A PROMISE TO KEEP: 5%
A Ballot Committee of Citizens for Limited Taxation

 

Patriot Ledger
Quincy, Mass.
Wednesday, April 21, 1999
COMMENTARY

Return to 5% income tax long overdue
By Ingrid Shaffer
Patriot Ledger columnist


"Since a politician never believes what he says, he is surprised when others believe him."

-- Charles DeGaulle


Every parent's heard it -- "And, anyway, I never said I'd wash the dishes every night!" -- or some such weak defense from the child whose allowance we raised on the good-faith promise of extra work, but who now doesn't wish to deliver. Memory grows dim -- and the pleas loud -- once the money's been spent, but the best parents accept no excuses.

We shouldn't, as taxpayers, either. Three recently filed Senate bills to reduce the state income tax from 5.95 percent to 5 percent -- either by 2000 or in a three-year phase-in  have produced enough crocodile tears pouring from the State House down Beacon Street to return the Back Bay to a swamp.

Senate President Thomas Birmingham cries that a tax cut would cause a dip in education, health care and public safety money. Others wail that Gov. Paul Cellucci's militant support for the rollback is "fiscally irresponsible" despite the windfall tobacco settlement coming to Massachusetts, along with this year's anticipated record budget surplus of $300 million to $600 million -- money that will more than cover anticipated outlays.

And now, the latest chutzpah: Though the Legislature raised the income tax from 5 percent to 5.75 percent in 1989 in order to plug a temporary budget deficit, which has long since evaporated, politicians such as Rep. John Rogers, D-Norwood, are claiming the "promise (to return the rate to 5 percent) never existed." Oh. I must have imagined the following account of the 1989 tax hike published in The Boston Globe that summer: "The Massachusetts House gave ... approval to a temporary 15 percent increase in the state income tax ... for an 18-month period."

In fact, every major news source at the time touted the tax increase as temporary, as voters like me who were about 10 years old know. But truth can be stretched -- or dodged -- in the politicians' elastic world. Pressed on the issue of the Legislature's original intentions at the March 31 Taxation Committee hearing on the tax reduction bills, Rep. John Slattery, D-Peabody, punted: "Well, I didn't make that promise. We can't go back to that promise because it's a whole different time."

How convenient that Slattery and so many of our reps weren't around when earlier lawmakers floated those bonds to cover the Dukakis budget shortfall with our bailout tax money. Now those bonds are paid off and the fiscal crisis is over, but the pols have bailed out, leaving their followers to collect the extra tax revenue, but not the blame.

Well, most followers. One exception is Sen. Robert Hedlund, R-Weymouth, co-sponsor and leading proponent of the three rollback bills now being considered. He doesn't buy the no-blame-game semantics of the anti-rollback faction. He says lawmakers have a moral obligation to live up to the representations made by their predecessors. "The Legislature may not be legally bound by the promises of past Legislatures, but I do think we are morally bound to acknowledge that this (tax hike of 1989) was of a temporary nature," Hedlund told me recently.

He saved special outrage, however, for Massachusetts' handling of the stabilization fund, the "rainy day" money gleaned from tax revenue surpluses that are set aside by the state for fiscal emergencies. Originally capped at $585 million -- an amount believed sufficient to cover an economic downturn -- the excess was to revert to the Taxpayer Reduction Fund and trigger a tax break for you and me. But it never happened because lawmakers "don't want to take taxpayer money out of the pipeline and send it back to the people," said Hedlund.

Instead, he said, the Legislature, "unconscionably and without economic justification" raised the cap on the rainy day fund to $950 million in 1997, and again to $1.4 billion in 1998, which eliminated automatic tax reductions of $365 million and $475 million, respectively. "This was a disgrace," Hedlund stated, noting that this year's doubling of the personal tax exemption, which will return just $443 million to taxpayers, will ironically bring less tax relief than if our lawmakers had just honored the last cap on the rainy day fund.

Less tax relief and more mischief, it seems. Thirty-two states set aside emergency funds, a few even approaching $500 million, but Massachusetts maintains a $1.4 billion trough.

Most states have "strict guidelines about how stabilization funds are managed," Hedlund said. Such safeguards typically include "demonstrating economic need, or at least requiring lawmakers to obtain a two-thirds majority" in order to spend or add money to rainy day funds. He noted that Massachusetts holds no public hearings on such proposals, requiring "only a simple appropriation" to tamper with this enormous pool of money. "This makes (the rainy day account) a slush fund for the legislative leadership."

That's why Hedlund's most sensible proposal might be Senate bill 1526, which rightfully -- and by statute -- limits the amount of the rainy day fund to 7.5 percent of all revenue. For each year that cap is reached, taxes decline by about a quarter percent, until we're back to a 5 percent income tax rate after three years of defined state surplus.

It's also best in line with House Speaker Thomas Finneran's recent public support for a possible immediate reduction to 5.75 percent. "What the (legislative) leadership wants, usually goes," Hedlund said.

Always? Or do the people have a say in the matter of tax cuts? I asked. "Oh, they certainly do," Hedlund replied, "so if you want to be heard, call your legislators" before the budget debates in June.


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