Limited Taxation
Post Office Box 408     Peabody, Massachusetts   01960     (508) 384-0100
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CLT Update
Monday, January 11, 1999

Massachusetts Taxpayers Foundation
Declares War on Taxpayers

Despite a staggering revenue surplus that grows larger by the day, the discredited Massachusetts Taxpayers Foundation has called for an increase in state revenues to appease its doomsday scenario.

"No tax cuts!" it demands, for the state has better uses for taxpayers' earnings, and greater needs.

Despite a state budget that took two centuries to reach $10 billion -- but has doubled to $20 billion in only another dozen years -- the alarmist Massachusetts Taxpayers Foundation cries out that this is not enough, for the sky is falling.

Despite even the billion dollar "rainy day" slush fund, the MTF wants more.

"Raise the fees!" the MTF shouts in panic, recalling the Dukakis heydays of stealth revenue growth though fee increases.

This scam was corrected by our court challenge in 1989 (Ford et al. v. Secretary of Administration & Finance Lashman). In an out-of-court settlement with the incoming Weld administration, it agreed with the plaintiffs that a "fee" cannot exceed the cost of providing the service and is not a substitute for general revenues.

The MTF would take us back there -- even without the '80s rationalization of a fiscal meltdown.

If fees are again raised for general revenue, CLT will be back in court with another challenge.

Using its usual erroneously-negative projections, the MTF again adopts the "It's MINE" philosophy: More Is Never Enough!

CLT's response to the MTF is ... enough is enough!

Chip Ford --

Citizens for Limited Taxation
PO Box 408 * Peabody, MA 01960
Phone: (508) 384-0100 * E-Mail:


For Further Information

For Immediate Release

Contact: Barbara Anderson

Monday, January 11, 1999

Chip Ford

Alleged Massachusetts Taxpayers Foundation

Opposes Governor's Tax Cut,
Wants Fees Raised

Real Taxpayers Association

Supports Governor's Tax Cut,
Will Go To Court if Registry Fees Raised

Citizens for Limited Taxation supports Governor Cellucci's bill to roll back the state income tax rate from 5.95 to 5 percent, as the Legislature promised it would be rolled back when the 1989 fiscal crisis was over.

Until the rate is reduced, Citizens for Limited Taxation supports returning the surplus to the taxpayers who are still paying an income tax rate that is too high. We estimate that the surplus this year will be at least one billion dollars.

When the present stabilization fund is full, that extra money should be used to increase the personal exemption.

Registry of Motor Vehicle fees can not be raised to pay for the Big Dig.

There was a court challenge on the Dukakis Registry fees in 1989 (Ford v. Secretary of Administration and Finance Lashman). In an out-of-court settlement with the Weld Administration in 1992, it was agreed that a fee cannot exceed the cost of providing the service for which it is assessed, and is not a substitute for general revenues. The Weld Administration then reduced Registry fees.

If the Legislature increases Registry fees to pay for the Big Dig, CLT will activate the court challenge. When we win, other state and local fees will face closer analysis as to whether they exceed the cost of providing services.

The Massachusetts Taxpayers Foundation, so-called, should review its history of being wrong about revenue estimates, budget deficits, and tax policy, and busy itself analyzing a state budget that has doubled in the last twelve years, in order to find the money for needed highway projects.

- 30 -

The Boston Herald
Monday, January 11, 1998

Page One, Banner Headline:

Toll, fee hikes pushed to help pay for Big Dig
by Carolyn Ryan

Gov. Paul Cellucci must quickly raise fees, Turnpike or tunnel tolls to avoid a fiscal crisis caused by the huge drain of the $11 billion Big Dig and other construction projects, according to a new report.

A report slated to be released today by the Massachusetts Taxpayers Foundation warns politically unpopular choices confront the newly inaugurated governor: find new sources of cash - such as Registry of Motor Vehicle fees - to avoid jeopardizing the state's fiscal stability or scrap important local projects such as libraries, schools and bridges.

"The longer we delay, the deeper the crisis," said Michael J. Widmer, president of the non-partisan group. "The time has come to act now."

