The Boston Herald
Saturday, July 20, 2002
Pols OK record hike in taxes: Package totals $1.14B
by Elisabeth J. Beardsley
Lawmakers overwhelmingly endorsed the biggest tax hike in
state history yesterday, hours before hustling a state budget past protests from Republicans and Democrats alike.
The $1.14 billion tax-hike package, which ratchets up five
separate levies, flew through the House and Senate early in the day - barely hampered by vigorous but futile Republican
The tax hike reneges on two voter-approved tax breaks by
freezing the state income tax rate at 5.3 percent and by indefinitely postponing a tax deduction for charitable giving.
The veto-proof package also jacks up the cigarette tax by 75 cents per pack, rolls back part of
the personal exemption, and reinstates taxes on capital gains at a rate of 12 percent in
the first year and 5.3 percent thereafter.
The average taxpayer will be stung with an added $317 in new
and increased taxes per year, according to the state Department of Revenue.
House Speaker Thomas M. Finneran and his lieutenants didn't
bother to offer any defense or explanation for the tax hike, but in the Senate - where President Thomas F. Birmingham is
running for governor - leaders took to the floor to fend off "tax and spend" allegations.
Pointing to the "nasty bursting" of the stock market bubble
and a precipitous $2.5 billion decline in tax collections over the last year, Senate Ways and Means Chairman Mark C.
Montigny (D-New Bedford) said lawmakers had no choice but to hit up the
taxpayers for help.
"We have done the best we can," Montigny said. "We did the
most responsible thing we could do within tight constraints."
The newly minted $22.93 billion state budget, adopted three
weeks late, slashes $1.2 billion across the board, affecting nearly every government program except school aid.
The most controversial cut eliminated the $70 million
MassHealth Basic program, yanking health care from 50,000 homeless and unemployed.
"It's ugly, but it's honest," said House Ways and Means
Chairman John Rogers (D-Norwood).
But it could have been worse. To avoid the deepest cuts in
an election year, lawmakers grafted in an $800 million dose of "rainy day" funds, $80 million in new fees and $570 million
in tobacco settlement money - allowing the bottom line to grow from last year's level, despite
the fiscal crisis.
While liberals in both branches clamored for more tax hikes,
Republicans angrily denounced them and accused Democrats of being unable to control their spending appetites.
"Shame on you," said Assistant House Minority Leader Bradley
H. Jones (R-North Reading). "It's a disgrace to the institution."
Some Democrats also expressed alarm at the unrestrained
spending, coupled with massive tax hikes. Rep. James H. Fagan (D-Taunton) warned the state is going to face a deficit mess
next year, after burning through almost all the $2.3 billion reserve fund in a single year.
The tax hikes and reserves allows local officials to escape
the worst of the cuts this year - after lawmakers trooped out and warned them of impending doom, at Finneran's insistence,
"We find ourselves in the position of the little boy who
cried wolf," Fagan said. "Those local community leaders might say, 'Ah, we've heard that before.' "
Both the budget and the tax hike passed overwhelmingly, on
mostly party-line votes. Lawmakers supported the tax hike by margins that will withstand acting Gov. Jane M.
Swift's expected veto next week - 116-26 in the House and 30-9 in the Senate. The budget,
subject to vetoes, passed 119-25 in the House and 33-6 in the Senate.
With no debate, the Legislature "fixed" a stipulation in a
$3.8 million Clean Elections appropriation, which would have restricted the money to gubernatorial candidate Warren
Tolman and denied funds to a handful of legislative candidates.
In addition to vetoing the tax hike, Swift is expected to
cut as much as $300 million from the budget, aides said. Advocates for public health, human services and other special
interests are already lobbying against further damage.
Fiscal watchdogs expressed alarm at the bottom line. Michael
Widmer, president of the Massachusetts Taxpayers Foundation, said the budget grows by $600 million this year,
potentially setting up a disaster next year when state reserves are exhausted. "Realistically we
don't have the revenues to support that," he said. "That's the hard reality."
