NewburyportNews.com, Newburyport, MA

April 4, 2013

Governor skeptical of new tax plan

By Matt Murphy
STATE HOUSE NEWS SERVICE

---- — BOSTON – As the House quickly advanced a $500 million tax package on Wednesday, Gov. Deval Patrick said he was “skeptical” that the proposal put forth by Democratic House and Senate leaders would be sufficient to meet the needs he has identified in both transportation and education.

The governor also raised doubt about whether the amount of new revenue being pursued by legislative leaders will be sufficient to support a consensus increase in local road and bridge repair funding, and suggested House Speaker Robert DeLeo and Senate President Therese Murray were trying to “position” him by jointly agreeing to the plan.

The tax proposal put forth by DeLeo and Murray raises only half of the new revenue the governor requested in his budget for transportation with new taxes on gas, tobacco and businesses, and funds none of the education initiatives Patrick sought with his $1.9 billion tax reform plan.

“I’ve been clear publicly and with the legislative leadership that I’m willing to compromise, but I do think there is such a thing as too small. We’ve got to be serious about investing in ways that give us growth, and investing in transportation and in education do that,” Patrick said, moments after addressing members of Stand for Children on Beacon Hill to press lawmakers to support new spending on education.

For the second straight day, Patrick offered a measured response to the Democratic leadership plan, but hinted he may have a more detailed and direct reaction on Thursday. “We’re trying to do some analysis. I am somewhat skeptical, but I want to make sure I’ve thought about what the implications are before I comment,” Patrick said.

Patrick and Education Secretary Matthew Malone told about two dozen members of Stand for Children to lobby lawmakers and make it clear that they weren’t giving up the fight for increased spending on education. Patrick urged them when talking to legislators to “make it personal” and share their own stories about how pre-school and lower college tuition costs would impact their lives.

Malone, who said he struggled through dyslexia to achieve success with the help of teachers and others, lamented that education “wasn’t part of the dialogue” when DeLeo and Murray rolled out their transportation financing plan on Tuesday.

“I had two choices to make. I can sit and complain, or I can get fired up and keep talking about education. I chose the second one. So I’m back here today as calm as I was yesterday to see your good faces and ask you to join me,” Malone said.

The House on Wednesday took procedural votes to tee up for debate on Monday the tax plan and a related borrowing bill that would increase funding for Chapter 90 authorizing $300 million for local road and bridge repairs.

Patrick said an analysis by Transportation Secretary Richard Davey “raises some question” about whether the state can afford to boost Chapter 90 funding by $100 million with the level of new revenue proposed by legislative leaders.

In order to meet an April 1 deadline to inform municipalities of their expected level of funding, the Patrick administration sent out letters on Monday informing cities and towns how much money they would receive based on a $300 million program, but cautioned that it was contingent on sufficient revenues.

Cities and towns cannot sign contracts or agreements for construction until a Chapter 90 bond bill is approved and signed by Patrick. “Without that passage of either our tax reform proposal or additional revenue that is derived from options substantively comparable to that which we have proposed, investment in the Chapter 90 program will not be implemented,” the governor wrote in the letter also signed by Lt. Gov. Tim Murray.

Asked his opinion on the House and Senate coming together to collaborate on a tax plan before either branch debates its budget, Patrick said, “Politics.” When asked to elaborate, he said, “It’s part of the way the building works. People are constantly trying to position themselves and position me. That goes with it. I get it.”

The governor also said he was looking forward to helping lawmakers during next year’s election defend any votes they might take to raise enough revenue to support his investment plan, dismissing suggestions that Republican Leah Cole’s victory in a special election in Peabody Tuesday was a referendum on his budget.

Harkening back to 2009, the last time the Legislature voted for a major tax hike raising the sales tax to 6.25 percent, Patrick said not only did he win re-election in 2010, but, “Not one of the people who voted for that sales tax increase lost their seat.”

In the 2010 election, House Republicans actually picked up 16 seats, defeating 12 incumbent Democrats, including nine who voted for the sales tax increase. Reps. William Bowles, Geraldo Alicea, Steven D’Amico, James Fagan, Mark Falzone, Danielle Gregoire, Barbara L’Italien, Allen McCarthy, and Matthew Patrick all supported the tax increase and lost.

L’Italien, an Andover Democrat and the highest ranking Democrat to lose that year after serving two-years as vice-chairwoman of the budget-writing House Ways and Means committee, said after the election, “The sales tax took on a heightened interest up my way. The whole Merrimack Valley, with the exception of Lawrence, they all voted for Charlie Baker. There was also a portion of folks who just wanted something new.”

Administration and Finance Secretary Glen Shor, in a memo obtained by the News Service to Cabinet financial officers, said the House-Senate leadership plan would require cutting $783 million from the governor’s budget proposal, leaving no money to support early education expansion, extended learning time in poorer school districts, or funding for college scholarships grants and to the University of Massachusetts to avoid tuition and fee hikes.

Shor also suggested the Legislature might have to eliminate additional funding for safety net hospitals, a restoration of adult dental coverage for MassHealth patients, a $2.8 million expansion of the State Police drug lab and funding for summer youth jobs, recycling, pools and parks and clothing allowances for low-income families.

Patrick declined to say whether he would support a new revenue package that did not provide for increased education spending, but used descriptive terms to outline the choices lawmakers face if they don’t support higher taxes.

He said he believes most in the Legislature agree with his priorities, but need to be convinced that paying more now will deliver economic growth in the future.

“The consequences of that are that 30,000 three- and four year-olds get told by Beacon Hill we can’t do anything for you, we can’t do anything to make your future brighter, to help you reach your potential,” Patrick said.

He continued, “We tell young people in middle schools that are underperforming that we can’t afford to do what’s necessary to prepare you for the work force. We tell the business community that you’re going to have to look elsewhere to meet your workforce needs. We tell middle-class families we can’t do anything and won’t do anything to help your kids pay for their college. I think we’re better than that.”

Rep. Carl Sciortino, a Medford Democrat and chair of the Progressive Caucus, said progressive Democrats were still considering their amendment options in preparation of Monday’s expected debate on taxes and revenue.

Education Committee Co-chair Alice Peisch (D-Wellesley) said new investments in education were not completely off the table, even though the tax proposal is focused on funding transportation.

“I think the governor’s budget was very generous with respect to education and I’d be very surprised to see those numbers reflected in the House budget, but I’m hopeful to see some modest increases in some of the areas,” Peisch said.

UMass officials have also been watching the Legislature closely, indicating earlier this year that the governor’s proposal and his commitment to try to ratchet up state investment to cover 50 percent of the system operating expenses would forestall tuition and fee hikes in September.

A spokeswoman for UMass President Robert Caret on Wednesday said it was too early to say whether tuition increases were back on the table.

“We don’t have anything to really discuss until we see the House and Senate budgets and those go through the conference. We have to wait and see,” spokeswoman Ann Scales said.

Asked about Ways and Means Chairman Rep. Brian Dempsey ruling out additional new revenue for education in the budget, Scales said, “We have to see how they use existing revenue to support higher education. This is the beginning of the process and the decision to raise tuition and fees is not a decision that’s before us right now.”