Cellucci was inaugurated Thursday boasting of a "prospering Massachusetts," and calling for a $1.2 billion income tax cut. But the MTF report says paying the huge Central Artery tab and for other capital projects must take priority before new tax reductions are even considered.

"State leaders need to face up to this stark reality," Widmer said.

The MTF says Cellucci and the Legislature should quickly:

  • Double tolls on the harbor tunnels from $2 to $4 and increase the toll on the Boston extension of the Massachusetts Turnpike from 50 cents to $2. The Cellucci administration is planning more moderate increases in 2002.

  • Reinstate Registry of Motor Vehicles license and registration renewal fees that former Gov. William F. Weld eliminated during 1996 when he was running for U.S. Senate. Charging $33.50 for license renewal and $35 for registration would generate $100 million.

  • Dedicate most, if not all, of any budget surpluses to pay for transportation projects, rather than sending the money back to taxpayers.

"There's no one solution to this problem," Widmer said. "The problem is serious enough that we would recommend doing all three."

Widmer and other watchdogs fear their message of austerity may not break through the foggy euphoria on Beacon Hill, where revenue collectors are being flooded with tax receipts generated by the robust economy.

Cellucci, who touts smaller government, will release his budget later this month that includes a call to reduce the income tax from 5.95 percent to 5 percent.

Beacon Hill analysts are predicting a budget surplus that could top $500 million for the fiscal year that ends June 30. Last year, Democratic legislators were unable to resist temptation to spend hundreds of millions of dollars of a similar windfall.

Legislators and Cellucci also agreed to increase the annual operating budget last year at a rate three times inflation.

"We're not going to have these surpluses forever," Widmer said. "It's important to step up to our responsibilities and meet our obligations. We're building these projects, and we need to pay for them without borrowing any more heavily against the future."

Massachusetts ranks third among the 50 states in its per capita debt burden, including money for courthouse repairs and school projects.

An aging infrastructure, cutbacks in the state's share of federal highway dollars, and the enormous burden of the Central Artery have caused the current capital crisis.

Last year, Congress reduced the state's highway aid by a third, from $830 million to $500 million.

"The major cutbacks in federal funding have thrown this over the edge," Widmer said.

The impact of the Big Dig's swallowing of transportation dollars is already being felt around the state, as local road and bridge projects are put on hold while Central Artery costs increase. This year, Big Dig spending rose from $971 million to $1.4 billion, while other highway spending fell from $773 million to $563 million.

Not only transportation projects are imperiled by the capital budget strain. Dilapidated courthouses need replacement, state college buildings need to be built, Boston Harbor needs to be dredged and public hospitals need repair. If those projects are shelved, the area's economic vitality is threatened, Widmer said.

"We're focusing a lot of attention right now on the future through education - investing in students," Widmer said. "That's the right thing to do. But we also need to invest in our infrastructure."

Even the Cellucci administration's rosiest scenario would fund only $3 billion of $11 billion in approved capital projects over the next five years, according to the report.

A number of other pressing projects have yet to be authorized, including the North-South rail link.

The report also urges a number of long-term measures to improve the state's fiscal health, including establishing a specific outlay for repair and maintenance of state buildings like courthouses to avoid deterioration and replacement costs. The MTF also wants to exempt small projects from project labor agreements, which are supported by unions.

Boston Herald Insert:
Project's cost just keeps on growing

If the Big Dig had gotten done under Gov. Michael Dukakis, taxpayers today might be holding one of those bags that say "I just got a bargain."

Back in 1985, of course, the mammoth construction project was only supposed to cost $2.56 billion. But even figuring inflation over that time, the cost has more than doubled due to "unforeseen circumstances" and other factors.

When William F. Weld ran for governor in 1992, he pledged to keep the project down to "$7.7 billion plus inflation."

The pledge helped put him in the Corner Office, but inflation brought the price tag up to $10.4 billion in 1995.

Last year, Turnpike officials admitted they could not get the project done for less than $10.8 billion.

Then a federal watchdog agency calculated the project will likely come in at more than $11 billion because Big Dig officials have underestimated the construction costs and inflation.

All told, the project will likely cost $11.6 billion, but an insurance rebate in 2017 may still bring the project in under $11 billion, the federal General Accounting Office reported.

- Tim Cornell

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