A Ballot Committee of Citizens for Limited Taxation


The Salem Evening News
Saturday, October 21, 2000

Question 4: Considering the tax rollback
By Jon Chesto
Ottaway News Service

The way Barbara Anderson sees it, state lawmakers made a promise 11 years ago.

The Legislature passed what was expected to be a temporary income tax increase in 1989 to help the state recover from a financial crisis.

But now, with the Massachusetts economy booming, the tax rate still hasn't been shaved back to its initial level of 5 percent.

For the past decade, Anderson has led an effort to force the Legislature's hand. Her group, Citizens for Limited Taxation, unsuccessfully tried to persuade voters in 1990 to approve a ballot initiative that would have, among other things, returned the income tax rate to its previous rate.

CLT tried again three years ago. But opponents challenged many of the signatures CLT had gathered for the petition drive and a court eventually disqualified enough names to keep the question off the 1998 ballot.

Anderson, executive director of CLT, has some important allies this time around. With the help of Gov. Paul Cellucci and the state Republican Party, proponents of a tax rollback collected nearly three times as many signatures as they needed to get it on the ballot on Nov. 7 as Question 4.

"I think we're in better shape now than we would have been in '98," Anderson said, pointing to the surging economy and huge state surpluses. "We have all that going for us, and we got two extra years to remind everybody about the promise they made in 1989 that the tax hike would be temporary."

But will voters go for it?

Recent polling predicted the rollback would pass by a 3-to-1 margin.

However, much can change in the next few weeks. Both sides launched major television advertising campaigns earlier this week, and a series of debates between Cellucci and several of the state's top Democrats about Question 4 is expected to raise the initiative's visibility.

There's also fierce opposition to the rollback, particularly among the state's labor unions. Critics say cutting the income tax back to 5 percent will jeopardize the state's ability to pay down more of its debt and invest in its schools and health care.

The state is already in the process of cutting the income tax rate from its current level of 5.85 percent to 5.75 percent over the next two years.

If Question 4 is approved, the tax rate would be cut all the way to 5 percent over the next three years.

The tax cut is expected to cost nearly $1.2 million a year starting in 2003. Supporters say the state can afford it without affecting important state-funded services because of the strong economy and the state's relatively high anticipated surpluses.

"Not a single program will be cut," said Bobby Matthews, spokesman for Cellucci's Tax Rollback Committee. "This will just force some fiscal discipline on Beacon Hill."

'A reality check'

Like presidential candidate George W. Bush, Question 4 advocates say an income tax cut will help stimulate the economy. They point to the some 40 various tax cuts that have occurred in the past decade as evidence of that theory.

Republican lawmakers tried to get a similar tax cut approved as part of the state's budget earlier this year, but the effort didn't get very far in the Democrat-controlled Legislature. Many of those Republicans also collected signatures last year for Cellucci's effort to get the rollback on the ballot.

"This is one of those issues where I think the Legislature needs a reality check," said Sen. Bruce Tarr, a Gloucester Republican whose supporters helped gather about 2,000 signatures last year. "The only way we're going to control government spending is by this sort of broad-based reduction."

Massachusetts Taxpayers Foundation president Michael Widmer said he expects the state would be able to support the income tax rollback without cuts in programs -- even with relatively modest 4.5-percent increases in state spending each year -- as long as revenues continue to climb.

But the MTF, a government watchdog group, has not taken a position on Question 4. Widmer said he would prefer a more gradual rollback, such as one proposed earlier this year that would be tied to the strength of the state's economy. He said the tax cut could come back to haunt the state if the economy suddenly takes a downturn.

Critics say wealthiest would benefit

Many critics say the negative impact of Question 4 would be much more immediate, particularly if voters also approve another ballot question next month known as Question 6, which would give tax credits for tolls and motor vehicle excise tax payments.

"The sky won't fall, the state won't crumble into the ocean, particularly if our economy stays strong," said Senate President Thomas Birmingham, a Democrat who is scheduled to debate Cellucci about Question 4 later this month. "But what will be compromised is our ability to move forward, to continue to improve our public schools, to expand health care coverage."

In another reflection of the current presidential race, opponents of Question 4 point out the people who will benefit most would be the wealthiest 1 percent in Massachusetts. According to a report released by the Tax Equity Alliance for Massachusetts, the total amount saved by 60 percent of the state would be nearly equal to what would be saved by the top 1 percent.

The tax rollback's benefits to the average family aren't worth the potential effects it could have on the state's schools, infrastructure and health care services, opponents say. They point out that a family of four making $50,000 a year would save $211 once the new tax rate is fully implemented.

"It's like a buck a day," said Bob Haynes, president of the Massachusetts AFL-CIO and chairman of the Campaign for Massachusetts' Future. "You can't buy a small cup of Dunkin' Donuts coffee with what you get back."

Haynes called Question 4 supporters' reliance on what legislators said in 1989 a "big sham."

Haynes said those lawmakers, most of whom are no longer in office, could have passed a law at the time that would have required the rollback at a certain point, but they didn't. He said a proposal to include such a clause in the legislation was actually shot down that year.

Besides, Haynes said, the same tax cuts Cellucci has been touting recently should be enough proof that the state has cut taxes significantly in the past decade.

"We've done an unbelievable amount of stuff (to keep) the promise of cutting taxes," Haynes said.

Supporters say that even if the rollback doesn't cut into current services, many public schools and health care providers have pressing needs that will continue to go unmet if Question 4 is passed.

"I think we really can build for a stronger, brighter future," Birmingham said. "History will judge us by whether we seize the opportunity that prosperity has given us or whether we squander it."

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