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Citizens for Limited Taxation & Government
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*** Promise Update ***
Tuesday, October 14, 1997

Message from Barbara:

Today’s Taxation Committee Experience

I thought you’d all like to know what happened at the Taxation Committee hearing on the income tax rate rollback today.

The hearing was on Governor Cellucci’s version, H. 4868, which is the same as our petition; a phase-down over three years, except that his bill would not have to wait for the 1998 ballot so the phase-down could begin a year earlier, for the 1998 tax year.

Gov. Cellucci and Administration & Finance Secretary Charlie Baker testified and answered dumb questions from the committee about "unmet needs," a possible future recession, possible federal cuts, other "better" potential tax cuts, and Sen. Magnani’s "We know it’s the wrong thing to cut taxes in a recession, but, is it the right thing to cut taxes when we have a surplus"? His conclusion was No.
Yes, this is the same David Magnani who received three hundred Jerry Williams-generated phone calls in 1989, and was then mentioned in the Middlesex News on July 9th: "In defending his vote, Rep. David Magnani yesterday emphasized that the hikes would be only in place for 18 months and that revenue generated would only go toward past bills." I, of course, read this to the Committee when it was my turn to testify.

Charlie Baker told the Committee that there is so much surplus money this fiscal year (starting July 1st) already that even "if we flat-line from now on, we can pay for the phase-out with what we have so far".

Magnani said that unfortunately much of the cut would go to "the rich," but if we had a graduated income tax we might want to do it. Charlie reminded him that one million Massachusetts voters do not want a grad tax, but they do want this rollback.

Gov. Celluci had a quiz for them: "How do you make a temporary tax temporary?" Answer: "You repeal it!"

They were followed by Treasurer Joe Malone who said that the focus is the promise, and do we want to allow individuals to keep their own money or do want to keep growing government?

Then the Committee called on its pet economist, Edward Moscovitch, the creator of the education reform formula. He testified that the economy will slow down and will not support this tax cut without cuts in services. Legislators then tried to impress themselves for half an hour by asking more dumb questions intended to show their ability to discuss econometric stuff with a real economist.

Finally it was my turn: I, who was the only person in the room who remembered that it was Ed Moscovitch who was responsible for the 1989 fiscal crisis in the first place.

We had convinced the House back then to cut Dukakis’ billion dollar budget increase in half before the state self-destructed, and were about to get support from the Senate, when Moscovitch brought his new "econometric model" to the Senate budget hearing and announced that the state was in great shape and didn’t need to cut anything! So the Senate didn’t, and the next year, the state crashed and would have burned except for the "temporary" tax increase.

I told the Committee this story, and others about the times in the past that rank and file legislators rebelled against their leadership and did the right thing; they usually like stories, so they paid attention and didn’t ask me any dumb questions, or any questions at all, but simply nodded thoughtfully as I reminded them of the promise.

Then Jim St. George, executive director of the Tax Equity Alliance of Massachusetts, testified that an income tax cut of some sort might be okay, but this one "goes too far." Hey, it worked in 1990!

Then the Taxation Committee, having heard all the testimony, voted to send the Governor’s tax rollback to a study commission until December 31st, 1998. Sen. Bruce Tarr pointed out that since petitioners are collecting signatures now, and the legislature must vote on the petition in May, and the voters will vote on it in November, December 31st might be a tad late for the Committee to have an opinion.

So Rep. Ron Gauch moved a vote, and this was rejected, and the bill went off to a study commission until Dec. 31st, 1998.

I may be imagining it, but I got the impression that the Senate Chairman, Warren Tolman, wanted to avoid a floor vote at all costs. This could mean he thinks we could win it, or just that he doesn’t want a roll call.

I’ve been told that the House Republicans will try to amend another tax bill to get a roll call vote on this one, if another tax bill comes up in the next month before they recess on November 12th—a week before we turn in our signatures to the city/town halls. It doesn’t look good. They’ll finish voting to create the new sales tax on real estate, and will probably vote for new taxes for the convention center, and then go home for a well-paid two-month holiday.

My bottom line opinion: we must get the signatures, or we will pay 5.95 percent for the rest of our lives.

Barbara Anderson

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