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February 15, 2013

Legislators Express Caution On Patrick Tax Plan

The opening for Gov. Deval Patrick to sell skeptical lawmakers on his ambitious new tax-and-spending plan narrowed on Thursday as key House and Senate lawmakers from both parties seemed to wave the caution flag in front of the governor's budget chief.

The House and Senate Ways and Means committees kicked off public hearings on the fiscal 2014 budget with testimony from the administration, constitutional officers and the inspector general.

But even as Secretary of Administration and Finance Glen Shor emphasized the urgency of the governor's recommended investments in transportation and education with $1.9 billion in higher taxes, the message emanating from lawmakers was that Patrick might be pushing for too much, too fast.

"We're not feeling the ability terribly so much that everybody can dig even deeper, and quite honestly we hear from our constituents in that regard, so as we balance this, balance the spending and revenue, these are the challenges," Senate Ways and Means Chairman Stephen Brewer told Shor.

Brewer, D-Barre, was careful to make the distinction that he was speaking only for himself and not the committee, but he highlighted the fact that lawmakers in January took a $1,100 pay cut because median family incomes are declining.

"We will wrestle with all the substantive issues here. They are long and they are complicated," Brewer said.

Patrick has proposed raising the income tax to 6.25 percent and lowering the sales tax to 4.5 percent. Combined with other measures to alter the tax code, Shor said half of Massachusetts residents would see no change or a reduction in their tax burden, while wealthier residents would pay more.

The new revenue would be dedicated to repairing and modernizing the state's transportation infrastructure and transit system, and boosting funding for education to extend early education opportunities to all children and increase spending on public universities and community colleges.

"The changes in our tax laws do not leave us with a tax system that leaves us anything less than competitive with our neighboring states and states we compete most with," Shor said, adding that investing in education and infrastructure will make the state "infinitely more competitive" for business.

Some Republicans have suggested that Patrick's budget plan is about building his legacy with only two years left in office, and Shor did little to dispel the feeling that Patrick has grown frustrated by the limitations the global recession put on his ability to accomplish the goals he imagined when he first ran for governor in 2006.

"This budget reflects the governor's and the lieutenant governor's restlessness to tackle the unfinished business of promoting opportunity and prosperity in every corner of the commonwealth. This budget would begin a course of groundbreaking new investments in education, transportation and innovation that will transform Massachusetts's economy in the short-term and over the long haul," Shor told lawmakers.

Shor continued, "Simply relying on cuts to address the challenges of today and tomorrow will not get us there." He said reform remains an "enduring focus" of the governor.

Sen. Michael Knapik, a Westfield Republican and the ranking minority member on the Senate Ways and Means Committee, gave kudos to the Patrick administration for the way it managed through the lean recession years with the support of the Legislature. But Knapik questioned the rush to raise new revenue to support transportation expansion projects and massive new funding for education when casino gaming revenue is just a few years away.

"Shouldn't we wait for the gaming revenue to start to coming? Wouldn't that be a more prudent course?" Knapik said.

Knapik also raised the issue of wasted resources from fraud, abuse and lax oversight in the state's welfare system, an increasingly common counter-argument to Patrick's call for higher taxes.

"I think we're hard pressed to just hand over more money unless we're doing a better job of policing what we have," Knapik said, saying his constituents are tired of reading stories about people getting benefits they don't deserve.

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