Patrick Lends Voice to Those Opposing
Income Tax Repeal
by Kyle Cheney, STATE HOUSE NEWS SERVICE
STATE HOUSE, BOSTON, MARCH 3, 2008.....Gov. Deval Patrick today blasted as "irresponsible" a ballot initiative to repeal the state's income tax, a proposal that, if passed, would remove $11 billion from the state's tax base as lawmakers weigh next year's $28.2 billion budget.
Invoking tax cuts pushed by President Bush, the governor said eliminating the income tax would undermine essential services such as road repairs and school building.
"Remember when [President Bush] was selling a federal tax cut? He kept talking about how 'it's your money.' He's right! It is your money," the governor said at a breakfast hosted by labor organizers and attended by many state legislators. "The point is, though, that that's not the whole story because it's also your broken roads, it's your overcrowded schools, it's your broken neighborhoods and your broken neighbors. And it's time we all started taking responsibility for that, and one way we take responsibility for that is by the income tax. So let us not do something foolish."
Proponents of the income tax repeal initiative, which has been spearheaded by former libertarian gubernatorial candidate Carla Howell, say it will save Massachusetts's 3 million taxpayers $3,600 annually and put money in the pockets of struggling families. If the measure passes in November, the income tax would be cut in half in January 2009 and would fully dissolved by January 2010.
The last tax-cutting ballot law was not fully implemented. Massachusetts voters in 2000 approved an initiative petition calling for the income tax to be reduced to 5 percent, the implementation of which was cut short in 2002 when lawmakers froze the rate rollback as part of a multi-pronged plan to raise taxes and balance the state budget in the face of a steep drop in tax collections.
Proving that the issue is not a partisan one, House Minority Leader Bradley Jones said he, too, opposes the income tax repeal. Jones, a North Reading Republican, said he was hard-pressed to name any other elected leader who would support the income tax repeal but added that his colleagues and the governor should hear what their constituents are saying.
"It's important to understand what is motivating people," he said."They're sending a message for a reason."
With his remarks, Patrick became the latest in a chorus of top state officials to speak out against the proposal. Twice last week, Sen. Stephen Brewer (D-Barre) warned attendees at state budget hearings to rally against the initiative or face severe budget cuts.
"Aren't they a little worried about this?" said Barbara Anderson, president of Citizens for Limited Taxation. "They certainly ignored [Howell] the first time she tried. It's interesting that now they are concerned."
Anderson, whose advocacy led to the passage of Proposition 2 ½, which limits property tax increases, said she supports the income tax repeal, which appears headed for the November 2008 ballot, because "it would get [state leaders'] attention." Her support, she said, stems mostly from the Legislature's refusal to implement the earlier effort to roll back the income tax rate to 5 percent. The rate remains stalled at 5.3 percent.
Howell responded to the governor's morning remarks by email and in the form of a question.
"Governor Patrick, we can see the results that you're delivering with this year's $28 billion in Massachusetts state government taxing and spending," she wrote. "If it were possible to produce the same results for $17 billion a year, would you support our End the Income Tax Ballot Initiative to give back the other $11 billion to the 3,000,000 workers and taxpayers who earned it?"
[N.B. We await Governor Patrick's response...]
Massachusetts Taxpayers Foundation President Michael Widmer warned that repealing the income tax would lead to "an extended period of political chaos."
"The impact would be devastating. It would decimate much of state and local services. Education, health care and so forth," he said in a phone interview. "It's approximately 40 percent of the state budget and 60 percent of total taxes. The proponents' notion that this could be accommodated with a little belt-tightening shows a total lack of understanding of where the money is directed."
Widmer said the repeal would lead to rampant lawsuits against the state for violating its court-ordered mandate to provide adequate education for all children and certain Medicaid programs.
"We'd be the joke of the nation and it would certainly undercut the Massachusetts economy," he said. "This kind of chaos that would ensue would certainly discourage job creation."
Lawmakers, while wary of the proposal, have yet to factor it into their political calculations.
"We'll have to wait and see what the appetite of the public is in regards to that," Rep. Paul Donato (D-Medford) told the News Service today. Donato, a member of House Speaker Salvatore DiMasi's inner circle, said House leaders "haven't talked about it yet."
"At this point, I think we're looking to deal with our budget first, have our budget out of the way, and then go from there," he said.
Jones said it was too early to speculate about potential ways to make up for lost revenue if the income tax repeal passes, but he cautioned against an immediate spike in either property taxes or the sales tax.
"There comes a point where New Hampshire would be like, 'that would be wonderful,'" he said. "Every neighboring state would love it."
Jones, too, pointed to the Legislature's freeze on the already- approved income tax rollback as a reason voters were fed up with the system.
"The size of state government is bigger than it was then. We're spending more than we did then," he noted.
Asked whether the proposal seems more likely to pass this time around, Anderson said she believes it is because constituents haven't received property tax relief despite the governor's campaign promises.
"I think if anything, people are more angry and disgusted this year than they were [in 2002]," she said, adding that CLT would, if called upon, throw its weight behind Howell's petition drive.
Asked how government would cope with the change in its tax base, Anderson said, "The first thing I would do is I would call politicians in New Hampshire, Texas, Washington State, Florida" - all states that don't impose an income tax - "and say 'how do you do it?'"
Teachers and labor leaders have formed a group called the Committee for Our Communities to oppose the income tax initiative, which they argue would decimate public education.
At Monday morning's labor breakfast, Greater Boston Labor Council President Rich Rogers noted that in December the governor called the income tax repeal proposal "a dumb idea."
"We'll be with you in this ... insane effort to eliminate the income tax," he said. "They took you to task because you called it dumb. But you are absolutely right, governor. It's a dumb idea."
Massachusetts Teachers Association President Anne Wass, who told the News Service in December that the income tax repeal was "a wacky, wrong-headed idea," said the repeal would devastate public education.
"It would mean major teacher layoffs, school closings, a lot less money for public higher ed, which is already at a disastrous level," she said. "I think one of the things we find from us is that kids only go through school once. It isn't a bridge that you can come back and fix."