Mindful that the state's booming economy might have crested, the
House of Representatives voted overwhelmingly yesterday to trim the income-tax rate to
5.75 percent and to spurn Republican calls for a much more drastic cut.
The action, a victory for House Speaker Thomas M. Finneran, fell
short of Governor Paul Cellucci's call for a 5 percent rate that would plow more of the
budget surplus back to Massachusetts residents.
The action, approved by a 122-24 vote, has a $275 million price tag.
The move came in the face of the governor's threat that, if defeated in the House, he
would take his campaign to the voters and put the 5 percent rate on the ballot.
The current income tax rate is 5.95 percent.
The House also rebuffed an attempt yesterday by a group of liberal
Democrats to substitute a less-expensive package of tax breaks targeted at "working
families." The lawmakers blasted the House leadership for squelching debate on their
proposal, which they said would have cost the state only half of Finneran's plan and
helped residents most in need.
Representative John H. Rogers, a Norwood Democrat who is House
chairman of the Taxation Committee, praised lawmakers for their vote. The tax cut, he
said, would "begin to impose the same notions of fiscal discipline upon state
government in economic good times that we are forced to embrace in economic dire
Republicans vowed to fight again. "We'll take this tax cut; it's
better than nothing," said Paul K. Frost, an Auburn Republican. "But it's not
The state's string of large budget surpluses produced the momentum
for a cut. In fiscal 1998, the state recorded a $600 million surplus. When the 1999 fiscal
year ends June 30, state finance officials expect a surplus of $250 million to $300
With such a cushion, House Minority Leader Francis L. Marini of
Hanson argued that legislators should keep the promise they made a decade ago to return
the tax rate to 5 percent.
But Democrats such as Representative Daniel E. Bosley of North Adams,
who served in the House when the rate was raised to help erase state deficits, said no
such promise was made. The call to honor such so-called promises, Bosley and others said,
is a red herring.
To become law, the 5.75 percent rate also would have to be approved
by the Senate, which has not acted on the tax cut.
The action to cut off debate on the "working families" tax
break, a proposal that would have provided relief through a series of deductions, was
based on a ruling that the amendment was not germane to the tax-rate proposal.
That rationale was blasted by the amendment's supporters.
"There's been a policy of obstruction," Representative John P. Slattery, a
Peabody Democrat, said.
"This is a sad day," said Representative Jay R. Kaufman, a
"The people who are voting for us think we are leaders,"
said Christopher J. Hodgkins, a Lee Republican. "We don't effectuate change anymore.
We are giving away our vote by proxy."
The disappointment also was echoed by Representative James J.
Marzilli Jr., an Arlington Democrat. "You can do Speaker Finneran's tax cut or none
at all," Marzilli said of House Majority Leader William P. Nagle Jr.'s ruling that
the "working families" package could not be considered.
The "working families" tax break has four components. The
$150 million plan would increase the deduction for child-care expenses to $8,000 per
child, double the $2,500 deduction for renters, double the earned-income tax credit, and
provide $45 million in refunds for senior citizens who pay more than 10 percent of their
income for property taxes, water, and sewer fees. The tax rate cut would save a family of
four $135 a year.
Supporters of the plan pledged to reintroduce the package during the
budget debate next week.
Marzilli asked how Finneran could argue that the state cannot afford
a large tax cut, but then back a reduction to 5.75 percent at a cost of $275 million.
Marzilli said those revenues should be used to provide even greater benefits for
prescription drugs for elders, home health care, and road and bridge repair.
The House also defeated a Republican amendment yesterday to attach a
"trigger" to Finneran's plan that would decrease the income-tax rate by .1
percent for each $2.5 billion of personal-income growth in Massachusetts. In this way,
Marini said, the tax rate would decrease only in good economic times.