Limited Taxation
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CLT Update
Friday, May 7, 1999

We have two events of importance to bring to your attention today. The first is a direct tax issue; the second affects our ability to respond to it, if at all.

Yesterday the state House of Representatives decided to spend more or our tax overpayment, and disguised it as a tax cut. The "progressives" in the House, who used to be called liberals until they went undercover, pushed through their "working families" tax credit package. Make no mistake about it: the Legislature is spending your money -- taking it from you under false pretense then parceling it out to where they see best fit, to those whom they deem most deserving.

To fund this latest redistribution scheme, they even intend to change the rules, break another promise, and increase taxes!

Of course Jim St. George of TEAM ("Tax Everything And More") thinks picking the winners and losers is simply wonderful -- as long as he agrees with who they should be. But he doesn't think the income tax rate should be reduced from 5.95 percent at all. The state simply can't afford Finneran's paltry cut to 5.75, he whines.

Do you remember anyone back in 1989 telling us they needed more or our money to "level the playing field" or "help the needy" or "aid working families" when they were crying "fiscal crisis" and "only for 18-months, honest, it's just temporary"?

The second event affects what we can do about what's being done to us. Today the Supreme Judicial Kangaroo Court will decide the fate of the initiative and referendum process in the Commonwealth, the intent of the state constitution and its future.

Depending on the outcome of the SJKC's decision, we will soon need to decide whether or not we will go forward with another initiative petition signature drive to Keep the Promise and roll back the income tax rate to 5 percent.

Pay close attention in the second report (below) and take special note of who is once again perverting the process at great expense. Those rank-and-file dues-paying teachers union members indeed must have very deep pockets and more money than courage if not sense.

Chip Ford --

The Boston Globe
Friday, May 7, 1999

House OK's $160m in tax credits
designed to aid working families

By Brian MacQuarrie
Globe Staff

In a victory for dissident Democrats shut out of last week's tax cut debate, the House of Representatives last night unanimously approved a $160 million package of tax credits that lawmakers said were designed to help working families.

Worked out in closed-door negotiations yesterday with House Speaker Thomas M. Finneran and Taxation Committee chairman John H. Rogers, the package quadruples the deduction for one dependent to $4,800, increases the deduction to $9,600 for two or more dependents, and doubles the child-care deduction to $4,800 for one child and $9,600 for two or more. The package, passed by a 153-0 vote, brings the cost of the total tax cut approved by the House to $435 million. The income tax rate reduction to 5.75 percent passed last week would cost $275 million of that total, according to estimates. The current tax rate on income is 5.95 percent.

"This is a victory for the progressives," said Representative John P. Slattery, a Peabody Democrat who last week decried the House leadership as obstructionist. Slattery was more conciliatory afte  the vote last night, praising Finneran for his willingness to accept a targeted tax cut.

"This is both good politics and good policy," said Representative Jay Kaufman, a Lexington Democrat who also was a force behind the legislation.

The package would be partly funded by setting at 2 percent the lowest tax rate on long-term capital gains on assets held six years or more. Under current law, the capital gains rate drops incrementally from 6 percent to zero during six years of ownership of such assets.

Slattery and Kaufman estimated that the change would generate $90 million toward the targeted relief. Asked where the remaining $70 million would be found, Slattery responded, "I think it's an appropriate and prudent cost."

The dependent deductions, which would be phased in over three years, would be expanded to include elderly and disabled dependents. The new child-care deduction would be phased in over two years beginning Jan. 1, 2001.

Representative James J. Marzilli Jr., an Arlington Democrat who hosted a St. Patrick's Day get-together at which the tax package was born, said the House has undergone a "sea change" in the last two weeks in embracing targeted tax relief. The effort,he said, has won the support of traditional urban Democrats, upper-income Democrats, and even the backing of many Republicans.

"I think the speaker accurately read the sentiment of the majority of members of the Legislature," Marzilli said.

Last week, the two dozen Democrats actively lobbying for the "working families" tax package assailed Finneran and his leadership team for refusing to allow consideration of their alternative. House Majority Leader William P. Nagle Jr. had ruled that debate on the tax package was not germane to the rate cut question.

"Last week there was some civil unrest, I guess you could say, in this chamber," Slattery told the House yesterday when he pressed for members' support.

As the so-called progressives savored their victory, the size of the tax cut evoked cautionary words from some observers. James St. George, executive director of the Tax Equity Alliance of Massachusetts, questioned whether the state can afford such a cut once the economy begins to sour.

"When the economy slows down," St. George said, "we will have forfeited the hard-earned fiscal strength we now have."

