Limited Taxation
Post Office Box 408     Peabody, Massachusetts   01960     (508) 384-0100
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CLT Update
Wednesday, September 8, 1999

Labor Day is behind and the petition drive is ahead! As you can see, CLT and the state Republicans are not alone as we pull out the stops and gear up for the upcoming tax rollback effort: our usual adversaries, the enemies of all taxpayers -- Tax Everything And More (TEAM) and the MTA (More Taxes Always) -- are scheming and plotting how to keep your hard-earned money at any cost. (The MTA spent $2 million of its members' dues to stop us last year!)

We should have the blank petition forms in our hands by the middle of next week. We are planning a kick-off event with the governor and are sending out an invitation postcard to each of our volunteers who's already responded to our call to arms.

If you are one of them, watch the mail for our postcard.

If for some reason you are not one of them yet, click on the link below and sign up! It's not too late to help yourself take back some of your over-taxation.

You wouldn't want to lose by a lousy 26 signatures again this time, would you?

CFord-Sig2.gif (4854 bytes)

Chip Ford

PS. If you have not volunteered yet to help us help you keep the Legislature's promise and cut your tax over-payment, you can participate in your own salvation now by clicking here and filling out the volunteer form.

... Add to the mix Cellucci's proposed income tax rollback, which the MTA [Massachusetts Teachers Association] has vowed to fight strenuously, and the stage is set statewide for lengthy and complex political battles.

Indeed, Barbara Anderson of Citizens for Limited Taxation has said if it were not for Cellucci taking up the tax cut flag, her grassroots organization would have all but given up the ghost on trying to roll back the state income tax rate from 5.95 percent to 5 percent.

"We will be playing a big part in seeing that (the tax cut) does not succeed," said Gorrie of the MTA. "It could have a huge negative impact on education funding. We're going to have to strategically look at whatever is necessary." ...

Gov threatens schools with state takeover
Cellucci's stance may spark battle with unions
by Cosmo Macero Jr.
The Boston Herald
Wednesday, September 8, 1999


Metro-West Daily
September 6, 1999

Study claims tax cut crucial to state's future
By Steve LeBlanc
News Statehouse Bureau

BOSTON -- The Cellucci Administration this week will release a report showing a sweeping tax cut backed by the governor would help Massachusetts withstand a major recession.

The report, compiled by the Office of Administration and Finance, is designed to help boost support for Gov. Paul Cellucci's proposal to cut the state income tax rate from 5.95 percent to a flat 5 percent.

One of the most important things the tax cut will do is convince companies not to pull out of Massachusetts if the economy sours, according to the report.

"We want to create a business climate so that during the next recession a lot of businesses don't go out of the state or go south or go west," Finance Secretary Andrew Natsios told the MetroWest Daily News. "We're trying to create an incentive to keep them here when the economy goes south."

Natsios did not release details of the report, but said it bolsters claims made by Cellucci that the tax cut will strengthen the state's fiscal well-being in an economic slump.

The report also shows that the dramatic tax cut will spur business growth and help fuel the state's ongoing boom.

"The initial evidence is that there will be a huge economic expansion and increased economic activity in the state," said Natsios, a native of Holliston. "I'm not an ideologue on this. I want to see what the data is showing and what the data is showing is that this will have a very beneficial effect."

The release of the report coincides with the state's budget impasse.

The tax cut is a key part of Cellucci's version of the state budget, but is not included in either the House or Senate's version. Senate President Thomas Birmingham and House Speaker Thomas Finneran are continuing to debate the budget plan, which is more than two months late.

Natsios' report is also designed to counter critics who say the state cannot afford the loss of $1.4 billion in annual revenue Cellucci's tax cut would create.

The liberal Tax Equity Alliance of Massachusetts, which opposes the tax cut, on Saturday released new data from the Congressional Budget Office which they say shows Cellucci's plan would widen the gap between the rich and poor in Massachusetts.

That data shows the richest 1 percent of the U.S. population has seen its income skyrocket by 115 percent in the last 20 years while middle-income families have experienced a growth of just 8 percent.

"It's clear that middle- and low-income families in Massachusetts and across the country are not fully sharing in the economic boom," said TEAM executive director James St. George. "It's time for Gov. Cellucci to join the legislature in fighting to help the working families who struggle to make ends meet."

Cellucci is undeterred by the criticism and by the reluctance of the Democrat-controlled legislature to approve his tax cut.

Last week, Cellucci filed papers with the Secretary of State's Office -- the first step in a signature drive he hopes will force the question onto the November ballot next year.

If the legislature won't approve the tax cut, the voters will, Cellucci predicted.

Natsios' report is intended to help Cellucci quell fears that the dramatic tax cut is irresponsible.

Natsios said the data collected by his office -- including a state-by-state per-capita comparison of taxation levels  shows Massachusetts is one of eight states in the country with the fiscal resources to withstand a major 18-month recession.

One reason for the state's strength is the billions it has stored away in the so-called "rainy day"and unemployment insurance funds, Natsios said.

Another reason is that the state has become more business-friendly since the disastrous recession of the late 1980s. Making the state even more attractive to business by cutting the income tax rate will create even more of a buffer against an economic downturn, he said.

"As the tax cuts ratchet in, it will convince businesses here to stay rather than leave," he said.

Natsios, one of the architects of Proposition 2, rejected the claim by opponents of Cellucci's tax proposal that a lower income tax rate will not draw more businesses to the state.

Natsios, who sat on the board of a major non-profit before joining the administration, said businesses look to income tax rates when deciding whether to move to a state or leave.

"I know taxes influence corporate decisions because I sat through boards of directors meetings where the decision was made," he said. "When I hear people on the left say it's irrelevant and it doesn't make any difference, that's total (nonsense).

"If your costs are not competitive with foreign competitors or competitors in other parts of the country, you move," he said.

"The study not only demonstrates the state's strengths, it also shows what Massachusetts should avoid in the event of a recession," Natsios said.

"In past recessions we always raise taxes," Natsios said. "That delays the recovery. You don't raise taxes in a recession, that's nuts."

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