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The Boston Globe
Saturday, July 20, 2002
The Legislature yesterday approved the largest tax increase
in Massachusetts history, then approved a $22.9 billion spending plan for this fiscal year that would slash Medicaid
benefits and social services and that legislative leaders say needs to be trimmed further.
Both the tax package and the budget now move to Acting
Governor Jane Swift, who is expected to veto the tax hikes and at least $300 million in spending from the budget. The
Democrat-controlled House and Senate are poised to easily override her veto on the $1.14
billion in new taxes, but leaders have indicated that they will allow many of her
spending reductions to stand.
The tax package includes a freeze of a voter-approved income
tax cut, increased taxes on cigarettes and capital gains, the elimination of the deduction for charitable contributions, and
a reduction in the amount of personal income not subject to taxation. The House approved
the taxes 122-28, and the Senate did the same a few hours later, 30-9. Veto overrides
require two-thirds majorities.
The budget for fiscal 2003, which began July 1, passed the
House 118-31, with opposition coming from Republicans and a handful of Democrats upset that Swift will make so many
decisions on spending cuts. The vote in the Senate was 33-6, with only Republicans voting
against the budget.
Republican lawmakers fought in vain to stop the drive to
raise taxes, accusing Democrats of robbing taxpayers to avoid spending cuts. They asked that other options be pursued, such
as limiting of Lottery prizes.
"It's going to stifle economic growth in this state," said
Senator Richard R. Tisei of Wakefield, a Republican.
But Democrats countered that new taxes were the only way to
prevent a dismantling of state government. Actual state spending this fiscal year will probably be several hundred
million dollars less than the $23 billion spent last year after Swift is done with her vetoes, legislative
"The first thing we did was cut - painfully cut programs
that affect the citizens of Massachusetts," said House Ways and Means chairman John H. Rogers, a Norwood
Democrat. "We cut deeply in the areas of public health. We cut deeply in the
areas of human services, our most vulnerable citizens."
Legislative leaders argued that the tax package was fair and
balanced. Some critics had taken issue with lawmakers' plan to make the capital gains tax increase retroactive to Jan. 1,
before public discussion of the increase had begun on Beacon Hill, saying investors had
made financial decisions unaware that the tax would rise. So legislators made it effective May
1, when the proposal first surfaced, said Senate Ways and Means Chairman Mark C.
"We took the cards that were dealt us and did the best that
we could," said Montigny, a New Bedford Democrat.
Even with the new taxes, deep cuts were necessary. Department of Mental Health
Commissioner Marylou Sudders said that her department's $605.5 million budget is $13.8
million below what would be needed just to maintain current levels of services.
That could result in the layoffs of up to 100 workers, she
The Medicaid cut, which would eliminate basic health
coverage for up to 50,000 poor adults starting next April 1, was decried by several House and Senate members yesterday.
Representative Deborah D. Blumer pleaded with Speaker Thomas M. Finneran to do what
he could to stop those people from losing health care.
The Swift administration will take several days to analyze
the spending plan and will make sure the final state budget is balanced, said James Borghesani, Swift's press secretary....
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The Boston Globe
Saturday, July 20, 2002
Fee to subsidize nursing homes
Private patients to face higher cost
By Alice Dembner
Moving to ease a nursing home crisis that has forced dozens
of facilities to close in the last few years, the Legislature has devised a Robin Hood-like plan to generate $130 million in
federal funds for the large majority of homes that accept poor patients.
But the plan, laid out in the pending state budget, has a
downside for about 8,000 patients who pay cash for their care. Unless their facilities pay the state fee from capital
reserves, they will probably charge each patient about $3,300 a year above the current price.
