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 ***
Sunday, March 29, 1998

Greetings activists and supporters;

I’ve gotten a bit behind with these updates, but tomorrow is the deadline for us to turn in to the court our defense of the signatures the teachers union is attempting to get thrown out.

We’ve been struggling literally around the clock to complete the task of verifying each of some 1,000 signatures that the teachers are trying to get knocked out; I had to pull an all-nighter Friday in order to complete the task and print out our report early yesterday morning so that our attorney, Steve Epstein, can spend the rest of his weekend in preparation.

Last week we were provided a final list of 990 signatures they are still challenging. We were able to establish that at least 713 of those are of registered voters, and Steve’s now working to find more based on copies of voter registration cards he has procured from city and town clerks.

Still ahead is our challenge of some 2,000 signatures that the clerks failed to certify that we’ve found to be of registered voters according to the Secretary of State’s Central Voter Registry database.

I’ll keep you posted as this court battle continues, but we still expect to be on the ballot in November—and Steve’s now talking about seeking damages against the teachers union when we prevail!

In yesterday’s Boston Globe (below), Globe state house reporter Geeta Anand has taken the time to understand then report on the difference between a "budget surplus" and a "revenue surplus." Leaving the election year politics aside, it’s important that the difference be understood in light of the debate and ballot campaign ahead, because I’m sure both terms will be casually tossed around.

In today’s Boston Sunday Globe, she reports: "Study backs Cellucci tax cut proposal; Think tank cites impact on economy." It is based upon a report to be released later this week by Suffolk University’s Beacon Hill Institute.

There’s a wealth of information available on the Institute’s web-page that supports our initiative and Gov. Cellucci’s parallel plan to "keep the promise" and roll back the income tax rate to 5 percent. I expect we’ll see this new report there as soon as it’s released later this week. We have provided a
link to it on our homepage at: http://cltg.org
Chip Ford—
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The Boston Globe
Saturday, March 28, 1998

On budget, a surplus of opinions
Cellucci, Malone differ on amount of windfall
By Geeta Anand
Globe Staff

Calculating the state’s budget surplus should be about as simple as figuring out one’s household finances. Subtract the expenses from the income, and what’s left over is a surplus.

But it is not that simple in an election year. With tax revenues overflowing the state’s coffers and expenses lower than expected, Acting Governor Paul Cellucci and State Treasurer Joseph D. Malone, who are both running for governor, are miles apart on how much they believe the state will have after it tallies its books.

Actually, they are a whopping $650 million apart.

The reason lies in the tricky politics of budgetary accounting on Beacon Hill and exactly how the two candidates define a surplus.

And as the Legislature ponders what to do with the state’s fat surplus this spring - save it, spend it, or return it to taxpayers - how the candidates define the word will form the baseline for all debate on the issue.

Malone says the surplus is the difference between actual revenues the state brings in this year, projected at $19.1 billion, versus money spent on things originally budgeted, expected to be $18.3 billion. That leaves a surplus of about $800 million, which if applied to tax cuts could save a single filer in the Bay State $207, the treasurer calculates.

But the Cellucci administration defines a surplus as what remains after the governor spends an extra $350 million on roads, staff for the state’s new prison, computer upgrades and budget shortfalls, as well as another $350 million for the rainy day fund, capital projects, and transfers to next year’s budget.

Cellucci says he will put every dollar of his surplus into tax cuts. But under his pared-down definition, there will be just $150 million available for taxpayers this year, an amount that would save an average single filer $39 this year. A couple with two children and earning $60,000 would save $61, according to the Massachusetts Taxpayers Foundation.

The debate over what constitutes a surplus has supporters on both sides and some standing in the middle.

Edward F. King, founder of the state’s leading tax-cut group, Citizens for Limited Taxation and Government, says Cellucci’s position is disingenous.

"In household terms, it’s like a husband getting a $1,000 bonus, which reasonable people would say is his surplus, and stopping on the way home to spend $500 on hunting gear. Then when he gets home he tells his wife we have a $500 surplus. In my opinion that’s unfair. That $1,000 should have been brought home for discussion," says King, the GOP gubernatorial nominee in 1978 who supports Malone for governor.

But Richard Voke, a Charlestown Democrat and former chairman of the House Ways and Means Committee, sides with Cellucci - at least technically speaking. "If you spend it, you’ve chosen to head off the surplus at the pass, which is a value judgment, rightly or wrongly. If you freely spend that money, that’s no longer a surplus," Voke said.

Cellucci, when pressed on the question, is less than straightforward. He stops short of saying he is choosing to spend some of the surplus, and indeed, says quite the opposite.

"I would apply all of [the surplus] to my income tax relief," he said during a press conference. "I don’t intend to spend the surplus. I intend to cut taxes."

A few days later, Cellucci said he will return as much of the surplus as he can under state law.

"Once we’ve fulfilled our statutory obligations, I think all of the surplus should be returned to taxpayers," he said this week.

But a Globe review of state law shows that the Legislature and governor, acting together, can put any amount of money they want back into taxpayers’ hands. Indeed, it was at the insistence of the Weld-Cellucci administration in 1996 that the Legislature directly transferred $150 million into a tax relief account, giving single state residents a $40 refund and families $80 back that year, according to the taxpayers foundation.

"Yes, Cellucci could say, ‘I’m going to get approval from the Legislature and put most of that money into tax relief,’" says Michael Widmer, president of the taxpayers foundation.

But Widmer doesn’t advocate doing that because the state clearly has some pressing capital needs he believes should be addressed first. He supports Cellucci’s plan to send just $150 million back to taxpayers, but he does not attempt to portray this amount as the entire surplus.

In Widmer’s version of the budgetary world, the actual surplus is somewhere between Cellucci’s and Malone’s interpretations. He puts it at $560 million, after first subtracting his estimate of supplementary budget needs for the computer upgrade, prison staff, some road projects, and shortfalls in some accounts at $200 million.

Widmer supports a plan similar to Cellucci’s: put $190 million into capital projects, $125 million more in the rainy day fund, and transfer $90 million to next year’s budget, leaving $155 million for a tax cut.

Earlier this week, Cellucci sent his $150 million tax cut proposal to the Legislature, but the House and Senate have not taken it up.

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