Citizens for Limited Taxation & Government
18 Tremont Street #608 * Boston, MA 02108
Phone: (617) 248-0022 * E-Mail: cltg@cltg.org
Visit our web-page at: http://cltg.org
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*** CLT&G Alert !!! ***
Wednesday, April 9, 1997
Hey folks—time to focus on Beacon Hill *real fast*!
This is a bit lengthy, but we're getting taken to the cleaners and things are becoming very strange up there lately, so bear with the length. Finneran's grabbing more power than Billy Bulger ever dreamed of holding and The Cabal is on a frenzy at our expense.
The following is from just *today's* Boston Herald— including *two* editorials that follow head-to-foot:
GOP leader blasts reform plan as Dems' power grab
By Ed Hayward
House Minority Leader David M. Peters yesterday ripped Speaker Thomas M. Finneran for an “unprecedented” power grab that would virtually gag rank-and-file lawmakers during key debates.
Peters charged there's a simple bottom-line to the proposal, to be in a Rules Committee report today: Lawmakers who aren't committee chairs will have little chance of having their bills or amendments heard.
Instead, decisions about what's worthy for consideration would be made by Finneran's handpicked committee chairmen, Peters said.
“This is a huge, blatant abuse of power,” charged Peters (R-Charlton), in an interview with the Herald. “Now the speaker wants to shut off the last remaining daylight of the legislative process.”
Finneran shot back that Peters' comments were based on speculation.
“This is like a dog barking and there's nothing out there,” Finneran (D-Mattapan) said. “He hasn't even sen what the Rules Committee might propose.”
The reforms are an attempt to spread power to the committees and end “midnight amendments that in the past have sparked public outrage and earned judicial rebukes,” Finneran said.
The war of words between the two House leaders comes amid a Beacon Hill firestorm over room in the state budget for a platter of tax-cuts proposed by Gov. William F. Weld.
On Monday, House budget writers issued an $18.3 billion budget that includes none of the $166 million worth of measures Weld offered up in January, including cuts for veterans, families, investors and the insurance and telecommunications industries.
The measure earned an animated counterattack from Weld, who called the House budget “ludicrous.”
Finneran then slammed Weld's proposal as irresponsible pandering to the tax-weary residents.
House Ways and Means Chairman Paul R. Haley continued the anti-Weld offensive telling a Herald editorial bard that the governor's budget plan was reminiscent of the out-of-control spending that nearly bankrupted the state in the 1980s.
“He's changed course,” said Haley (D-Weymouth), referring to Weld's election loss to U.S. Sen. John F. Kerry.
“The lesson he learned in the last election is that it's popular to spend now and worry about it later. We're very concerned about that.”
Haley and other legislators have charged that Weld's brash defense of his budget plan could signify he's leaning toward a third term as governor.
But his likely opponent in that race—U.S. Rep. Joseph P. Kennedy II—was conspicuously absent from the bickering on Beacon Hill.
A spokesman for Kennedy (D-Brighton) said the congressman wouldn't comment on the budget or tax-cut plans.
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Wednesday, April 9, 1997
Too much money . . .
You're the House Ways and Means Committee. What do you do if you've got *too much* money?
Why you squirrel away a nickel here and a dime there and if you *still* have too much money about $150 million - - what do you do?
You propose, in the name of fiscal responsibility, one of the biggest hare-brained schemes seen on Beacon Hill in many a moon. You propose to use operating funds for capital projects. That means this year's taxpayers pay the *entire* cost of projects like highway bridges that may last for 30 years.
That's unfair. People who use the bridges (or roads or prisons), many of whom aren't yet born yet, should pay their share, which they do by repaying the debt incurred to build them.
Such a proposal is a startling reversal of the old political trick of using borrowed money to pay for things that are quickly used up like paper clips or gasoline. That old gimmick holds down the taxes today but raises them in the future. It makes future generations who repay the debt pay for the use of paper clips and gasoline today from which they get no benefit. That's unfair too.
This budget is not the committee's best honest effort at allocating the resources of the commonwealth to its needs. Whatever else it is, it's a weapon in a power struggle.
At least the committee didn't allocate the surplus $150 million to raises for everybody or something equally unwarranted. It has held the sum as a slush fund that the Legislature could use to finance projects (at the moment unspecified) for which the governor does not release authorized bonds.
