Associated Press
Friday, July 19, 2002
House, Senate give final okay to tax hike
By Jennifer Peter
BOSTON -- The Senate and House gave final approval to one of
the largest tax increases in Massachusetts history Friday to help offset a precipitous decline in state revenues over the
past year.
The endorsement of the $1.1 billion compromise tax increase
first by the House and then the Senate launched a day of debate and votes on the final state budget plan.
The tax package will now proceed to acting Gov. Jane Swift
for her promised veto, and then back to the two chambers for an anticipated override.
With that additional revenue in place, the Legislature was
expected to give final approval Friday to a spare $22.9 billion spending plan that denies health insurance to as many as
50,000 chronically unemployed and homeless people, but spares schools,
the courts and methadone clinics.
The two chambers signed off on the tax package, which had
been hammered out by legislative leaders in a conference committee, after a brief, futile debate by Republicans, who
argued that rigorous scrutiny of the state's spending habits could have negated the need for
the increases.
"We needed to increase taxes because we don't want to cut
anything," said Rep. Francis Marini of Hanson, the House Minority Leader. "We wanted to continue to spend as if the
glory days of the 90s had never ended. We shouldn't be doing this."
The legislative budget leaders argued, however, that they
tapped into everything they could service cuts and the state's depleted reserves but still were forced to put a greater burden
on taxpayers.
"We come to a simple fact," said Senate Ways and Means
Chairman Mark C. Montigny, D-New Bedford. "We can't run core government functions without some level of revenue
enhancements. We did the most responsible thing we could do within very tight restraints."
The tax compromise establishes a new capital gains rate,
retroactive to May, of 12 percent for the first year and 5.3 percent after that. The tax package also freezes the state
income tax rate at 5.3 percent, creates a 75 cents per pack tax hike on cigarettes, trims the personal
income tax deduction and ends the deduction for charitable gifts.
With the help of this revenue, the proposed budget compromise would fund the Clean
Elections law for one year, boost fees for driver's licenses and car registrations and dip
deeper into the state's dwindling reserves. It was expected to trigger hundreds of layoffs.
"I'm not going to say to you that this... is something that
is less than ugly," said House Ways and Means Chairman John Rogers, D-Norwood. "It's ugly, but it's honest."
The final plan includes $18 million to reduce class size in
kindergarten through third grade, $50 million for MCAS tutoring and an extra $40 million for schools. The House plan would
have eliminated or reduced all three.
The plan also restores about $35 million in proposed Senate
cuts to the courts, cuts higher education and AIDS services, and eliminates a program to encourage schools to design
education plans for special needs students.
The most controversial cut was the decision to eliminate a
Medicaid program for the chronically unemployed and homeless. The cut will save the state about $70 million.
The final budget, which cannot be amended, also includes an
agreement on Clean Elections designed to prevent more state property auctions. The plan sets aside money to fund
candidates running under the voter-approved public financing law this year
and puts the question back before voters.
Over the past month, negotiators struggled to close a $600
million budget gap that opened after the House and Senate finished debate on their separate budget plans.
The final budget will cut about $300 million and use the
state's tobacco settlement fund and reserve funds to make up the difference.
Swift is expected to make vetoes that will cut an additional
$300 million from the bottom line, which some lawmakers railed against during the beginning of House debate on the budget
plan Friday afternoon.
"We are asking the governor to do our job," said Rep.
Charles A. Murphy, D-Burlington. "It's difficult for me to vote for a package anticipating vetoes from our governor, not
knowing what those vetoes are going to be."
The budget plan will deplete the state's "rainy day" fund,
which stood at about $2.6 billion last year, to about $170 million. It took the state about eight years to save the money.
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The Boston Herald
Friday, July 19, 2002
A Boston Herald editorial
New taxes resemble elephant in the yard
The Legislature today likely will pass a budget for the
fiscal year that began July 1, and separately pass more than $1.1 billion in tax increases.
Members are reported to have insisted on doing these deeds
on a Friday to put the news in Saturday newspapers, which are not as well-read as those of the rest of the week.
Do they think citizens won't notice their taxes are going up
if they skip the Saturday paper to get the beach early? Beach bums and news junkies alike will know who did it.
It's another manifestation of the urge to duck responsibility - the same urge that produced the
budget-writers' plan to plug a $300 million hole with another withdrawal from reserve funds
on the understanding that acting Gov. Jane Swift would use her line-item veto power to
eliminate that provision and make offsetting program cuts.
About the only good thing that can be said of the tax
package produced by the joint House-Senate conference committee is that committee members recognized that their
colleagues in both houses had been wildly unfair in making an effective
doubling of capital gains taxes retroactive to Jan. 1. The committee has changed that date to May 1, which at
least provides a semblance of fairness.
