposals to spend more of the
state's tobacco settlement money, and to raise $275 million by curtailing Lottery payouts, Montigny said. The House
ignored both.
While the Senate is on board with the House's determination
to protect education and some human-service programs, Montigny said the upper branch would fight any attempts to
"decimate" Medicaid.
Senators aren't the only ones looking skeptically on
elements of the House plan - acting Gov. Jane M. Swift is already inking her veto pen.
Administration and Finance Secretary Kevin Sullivan said
he's found $175 million in earmarks sprinkled through the House budget.
While noting that some earmarks put money toward worthy
causes like the Pine Street Inn, Sullivan said others are purely pork.
"I think were going to take a very, very hard look at these
earmarks," Sullivan said.
Swift is also digging in against the House's plan to slash
Medicaid by nearly $400 million, booting 32,000 low-income kids, seniors and unemployed adults off their health insurance.
Sullivan frowned on the House's sudden reversal of the
state's decade-long policy of aggressive health-care expansion.
"There seems to be a schizophrenia going on," Sullivan said.
"The meat cleaver approach to reforming human service is not a good one."
House Speaker Thomas M. Finneran (D-Mattapan) defended his
branch's deep cuts to Medicaid and scores of other programs, including mass layoffs of prison officials, which are
being blamed for this week's outbreak of violence at a Suffolk County jail.
"We are hostages to a larger economic situation," Finneran
said.
Fiscal watchdogs gave an approving nod to the outcome of
House budget deliberations.
Massachusetts Taxpayers Foundation President Michael Widmer
praised the House's straightforward tackling of the deficit, and the even balance between tax hikes and spending
cuts.
But Widmer noted that House members failed to account for a
new $400 million deficit just announced this week, and warned that the business community won't tolerate any extra tax
hikes.
"The state probably needs to find another $400 million,"
Widmer said. "The reality is, one needs to find additional spending cuts."
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The Boston Globe
Sunday, May 19, 2002
Political Capital
Search for new state revenue never-ending,
may lead to extremes
By Globe Staff
They had already approved more than $1 billion in new taxes,
but that didn't stop some House members from trying to push a few more fees through as the budget debate dragged
on last week. A proposed increase on the automobile excise tax and a 1
percent increase on the meals tax were soundly defeated, but not without significant, rancorous, and at times
humorous, debate. The meals tax apparently was just too much for minority
leader Francis L. Marini to bear, leaving him to ask with some exasperation where the feeding frenzy, so to
speak, would end. "When is enough really enough?" he bellowed. "When do we nickel
and dime our citizens out of their weekly meal?" And he wasn't finished criticizing the zeal with
which his colleagues have embraced new levies, suggesting that maybe some revenue could
be raised in-house.
"Shall we tax catnaps?" he said. "Think of the possibilities
... We could raise money right here in the chamber."
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State House News Service
Advances - Week of May 20, 2002
STATE HOUSE, BOSTON ... Just six weeks remain before the start
of the next fiscal year and there are fewer than 11 weeks left for the House and Senate to finish work on important
non-budgetary business for the 2001/2002 session. But the activity may be hard to discern
because it's either not happening at all or is occurring off stage.
The pace and the pressure to get things done is about to
increase dramatically on Beacon Hill. Senators are waiting for the final paperwork detailing the House-approved $22.9 billion
budget, which relies on $1 billion in spending cuts, $500 million drawn from state reserves,
and more than $1 billion in tax hikes....
Senate Ways and Means chairman Mark Montigny (D-New Bedford)
said Friday the Senate budget bill will likely be announced during the week of June 3 and hit the Senate floor
for debate the week of June 10. Montigny said that unlike the House, the
Senate would wrap its revenue-raising package into its appropriation bill, rather than doing the bills separately.
Montigny is meeting with colleagues to determine which tax
hikes have support in the Senate, as well as which spending cuts are viewed as intolerable.
As the action shifts to the Senate, House members will spend
this week measuring the reaction of constituents to their votes to wipe out three voter-approved laws by redirecting
funding for the four-year-old public campaign financing law, freezing the income tax cut, and
indefinitely delaying a law that allows taxpayers to deduct charitable contributions....
The budget is due July 1 and House and Senate rules require
that formal sessions, during which controversial matters or those requiring roll calls are considered, end by July 31 in
election years.
It's still not clear whether this year's budget conference
committee talks will be held in private, as has become the custom, or in public, as Senate President Thomas Birmingham
has recommended.
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The Boston Globe
Sunday, May 19, 2002
A Boston Globe editorial
Mass. budget, stage 2
If the Massachusetts Senate can end the state budget debate
as well as the House began it, the Commonwealth will be well served in the most difficult economic year in a decade.
The hard part will be for the Senate to avoid the serious
errors made by the House in the last stages of its debate, which stretched longer than a week.
House Speaker Thomas Finneran deserves considerable credit
for facing up to the state's $2 billion budget gap early on. He personally toured the state describing the limited options
confronting lawmakers, then had the House produce a draft budget with deep program cuts
of the kind that would be needed if there were no revenue increases. The combination made
it politically acceptable for the House to approve $1 billion in new taxes - a key step toward
a responsible budget.
The Senate can improve on that package in one way. The House
cut the personal exemption in the state income tax from $4,400 to $3,300 - a regressive move - but froze the income tax
rate at its current 5.3 percent rather than raising it to 5.6 percent, as the Massachusetts
Taxpayers Foundation and others had recommended. Since the percentage increase would
produce some $140 million more than the exemption change, it would give
the Senate some flexibility with appropriations. Mark Montigny, chairman of the Senate Ways and Means
committee, supports this move.
More difficult will be the task of cleaning up after some of
the House budget cuts. For example, Montigny, a New Bedford Democrat, was right to call the House "irresponsible"
for its vote to lop 30,000 long-term unemployed residents off Medicaid.
In addition, the House raided the Clean Elections Fund of $23 million, shaved $24 million, or nearly 20
percent, out of needed housing programs and reduced MCAS remediation money by
more than half, from $50 million to $20 million, just when the money is needed most to help the
high school class of 2003 to graduate.
The House, knowing that Montigny, Senate President Thomas
Birmingham, and their colleagues will likely augment these accounts, has essentially left the tough choices to the
Senate.
In the closing days of House debate, Finneran asked members
to fund overdue labor agreements by raiding the Clean Elections Fund of $23 million he has refused to appropriate
for that voter-approved reform. Finneran was quoted as saying he felt he
had been pummeled by Clean Elections supporters and wanted to fight back once, but it is Finneran
who has crippled the law. As several members pointed out, the unnecessary raid on Clean
Elections soured what had been a responsible budget process.
It will be up to the Senate to do better.
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