Thursday, April 23, 2009

Budget Season Round Three: The Good, The Bad and The Ugly

Over the last two days, we’ve discussed two tax proposals up for debate next Monday, the income tax and the gas tax. The tax du jour however, is the sales tax, perhaps the tax that could have the most immediate and significant damaging effect on the state’s economy, small businesses and families alike.

According to a study recently released by the Beacon Hill Institute a Massachusetts sales tax hike would cost the state 10,000 jobs and more than $40 million in investment. The retail industry currently employs 18% of all workers in Massachusetts. During a bad economy, the last thing we want to do is put more people out of work. We also want to encourage new business to come to the Commonwealth, not dissuade them, which is exactly what a steep increase in the sales tax will most definitely do. The Retailers Association of Massachusetts recently announced that tax free reported an 18% increase in 2008 4th Quarter sales. Furthermore, the same company is expected to report a 15% increase in 2009 1st Quarter sales. Meantime, retailers in Massachusetts are seeing the polar opposite. Small businesses are laying off employees, reducing salaries and even worse closing their doors all together. If small businesses can adapt and adjust to a weakening economy, why can’t the state do the same thing? The Majority party needs to learn to live within its means, cut wasteful spending and tighten its belt. Consumer spending is at an all time low, and until it picks up, the economy will continue to struggle. Increasing the sales tax would be adding a roadblock on the road to economic recovery.

We are always talking about reducing waste and inefficiency in state spending, and we believe the medical waste proposal filed as an amendment to the budget can certainly do just that. The amendment we filed encourages medical facilities to return unused, unexpired medication. This proposal could save the Commonwealth at least $20 million annually, as nursing homes in Massachusetts alone are known to waste millions of dollars in unused prescriptions. This concept will lead to a decrease in overall health care costs in the state. It is important to think outside of the box and come up with innovative ideas that have the potential to lead to savings for the Commonwealth. Instituting a new tax or raising currents ones is the easy way out. However, coming with alternative ideas and solutions to the state’s problems that do not involve asking the taxpayer for more money shows the general public that you understand the hard times we’re all facing.

Check out www.thecapitolviewlive .com tomorrow as we discuss a Democrat proposal that would drive major manufacturers out of Massachusetts and a Republican amendment that will shift all MassHealth members to managed care plans which could save the Commonwealth up to $1 billion over five years.