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Massachusetts
Likely to Have a Referendum About Tax Cut
Cellucci Wants to Reduce Income Tax Rate to 5% by 2001, Democratic Legislators Resist Massachusetts News
August 2--Regardless of how the state budget turns out in 1999, the tax cut it contains is unlikely to be deep enough to restore the five percent income tax rate. The legislature is unlikely to reduce the rate below the 5.75% passed by the House of Representatives. Governor Cellucci made the tax-rate rollback a main part of his 1998 gubernatorial campaign. He has promised to attempt to put the matter before the voters in a referendum for the year 2000. He wants to reduce the rate retroactively for 1998 to 5.7%, to 5.5% for 1999, to 5.3% for 2000, and to 5% for 2001. Tax Opponents Prepare for Fight Among the chief promoters of the reduction is Citizens for Limited Taxation.
Barbara Anderson, co-director of CLT, told Massachusetts News that her organization is ready to file the necessary papers with the Secretary of State's office before the August 4 deadline. She is optimistic about the prospects for success. "It's hard to predict
the mood of the electorate in the middle of the next year," she said, "but
all of the polls show that the voters are overwhelmingly in favor of a
tax cut."
Liberals Want "Targeted Tax Cuts" James St. George of the liberal, union-backed Tax Equity Alliance of Massachusetts is one of the chief opponents of the tax cut. He concedes that the measure will probably get enough signatures to be on the 2000 ballot. St. George dismisses the polls that show voters favor a tax cut. "Experience shows that when people face the choice of a tax cut or services like education and health care, they invariably recognize the value of services and reject tax cuts," he told Massachusetts News. "That was the case in 1990," he said. TEAM opposes across-the-board tax cuts, St. George says. They have a counter-proposal of "targeted tax cuts" that will help working families, including a larger earned income tax credit, a deduction for rent-payers, and greater child-care deductions. They claim that their plan would save a typical "working family" (a family with two children, with an income of $50,000 a year, renting, and paying $100 a week in childcare) $173 rather than the $60 in the House's across-the-board tax cut. But Barbara Anderson claims that restoring the 5% rate will save a family of four with one wage earner making $40,000 a year close to $300. "It's the people's money in the first place," Anderson says. "It shouldn't
be up to the government to decide who gets to keep how much of what he
earns."
A centerpiece of the debt will likely be the impact of any tax cuts on education spending, one of the largest items in the budget. The budgets proposed for the coming fiscal year by the Governor, House, and Senate all propose to spend over $4 billion on the Department of Education, plus another $3 billion in local aid earmarked for education. St. George noted that Education Commissioner David Driscoll said that he favored smaller class sizes, improved school buildings, and higher teacher salaries, but does not know how to pay for them. "How can the administration call for tax cuts when it can't fund its education priorities in the current budget?" he asked. Barbara Anderson denies that concern for education spending will influence the vote. "The public is starting to realize that all the money we poured into education is going for nothing," she said. Anderson hopes that the voters will also be able to approve a referendum that allows vouchers for parents to send their children to private, including religious, schools. "People will see that an alternative is available," she said. "The usual
scare tactics about tax cuts threatening to harm education aren't going
to work this time."
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