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Local News

January 24, 2013

Patrick outlines 'growth budget' built on tax increases

(Continued)

“I reject the notion of this self-defeating strategy of not shaping our future. ... If we want growth, then we’re going to have to have to invest in it,” Patrick said.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, said the tax proposal carried “some risk to the economy in the short term.”

“There are probably more moving pieces in this tax proposal than anything I’ve ever seen from a governor,” Widmer said.

Widmer did not take a firm position against the income tax hike idea, but questioned whether it made sense to put more focus on the income tax as a revenue generator with an increase that would give Massachusetts the highest income tax burden – though not the rate – of any state in the country. “He’s really rolled the dice. This is a very aggressive budget and depends on a lot of things happening, but he’s put his stake in the ground,” Widmer said.

Patrick said he could not envision supporting an income tax increase to 6.25 percent without the accompanying decrease in the sales tax, suggesting they are a package deal that will only work when coupled together with the other reforms.

The reliance on new revenue to support significant increases in spending in key areas will complicate the budget process as the bill heads to the House. Any changes to the governor’s tax proposal will require lawmakers to scale back spending elsewhere.

House Speaker Robert DeLeo told the News Service that he asked House Democrats during a private caucus to “keep your powder dry” until the governor’s full proposal can be reviewed and the House crafts a response. “Quite frankly, I want to give the governor his due and see exactly what that means, especially to the middle class, the folks that I represent. Where’s this money going to be coming from?” DeLeo said.

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