"I wish there were a better way of doing this," said Scott
Plumb, senior vice president of the Massachusetts Extended Care Federation, which represents most of the state's nursing
homes. "But the state's in as big a hole as we are. This is really our
At Marian Manor in South Boston, the state's largest nursing
home with 366 patients, Sister Pauline Ross said the new money would improve patient care by enabling the home to hire
more nurses and pay aides better. More than 80 percent of Marian Manor residents are
poor enough to qualify for Medicaid.
At facilities that are near bankruptcy because of high labor
costs and low government reimbursement, the money will help keep the doors open, Plumb said.
But to the residents of the state's approximately two-dozen
primarily private-pay nursing homes and of the assisted living facilities linked to those homes, the measure is an unfair tax.
"We feel discriminated against," said Barbara Levings, 77, a
resident of the North Hill assisted living center in Needham. "It seems absurd for those of us who have planned for our
long-term care to end up subsidizing, not just our nursing home, but nursing homes around
Under the plan modeled on those in 18 other states, the
state would charge each of 500 nursing homes a fee of $9 per patient per day. The state would return most of the $145
million generated to the nursing home industry as payments for Medicaid patients. A small
portion would be used to fund other health expenses. Because the federal government
matches state Medicaid spending 1 for 1, the move means an additional $130
million for the nursing homes overall. The money from these new fees will boost a federal-state
appropriation of about $1.4 billion for Medicaid patients in nursing homes.
However, homes that have fewer Medicaid patients will
subsidize homes with larger populations of poor patients. About 70 percent of 51,000 nursing home residents statewide
are on Medicaid, another small percentage are on the separate federal Medicare system, and
the rest pay cash or with private insurance.
Yesterday, Jim Borghesani, a spokesman for Acting Governor
Jane Swift, said that Swift supports the concept of the user fee, but will analyze the specifics before deciding whether to
sign it into law.
Wendy E. Warring, state Medicaid commissioner, issued a
statement saying she also supports the idea, but is "concerned about infusing additional funds into the industry without
having a clear measure of the value that will be received from these increases or assurance of
the industry's long-term viability."
The Legislature earmarked $50 million of the new money for
improving the wages and increasing the hours of direct care staff. It called for a report by October 2004 on how the
money was used and whether the user fee placed a burden on individual residents.
Mary Berrigan, general manager of the totally private-pay,
family-owned Fairlawn Nursing Home in Lexington, said she will have to pass the fee on to residents and expects it will force
some of the 104 residents to leave.
"I wonder how many more individuals are going to be thrust
into Medicaid," she said. "It's penalizing those who are trying to stay out of the government system."
But Plumb said the infusion will benefit nine out of 10
nursing homes and most residents by helping to halt the rapid turnover of staff due to low wages and poor working conditions.
It will also help slow the closings that Plumb said have averaged a home every other week for
the last three years and have forced patients to travel farther from their family homes
to find a vacant nursing home bed. Plumb said Medicaid reimbursements have fallen short by about
$20 per patient per day.
The state increased Medicaid reimbursement rates in the last
few years, but the economic downturn left little likelihood of another increase this year without the user fee.
"This fills a good chunk of the hole we're in," Plumb said,
adding, "There's a certain amount of ethical justice in rewarding facilities that have admitted poor people."
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The MetroWest Daily News
Saturday, July 20, 2002
Budget reflects 'taxing' choices:
$1.2B is added; special ed is cut
By Michael Kunzelman
... The budget pact includes a controversial plan to charge
nursing-home patients a daily "user fee."
Medicaid will cover the cost of the fee, but residents of
"private-pay" nursing homes will have to pay the fee out of their own pocket.
"I think this fee is one of the most outrageous legislative
moves I've seen in my time here," [Rep. Paul Loscocco, R-Holliston] added.
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State House News Service
Weekly Roundup - Week of July 15, 2002
(Recap and analysis of the week in state government)
By Michael P. Norton
STATE HOUSE, BOSTON, JULY 19, 2002 ... Democracy, or oligarchy?
It's getting tougher to tell.
State government in Massachusetts is set up with a system of
checks and balances designed to make sure the citizenry is well represented, but critics these days have more and more
reasons to be skeptical.