More fair does not mean more rational. The committee
retained the punitive 12-percent rate on gains from sale of assets held less than a year. There is no rational reason to
distinguish between 11-month gains and 13-month gains, or to tax any capital gains at a higher rate than
the 5.3 percent applied to salaries and wages.
Rationality, though, has never been a prime characteristic
of the state budget, and any citizen hoping to discern it better be prepared for a long wait.
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The Patriot Ledger
Thursday, July 18, 2002
Editorial
A bad balancing act
Once again, state legislators are fumbling their most
important task: producing a balanced state budget.
The Legislature is trying to rush together a budget proposal
this week for the sake of finishing it. We're already into a new fiscal year - it began on July 1 - and legislative leaders
want to avoid the months-long delays that usually mean a balanced budget isn't on the books until
Thanksgiving or so. Senate President Thomas F. Birmingham, a Chelsea Democrat who
is running for governor, has a particular interest in producing a timely, well-thought-out budget
plan.
But that's apparently not in the cards. Legislators admit
the budget they're putting together for the fiscal 2002-2003 year won't be balanced. The $22 billion budget plan is $300
million out of whack, and our solons admit they'd rather pass the buck to Acting Gov. Jane Swift than
to make the cuts themselves.
Chief House budget writer John Rogers, a Democratic state
representative from Norwood, calls the unbalanced budget plan a compromise. Since the Legislature has already made its
own cuts, Rogers reasons, Swift should be allowed to make her own spending cuts.
"It needs to be an unprecedented cooperative effort of the
House, the Senate and the administration," Rogers said.
In other words, let Swift do the dirty work - after all,
she's not running for reelection, and most legislators are.
That's a shameless cop-out. The Legislature spends the bulk
of each year preparing the annual budget document - at the expense of other pressing legislative issues that go ignored.
It has a constitutional requirement to send a balanced budget to the governor's desk, not
some almost-baked plan that someone else must fix.
As it stands, Swift is threatening to veto some or all of
the $1.2 billion in new taxes called for by the budget plan. Which means there may be months of work and debate remaining on
a budget that was supposed to be in place on July 1.
In the meantime, school districts across the state are
worrying about potential cuts in education funding - after months of assurances from Beacon Hill that education funding
will be "held harmless."
The fact that the Legislature is dropping the ball once
again underscores the need for a complete overhaul of the budget process. The secret, closed-door meetings among a
handful of top legislators are unacceptable, with a few lawmakers convening privately to set spending
priorities and shape the people's agenda.
We need public budget hearings, to allow taxpayers some say
in how their money gets spent. We need to hear department heads talk about what's really going on in state government,
instead of taking House Speaker Thomas M. Finneran's word that all the
right programs are getting funding. We need to shine a light on a legislative budgeting process that for too long
has produced results that are as late as they are questionable.
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The Lowell Sun
Thursday, July 18, 2002
Editorial
Beach budget toss
The Legislature has thrown in the towel on the state budget
crisis, and members will soon head for their summer homes at Cape Cod, Salisbury Beach and Newburyport.
These quitters couldn't solve the 2003 budget crisis after
all a crisis they created by incredulously increasing last year's $22.6 billion budget to (a.) $23 billion in the House
and (b.) $23.2 billion in the Senate despite (c.) an economic freefall.
Just a month ago, Speaker Tom Finneran was beating his chest
in triumph, praising the work of the Democrat-controlled House for making the tough choices needed to rescue
Massachusetts from its fiscal crisis. Senate President Tom Birmingham was
doing the same. He promised a smooth reconciliation of the House and Senate budgets, so that Gov. Jane
Swift would get a fiscal blueprint on time.
It was a sham.
Today, Finneran, Birmingham and the Legislature have given
the Commonwealth their latest indignity an unbalanced, tardy state budget.
It means they're passing the buck and the spending crisis to
Republican Gov. Jane Swift to sort out.
Finneran and Birmingham are the same pair who discounted
Swift's original budget plan in January as being out of whack. They said the numbers didn't add up. They called it a
laughingstock. But who's laughing now? As it turns out, these Democrats are bigger jokers
than Arthur Andersen at balancing the books. What's more, they've got the constitutional gall
to admit they're submitting a misshapen ball of wax.
Nice job, guys. Hey, why not just use a shredder on the
budget numbers? That'll cut the new $600 million deficit down to size, won't it?
Just like there's no real vision at the Statehouse to deal
seriously with Massachusetts' mounting fiscal woes, there's no courage either. It's an election year, and Finneran and
Birmingham have devised a way to let Swift, a lameduck governor, deliver the pain. She'll cut
state workers' jobs and taxpayers' services while legislators wash their hands of the
dirty deed and head out for some summer fun.
Where reform measures might have been instituted to reduce
costs without devastating services the time has passed.
We have no doubt that Gov. Swift will take the heat and do
what's right for the Commonwealth.
As for legislators, we've got to give them credit too.
Somehow they always know when it's time to quit.
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