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 News Advisory ***
Monday, February 23, 1998
NEWS ADVISORY
February 23, 1998
Contact: Barbara Anderson -(617) 248-0022
RE: CELLUCCI/MALONE (in alphabetical order) AND TAXES
NOBODY ASKED US, BUT...
We are neutral on Republican gubernatorial politics. We support both Governor Cellucci and Treasurer Malone, and it is up to the Republicans, not us, to choose among two fine candidates for nomination in 1998.
But we are not neutral on taxes. And we dislike injustice. What is being done to Joe Malone on our tax issue, by some in the media, is simply wrong.
It doesn’t take a lot of checking to determine that what he has been saying about a tax increase last year is accurate. And by the way, no one from his office or campaign initiated this advisory; they are being very tolerant of our neutrality, even though Joe has done so much for both CLT&G and the taxpayers over the years—as, in our opinion, has Paul Cellucci. We do not agree with the tone of the attack by our former Chairman Edward F. King on the Weld/Cellucci Administration, and we strongly object to the attacks on Joe Malone on this tax issue by whoever makes them.
Here are the facts about the tax increase, for those who care about facts.
The 1986 stabilization fund law required money to be transferred to the tax reduction fund at a certain point, and that money to be returned to the taxpayers with an increase in the personal exemption (the kind of progressive tax cut that Senator Birmingham now supports in place of "A Promise to Keep: 5%", *but which he helped to kill last year*).
Governor Weld and the House and Senate leadership, both Democrat and Republican, decided to increase the amount in the stabilization fund before putting money in the tax reduction fund. This resulted in a much smaller increase in the personal exemption than taxpayers would have received for tax year 1998 and in future years, and therefore an increase in taxes beyond what the previous law would have allowed.
Though there was no public hearing on the stabilization fund change until after the votes, we made it clear with memos and lobbying that we considered it a tax increase -- *what else could it be?*
State House News Service 4/3/97: "The legislation is one section of an $81 million supplemental budget passed by the Senate Thursday. It says the stabilization fund can be set at five percent of all state revenues, not just =91adjusted tax revenue’ as defined in the 1986 law that created the fund. If the change had been in place this year, the fund would have been allowed to grow to about $870 million instead of being capped at $543 million. Anti-tax activists oppose the change because any tax revenue above that that flows into the fund must be returned to the taxpayers in the form of an increased exemption on the next year’s tax form.
"So, people like Barbara Anderson of the Citizens for Limited Taxation and Government argued, the Legislature and governor were stealing a tax hike from the people by increasing the stabilization funds. They also lambasted the lack of a public hearing on the matter and roll calls." [End SHNS]
But with both the Democrat and Republican leadership in collusion, the tax increase passed. There was no debate allowed in the House, despite an attempt by one Republican ("Rep. Gauch said I want everyone to be aware that by changing the cap of the rainy day fund in the supplemental budget we just passed, we are saying that $323 million won’t go back to taxpayers in the form of tax cuts. I think that’s an awful lot of money not to be giving back." State House News Service, 3/25/97) and no roll call. So here they all were, doing the "responsible" thing, increasing the stabilization fund, pleasing the business community, but afraid of a roll call! Rules were suspended and the bill engrossed the same day. What does this secrecy and haste tell you? *It says "tax increase" to us.*
After first attempting to do the issue in an informal session, Senate President Birmingham allowed debate with attempted amendments by Senators Hedlund and Panagiotakos. "Sen. Panagiotakos said this tax matter should get a public hearing. We should make an informed decision. Some say passage of this will improve our bond rating but that is somewhat specious. Some people say a tax cut of $43 doesn’t mean anything, but it does mean something to a lot of people in our districts. It’s never bad to give something back to the taxpayers. (Sen. Panagiotakos was applauded for his maiden speech)" SHNS 4/7/97. But with both the Democrat and Republican leadership in collusion, his amendment failed 6-33, and the tax increase passed.
If you don’t believe me, the State House News Service, or Joe Malone, then please compare your state income tax form with last year’s, and you’ll see it with your own eyes. Thank you.
/s/ Barbara Anderson, Chip Ford, Chip Faulkner
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You can e-mail CLT&G at --> cltg@cltg.org
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