Limited Taxation
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CLT Update
Wednesday, April 28, 1999

Bend over and get ready to have your pockets picked again this year!

It took Massachusetts government 207 years to reach the first $10 Billion budget and only another dozen years to double it to $20 Billion, but the pols are out to break that 12-year record!

They're pushing for $21 Billion as we speak!

But they need our money to break their own record!

While today the House takes up Speaker Finneran's token tax cut of two-tenths of one percent off the 5.95 percent income tax rate (intended to satisfy and stifle us), his Ways and Means Chairman is planning to increase spending in his FY 2000 budget -- surprise, surprise -- even over and above Gov. Cellucci's proposed budget increase.

The State House News Service yesterday reported:

The one-year budget is about $980 million, or 4.9 percent, larger than the state's anticipated spending for this fiscal year, and about $210 million larger than Gov. Paul Cellucci's spending plan.

The House budget is built on a tax revenue estimate $390 million higher than the one Cellucci used to draft his budget, which was unveiled in late January....

In his Introduction Letter to his proposed FY 2000 budget, House Ways and Means Chairman Paul Haley writes: "We have identified nearly $800 million of maintenance needs that have been deferred for too long ..."

The Good News is, apparently all the "unmet needs" have finally been met and overcome. (The Social Services- and Education-industrial complexes don't agree, but of course they never will while we have even a penny remaining in our pockets.)

The "unmet needs" apparently have been met, hallelujah!

But the Bad News is, suddenly we now seem to be overcome with "deferred needs" that need to "ferred" ... or whatever it is we must spend another billion dollars or more on to rectify before we can "responsibly" expect to get any of our government surplus money back.

After all, "unmet" or "deferred," needs are needs, so just sit back, relax, and count your blessings that you have none.

It's sort of like that Cold War "Peace Dividend" we're still waiting to have returned ... you know, that "Middle-Class Tax Cut" Candidate Clinton promised.

What's with those Democrats anyway? Must we conclude that they are all liars?

Chip Ford --

PS. The House tax debate will begin at 1:00 this afternoon and will be carried on WGBX TV-44.

The Boston Herald
Wednesday, April 28, 1999

A Boston Herald editorial

Promises must be kept

The Massachusetts House is expected to take up Speaker Tom Finneran's proposal today to cut the state's income tax rate from 5.95 percent to 5.75 percent. This is not a bad thing, of course. Cutting taxes is rarely a bad thing.

But the House should not kid itself that this cut would fulfill the promises made back in 1989 when this "temporary" tax increase first saw the light of day. In a full-page ad that ran in yesterday's Herald, Citizens for Limited Taxation came up with a host of newspaper stories published at the time, all attesting to the fact that legislators intended this new tax burden to be only temporary, a boost to get the state out of the fiscal crisis that then Gov. Michael Dukakis and his merry band of spendthrift Democratic liberals had gotten it into.

Well, thanks to a strong economy, some fiscal prudence on the part of Govs. William Weld and Paul Cellucci -- and with a good deal of help from Finneran too -- the state is in far better fiscal condition as the 1990s draw to a close. In fact, the rainy-day fund is overflowing and still surplus tax dollars accumulate.

And as long as those tax dollars are flowing in, legislators will find ways to spend them. The House budget for the coming fiscal year (which we will explore more fully in tomorrow's editorial) is a prime example of that. This is a fact of political life. It's time more of those dollars were returned to the people who earned them. The House ought to consider its action today a mere down payment on a debt that has for too long gone unpaid.

If the Legislature fails to reduce the income tax rate eventually to 5 percent, taxpayers will have no choice but to use the ballot to force lawmakers to keep the promises made to them a decade ago.

The Boston Globe
Tuesday, April 27, 1999

House panel to release budget plus a warning
By Brian MacQuarrie
Globe Staff

The House Ways and Means Committee today will unveil a $20.77 billion budget, a record spending plan with a foreboding caveat that now is the time for Massachusetts to prepare for an economic downturn.

