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CLT&G Update
Tuesday, August 11, 1998

"The Biggest Tax Cut in State History," we now learn, will give us back 15 cents of every dollar of our tax over-payment. The pols get to keep and spend the other 85 cents of our over-payment, and for this we're supposed to be grateful?

"The Biggest Tax Cut in State History" is primarily the result of the Biggest Tax Increase in State History back in 1989-90, when the income tax rate was "temporarily" increased from 5 percent to 5.95 percent.

That billion-dollars-plus of current excess revenue is not a surplus -- a surplus is an unexpected amount left over after careful budgeting for the necessities.

Once the stated purpose for the "temporary" tax increase was satisfied, once the emergency "fiscal crisis" bonds had been paid off, that billion-dollars-plus of additional revenue became the indisputable product of gross over-taxation.

Would we quietly accept it being called a "surplus" if the Bacon Hill Cabal taxed our income at 100 PERCENT, then discovered (to their surprise, of course) that they were sitting on a bigger pile of our money than ever before, more money than even they could pig-out on in one sitting?

Should we then be even more grateful to get back a lousy 15 percent of our entire annual income? That would be an even bigger tax cut, you of course realize!

Chip Ford --

State House News Service
August 10, 1998


SHNS ... AUG. 10, 1998 ... Acting Gov. Paul Cellucci today signed a $200 million tax cut and served notice he will veto $200 million worth of projects lawmakers approved to spend part of last year's budget surplus. He wants that money, plus another $90 million, sent back to taxpayers, but needs legislative approval to do so.

With formal House and Senate sessions ended for the year, lawmakers cannot override Cellucci's vetoes unless they convene in a special session. The acting governor said he will file a bill to give taxpayers another $290 million in one-time tax cuts, speculating lawmakers could approve that added relief during the informal sessions that will continue through the end of the year.

"The one thing they can get through in an informal session, is a tax cut," Cellucci told reporters. During such sessions, any bill's progress is halted if just one single member opposes it.

The money Cellucci intends to veto is in a supplemental budget using $390 million of the fiscal 1998 surplus to pay for projects for which the state would otherwise borrow. Remaining intact, he said, would be $100 million for two year's worth of local road and bridge projects and $30 million needed to assure the state's computer systems are ready for the new millennium.

"Most of the stuff getting vetoed hadn't gone through the capital planning process," Cellucci said, adding "though they may be worthy."

There is $834 million in the rainy day fund now, with another $150 million to be poured into it by way of the supplemental budget Cellucci signed today. That total of $984 million means there is room for another $441 million in excess revenues before a tax cut would be triggered above the $1.425 billion level.

Cellucci said today he had little choice but to sign the proposal raising the ceiling on the rainy day fund since lawmakers put the change in the $700 million tax package. While he can veto individual items in a budget or capital outlay bill, he cannot line-item veto in other bills and would have had to veto the entire tax relief package.

While Cellucci touted the record-breaking tax cuts of the past year, his nemesis and GOP primary foe continued to charge the administration has not sent enough money back to those who pay the bills. . . .


By Trevor Hughes
State House News Service

STATE HOUSE, BOSTON, AUG. 10, 1998 ... Treasurer Joseph Malone said acting Gov. Paul Cellucci's "Hollywood-style" tax-cut signing Monday was a smoke screen to hide the fact that only a tiny part of the state's two-year $2.1 billion surplus is going back to taxpayers.

"When you have $2.1 billion in surplus and only $360 million of it goes back to the people, that means the public sent an extra buck in, and instead of getting the whole dollar back, they get 15 cents back," Malone said. "That's a problem."

Monday afternoon, Cellucci signed a pair of bills bringing the year's tax cuts to $1 billion. One of the bills returned $48 million to domestic insurance companies; the other was a $200 million one-time tax cut funded by the fiscal 1998 surplus.

Cellucci and Malone are vying for the Republican primary victory.

Malone, reiterating one of his campaign's clarion calls, said Monday's tax cuts weren't enough. He said Cellucci should have vetoed an increase in the state's stabilization fund, which is already one of the largest in the country. By increasing the fund's cap, Malone said, lawmakers made it harder to trigger automatic one-time tax cuts.

"That (tax cut) should be more like $1.8 billion. And we should be able to tout the fact that we're keeping the growth of state spending at the rate of inflation," Malone said. "Instead we have out-of-control spending." . . .

The Boston Herald
Tuesday, August 11, 1998

Editorial: Games legislators play

Ah, the life of a legislator is often fraught with difficult decisions. And while most are enjoying the sun, the surf, the sand and oh, yes, the campaign trail, the business of the Legislature continues at the pace one might expect for a hot day in August.

Officially the Massachusetts Legislature ended the bulk of its work July 31. This was intended to be a reform. Post-election feeding frenzies were not a pretty sight and certainly didn't engender respect from voters. So it was determined that sending the troops home would hold those baser instincts in check.

But just in case the passage of certain non-controversial legislation was needed after July 31, legislators would meet "informally" two days a week to tend to that kind of housekeeping.

How much of a "reform" this system turns out to be will depend on whether legislators can live up to its demands.

Under the rules of informal sessions non-controversial means just that. If just one member objects to a bill, it won't be moved.

Last week Rep. James Marzilli (D-Arlington) threatened to hold up passage of a bill aimed at speeding the redevelopment of the South Weymouth Naval Air Station, not because he has anything against the plan, but because he wanted a vote on raising the minimum wage. Marzilli's combination extortion attempt and pout lasted only 24 hours.

A similar game was attempted by Rep. Thomas O'Brien (D-Kingston) over a bill to abolish Hampshire, Essex and Berkshire counties. O'Brien was concerned not about those counties, but about the future of the Plymouth County Registry of Deeds.

Memo to legislators who want to play games in August: Take up beach volleyball.

NOTE: In accordance with Title 17 U.S.C. section 107, this material is distributed without profit or payment to those who have expressed a prior interest in receiving this information for non-profit research and educational purposes only.

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