THE ISSUE
Speaker Thomas M. Finneran offers a tax cut to taxpayers while taking away a guaranteed refund.
OUR VIEW
Surplus revenues should be returned to those who generated them - the taxpayers.
House Speaker Thomas M. Finneran, D-Boston, is once again trying to pull the wool over the eyes of
his favorite dupes - the Massachusetts taxpayers.
The current sleight-of-hand concerns what to do with the $600 million to $800 million surplus in tax
revenues the state expects to generate this year.
Watch closely as Speaker Finneran extends a tax cut in one hand, while snatching away a big refund to
taxpayers with the other.
Here’s the careful finger work behind the illusion:
There is a law that says any money in the state’s stabilization, or "rainy day" account, over $950
million must be returned to taxpayers.
The stabilization account currently holds about $800 million.
The state, after spending on capital projects, expects to pump between $100 million and $500 million
into the stabilization fund, well over the $950 million cap that generates a refund to taxpayers.
Finneran extends to the taxpayers a long-sought reduction in the state’s income tax rate from 5.95
percent to 5.7 percent. He also offers a reduction in the tax on dividends from 12 percent to 5.7 percent.
That saves taxpayers $302 million this year.
But at the same time, Finneran raises the cap on the stabilization fund by $500 million to $1.45 billion.
Net loss to the taxpayers this year: about $200 million.
Presto, taxpayers fleeced again!
The House approved Finneran’s bill to do this last week. The increase in the stabilization fund cap was
never even debated, probably because many of our solons never even knew it was there.
It’s a classic example of how Beacon Hill insider politics works and it is appalling. The leadership
throws a bone to the taxpayers while grabbing the steak for themselves.
And Speaker Finneran has the gall to call this prudent fiscal management. The state needs the money
in case the economy sours, he says. Of course, the taxpayers don’t need the money. They’d just blow it
anyway.
Gov. A. Paul Cellucci has vowed to veto this bill, as well he should. He should veto any bill Finneran &
Co. send to his office that does not return the surplus to its rightful owners - the taxpayers who worked
to generate it.