The proposal, heavy with capital spending and education initiatives, allocates $386 million more than Governor Paul Cellucci's budget because it does not divert revenue from the national tobacco settlement to existing programs.

According to highlights of the document obtained by the Globe, the House would channel $103 million to maintenance and repair of schools, buildings, bridges, and roads; $71 million to early-childhood education; and $14 million to help retire the short-term debt of the Massachusetts Bay Transportation Authority, which Ways and Means chairman Paul R. Haley wants to make an independent agency funded by a dedicated portion of the state sales tax.

In addition, sources said the budget could give as much as $10 million to the Clean Election Law, which would provide a large, unprecedented supply of funding for state political campaigns.

The budget introduction, written by Haley, warns Massachusetts residents that the economic boom of the 1990s cannot last indefinitely and that steps must be taken now to promote fiscal health.

"The continuing good economic news is feeding soaring expectations for embracing new spending initiatives," wrote Haley, a Weymouth Democrat. "This exuberance is based on a misunderstanding of the complete fiscal condition of the Commonwealth."

Although a generous revenue stream has helped the state make capital improvements, increase the Rainy Day Fund to $1.3 billion, and reduce income taxes, Haley said that "the Commonwealth's assets are in disrepair."

After the budget is introduced today, legislators in the House will have one week to study the document before debate begins. The Senate also will introduce a spending plan soon. The differences between the two proposals will be hammered out in conference committee before a final budget is approved by both chambers. The new fiscal year begins July 1.

According to Haley, the list of serious, unmet capital needs is growing because of the financial appetite of the Big Dig. Borrowing to make those improvements would jeopardize the state's bond rating, the chairman continued, because Massachusetts is at its debt ceiling.

"We have identified nearly $800 million of maintenance needs that have been deferred for too long," Haley wrote. As a result, the state will conduct a $2 million inventory of all state facilities.

"Nearly every state agency that has testified before the committee has described the need to repair their facilities as their No. 1 priority," Haley said. Many state agencies would receive direct funding under the budget to make repairs.

Surplus revenue, which could reach hundreds of millions of dollars this fiscal year, would be used aggressively to pay down pensions and for technology improvements, road resurfacing, and other ongoing costs, Haley said.

Local road projects, which have been funded by bond issues, would become a regular part of the budget. The fiscal 2000 budget would provide $50 million for this obligation.

Besides bricks and mortar, the budget calls for new human-services spending. In addition to expansive early-education programs announced last week, the budget would increase the prescription-drug benefit to $1,000 per year for senior citizens within 150 percent of the federal poverty level. Currently, the benefit is $750. The plan also would be available to seniors within 400 percent of the poverty level who spend more than 5 percent of their annual income on prescription drugs.

The US poverty standard is $14,378 for a family of two, and $21,710 for a family of four.

In another initiative announced yesterday, the budget would provide $5.5 million to raise the income eligibility for family shelters, and $1.4 million to provide more transitional beds at YMCAs and YWCAs for homeless people.

The early-education proposals, touted as a priority by Speaker Thomas M. Finneran last week, include $25 million to promote full-day kindergarten and $24 million for early-childhood care and education, primarily in low-income areas.

Unlike Cellucci's budget, the House proposal calls for none of the money from the tobacco settlement, of which about $360 million is expected in Massachusetts through fiscal 2000, to be used for existing health programs. That settlement, $7.6 billion for Massachusetts over 25 years, would be placed in a 21st Century Fund "to generate interest earnings year after year in perpetuity" for tobacco control and health-care expansion, the budget document states.

The House plan also recommends that the state be placed on a two-year budget to "require agencies to be more accountable in their spending," Haley wrote.

Other proposals for restructuring the budget process include instituting a "pay-as-you-go" system for building, road, and bridge maintenance; and reserving spending increases for "citizens least able to care for themselves."

For a full copy of the proposed budget, click below:
get_it.jpg (2620 bytes)

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