A PROMISE TO KEEP: 5%
A Ballot Committee of
Citizens for Limited Taxation & Government
PO Box 408 * Peabody, MA 01960
Phone:(617) 248-0022 * E-Mail: cltg@cltg.org
Visit our web-page at: http://cltg.org
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*** Promise Update ***
Wednesday, March 11, 1998

Greetings activists and supporters:

The obfuscation and political "gorilla dust," as Ross Perot used to call it, has begun in an apparently concerted effort to confuse the simple issue of keeping a promise. As you saw in Monday’s letter from Senate President Tom Birmingham to the CLT&G staff, finally following the lead of House Speaker Tom "Imperious Maximus" Finneran’s position all along, the Beacon Hill Cabal has assumed the Clinton position: Just keep denying the obvious and hope nobody’s paying attention.

All of this suddenly frenzied activity tells me that the Beacon Hill Cabal has come to recognize among themselves that our initiative petition has a better-than-likely chance to get on the ballot after all, despite their best efforts to derail it. So they must quickly lay the groundwork for their campaign to defeat it in November.

But indeed what strange bedfellows politics sometimes makes!

Did you ever imagine that tax-and-spend Michael Dukakis would stand up for the promise "that all tax hikes were meant to be temporary, to be cut as soon as good times permitted"? And that House Ways and Means Committee Chairman when the promise was made, Richard Voke, would too? (Of course, "Duke" stops short of agreeing that the taxes should be rolled back, so he’s not wandering too far out of character or off the more-is-never-enough reservation!)

By the way, it was then-Chairman Voke who told then-Gov. Dukakis: "Governor, you are not getting permanent new taxes out of this House. Do you get it?" (The Middlesex News, July 9, 1989)

Chip Ford—
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The Boston Globe
Wednesday, March 11, 1998
Bay State tax-cut vow is hard to track down
By Geeta Anand, Globe Staff

When the Massachusetts House begins debate today on a $500 million tax cut, a curious whodunit, or perhaps who-didn’t-do-it, is likely to grab center stage.

The mystery is over whether lawmakers actually promised in 1990 that an income-tax hike would be temporary - and tax rates would be rolled back once the economy recovered.

Acting Governor Paul Cellucci says he recalls the promise quite well. At the State House and on the campaign trail, Cellucci has dismissed House and Senate tax-cutting plans in favor of his own, which he says lives up to the Legislature’s vow to cut the income-tax rate from 5.95 percent to 5 percent.

But the $1.2 billion promise Cellucci insists he is keeping is proving difficult to find. Not only is it absent from the text of tax law at the time, it can’t be found in news accounts of the day.

Cellucci has some witnesses, albeit from some unusual corners. Two leading Democrats, former governor Michael S. Dukakis and former House Ways and Means chairman Richard A. Voke, say Cellucci’s recollecton is correct.

"I thought it was written into the law," Voke said. "But even if it isn’t, I know it was our intention to cut back the tax rate when times got good. It was never intended to stay at 5.95 percent."

The confusion has created some unusual political alliances as the debate on what was promised becomes pivotal in Boomtime 1998. Further confounding the issue, the state’s leading tax opponent, Barbara Anderson of Citizens for Limited Taxation and Government, says Cellucci is wrong and no such pledge was made in 1990, inadvertently allying herself with the present Democratic leadership whose tax initiatives she considers misguided.

But Anderson says there is nevertheless a broken promise to rally around: She wants to put a referendum question on the ballot asking voters to hold the Legislature to a pledge it made a year earlier, in 1989, to lower the income tax rate to 5 percent within 18 months.

There is no dispute that this promise was made. And there is no disagreement that it was broken months later when legislators found that the economy had worsened and the state faced a huge deficit. That year, after contentious debate, lawmakers decided to go back on the 1989 pledge and instead raise the income-tax rate still higher: to 6.25 percent - writing into the law that this rate would fall back to 5.95 percent in 1992.

