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Excerpted from:
STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, APR. 3,1997
The state Department of Revenue reported that revenues exceeded the high end of expectations every single day in March, and are still running 7 to 8 percent above last year, while inflation remains around 3 percent.
That added impetus to a proposal increasing the amount of the state's rainy day fund, the stabilization fund lawmakers will turn to to avoid service cuts and tax increases when the inevitable end of the boom years arrives.
The legislation is one section of an $81 million supplemental budget passed by the Senate Thursday. It says the stabilization fund can be set at five percent of all state revenues, not just “adjusted tax revenue” as defined in the 1986 law that created the fund.
If the change had been in place this year, the fund would have been allowed to grow to about $870 million instead of being capped at $543 million.
Anti-tax activists oppose the change because any tax revenue above that that flows into the fund must be returned to the taxpayers in the form of an increased exemption on the next year's tax form.
So, people like Barbara Anderson of the Citizens for Limited Taxation and Government argued, the Legislature and governor were stealing a tax hike from the people by increasing the stabilization funds. They also lambasted the lack of a public hearing on the matter.
The governor and legislative leaders have argued the increase in the fund could lead to an increase in the state's bond rating by Wall Street financial companies, which would also be good for the taxpayer. The increase in the fund passed the Senate 38 to 1.
SENATE . . . SHNS . . . APR. 3, 1997 . . . The Senate convened at 1:10 pm with President Thomas Birmingham of Chelsea presiding.
SUPPLEMENTAL . . . Sen. Hedlund asked if the order adopted Monday relating to the supplemental budget prevents members from moving to table or postpone debate on the bill.
Sen. Birmingham said such motions are in order but will be taken up at once rather than put over until the next day.
Sen. Hedlund moved reconsideration of the vote adopting the order on Monday.
Sen. Hedlund said Massachusetts has the 5th largest stabilization fund among the 45 states that have such funds. This is a very important issue and shouldn't be dealt with as a section of the supplemental budget.
Sen. Birmingham reminded Sen. Hedlund that the order was adopted unanimously. Mason's Manual, Section 489, states measures relating to future procedures may not be reconsidered.
Sen. Hedlund received unanimous consent to make a statement. I was at a Public Safety Committee hearing Monday when the order was adopted in an informal session. It is my understanding that any member can block action on any substantive matter during an informal session.
The question came on ordering to third reading H 4355 the $81 million supplemental budget. By voice vote and without debate the Senate Ways and Means Committee amendment was adopted. By the same vote, the bill was then ordered to third reading and the question came on engrossing it.
Sen. Rosenberg said this is an emergency supplemental budget. It is identical to the House version with the exception of a $200,000 item for the next stage of a cemetery project in Agawam . . .
Sen. Panagiotakos offered an amendment striking sections 3 through 6.
Sen. Panagiotakos said this tax matter should get a public hearing. We should make an informed decision. Some say passage of this will improve our bond rating but that is somewhat specious. Some people say a tax cut of $43 doesn't mean anything, but it does mean something to a lot of people in our districts. It's never bad to give something back to the taxpayers. (Sen. Panagiotakos was applauded for his maiden speech).
Sen. Tarr said we should exercise caution. Sen. Tarr moved for a roll call on the amendment and it was granted.
Sen. Rosenberg opposed the amendment. We have an $18 billion budget and a healthy stabilization fund. It is true that a promise is a promise but money is going back to taxpayers. I hope we raise the cap and send the $87 million back to taxpayers.
Sen. Hedlund offered an amendment striking sections 3, 4 and 5 and further moved that it be printed in the calendar under Senate Rule 31.
Sen. Birmingham said the motion is out of order under terms of the order adopted Monday.
There was a rostrum conference following which Sen. Birmingham said Sen. Hedlund has moved to lay the matter on the table.
By voice vote, the matter was not tabled.
Sen. Hedlund said under Rule 53 I move reconsideration.
Sen. Birmingham told Sen. Hedlund his amendment is pending and has not been rejected. What does the senator want us to reconsider, Sen. Birmingham asked. There was another rostrum conference.
Sen. Hedlund said this is similar to the previous amendment. It strikes the stabilization fund language from the supp. I don't mean to be dilatory and I know the points have been made.
By voice vote, the amendment was rejected.
Sen. Hedlund offered another amendment relating to the stabilization fund.
Sen. Hedlund said 45 other states have stabilization funds. We rank fifth, and 16th in terms of revenue. The argument we have one of the lowest funds just doesn't wash. The House attached this language to the supp [sic]. I think something that means taxpayers will take a $300 million plus hit deserves at least a public hearing. Wall Street likes between 5 and 7 percent in the fund and we are in line with that. This would make us the third highest in the country and assure that we will never give any more money back. The amendment will assure that we run the fund properly.
Sen. Lees supported the amendment. It's important to have a stabilization fund but we need to tighten regulations so it won't be considered a slush fund. This says that if we're going to take the money out, it has to be for an emergency. We haven't run into this problem before because we have never had the luxury of having a surplus in the fund. But now it is important to send a message to taxpayers that we are serious and will not use this as a slush fund.
Sen. Clancy said the weather has overcome Sen. Lees with all this talk of slush. This proposal is unconstitutional. The Massachusetts Constitution dictates what vote is needed to appropriate money, transfer conservation land, etc. Also the Legislature has the power of the purse strings. We should not abrogate our responsibility.
Sen. Hedlund said Sen. Clancy is also caught up in the elements and is trying to give us a snow job. There is no problem with a two-thirds vote on other things. It behooves us to protect the fund.
Sen. Lees asked how one might amend the amendment.
Sen. Birmingham said an amendment can be offered to the amendment.
Sen. Lees moved for a recess so he could prepare an amendment.
RECESS . . . At 2:05 pm, the Senate recessed until 2:20 pm.
The question recurred on the Hedlund amendment.
Sen. Lees said there is nothing in the constitution that bars use of a two-thirds vote on this.
Sen. Clancy said Sen. Lees' snowball isn't hitting the mark. This amendment amends a statute. He is referring to a constitutional amendment.
Sen. Tarr said he'd like to shed some sunlight on this. It is possible to add matters requiring a two-thirds vote.
Sen. Clancy said there are certain enumerated instances where the constitution requires two thirds. Everything else is a simple majority.
Sen. Rauschenbach said we could not constitutionally change a two-thirds vote on a bond authorization to a majority because that is required by the constitution. This amendment is not unconstitutional because the constitution is mute on it.
Sen. Tarr asked if the Senate could adopted the amendment and then ask the SJC for an opinion on it. This is a separate but equal part of government and let's move to a vote and let it be challenged later. It simply requires a two-thirds vote to tap the stabilization fund.
The question then came on engrossing the budget..
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