All week, a handful of leading legislators met privately to
draft a budget bill that will be wildly different from the ones the full House and Senate voted on during May and June. Because
leaders have run out the clock on formal sessions for the year, nearly 200 lawmakers will
have just a few hours to flip through the budget before they're forced to take an up or down
vote. Few will fully comprehend the bill.
And because that small group of legislators could not agree
on a balanced budget, they plan to leave critical decisions about state programs and services to an even smaller group of
one: Acting Gov. Jane Swift. Democrats outgun the Republican governor and the pundits are fond
of saying how powerless and irrelevant she's been. But key decisions, however unpopular,
are now being left to Swift to make alone.
Another power play was pulled on Wednesday. The Legislature
voted 137-53 to adjourn its Constitutional Convention for the year rather than debate and vote on a controversial
measure put before them by a campaign that had gathered more than 130,000
Senate President Thomas Birmingham, who orchestrated the
proceedings, said it was better to kill a measure defining marriage as between a man and a woman by adjourning than risk
taking it up and having it pass, which would have moved the measure one step closer to a
ballot vote two years from now.
The proposal's opponents say it would prevent gay and
lesbian couples from attaining rights associated with marriage. A Boston Herald poll showed most voters oppose the question.
But with the campaign within striking distance of attaining the 25 percent threshold of support
needed to keep the question alive, Birmingham derailed the ballot drive with a carefully
calculated procedural vote.
All of the actions underscore a reality that Beacon Hill
regulars know well - most key decisions in state government are made by a few and signed off on by the rank-and-file in the
Legislature. There's very little dissent and even less debate. And there's another trend:
overturning the will of the voters.
After starving a voter-approved public campaign financing
law to death by not providing financing, the Legislature is poised to adopt a budget that blocks further implementation of
two other voter initiatives that reduce the income tax and make charitable contributions tax
This Legislature is clearly willing to accept the risks of
doing the opposite of what the voters say they want. With Clean Elections, lawmakers say the voters didn't know what they were
approving and don't really support it. And legislators say the tax cuts are less important than
preserving government services.
In a nutshell, this Legislature is comfortable substituting
its judgment for that of the voters. Some would argue that makes them a profile in courage. Others say it's grounds for
tossing them out of office.
But many incumbents have little to fear - a recent study
showed the bulk of lawmakers face no serious challengers. The treatment of Clean Elections has kept some from running. But
the larger question is whether residents of Massachusetts are getting the most out of their
Legislature when many lawmakers are marginal players.
There's a prevailing ethos on Beacon Hill these days that
can be summed up as don't know-won't tell. Many lawmakers simply don't know what's happening at higher levels with
major policy issues. Others know, but won't discuss it publicly often because they fear some
type of legislative retribution or just don't want to rock the leadership boat. Legislators are
often willing to talk, as long as it's off the record.
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The Boston Globe
Saturday, July 20, 2002
A Boston Globe editorial
The Massachusetts Legislature in its budget decisions
yesterday avoided some of the expedient policies that other states have adopted to cope with their fiscal crises. This
budget and tax package, however, will solve only this year's problem. Unless revenues pick up
significantly, the Legislature will face further difficulties next year without major
structural changes in the way the state spends its money.
The centerpiece of this year's package is a $1.24 billion
increase in taxes and fees, which Acting Governor Jane Swift has promised to veto in a bow to unthinking Republican
orthodoxy. More than two-thirds of the Legislature is ready to override the veto. Without
this money the state would be forced to gut essential services or resort to such one-time
gimmicks as selling off the 30-year revenue stream to be provided by the
tobacco lawsuit settlement. Several other states are planning to do just this, even though the one-time windfall
will do nothing for their later financial needs and will preclude a future generation from
enjoying the benefits of the settlement.
The $22.93 billion budget approved by the Legislature is
roughly in balance only because of the tax increase and extensive use of the state's reserve accounts. Legislative
leaders are counting on Swift to make $300 million more in cuts with line-item vetoes to make sure the
budget is not in the red.
