CITIZENS
for
Limited Taxation & Government
Post Office Box 408    Peabody, Massachusetts   01960     (617) 248-0022
E-Mail:  cltg@cltg.org       Web-page:  http://cltg.org

CLT&G Update
Wednesday, August 12, 1998

This quiet summer news day is a good time to look at just where we taxpayers stand now that the dust's more or less settled. Call it "summer reading."

Our tax over-payments are still pouring in, faster than even last year. But the Bacon Hill Cabal has insured itself that there is plenty of slack room in the expanded "Slushy-Day Fund" to bury the plunder. And if it appears that their personal piggy-bank still might overflow, hey, the pols will just move the goal post again, perhaps to two billion of our dollars next time.

And lest we forget, there's a very good reason why "The Best Legislature Money Can Buy" hasn't officially ended its session, prorogued and gone home for the year like almost every other state legislature in the country: M-O-N-E-Y of course!

MORE TAXPAYER OVER-PAYMENT AHEAD

State House News Service
ADVANCES - August 7, 1998

PROSPECTS . . . The debate over how to spend excess dollars could be replayed next year at this time if last month's revenue numbers hold true throughout the fiscal year. Last week, the Department of Revenue reported that July's revenues were up 12.1 percent over July of last year. The first month of fiscal 1999 showed the state had collected $96.4 million more in taxes than it did in July of 1997. If revenues continue to grow beyond expectations, state leaders at this time next year may again have the enviable problem of deciding how to spend another huge surplus.

SLUSHY-DAY FUND LEVEL

State House News Service
August 10, 1998

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.

WHY "THE BEST LEGISLATURE MONEY CAN BUY"
IS STILL IN "INFORMAL" SESSION

One of our member-activists and candidate for State Rep in the 12th Middlesex District (Newton), Richard N. Freedman, asked:

"Our legislature became a 'full-time legislature,' as CLT&G used to point out, when federal tax laws provided a benefit to legislators, a commuting deduction, for days when the legislature is in session. Does that deduction still apply to 'informal' sessions?"

The clearest way to answer this is to repost the following 1995 Associated Press report.

Chip Ford --

Legislators Keep Parley Going, Money Coming
by Glen Johnson, Associated Press
November 17, 1995

BOSTON - Members of the House and Senate bickered up to midnight yesterday about whether to formally or informally end their legislative year, but it was more than a question of semantics.

It was, in part, a matter of money. If the Legislature formally ended its session, called "proroguing," legislators who live more than 50 miles from the Statehouse would have been ineligible for a special tax break they receive from the federal government.

During the recent trial of Sen. Henri Rauschenbach, R-Brewster, he acknowledged using the write-off to eliminate his federal tax bill in 1991.

Also, if the House and Senate had prorogued, all 200 members of the Legislature would have had a much harder time justifying a daily expense allowance they receive. It pays them $5 to $50 each day they travel to the Statehouse.

Both perks are in addition to the $46,410 base salary legislators receive each year.

In the end, House Speaker Charles Flaherty wanted to adjourn but Senate President William Bulger did not, so the Legislature did not prorogue. Both the House and Senate can continue to meet informally -- and legislators can continue qualifying for their tax break and expense allowance.

In order to formally end a legislative session both the House and Senate have to pass a bill saying they have finished their business, and then they must present that bill to the governor for his acceptance. It is something that has been done only once in the past 15 years.

The specter of proroguing was raised this year because the Legislature was using new rules requiring it to end formal deliberative sessions at midnight Nov. 15. Flaherty suggested that proroguing to make the point that the House and Senate had adhered to their new rules.

Doing so would have prevented all legislative activity until the first Wednesday in January, the traditional start of the new legislative year.

Proroguing was commonplace until 1981; that was the year the federal government modified a tax break applying to state legislators across the country.

On Jan. 1, 1976, Congress instituted a tax change that allowed state legislators to write-off a portion of their income, supposedly to cover meals, lodging and incidental expenses incurred while performing their jobs.

The write-off was renewed annually until 1981, when it was made permanent by the Economic Recovery Act of 1981. At the same time, the write-off was limited to only those legislators living more than 50 miles from their state capitol building.

The deduction allows legislators to write-off the higher of the two amounts: the per diem rate their state pays its employees for meals, lodging and incidental expenses when they take a business trip, or the federal government's rate for its employees.

In Massachusetts, the federal rate prevails - $139.00 per day.

While the law ostensibly was created to cover travel expenses, it applies to any day a legislature is in session, including weekends and days when neither the House nor the Senate meets formally.

Legislators do not have to submit receipts to justify the write-off.

The write-off also is in effect during recesses up to four days long.

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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