Limited Taxation
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CLT Update
Thursday, March 4, 1999

The following AP report and Department of Revenue news release continues our ongoing effort to keep you informed and up-to-speed with the evolving debate and upcoming decisions over what to do with the taxpayers' ever-mounting overpayment (aka, "the state's revenue surplus").

"Year-to-date revenue collections total $9.02 billion, up $645.6 million or 7.7 percent." -- DOR News Release

With all of this revenue pouring in, despite last year's tax cut, what will the state surplus be by the end of the fiscal year in June? The "gloom and doom" estimate of up to $500 million by the alleged Massachusetts Taxpayers Foundation is roughly half of what CLT has predicted. As Barbara says, it all depends on how you define "surplus"!

We see a surplus as an excess of taxation beyond what is anticipated as necessary to run government for the year. If it cost fifty bucks to get something done last year it shouldn't cost five hundred this year just because you've got it, and if you anticipate having to spend three hundred, you don't spend a thousand just because it's there.

But in political parlance, a surplus is what's left after the pols have done their darndest to spend every cent they expect to extract from taxpayers, and still they have money left over that they just can't find a way to spend or avoid giving back to -- ugh! -- those nuisance taxpayers who earned it.

Chip Ford --

Associated Press
Tuesday, March 2, 1999

Questions raised about Cellucci tax cut

BOSTON (AP) - State administration and finance officials touted the governor's budget, but met with plenty of questions during a hearing of the House Ways and Means Committee.

On Tuesday, Administration and Finance Secretary Andrew Natsios said, "We are proposing to hold the line on new spending in a time of record surpluses; we remain committed to cutting taxes."

But the proposal drew questions from Ways and Means Chairman Paul Haley, D-Weymouth, who said Gov. Paul Cellucci was proposing to "radically cut" taxes.

Cellucci is proposing a $1.4 billion tax cut.

Haley said he was worried that the governor's budget, with its tax cut, couldn't be sustained at the same time there is pressure on the spending side with an "insatiable appetite for spending."

The Republican governor's $20.4 billion budget is being examined by the Democratic-dominated House, which will prepare its own version of the budget. The Democratic-dominated Senate will then prepare its spending plan and the House and Senate will hammer out a compromise to be sent to the governor's desk.

The budget would go into effect on July 1.

In related news, the state Revenue Department said Tuesday that taxes flowed into the state treasury at a slower rate in February, apparently because of tax cuts enacted last year.

February tax collections totaled $748.3 million, slightly down from the $791.8 million in the same period a year before.

But for the first eight months of the current fiscal year, the state was still far ahead.

It collected about $9 billion, compared with about $8.4 billion in the same period in the previous fiscal year.

Revenue Commissioner Fred Laskey said the economy was strong, but past tax cuts were beginning to have an impact on revenues.

The state is expected to eventually rack up a surplus for the current fiscal year of $300 million to $500 million.


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Commonwealth of Massachusetts
Department of Revenue

March 2, 1999
Contact: Jeffrey Busha - (617) 626-2201


     Massachusetts Department of Revenue (DOR) Commissioner Frederick A. Laskey today announced that February collections totaled $748.3 million, slightly down from last February due to larger taxpayer refunds this year. Year-to-date revenue collection increased $47 million against the revenue estimate benchmark, which was adjusted last month to reflect the expected impact of the tax cuts. The result is that revenue collections for the year are $274 million above the midpoint of the revenue estimate range.

     "Overall, the economy remains strong as we begin to see the expected revenue impact of the tax cuts. In addition, due to the increased personal tax exemptions, we are also seeing larger taxpayer refunds. We are working hard at getting these larger refunds out-the-door and in to the hands of taxpayers," said Laskey.

     DOR has issued over 575,000 refunds this tax season totaling $258 million, which is $90 million more than last year at this time.

     February 1999 income tax collections totaled $396.1 million, down $56.4 million or 12.5 percent from last February. Withholding tax collections totaled $593.2 million, an increase of $16.4 million or 2.8 percent. Sales and use tax collections totaled $229.1 million, $1.80 million or .8 percent higher. Corporate income tax collections totaled $15.6 million, down $13.8 million or 46.9 percent.

  • Year-to-date revenue collections total $9.02 billion, up $645.6 million or 7.7 percent.

  • Income tax collections total $5.27 billion, up $332.2 billion or 6.7 percent.

  • Withholding tax collections total $4.54 billion, up $314.2 million or 7.4 percent.

  • Sales and use tax collections total $2.16 billion, an increase of $217.2 million or 11.2 percent.

  • Corporate tax collections total $417.2 million, up $12.2 million or 3.0 percent.


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