, Newburyport, MA


November 16, 2013

Taxing times on Beacon Hill


We spent months interviewing experts about the tax system and eventually released a report with recommendations that I wonder if Rep. Kaufman found in its burial place and shared with his new commission. Sen. Rosenberg was talked out of his grad tax, the members who wanted local income or sales taxes learned from many sources that this was a bad idea, and I think the final recommendation was about local aid funding formulas. I was able to include a minority recommendation that we fund education with taxpayer-funded vouchers that would give parents real school choice.

Well, education is still being funded by the property tax and local aid, but Gov. Weld’s encouragement of charter schools is still supported by the Legislature, albeit with a cap on the number of charter schools, lest there be too much choice for parents.

In 1998, I served on Gov. Paul Cellucci’s Transition Team for Economic and Fiscal policy. I like to think this led to his 1999 decision to work as a partner with CLT on a ballot question to roll back the state income tax rate, which had traditionally been 5 percent until it was raised “temporarily, for 18 months,” in 1989.

In 2000, CLT and Gov. Cellucci won their ballot question for a three-year rollback of that “temporary” tax increase. The rollback was frozen two years later at 5.3 percent by the Legislature with another promise, to slowly continue the rollback when state revenues allow.

It’s now a quarter-century since the first promise that the rate would return to 5 percent, and we just learned from preliminary revenue data that next year, the rate might drop to 5.2 percent. Hooray!

My first recommendation for “Principles of Good Tax Policy” would be, when voters are promised that a tax increase is temporary, the state government should keep its word. My second would be, when voters make a decision on tax policy, their decision should be respected.

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