A bigger tax increase would have been preferable to
forestall the line-item cuts. The governor by herself is unable to make the changes in state law that might make some of the
Even without Swift's cuts, higher education and environmental programs are going to take a
severe hit, and thousands of Medicaid recipients will lose their health
insurance. Replenishing these programs will require money that will be hard to find in the coming months.
The reserves accumulated by the Legislature during the 1990s
boom and the support for the tax increase have given the state the luxury of a reasoned budget debate this year. Timely
passage of the budget allows legislative leaders and all the candidates for governor to
consider solutions to next year's budget difficulties with equal deliberation.
So far the most comprehensive set of proposals comes from
the nonprofit Massachusetts Taxpayers Foundation. These range from lowering reimbursements to police officers who get
college degrees to revamping the rules governing public construction contracts.
Not all these ideas may be workable, but they represent the
kind of thinking necessary to preserve essential state services, particularly education aid and Medicaid, while
eliminating or trimming programs that are no longer vital. Budget difficulties should produce better
government, not recurring crises.
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The Brockton Enterprise
Friday, July 19, 2002
Last straw from our do-nothing Legislature
In 1994, Gov. Weld made a deal with the Legislature: I'll
sign a 55 percent pay raise for you if you cut capital gains taxes.
The deal was made and the public outcry didn't last very
long. But now that legislators are breaking the deal by raising capital gains, and many other, taxes, it is time to take back
their salary hikes. It is not as if they are doing much to earn their pay anyway.
The latest abrogation of responsibility is the Legislature's
apparent decision to give up on the budget and leave it to acting Gov. Jane Swift to make cuts needed to balance the
books. This comes a year after the Legislature produced a budget five months late. Will the
incompetence never end?
Swift is willing to do the dirty work after all, she is
not seeking votes in the fall and has little to lose. Senate President Thomas Birmingham is presiding over this fisaco and
remarkably wants to become governor - based on what, a long track record of fiscal failure? Birmingham
should have resigned his "leadership" post long ago when it became obvious he could
not run the Senate and run for governor at the same time. On the House side, Speaker Thomas
Finneran always has a big grin when he talks about "the full-blown crisis" the state facing.
It is not as if he is in danger of losing his job, as have thousands of
The Legislature's decision to deliberately create a budget
with a $300 million deficit should be the last straw. The politicians had no trouble spending the millions when they
rolled into state coffers over the last decade. Now that they have to decide where to cut, the
cloakrooms are empty; the overpaid pols will be on the Cape while Swift and taxpayers are
left holding the bag.
It is a shameful disgrace. These men and women are paid a
minimum of $50,000, far more than the average worker in the state, yet they refuse to do their jobs. And because they have
ignored their constituents and refused until now to fund Clean Elections - which would allow
some competition for their jobs -they know there is little chance they will be booted from
Now is the time for people to run to their windows - and voters
to run to the polls with pencils in hand to write in "none of the above" - and scream, "I'm mad as hell and I'm not
gonna take it any more."
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CLT's Voluntary Tax Check-off adopted!
FY 2003 State Budget
SECTION 183. Notwithstanding any general or special law to the
contrary, regulations adopted by the commissioner of revenue shall implement and be consistent with the
a.) All state personal income tax forms shall contain a
check-off box allowing taxpayers to elect, at the option of the taxpayer, the following: "I elect to pay 5.85 percent income
tax on Part A taxable income and Part B taxable income.";
b.) All state personal income tax schedules and instructions
booklets shall contain a table providing the tax at various incomes calculated at the voluntary rate of tax of 5.85
c.) The department of revenue shall maintain a record of the
number of taxpayers who choose to elect the rate of tax of 5.85 percent; and
d.) The department of revenue shall maintain a record of the
amount of revenue collected from taxpayers who have elected to pay the rate of tax of 5.85 percent.
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