A PROMISE TO KEEP: 5%
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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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*** CLT&G Update ***
Sunday, March 1, 1998
The Patriot Ledger
Saturday, February 28, 1998
State’s secret tax increase shows face on forms
By Barbara Anderson
If I were a Republican and had to decide between, in alphabetical order, Paul Cellucci and Joe Malone, I would flip a coin.
There is no way I could choose between two good friends of the taxpayers. So I avoided thinking about the Republican primary until this week, when Malone aired an ad accusing Cellucci of supporting a secret tax hike last year. Cellucci supporters Bill Weld and the House and Senate Minority leaders, Dave Peters and Brian Lees, wrote a letter stating that there was no tax hike and accusing Malone of a "complete fabrication."
I don’t know if Cellucci was involved in a secret tax hike last year or not. I do know that Weld, Peters and Lees were, and I don’t like their implication that Malone is lying.
So here are the facts about the tax increase, for those individuals who are presently doing their state taxes and wondering why they are paying more this year.
The 1986 stabilization "rainy day" fund law said that when the fund equaled 5 percent of state tax revenues, additional surplus money would be transferred to a tax reduction fund and returned to the taxpayers with an increase in the personal exemption. For the next nine years, there wasn’t enough surplus to transfer, but in 1996 the fund overflowed and we all got an increase in our personal exemption on the 1996 tax form.
The next year, the stabilization fund was still full and lots of money was heading for the tax reduction fund. So Weld and the House and Senate leadership decided to change the law and increase the amount allowed in the stabilization fund before money had to be transferred. This resulted in a smaller increase in the personal exemption than taxpayers would have received for tax year 1997 and future years, and therefore an increase in taxes beyond what the previous law would have allowed.
Citizens for Limited Taxation and Government objected to the tax increase, but before the public hearing, the Legislature passed it. Speaker Tom Finneran attached the change to a supplemental budget and rushed it through the House on a voice vote, with one Republican, Ron Gauch of Shrewsbury, objecting, and no request for a roll call from any House member.
Then it passed the Senate on a voice vote in an informal session. One Republican, Bob Hedlund of Weymouth, demanded a proper debate. One Democrat, Steve Panagiotakos of Lowell, tried to remove the tax increase language. Another Republican, Bruce Tarr of Gloucester, requested a roll call. So we know that these three, plus three other Republicans—Amorello of Worcester, Knapick of Westfield, and Tisei of Wakefield— opposed the tax increase. When you pay it this year, you can blame everyone but them and Joe Malone, who, like you, didn’t know it was happening because, as he said, it was a secret.
Joe found out and is telling you now. But if you don’t want to take his or my word for it, just compare your state income tax form with last year’s and you’ll see it for yourself.
Now, maybe you don’t care. After all, isn’t a stabilization fund a good idea? It can be; but a genuine rainy day fund doesn’t allow access until a recession forces state revenues to drop. This one can be raided before the first little cloud appears in the sky.
Another thing. Senate President Tom Birmingham wants to substitute a more "progressive" tax cut, an increase in the personal exemption, for a reduction in the income tax rate that is heading for the 1998 ballot. But just last year, he helped decrease that same personal exemption. So are we to accept his sincerity on the proposed substitution? We might have, if the secret hadn’t been revealed.
Last year, Republicans told me they had to make a deal on the stabilization fund to get anything at all,
because the money in the tax reduction fund needs to be appropriated into the actual tax cut. We can
debate why they didn’t just fight for the entire amount and let the Democrats explain their refusal to
support a progressive tax cut when the surplus surpassed a billion dollars. They can tell us why, if the
deal was such a great idea, it had to be done quickly and quietly. But they can’t tell us Joe Malone is
making up the secret tax increase, because he’s not.
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Barbara Anderson is co-director of Citizens for Limited Taxation and Government. (Her column
appears b-weekly in The Patriot Ledger and is often syndicated elsewhere.)
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You can e-mail CLT&G at --> cltg@cltg.org
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