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
--------------------------------------------------------------------

*** CLT&G Update #1 ***
Monday, July 7, 1997

Greetings activists!

"Eternal vigilance," refreshed from a perfect three-day summer weekend, has begun anew with our statewide announcement this morning of the results of our June membership poll.

(Guess what Barbara and I were doing over the weekend!)

Make sure you read today’s Boston Globe front page story on CLT&G (which follows in a separate post). When you do, and read Senate President Tom Birmingham’s comments, ask yourself: Was the question of "Too much too soon" considered when they jacked up our income tax rate—not once, but *twice*?

And here come all those "unmet needs"—right on schedule.

According to House Speaker Tom Finneran: "I do not think we can afford it," he told the Globe, "ticking off a list of pressing spending needs ranging from education reform to help for mentally retarded people and abused children."

Apparently he forgot all about granting his ten legislative "team players" a cumulative $100,000 pay hike last week— "mentally retarded" and "abused"? Apparently so, according to Mr. Speaker, and who am I to argue?

Chip Ford
Co-chairman


NEWS RELEASE
July 7, 1997

"Rollback the Rate"
CLT&G Members Vote to Keep Income Tax Promise

In a June poll, members of Citizens for Limited Taxation & Government voted overwhelmingly to enforce the Beacon Hill promise to rollback the *"temporary"* income tax rate increase, currently 5.95 percent.

86 percent voted to restore the 5 percent income tax rate;

88 percent favored cutting the rate on savings or both; and 28 percent supported repeal of the legislative payraise or doing both the tax and payraise issues. Members have already voted to oppose the proposed constitutional amendment for automatic legislative payraises, which the Legislature may itself place on the 1998 ballot.

In 1989, during the Dukakis fiscal crisis, the income tax rate was increased from 5 percent to 5.75 percent. Legislators, reluctant to vote for new taxes, extended the rate *for only 18 months* to pay off old debts and a budget deficit. The narrow vote (82-78) in the House clearly showed that a tax increase would not have passed if it were sold as permanent. Even in the Senate (23-15), members made it clear that they were voting only for a *temporary* increase. News stories used "temporary" as the descriptive adjective before "tax hike". However, the next year the rate was increased again, and is presently 5.95 percent.

Legislators made a commitment not as individuals, but as members of an ongoing legislative body. "We teach our children not to lie and always to keep their word; we must expect no less from our elected representatives," said CLT&G co-director Barbara Anderson.

The deficit bonds are fully paid off this fall. The fiscal crisis is far behind us. This year, the state has a huge surplus, a larger-than-anticipated "rainy day" fund, and excellent prospects for the rest of the decade. It is time to restore the 5 percent rate as promised. "Since the legislative leadership has made it clear that it will not do the honorable thing, Massachusetts voters will have to keep the promise for themselves," said CLT&G co-director Chip Ford.

CLT&G will file an initiative petition by the first Wednesday in August. It will propose a rollback of the 5.95 percent rate to the promised 5 percent for the November ‘98 ballot. Not yet determined is by what year the rate will be fully restored, but we hope to begin the new millennium back at the 5 percent rate.

CLT&G members also voted to equalize the rate on savings income, presently the highest in the nation at 12 percent. Responsible citizens who save for their children’s college tuition and their own retirement should no longer be penalized for their thrift. With the capital gains tax already phased out, this tax cut is not a big-ticket item, but it offers large benefits to the economy as the thrifty of all ages are encouraged to work and save here.

We hope the Legislature will enact at least this small tax cut for savers before its recess. But if it doesn’t, we will phase in our rate reductions so they can be absorbed by expected state surpluses. We will not go too far, or too fast, but we will go to where the Legislature promised to return us: back to 5 percent.

· 30 -