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 #2 ***
Monday, July 7, 1997

The Boston Globe
Monday, July 7, 1997
Page One

CLT returns to center stage in fight for income-tax cut

By Scot Lehigh
Globe Staff

Barbara Anderson is fuming.

"Look at them," she sputters, gesturing at a pile of newspaper stories on her desk. "Every one says it’s temporary."

The clippings concern the income-tax hikes of 1989 and 1990, enacted to help the state survive the most recent deep recession.

Anderson’s anger today is with those like House Speaker Thomas M. Finneran, who now dispute that the tax increases were meant as a temporary remedy, to be repealed once the fiscal crisis was over.

Gluestick in hand, scissors at the ready, Anderson, co-director of Citizens for Limited Taxation & Government, is making a collage of news stories to prove her point.

But if she has her way, voters will have the final say.

After the better part of a decade doing frustrating and sometimes futile battle trying to limit terms and cut legislative pay, Anderson and her group are returning to what they do best: putting tax cuts on the state ballot.

Weary of trying to storm the castle, they will try divert its water supply by rolling back the "temporary" income tax hike.

If all goes as planned, in early fall her group will begin collecting the 75,000 signatures of registered voters needed to put the tax-rollback question on the November 1998 ballot. "It’s time that state government keeps its word - and we’re going to help it do that," she said.

It is a campaign that will test whether her organization can recapture the heady days of the 1980s, when Anderson was a force to be feared on Beacon Hill and a voice to be heard on WRKO. It was a time when the threat of a CLT referendum proved a more effective check on the Legislature’s Democratic majority than the state’s rag-tag Republican forces.

Anderson is still polling her members, but her plan is to ask voters to cut the state income tax from 5.95 to 5 percent, a reduction that would cost the state about $1 billion a year.

She may also propose reducing the tax on unearned income from 12 percent to 5 percent, which would cost another $350 million per year. If voters do both, Anderson says, the cuts will have be phased in over several years.

CLT scored its hallmark victory in 1980 with the property-tax-limiting Proposition 2 ½. Six years later, another CLT ballot question pushed legislative leaders to repeal the Dukakis income surtax—imposed in November 1975 -- and sought to put an overall limit on tax receipts.

But then CLT overstepped. In 1990, voters roundly rejected a CLT ballot question proposing a $2 billion tax rollback. Since then, Anderson and her organization have drifted off center stage.

To an extent, they have been the victims of their own ideological success: With Republican William F. Weld, a defender of Proposition 2 ½ and a confirmed tax-cutter, in the corner office, Anderson has been supplanted as the state’s highest-profile advocate of tax cuts.

But this is also a story about a shift in strategy that led CLT to expend its energies on unproductive battles.

First, Anderson and CLT joined in the effort to put a term-limits question on the state ballot in 1994. Although that question squeaked by, 47 percent to 44 percent, careful legal observers expect the Massachusetts Supreme Judicial Court to soon rule the law unconstitutional.

Next, CLT signed on to the effort to repeal the pay raise that Weld and legislative leaders rammed through in the lame-duck 1994 session. After months of back-and-forth between the executive and judicial branches—which Anderson insists was tantamount to the court system protecting the Legislature -- the question was kept from the 1996 ballot.

Term limits and the pay repeal are issues that Chip Ford, an anti-government activist with whom Anderson has ideological and personal ties, has also worked hard on. Indeed, last November, Anderson and Ford merged their two organizations to form Citizens for Limited Taxation & Government.

But though those issues reflected a joint interest of the two activists, that change of focus had the effect of diminishing CLT’s clout.

"There clearly was an outcry against the pay raise, but it is tough for the public to sustain their anger over time," said Michael Widmer, president of the Massachusetts Taxpayers Foundation. "And on term limits, there is really a mixed opinion. It is not a clear-cut issue."

Anderson rejects the notion that CLT wandered off-course in the 1990s, noting that her group did a pay-raise repeal and tried legislative reform in the 1980s as well. One reason CLT didn’t try another tax-cut question in the 1990s, she says, is that it had to mobilize against the progressive-income-tax proposal progressives put on the November 1994 ballot.

Still, she concedes that the prospect of a judicial overturning of the term-limits law and the tortuous struggle to put the pay-raise-repeal question on the 1996 ballot—a fight she and her allies eventually lost—have taught her a valuable lesson: It’s hard to battle Beacon Hill by taking direct aim at the perks and prerogatives of the powers that be.

"Your chances of getting through all of those elements are slim to nonexistent," she said. "We decided we had better do a petition that isn’t going to have any challenge to it at all, because they’ll use any excuse they can."

For his part, Secretary of State William Galvin scoffs at the notion that there was any conspiracy to keep the pay-repeal question off the ballot.

"That is ridiculous," Galvin said. "The attorney general used his best judgment; I used my best judgment."

Anderson admits she worried Ford might not want to shift the emphasis from repealing the pay raise—one of his pet issues—to cutting taxes. "But he was the one who first suggested that maybe we should be looking at this window of opportunity on the income tax," she said.

This is, she believes, a opportune moment for the income-tax rollback. The deficit bonds financed by the "temporary" tax will be paid off this fall. The money lost to the tax cut would thus be substantially offset, she says, by the end of payments on the bonds. Tapping the state’s rainy-day fund and using the budget surplus would fund the rest of the tax cut, she says.

"If we wait, they’ll take the money they have been spending on the deficit bonds and earmark it for handicapped puppies so we’ll never be able to get it," she said. "Right now, we don’t have to cut anything."

Other fiscal experts say it’s not quite that easy. For example, the estimated $1 billion the income-tax repeal would return to taxpayers far outstrips the $265 million that has been devoted annually to paying off deficit bonds the last six years.

Weld has proposed smaller income-tax cuts in the past, but legislative leaders managed to fend them off, while endorsing a variety of other cuts. The leadership has made it clear they have little interest in such a large rollback.

"Too much too soon" has been the reaction of Senate President Thomas Birmingham, who, says aide Alison Franklin, prefers that any tax cuts be targeted to those in need.

"I do not think we can afford it," said Finneran, ticking off a list of pressing spending needs ranging from education reform to help for mentally retarded people and abused children. "It is not just revenues, it is expenditures."

Few doubt that CLT has the organizational muscle to gather the signatures necessary to put its proposed tax cuts on the ballot. But opinion is mixed about whether a large tax cut will succeed in a state where defenders of state government have learned to fight back.

"I just don’t think that the atmosphere is what it was when, for example, we had the highest property taxes in the nation," said Richard Manley, a senior fellow at the University of Massachusetts’ McCormack Institute.

Others say success may well depend on whether CLT can resist the urge to overreach, to try to cut too much too fast. That mistake ultimately helped sink Anderson’s massive 1990 tax-cut question. Opponents convinced voters that, however angry they may be about the state’s fiscal troubles, CLT’s tax cut would be ruinous to state government.

"As our bumper sticker said, Question 3 simply went too far," said Jim Braude, ex-director of the Tax Equity Alliance for Massachusetts. "In 1998, if Barbara overreaches again, the result will be the same."

But some fiscal experts say that, if phased in over a number of years, the ballot question could succeed with voters in a way Weld has not with legislators.

"If the thing comes all in one bite, it would be enormously difficult to be credible," said Charles Baker, state secretary of administration and finance. "But if they pursue something that, over some manageable period of time, moves the tax rate back to its original 5 percent, I think that would have a lot of popular appeal."

Copyright 1997 Globe Newspaper Company.

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