Senate President Thomas F. Birmingham, who was not in office in 1989, says he would try to abide by such a promise if there was one. But he says any pledge made in 1989 was broken the next year, and it is preposterous for Cellucci to suddenly hold it up for fulfillment eight years later.

"In 1990, the circumstances didn’t allow the promise to be kept," he said. "Members took a very different vote in an election year, withdrawing the temporary nature of the tax increase."

Besides, says Birmingham, the legislative process is an evolutionary one and legislators have the right to change their minds and pass new laws as they gain new information.

Anderson disagrees, comparing the tax increases in 1989 and 1990 to criminal offenses. This week and last, she and Birmingham exchanged tough-talking letters arguing over the existence of the promise.

"Just because they committed a second offense doesn’t mean they don’t have to pay restitution on the first offense," she said.

Cellucci, however, argues passionately and at every opportunity that the 1990 Legislature intended to reduce the tax rate to 5 percent at a later date, even though this was not written into law.

"I was there and Senate President Birmingham wasn’t," Cellucci said.

"I don’t understand why Speaker Finneran and Senate President Birmingham can’t keep the promise that was made by the Democratic leaders in this State House in 1990, that this would be a temporary tax increase," he said.

Yet, the State House News Service and Senate Journal accounts of the legislative process that year paint a murkier picture. Those records show that Cellucci and eight senators tried to pass an amendment sunsetting the 1990 tax increase to 4 percent by 1995 and failed.

"In my mind, that shows that they tried to make the tax hike temporary and they failed and they knew it," Birmingham said.

But neither Dukakis nor Voke remembers any of the specific votes. Both men say their memory is that all tax hikes were meant to be temporary, to be cut as soon as good times permitted. And certainly these times are as good as it gets.

And yet, Dukakis today stops short of demanding an immediate repeal of the income-tax hike. The reason, he says, is the Weld-Cellucci administration encouraged and approved $1.1 billion in tax cuts over the past eight years, many of them to businesses, making the affordability of another $1.2 billion tax reduction questionable.

"Those tax cuts have overwhelmingly benefitted special interests and the wealthy," Dukakis said. "To Barbara Anderson or anyone else who calls for that tax cut, I ask, ‘Where were you when all of these special-interest tax breaks were being voted?’"
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The Boston Globe
Wednesday, March 11, 1998
Lead editorial: A good tax plan for Massachusetts

House Speaker Thomas Finneran has made a sensible proposal for tax cuts the public expects and budget surpluses justify. The House can accept his package today as a good start on what should become a broader debate in coming weeks.

The Mattapan Democrat’s proposals have several important virtues. They are directed primarily at middle- and lower-income families. They simplify the tax system. They improve the state’s tax rate competitiveness with similar states. They fit the context of the state’s continuing urgent need to invest in capital projects, most prominently the Big Dig, but across the Commonwealth as well.

Middle- and lower-income households would benefit from increases in deductions for children up to age 18 and for dependent senior citizens.

The House plan adopts a 5.7 percent flat rate for all classes of income except short-term capital gains, which would still get a reduction from the current 12 percent rate. Critics may complain about losing a promised reduction in long-term capital gains taxes, but assets held for more than six years are presently taxed at 4 percent, a rate that would be increased by only 1.7 percent.

The new 5.7 rate would place Massachusetts toward the middle of all states that collect income taxes, though the state, wisely, would continue to rely more heavily on the income tax than the less progressive sales tax.

The price tag would begin with a modest $200 million overall revenue reduction in the first year and rise to $500 million after the year 2000. A tax cut on this scale is realistic in the light of competing social needs and potential future economic downturns without relying on various so-called triggering mechanisms that in themselves are arbitrary and perhaps inappropriate if there are unfavorable shifts in the state’s economy.

The reductions would also be modest enough to pass in Washington, where the long knives are out, targeting the highly visible Central Artery project.

The House, in taking up this reasonable tax package, would do the public a good service by accepting its broad principles.

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You can e-mail A Promise to Keep: 5% at --> cltg@cltg.org
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