Limited Taxation
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CLT Update
Thursday, January 7, 1999

If you find that complacency has set in regarding our tax burden, the broken promise to return it to 5 percent, and the whopping revenue surpluses that keep pouring in, consider the following.

If you think that apathy can be afforded, that things are going too well for worry or concern, that the cry to fill "unmet needs" has a certain appeal, consider the following.

If you don't find it utterly and absolutely outrageous that we're pumping so much of our financial lifeblood into state government, so much more than even the pols and bureaucrats can creatively find an arguable use for, consider the following:

It took 207 years from when the Massachusetts Constitution was ratified in 1780 to reach a $10 billion budget in 1987.

It has taken only a dozen years more to double it to $20 billion!

And still the Gimme Lobby cries out for more and ever more of our hard-earned money for their still "unmet needs."

Think about it.

Chip Ford --

The Lawrence Eagle Tribune
Wednesday, January 6, 1999

Remember, it's our money


Leaders of the Massachusetts Legislature

are worried about how to spend
all the money gushing into state coffers.


Give it back to taxpayers, who could use it.

Only on Beacon Hill would a massive surplus of cash from the taxpayers be deemed a crisis.

But that's the case. Tax collections since last July have soared way above projections. Income is more than double what it was for the same period last year, when the state rolled up a $900 million budget surplus.

The powerful politicians who control the Legislature are deeply worried about finding ways to spend that money and expand government quickly enough so that the cash will not have to revert to the taxpayers.

They are laughing at Gov. A Paul Cellucci's proposal to roll back the state income tax from 5.95 percent to 5 percent. Their mantra is: We need to spend on government now, because good times won't last forever.

Here are a few points they -- and we voters -- should remember:

The hike in income taxes from 5 percent to 5.95 percent was supposed to be a temporary measure to get Massachusetts government through its self-induced fiscal crisis of the late 1980s. Lawmakers promised the "temporary" hike would be rolled back as soon as the crunch was over. They are now hoping we forget.

Massachusetts got in trouble the last time because it spent madly as the economy boomed and tax revenues flowed into the Treasury. If the government expands beyond its means again, it will face another budget crunch when the economy cools.

We live under a government founded on principles of freedom, guaranteeing us maximum opportunity to shape and enjoy our lives with minimum intrusion from government. As government fattens up, growing more powerful and intrusive, freedom shrinks.

This surplus is on the backs of working families, who do not have it as easy as politicians seem to think. Because of a record burden of taxation, people find it desperately hard to save and many families need two incomes just to get by.

That has some serious consequences: Children are starved for attention from parents, family life is more strained than ever and the standard of living holds steady or declines as people work harder and harder.

It is human nature for politicians to want to absorb as much money from the taxpayers as possible. It means clout for them, patronage jobs to hand out, opportunities to take personal credit for being compassionate while using other people's money.

That is why the citizenry has to step in and remind them: The money comes from somewhere. If families must live within their means, so must government.

The surplus must be returned to the taxpayers.

State House News Service
January 5, 1999



JAN. 5, 1999 ... As Massachusetts pushes the historical boundaries of economic expansion, the Cellucci administration will push for a $1 billion income tax cut and propose the state's first $20 billion state budget.

But Cellucci's top budget official maintains the biggest challenge of the year ahead won't have to do with budget numbers it will be the numbers "00" in state computers, causing a Year 2000 compliance problem so large it's slowing down the Commonwealth's efforts to improve technology in other ways.

[ . . . ]

"It's a difficult task to sit here and convince people that  revenues are going to slow down and that this boom is not going to continue forever at a time when money is coming in hand over fist," said state Administration and Finance Secretary Frederick Laskey.

"It's very difficult to tell people 'no' when you have 11 percent (revenue) growth and everyone is lining up at the door and saying, 'If I only had this or I only had that.' The single most important challenge we face in the next fiscal year is to maintain fiscal discipline and to temper expectations."

Laskey, who is writing Acting Gov. Paul Cellucci's first budget, wants to keep spending growth below the rate of inflation. But he does not think it will happen, because of the pressure to hike education spending and the likelihood of higher health care costs.

"But that doesn't mean we shouldn't keep that as a goal and try to stay as close as we can," said Laskey, who will become state Department of Revenue commissioner in March. Longtime Cellucci friend and former state Rep. Andrew Natsios will take over as A&F secretary, a job that is sometimes referred as deputy governor.

A 3.4 percent increase in the current $19.5 billion state budget would put spending in the $20.1 billion to $20.3 billion range in fiscal 2000. At $20.2 billion, the state would spend an average of $55 million a day.

Cellucci, Laskey and Natsios face the challenge of trying to convince the Democrat-controlled Legislature that less than a year after enacting a $1 billion tax cut, the largest in state history, the state should cut taxes by more than $1 billion again by slashing the income tax to 5 percent from 5.95 percent.

Tax cut skeptics will point to claims of an inevitable economic slowdown and the pressure of being able to invest millions of dollars in education while also funding the most expensive public works project in US history, the Big Dig.

And the Cellucci administration is also planning a major expansion in health insurance coverage for the working poor. The expansion will be funded in part by the state share of a national public health settlement with tobacco companies $7.6 billion over 25 years.

"The question is how does that expansion, which is one of the most progressive plans in the country, tie to this increase in smoking money," Laskey said. "That's something that we're going to look long and hard at."

As with any A&F chief, Laskey has his eye on several balls at once:

Taxes. Laskey foresees no single area where the administration will open the spending floodgates. The biggest drain on the revenue side comes in the form of Cellucci's plan to reduce the income tax from 5.95 percent to 5 percent. That plan would remove more than $1 billion from the state tax base. After cutting taxes by more than a billion last year, Democrats, uncertain about continuing economy strength, are likely to be skeptical.

The administration will respond to skeptics by pointing out that the state has more than $1 billion in both its unemployment and rainy day funds.

Historically, Laskey said, recessions cause drops in tax receipts that can last from 12 - 18 months. "If we do face an economic downturn or a recession, we are well positioned to ride it out," Laskey said.

While Laskey will fend off spending requests by arguing a downturn is inevitable, the administration will make the opposite argument in fighting for tax cuts. "The economy is really booming," Laskey said. "We took pause in the summer when the market went south and there was all the uncertainty in Asia and it seemed like it was spreading. Exports were hurting but we just continue to plow ahead. And it shows that the economy is very sound and very diverse. We don't have all our eggs in one basket. We feel pretty good about where we are."

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