Limited Taxation
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CLT Update
Monday, June 21, 1999

Barbara and I are back, and just in the nick of time! Today, I'll try to catch you up with important things that have been going on and being said while we were away in Washington and on our brief R&R to visit her mom.

The Taxation Committee hearing on S.1635 [Petition of the Citizens for Limited Taxation, by Barbara Anderson, co-director, (Reps.) Demetrius J. Atsalis and Shirley Gomes for legislation to provide for the return to the taxpayers of the proceeds from the nationwide tobacco settlement] will be held at the State House on Wednesday (June 23) in Room A-1 at 1:00 PM.

The Massachusetts "taxpayers reimbursement" is now up to an obscene $8.3 BILLION. The trial lawyers have their hands out grabbing for TWO BILLION DOLLARS as their "fair share" -- which they intend to plow into their next extortion scheme, the mayors' lawsuits against gun manufacturers!!!

[Some of these same trial lawyers' greedy law firms are now actively shopping around for government clients willing to sign up to sue paint manufacturers -- for "damages" to their constituencies from the lead companies ceased putting into their interior paint back in the 1950s! "No Taxation through Litigation!"]

How many times must we pay those alleged Medicaid costs over and over again? I'll be attending the hearing to testify for the promised "reimbursement" and against all bait-and-switch scams to rob the taxpayers of their reimbursement -- after all, reimbursing us taxpayers was the alleged purpose of the lawsuits. I hope you can be there too!

On the over-taxation issue, the bad news is that TEAM and the unions already are gearing up to again oppose keeping the promise and rolling back the income tax rate increase to its pre-crisis rate of 5 percent. (If you are a union member they'll want you to pay twice: first when they pick your pocket for their dues; then, when you lose your tax cut if they succeed in defeating it!)

The good news is that a recent private poll shows the rollback winning by a big margin if it's on the ballot, where Gov. Cellucci and the Republican Party vow to put it -- with our help!

Chip Ford --

The Boston Globe
Thursday, June 10, 1999

As budget posturing begins, troika set to keep elbows high
By Frank Phillips
Globe Staff


The state's coffers are overflowing with cash, for the third year in a row. Beacon Hill is free of those polarized debates that used to paralyze state government. Civility reigns among our state political leaders.

So why, in these fat and happy times, is almost everyone familiar with the process predicting an ugly deadlock over the state budget?

In a word, ambition. Or rather, ambition cubed.

For the first time in memory, all three of the major political leaders at the State House have a direct and personal interest in the seemingly never-ending gubernatorial sweepstakes.


Tax cuts seem sure to be most contentious issues. Cellucci is pushing for a massive $1.2 billion cut in the state income tax, taking the rate down from 5.95 percent to 5 percent, the level it was before rates were raised during the state's fiscal crisis a decade ago.

Lacking GOP muscle in the Legislature, Cellucci vowed to use the Republican Party organization to put his tax cut on the 2000 ballot if lawmakers didn't pass his plan.

That threat has added considerable clout to his position. The liberal Democratic establishment is obsessed with trying to deflect Cellucci's tax-cut initiative. But, according to sources, a recent private poll delivered some jolting news. It showed that the public overwhelmingly supports the tax break, particularly with Beacon Hill awash in surplus cash. ...

State House News Service
Wednesday, June 16, 1999

Cellucci, TEAM Laying Groundwork for Tax Rollback Campaign

JUNE 16, 1999 ... TH ... Pitted against a Legislature opposed to his demands for a massive $1.4 billion income tax cut, Republican Gov. Paul Cellucci today promised to send an army of GOP activists onto the streets to rally support for his cause.

Tax-cut opponents are already assuring they'll match the governor's efforts, arguing such large cuts would imperil schools, the elderly and the poor. Both sides say they have already begun marshalling their forces.

Cellucci vowed to take the rollback to the 2000 ballot after legislators in March indicated their unwillingness to approve the plan. Today, three months after making that promise, Cellucci told members of the Taxation Committee that "we can do this the easy way ... or we can do this the hard way."

"We will win," Cellucci declared after testifying on his rollback bill. "It's going to be good for the Republican Party, but more importantly, it's going to be going to be good for families, it's going to be good for our competitive position."

He said legislators who have refused to approve his tax cut are "going back to the future" by acting like they did in the late 1980s, when the state's economy crashed. He said that if the Democrat-dominated Legislature is unwilling to proceed with his plan, his party is ready for the challenge.

"There's no question there'll be a full-blown campaign," said state Republican Party executive director John Brockleman. He said the party has already begun plotting strategy with legendary tax-cut activist Barbara Anderson and her Citizens for Limited Taxation.

"Obviously we're at the beginning stages of the process," Brockleman said. "There's no question that CLT is thrilled that the governor is going to take a lead in putting this on the ballot and getting this passed in 2000."

"Quite honestly, everybody better realize that if this question goes on the ballot, it's going to win," added GOP chairman Brian Cresta. "This is an issue that the public wants."

Brocklman said the first step will be filing the ballot question language with the attorney general this August 4. The language, as filed by Cellucci in the bill heard by the committee today, calls for rolling the tax rate down to 5 percent from 5.95 percent over three years. When fully phased in, the tax cut would cost $1.4 billion. Cellucci argues taxpayers will plow that money back into the economy and increase state revenues.

After the attorney general reviews the proposal's constitutionality, Brockleman said, the party will unleash thousands of activists in September to gather the 57,100 signatures needed to put the rollback on the 2000 ballot.

