State House News Service
Tuesday, May 21, 2002
Senate Democrats say veto-proof vote is there
to back house tax plan
By Rick Collins
STATE HOUSE, BOSTON, MAY 21, 2002 ... The House and Senate
appear to be in agreement on how to raise taxes.
During a private caucus Tuesday, Democratic senators voted
informally to support the House-passed tax package, and say they have enough votes to override an expected veto from
Republican Acting Gov. Jane Swift.
Following the three-hour meeting, Senate President Thomas
Birmingham told reporters that more than two-thirds of the senators polled during the closed-door meeting backed the House
package. Birmingham broke the news at a press conference attended by a handful of Senate Democrats.
"This is a very good news story for those who care about our
public schools and those who care about our health institutions because now it is clear that both chambers of the Legislature
have the two thirds vote necessary to do over a $1 billion in taxes," he said. "It is now essentially a fait accompli."
The House package freezes the income tax rate at 5.3
percent, raises the cigarette tax by 75 cents, reduces personal exemptions, postpones implementation of the charitable giving
deduction, and taxes capital gains at the same rate as income. The House had placed a $1.065 billion price tag on the hike,
but Senate Ways and Means chairman Mark Montigny (D-New Bedford) estimates the cost between $1.1
billion and $1.2 billion. The Department of Revenue estimates that tax package
will produce $1.4 billion per year.
Birmingham said a majority of senators supported raising the
income tax rate to 5.6 percent, but not enough to override the expected gubernatorial veto. He cautioned that Tuesday's
agreement was preliminary and said no tax or revenue proposal had been taken off the table.
"We're not drawing any lines in the sand," he said.
Birmingham said the Senate tax package might propose
different triggers that would be used to reduce raised taxes when the economy turns around. The Senate's tax package is
expected to be included in the Upper Branch's fiscal 2003 budget proposal, scheduled for release during the first week of
June.
Montigny said with a revenue agreement now in place, he can
focus on crafting his fiscal year 2003 spending plan, which will include $800 million in spending cuts.
Even with the spending reductions and use of $500 million in
reserves, many say a tax hike is needed to prevent big cuts in health care, elder and social services, and programs that help
the mentally disabled.
Republican critics of the tax hikes say state budget writers
should pursue casino gambling options, use more of the $2 billion sitting in various reserves, and use all of next year's
$300 million tobacco settlement payout. Democrats say reserves should be used cautiously because the state's budget problems
are expected to continue for several years.