Efforts are under way elsewhere to give the Legislature a voice in what bond issues to take to Wall Street, a power that now belongs to the governor alone—and a good thing, too. Somebody has to show a little discipline, and the Legislature likes nothing better to please constituents by voting a bond issue for some worthy project knowing that the governor—at least this governor—will show the backbone necessary to preserve the state's good credit rating. The $150 million slush fund is a second prong in the attack on this gubernatorial power.
Economist Milton Friedman was once asked by a governor what he should do with his state's surplus. “It's simple,” said Friedman. “A surplus is a sign that your taxes are too high. Lower taxes.” That's still the best advice.
[Part II] . . . so let's lower taxes
When it comes to tax cuts Massachusetts House leaders have taken to talking out of both sides of their mouths. While that's not a rare talent on Beacon Hill, it's one in this instance the public won't take kindly to.
For the reasons we suspect more political than fiscal, the Ways and Means Committee reported out an $18.3 billion budget that includes not one thin dime in tax cuts.
When asked in particular about Gov. William Weld's proposed $1,000 increase in the dependent child deduction House Ways and Means Chairman Paul Haley (D-Weymouth) said this:
“That's the first one [tax cut] we should embrace ... I'm not saying we're taking it off the table. We're just not embracing it in this budget.”
Got it? It's Haley's position and, presumably, that of House Speaker Tom Finneran (D-Boston) that sometime *after* the budget is passed by the House this particular tax cut might just pop out of the House Taxation Committee. Then, of course, the problem is how and where to find the $18 million it will cost in revenues lost to the state. That needs to be done in the budget - - unless, of course, it has already been spent on something else.
The same argument applies to the proposed rollback of the tax on interest, dividends and other so-called “unearned” income from its current 12 percent to the 5.95 percent state tax on other forms of income. While Haley maintains that would cost some $24 million in lost revenue, that figure grossly underestimates the lengths to which Massachusetts residents— particularly the elderly with a second home in some sunbelt state—now go to avoid paying this killer tax. Allowing those assets to come home (and keeping others from fleeing) would one day make that supposed “loss” a break-even proposal.
But the bottom line here is that both tax cuts are enormously popular both with legislators and most certainly with their constituents. Moreover, both are easily affordable in this budget.
Either Haley and Finneran have badly miscalculated the public mood or both are playing a chancy political game, attempting to hold the tax cuts hostage while making William Weld squirm.
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This afternoon Chip Faulkner of CLT&G hand-delivered a copy of the following memo to each member of the House:
To: Members of the Massachusetts House
From: Barbara Anderson
Re: “A Prudent Course for Uncertain Waters,” or . . .
Taxpayers Thrown Overboard as Tax Cuts Deep-Sixed
For those members who haven't read the budget, its leadership-set theme is “A Prudent Course for Uncertain Waters,” as if waters are ever certain, and prudence anything but an excuse.
On the assumption that a majority of members of the Finneran cult didn't spend Easter break in Mexico getting spayed, we expect that amendments to change the bottom line of the budget with tax cuts will be debated. We hope you will find it prudent to return some of the state surplus to the people who created it.
Our members' preferred tax cut is a reduction in the double tax on so-called “unearned income.” A version of this cut was passed by the Legislature in 1984, but vetoed by Governor Dukakis. This is the only state to tax investment income at more than twice the rate of wage income, which has always been unfair but is now an even bigger issue. Waters don't get more uncertain than the Social Security system's; since the federal government is spending the Social Security tax on current expenses, the system will be bankrupt for our younger generations, so they must start to save for their own retirement. In Massachusetts, they will be penalized with a 12 percent tax on their old age savings. And this while the state takes more of their current income than necessary to build itself surpluses in a rainy day fund that can be raided when the first cloud appears in the sky.
The cap on that rainy day fund was raised without a public hearing, so please don't think we're buying the excuse that there hasn't been a hearing yet on the tax cuts. Or the excuse that tax cuts don't belong in the outside section of the budget whose bottom line they are attempting to control. Or any excuse. You took the money, you intend to keep it, and the taxpayers can walk the plank.
Just don't think we'll go quietly. As in the past, the initiative petition process will put a bridge for the taxpayers over troubled waters. To paraphrase another political excuse-maker, the future will be that bridge.
s/ Barbara Anderson
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