Legislators like Senate President Thomas Birmingham argue the state can't afford to cut taxes by $1.4 billion while paying for needed health care and education expansions. Last week, senators approved tax cuts worth about $177 million in their spending plan for next year. The House approved cuts of about $450 million.

That message about making choices will be loudly sounded by the union-backed Tax Equity Alliance for Massachusetts.

"I realize that if you ask voters if they want a tax cut this early in the campaign, they will likely say 'yes,' said TEAM executive director Jim St. George. "But poll after poll shows that if you ask voters if they want a tax cut or improvements in public education and health care, they will take the latter."

"Our campaign will be about educating voters about the choice they are making when they vote on this initiative," he added.

St. George said those tactics mirror those used successfully when a similar ballot question went before voters in 1990. During that campaign, opponents used the "No on 3 - it goes too far" slogan. St. George said TEAM has also begin preliminary work to form an opposition organization and collect money for television advertisements.

In 1997, TEAM helped block a similar rollback from the 1998 ballot by challenging the validity of the signatures collected by Anderson and CLT&G. ...

Associated Press
Thursday, June 17, 1999

Unions to fight tax-cut plan
By Martin Finucane

BOSTON -- Organized labor will mobilize to fight Republican Gov. Paul Cellucci's proposal for a massive cut in the income tax, officials said yesterday.

"We absolutely, positively will work to defeat it," said Kathleen Casavant, secretary-treasurer of the Massachusetts AFL-CIO.

But Cellucci promised that he, along with a revitalized Republican party, would put an "army of volunteers" on the street to get the $1.4 billion cut passed in next year's election.

"We will get the signatures. We will get this question on the ballot and the people of the state will overwhelmingly approve it," he said.

The governor has been a consistent proponent of the tax cut, which would reduce the income tax rate from 5.95 percent to 5 percent. The average family of four would save $600 a year in taxes when it is fully phased in, administration officials estimate.

But the Democratic-dominated Legislature has given his proposal the cold shoulder.

The House has called in its budget for a smaller cut, from 5.95 percent to 5.75 percent, while the Senate has completely ignored his proposal.

Cellucci made a last-ditch plea to the Legislature's Taxation Committee yesterday.

He argued that cutting taxes would keep the state from overspending, help families and boost the economy.

"Everywhere I travel, we hear nothing but good economic news. I want that economic expansion to continue to grow," he said.

But he also threatened: "We can do this the easy way or the hard way" and said he was ready to take the question to the ballot.

Rep. John Rogers, D-Norwood, the House chairman, noted that the House had taken some steps toward Cellucci's proposal and suggested the income tax rate could be cut even further next year.

The Tax Equity Alliance of Massachusetts, a liberal, union-backed group, said it was already preparing for the ballot battle.

"We will be prepared to raise the money and fight the battle from the neighborhoods to the television screen if this proceeds to the ballot," Jim St. George, the TEAM executive director, said in a statement.

St. George said both unions and some business groups would mobilize to fight the cuts, arguing that you can't cut such a massive amount of money without cutting services that people rely on.

St. George said people might initially support the tax cut, but opponents would "talk to people about the real choice they're making," arguing that the tax cuts would hurt the state's progress on areas such as education, prescription drug help for the elderly, and aid to cities and towns.

St. George pointed out that TEAM and other groups defeated another massive tax-cutting measure, Question 3, in 1990.

The Boston Herald
Monday, June 14, 1999

Budgeting for 2000: Let the games begin
A Boston Herald editorial

Let the words of Senate Ways and Means Chairman Mark Montigny (D-New Bedford) be a warning to all members of the budget conference committee and to taxpayers generally.

"In a balanced budget, there is always more that you wish you could do," Montigny told the State House News Service.

Another way of saying that is: Rest assured, whatever revenue comes in will be spent. Is it any wonder then that the Senate's version of the budget, passed last week, includes a paltry $177 million in tax cuts, and those not fairly and evenly distributed but carefully targeted in keeping with the Senate's usual class-warfare mentality?

By contrast, the House version of the budget contains $450 million in tax cuts, including at least a modest reduction in the state income tax rate (from its current 5.95 percent to 5.75 percent) and an extension of the essential investment tax credit, which, of course, the Senate refused to go near. (What, and do something sensible for small and big business alike? Heaven forbid!)

The Senate also failed to do anything to halt the runaway spending that has plagued the MBTA for years and burdened both the state and the communities which share the agency's expenses. The House effort, while not perfect, is certainly miles ahead in attempting to reform an agency that was labeled a budget-buster years ago when the Senate budget was in the hands of then Ways and Means Chairman Patricia McGovern, who actually could read a balance sheet.

The really bad news, of course, is that both the House and Senate have reneged on the state's commitment to cut the long-term capital gains tax to zero, as promised by previous legislation. That rate will be "frozen" at 2 percent, and since there is no disagreement between the branches on the issue, it won't even be a matter for the conference committee.

But what does that broken promise mean to Montigny?

"We have reprioritized and we have better priorities today," the Senate chairman explained.

Imagine an investor or a CEO considering relocating to or starting a company in Massachusetts reading that. In other words, the state's word on tax policy -- as interpreted by its legislative leaders -- isn't worth spit.

The word is already out on Beacon Hill that it's highly unlikely the state will have a budget in place when the new fiscal year begins on July 1. With the House and Senate at odds on tax policy, on the MBTA and on a host of spending issues and priorities, that would hardly be surprising. And, frankly, there are worse things than a late-arriving budget. Far worse is a budget that spends too much and gives taxpayers back too little.

But the real remedy for that isn't in either the House or the Senate versions of the budget. The real remedy for that will be when taxpayers vote at the ballot box to cut their own taxes.

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