"We can afford this cut," he continued, "but not this added to the $275 million tax cut" approved last week.

The Senate has yet to begin deliberations on its budget, and the shape of its tax proposals are not yet known. But Senate President Thomas F. Birmingham is known to favor targeted tax relief, such as the "working families" package, as opposed to straight rate reductions that provide more relief to the wealthy.

This heartens the package's Democratic supporters, who will need support if Governor Paul Cellucci decides to veto the package on the grounds that the capital gains freeze is a tax increase. Cellucci proposed a 5 percent income tax rate in his budget.

"This is a great victory for working families across the Commonwealth," said Elaine Fersh, director of Parents United for Child Care. "With the cost of quality child care beyond the reach of most working families, allowing them to deduct what they actually spend on child care will be a boost for their economic security."

Under the current child-care deduction, a family can claim $2,400 per child and a maximum of $4,800 per family.

The package also would increase deductions up to $9,600 for families who adopt a child.

The Boston Globe
Friday, May 7, 1999

SJC to revisit rules on initiative petitions
By Sacha Pfeiffer

Globe Correspondent

When backers of an initiative that would have paved the way for school vouchers in Massachusetts submitted 70,000 signatures of support last fall, their petitions contained the usual notations: the name and phone number of the person collecting signatures, the date the petition had to be returned.

To the average eye, the markings were inconsequential.

But not to the secretary of state's office, which invalidated several thousand signatures.

The reason? A ruling last summer by the state's highest court in a similar case involving petitions stamped with the name of a group supporting the signature drive. Taking a hard line in that case, the Supreme Judicial Court prohibited alterations of any kind on petitions.

It's a ruling the SJC will revisit today as it hears an appeal of the rejection of the school-voucher petition. At issue is whether the no-notations rule is too strict, or a necessary requirement to prevent petition gatherers from adding innocent-looking markings meant to subtly influence signers.

The SJC's ruling could have broad ramifications for petition drives and other signature-gathering efforts across the state, including nomination efforts of political candidates.

Taking the hard-and-fast rule to the extreme, "Someone idly putting a coffee cup down and getting a little brown stain on a petition could cause an entire set of signatures to be thrown out," said Barbara Anderson, executive director of Citizens for Limited Taxation and Government, whose Proposition 2 1/2 tax-limiting law was an initiative petition.

The case has sparked concern among grassroots groups like Common Cause, which argues that invalidating entire petitions because of an innocuous notation robs signers of their right to participate in the democratic process.

Taking the opposite stance is the Massachusetts Teachers Association -- which opposed the school-voucher initiative petition. The MTA contends that keeping petitions notation-free keeps the petition process free "from manipulation by special interests."

In a brief filed in the case, it cites a state law that prohibits any form of "advocacy" on petitions and includes examples of notations that could be meaningless to some signers, but not others.

Take the name Donna McEachern, which was written at the top of one petition, probably to indicate the person responsible for circulating it.

"Donna McEachern may be an ordinary citizen unknown to the potential signer," the brief reads, "or she may be a local public official, respected citizen, personal friend, or recognized bellwether for the cause of diverting public aid to private schools."

As a result, the brief continues, "It will be an impossible task ... to determine how many persons placed their name upon a petition just because Donna did."

Furthermore, the brief notes, petitions prominently warn signers and signature gatherers that altering the forms "in any way" could result in their invalidation. Ignoring that warning treats petitions "as scrap paper," the MTA brief says.

Critics of the no-notations rule accuse the teachers' association of simply trying to block the petition - which called for a constitutional amendment permitting the use of public funds fo  private schools - from reaching a statewide vote. Despite the invalid signatures, voucher backer  won a court order that allowed the issue to proceed to the Legislature, pending the SJC's review.

Advocates of a more flexible rule insist that forbidding all markings is unrealistic and invites wrongdoing by petition opponents. Since petition drives are often conducted by volunteers outside supermarkets and inside malls, a rule requiring pristine petitions "ignores the reality of the ballot initiative process," said Ken White, executive director of Common Cause.

And if a single mark can disqualify an entire petition, "somebody could sabotage a petition by walking past a table at a mall, running a pen across it and killing all the signatures," added Anderson.

Even the office of Secretary of State William Galvin has questioned the no-notations edict. A spokesman for Galvin said the ban on markings should apply only to certain areas of petitions, or to notations that could "influence the potential signer's decision whether to sign."

Other random markings -- such as numbers that enable petitions to be tracked or names and phone numbers of petition gatherers -- should not cause the forms to be invalidated, the spokesman said.

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