Limited Taxation
Post Office Box 408     Peabody, Massachusetts   01960     (508) 384-0100
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CLT Update
Thursday, January 28, 1999



For Further Information

For Immediate Release

Contact: Barbara Anderson

Thursday, January 28, 1999

Chip Ford

"Tobacco Settlement" Reimbursement

I.   Some Massachusetts citizens smoked, coughed, went on Medicaid. Massachusetts taxpayers coughed up tax dollars that went to Medicaid payments.

The Commonwealth, using taxpayer dollars, sued the tobacco companies for the Medicaid costs incurred by Massachusetts for smoke-related illnesses.

A settlement was reached and the tobacco companies agreed to pay the Commonwealth $7.6 billion over 25 years.  The taxpayers should get back the tax dollars they paid for Medicaid-funded treatment of smoke-related illnesses. We are the aggrieved party here. We are like an assault victim who pays his medical bills, pays his lawyer to sue the perpetrator, wins a court settlement, then learns that the settlement money will be used to provide self-defense lessons for whoever wants them. Anything else is a bait-and-switch scam.

II.   The Massachusetts Legislature increased the state income tax rate in 1989 to address a fiscal crisis; we taxpayers were told the increase would be temporary.

The deficit bonds have been paid off and the "temporary" 5.95 percent income tax rate has been causing monumental surpluses.

Governor Cellucci wants to phase-out the "temporary" income tax rate increase that is causing the surpluses.

Senator Birmingham is accusing Governor Cellucci of using the tobacco damages settlement with the taxpayers to fund his income tax rate cut.

What, besides cigarettes, has Senator Birmingham been smoking?

Citizens for Limited Taxation has filed a bill to rollback the income tax rate to 5 percent by 2001. A promise was made and a promise should be kept; with the budget going up a billion dollars a year and another giant surplus expected, there is no excuse for not rolling back the rate.

We have also filed a bill to reimburse the taxpayers of the Commonwealth for the money they spent on Medicaid payments and the Attorney General's lawsuit. The reimbursement money belongs to the taxpayers and should be returned to us in proportion to the amount we paid, with an additional income tax cut.

A Tax is a Pay Cut ... A Tax Cut is a Pay Raise

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