Gov. Paul Cellucci and veteran anti-tax activist Barbara
Anderson have filed three times as many signatures as needed to
get the income tax rate rollback on the November ballot. This is how to cut taxes. All that
remains is to do it.
News that the fiscal year just finished produced a surplus
of about $700 million instead of the planned-for $500 million could keep the issue in the spotlight for the rest of the
legislative session.
There's a chance that $200 million could be given back to
the taxpayers through an adjustment in the personal exemption, though don't bet your vacation bonus on it. Judging by past
experience, the Legislature may want to devote it to capital projects around the state -- roads, bridges, parks, buildings
and so forth -- as was done last year, or to pay down more state debt than planned, or to beef up yet another social
program.
Taxpayers have to take back their money permanently, and the
ballot initiative is the way to do it. Polls show three-quarters of voters are prepared to do just that.
Cellucci's cut would return the income tax rate to 5 percent, where it was before the "temporary" increase
in 1990, from the current 5.85 percent. It would cost about $1.1 billion
a year when fully in effect in three years. The size of the surplus, and the rate of growth of state revenues, shows that
this is a practical goal.
But hasn't the Legislature cut taxes enough? The very
existence of growing surpluses answers that question in the negative.
Legislatures by nature respond to interest groups. Sen.
Claghorn's support of mandatory hang-nail coverage by health insurers makes hang-nail sufferers tell Claghorn over and over
what a godsend to humanity he is, to the point where the senator begins to believe it.
There is a constant upward bias in spending. Just open any
recent budget document -- the Senate's version of the next budget, Page 15: "We increase the eligibility for the Emergency
Rent Arrearage program from 100 percent to 130 percent of the federal poverty level." Why? Well, last year the state
increased the eligibility for family shelters to 130 percent of the federal poverty level and, "This is the logical next step"
to keep families out of shelters.
No doubt this money will not be wasted, but there's always a
logical next step. This is why, from the depth of the recession in 1992, the budget has grown at twice the rate of inflation,
and more than twice the rate of growth in real personal income.
This is what makes us give only two cheers for the House
version of the budget, which would continue the current molasses-slow schedule of rate cuts after the 2002 fiscal year,
when the rate is supposed to reach 5.75 percent. The House wants a 0.1 percentage point rate cut for every 2.5 percentage
points of growth in real personal income in Massachusetts. In all likelihood, it would take about 10 years to bring the rate
back to 5 percent.
There are too many "logical next steps" in the coming decade
to have any confidence at all that the Legislature wouldn't grab the increased revenues and leave the taxpayer looking like
Charley Brown after Lucy snatched the football away. Assuming it makes the ballot, as it should, the governor's tax cut will
avoid such an embarrassment. It deserves your vote.