NEWS RELEASE
Friday, July 19, 2002
The Biggest Tax Hike in State History:
Inevitable
If Citizens for Limited Taxation had realized
its goal of constitutional tax limitation in 1978, the Massachusetts
Legislature would not be imposing the biggest tax increase in state
history in 2002.
Like proponents of Wednesday’s constitutional
amendment, we collected sufficient signatures to reach the constitutional
convention, and like them, we were defeated by legislative sleight of
hand. When we were again prevented by legislative cuteness from getting a
ConCon vote on term limits, we realized that it is impossible to get a
constitutional amendment petition on the ballot here, so we focused on
statutes instead.
If Massachusetts had a constitutional tax limit like
Colorado’s, we too might be named in The Wall Street Journal as
being a "state of prosperity," not fiscal disaster. Despite a
state budget that has doubled over the last decade, it is still not
enough. Even with the biggest tax increase in state history, it will not
be enough to bail out the biggest spending binge in state history .
Last-minute impulse cuts will not save us from another
crisis next year and a real humdinger of a crisis in the future, as
Medicaid rolls are slashed but real reforms are avoided.
Years ago we warned about this inevitable "fiscal
crisis" if the now 14-year old "temporary" income tax hike
was not rolled back by intransigent Beacon Hill politicians, if they
continued to spend billions of dollars of taxpayers’ overpayment. It
didn’t take Nostradamus to see this coming – economic cycles are
inevitable.
The Mass. Taxpayers Foundation, like us, warned about
this inevitability; but unlike us, it wouldn’t support what was
necessary: removal of the surplus income tax money from the eagerly
spending Legislature. The much-vaunted rainy day fund only reassured
legislators that they could overspend and then count on the savings
account to bail them out if (when) there was an economic downturn.
The Wall Street Journal on Tuesday commented in
its Review & Outlook column, "States of Prosperity (or
Not)":
"As the
nation's governors meet in Boise, Idaho to share tales of woe about a
slower economy, it's a good time to ask why some states have bigger
budget problems than others. California is a debacle, for example, with
a $23 billion deficit and Governor Gray Davis scrounging for revenue. But
in Colorado this year, Governor Bill Owens delivered a balanced budget
and $927 million in tax rebates....
"In
Colorado, government spending was restrained by a 1993 constitutional
amendment called the Taxpayer Bill of Rights. The law requires voter
approval for any tax increases and limits increases in state spending to
inflation plus population growth. This meant that even in the fat years,
state politicians couldn't spend all of their revenue windfall.
"In other
words, they couldn't use an economic boom to build a permanently larger
government....
"The larger lesson here is that the best defense
against future tax hikes is an automatic political restraint on
spending."
CLT’s counterpart in Colorado,
anti-tax activist Doug Bruce, had an advantage: the Colorado constitution
can be amended with an initiative petition that does not require a vote
from the Colorado legislature, but can go directly to the ballot.
Our legislators failed to act
responsibly on a similar amendment in 1978, learned nothing from the
fiscal meltdown of the late-‘80s, and won’t learn from this fiasco
either – unless they are held accountable for their irresponsibility and
public malfeasance.
We thank Governor Swift for her veto
that will provide us with a roll call vote to help with that
accountability.
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