Citizens for Limited Taxation & Government
18 Tremont St., #608 * Boston, MA 02108
Phone: (617) 248-0022 * E-Mail: cltg@cltg.org
* The Commonwealth Activist Network *
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CLT&G Update
March 11, 1997

Today’s update is a two-fer: a taxes vs. tolls issue, and an interesting notation on the media.

Background on the issue: the state is rolling in money, with surpluses piling up, and the Big Dig is going to need money more or less, depending upon how much the Federal government shares the cost of the project.

The rolling-in-money "problem" can be addressed by "our side" in various ways. CLT&G’s favorite solution: an immediate income tax cut, on both wage and so-called "unearned" income. Problem with our solution: the legislature isn’t interested, recalling as it does that the voters rejected an income tax cut on the 1990 ballot and happily assuming that this means we like paying the highest income taxes in the nation.

Gov. Weld’s solutions: please the bond rating agencies by increasing the state "rainy day" fund, and paying off the unfunded pension liability in 20 years instead of the presently-planned 30 years. CLT&G opposes the first bill because we see it as a tax increase: present law sets the rainy day fund at a certain level, and any amount beyond that triggers an increase in the personal exemption and hence a one-time tax cut (note this cut on your 1996 state tax form, item a).

The second item is a good idea under normal circumstances, until you take into account the Big Dig and the proposed toll increases to help pay for it.

Treasurer Joe Malone’s solution: keep to the present 30 year schedule on the unfunded pension liability, which has dropped from $14 billion when Weld and Malone took office to between $6-7 billion at present, and use the difference in state funding of the liability to pay for the Big Dig. This would mean less state borrowing for the Dig, and eradicate the need for new tolls. The point: while it is normally a good idea to pay off debt quickly, it would not be wise to pay off your mortgage is your roof was about to collapse and your boiler needed replacing.

Now for the media: if you get both the Globe and the Herald, note the difference in coverage today. The Globe puts "Malone offers Big Dig plan, use of fund would mean no toll hikes" on page 1 of the Metro section, and gives a fair account of the issue. The Herald, on page 12, says "Malone floats new proposal to sink Big Dig toll hikes", but then the reporter Laura Brown writes: "Malone’s Big Dig financing scheme, which involves an adjustment in payments to the state pension fund, would shift the burden for the state’s share of the $10.4 billion project from drivers to taxpayers." Casual readers may be confused.

The bottom line is this: we must keep the money from those on Beacon Hill who would spend it to increase the size of government. Both Weld and Malone are trying to do this: we think the better plan prevents a toll increase that adds to government’s total revenues.

Barbara Anderson