Citizens for Limited Taxation & Government
"The Commonwealth Activist Network"
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 Update ***
Wednesday, June 11, 1997

Date: 97-06-11 02:08:42 EDT
From: State House News Service
To: SHNS Subscribers

PAY RAISE REPEAL MAY GIVE WAY TO INCOME TAX CUT ON ‘98 BALLOT
By Jonathan Tapper
STATE HOUSE NEWS SERVICE

STATE HOUSE, BOSTON, JUNE 10, 1997....The leader of last year’s unsuccessful movement to cut legislative pay is leaning towards giving up that fight and concentrating on a referendum to cut the income tax.

Robert "Chip" Ford headed the Coalition for Payraise Repeal last year until the Supreme Judicial Court ruled that the ballot question was unconstitutional.

Instead of trying again next year, however, Ford said today he is hoping his group, which merged with Citizens for Limited Taxation last year, votes to focus its attention in 1998 on trimming the state income tax back to 5 percent.

"It’s futile to go after the pay raise," Ford said.

He’ll soon learn if his membership agrees with him. Citizens for Limited Taxation & Government today sent out letters to its 10,000 members, asking them which ballot question they would prefer to do. Trying to do both, he said, is impossible given the resources.

CLT&G’s brass, while willing to do what their members want, are hoping the choice is the income tax.

"That’s been my preference for a while," said Barbara Anderson, CLT&G’s executive [co-]director. "I thought it was going to be hard to convince Chip, but he has come to understand that there are some things you can’t do."

The outrage that followed lawmakers’ decision in December 1994 to raise their own pay 55 percent drove the formation of Ford’s group. He pledged to repeal the increase, and the initiative petition CPR drafted also encouraged a part-time Legislature by refusing to pay lawmakers after June 30.

But the referendum, which was initially approved by the attorney general’s office, also called for the Legislature and the Department of Veterans’ Services to open their books to the inspector general’s office. The SJC ruled in April 1996 that the introduction of "unrelated" subjects in a ballot question violates the constitution.

"I lost all faith in the court after watching that whole thing last year," Ford said. "The courts are in the bag, too."

Instead, Ford and Anderson have decided the time is right to reduce the state income tax from 5.95 percent to its pre-recession level: 5 percent. Both mentioned a limited "window of opportunity" to do it next year since the bonds that were issued to bail the state out of its multi-billion dollar deficit will be paid off then.

"There’s no excuse for keeping the income tax rate higher than 5 percent," Anderson said. "When those bonds are paid off, we should have a mortgage-burning party."

If lawmakers are allowed to spend the money that had been earmarked for the bonds, Ford said, it will be difficult to take it away from them.

"If they’re allowed to commit these funds, it will be far more difficult to cut spending in the future," he said.

The income tax rate increased to 5.75 percent in 1989, when the state felt the first tremors of the fiscal crisis, and was bumped up again the next year, to 6.25 percent. The latter hike contained a provision reducing it to 5.95 percent in 1992.

Anderson’s only loss at the ballot box came in 1990, when she steered the Question 3 drive to roll back the tax increases. She has been preparing the second attempt since that defeat, she said.

"I started planning right after we didn’t win in 1990," she said. "At this point, no one can say it goes too far."

Since the tax cut would cost the state $900 million, she said she would consider phasing it down over a period of years. Anderson added she would like to start the new century with a 5 percent income tax.

But regardless of how many years it is phased in, losing $900 million will be too big a hit for the state to take, said Jim St. George, the executive director of the Tax Equity Alliance of Massachusetts.

"It’s just simply unaffordable," St. George said. "Economically, it doesn’t matter. You can phase in the pain, it’s like taking a Band-Aid off slowly. It doesn’t change the fact that $900 million is unaffordable."

He said the state has put off paying other bonds while repaying the fiscal recovery notes. Any excess money, he said, will have to be committed to the Central Artery project, which is entering its most expensive phase at a time when the federal government is expected to curb its aid to the Bay State.

Anderson did not agree.

"It’s always the same argument and always the same people," Anderson said. "It’s people who don’t grasp the basic concept that it’s our money. If it were up to them, they would take it all and give us an allowance."

But St. George said a tax-cutting ballot drive may form an unlikely alliance - TEAM and big business.

"You might see a significantly broader constituency," he said. "The business community will look at this and they’ll say, `Wait a minute.’ If the income tax goes down, the first thing that will be looked at for revenue is corporate taxes."