Jones on Corporate Tax Increase

Kudos to the Boston Globe for pointing out the state may lose $535 million in tax revenue beginning in 2012. Luckily, the History Channel has also pointed out that the world will end that year as well. It looks like the loss of corporate tax revenues is the least of our worries.

Sarcasm notwithstanding, it’s fascinating how the Globe paints the largest corporate tax increase in Massachusetts history as falling short of its promise. As a member of the Corporate Tax Commission, I made it very clear back then that the state’s revenue intake from so-called, closing “loopholes” was way over-exaggerated. If you need more proof, just look at how the Patrick Administration had to revise its fiscal 2009 tax revenue projections a total of five times, and still failed to get it right.

The Globe also highlights how only three corporations will benefit the most from a corporate tax deduction designed to lessen the sting of combined reporting. Those three companies are planning on claiming over $40 billion in tax deductions for the seven year period. That would equal about $281 million in tax revenue lost to the state. The Globe failed to point out the ratio of revenue lost to tax deductions claimed is only seven-tenths of a percent. Moreover, if you look at the total amount of deductions claimed by all 128 companies - $178 billion – the total estimate loss to state coffers is $535 million, or three-tenths of a percent. The Globe also failed to mention how many people are employed by these companies. It seems to me if 128 companies are big enough to ask for almost $180 billion (almost 10 times the state budget) in tax deductions, they probably provide a lot of services to the state in terms of employment, healthcare benefits, capital infrastructure, and municipal revenue. So much for investigative reporting.

The Boston Globe should just come clean and tell us the real reason for this article: laying the foundation for more taxes. Tax revenues have been falling for over a year now. Clearly, the Patrick Administration is going to need more cash to look good for next year’s campaign for re-election. What better way to pave the way to more taxes than to have the Morrissey Boulevard satellite office point out that, once again, the evil, bad corporations are not paying their fair share?

Earlier this year, Senate Minority Leader Richard Tisei and I filed legislation to repeal the $500 million corporate tax increase all together. The tax increase – believed to be the largest business tax increase ever passed in the Commonwealth – was approved by the Legislature on July 1, 2008 without the support of a single Republican legislator and signed into law by Governor Deval Patrick the following day.

From all of us here at The Capitol View, have a safe and happy Columbus Day weekend.

We'll be back on Tuesday with the latest happenings from Beacon Hill.

Good Ideas in April, Even Better in October!

The Commonwealth is facing close to a $1 billion revenue shortfall, this despite a significant hike in the sales tax. In April, in an attempt to be proactive, Republican lawmakers offered more than $300 million in cost savings initiatives. Not surprisingly, every proposal was overwhelmingly rejected by the tax and spend Democrats on Beacon Hill. Those ideas were good in April, but they’re looking even better now that it’s October.

While we are cognizant that some cuts will have to be made, we are disappointed that none of our efforts to save money were adopted.

Here’s a recap of what we offered:

1. Require furloughs of all state employees.
Cost Savings=$40 million

2. Shift all MassHealth members to managed care plans, rather than the MassHealth fee-for-service program and primary care clinician plan.
Cost Savings=$200 million annually

3. Encourage medical facilities to return unused, unexpired medication, which will lead to a decrease in overall health care costs in the Commonwealth.
Cost Savings=$20 million

4. Change the Pacheco law threshold from $200,000 to $5 million.
Cost Savings=$40 million

5. Provide the rules and regulations for the state to expedite the sale of surplus land, transferring the revenues from such transactions to the general fund.
Cost Savings=$30 million

Those five proposals would save the Commonwealth about $330 million this year alone, and that is a conservative estimate as there is potential to save even more by implementing these ideas. Innovative thinking is needed to rectify the fiscal crisis the state is dealing with right now. Saving hundreds of millions of dollars would spare essential programs when the Governor takes out his 9C pen and we owe at least that to the people we represent.

House Removes Questionable Provisions and Adds Limitations on Governor

Representative Jeffrey Davis Perry (R-Sandwich) released the following statement today after he and several House Republicans voted in favor of an Act Relative to Public Health Emergency Preparedness and Response in the Commonwealth.

“The Bill, as was originally written by the Senate, granted what I believe was improper new powers, including the entry into private property without a warrant and several other questionable conflicts with provisions of the Forth and Fourteenth Amendments to the United States Constitution.

The version that passed the House of Representatives today addressed many of those concerns and others expressed by my constituents by striking the entry into private dwellings without a warrant, allowing for an appeal to the Superior Court of an isolation order and calling for the least restrictive means to be used. These are all positive steps and I appreciate the fact that my concerns were heard and addressed in the Committee process.

The revised Bill also includes a Republican Amendment which now more clearly defines the circumstances when the Governor can declare such a pandemic emergency. This is not the same Bill passed by the Senate. I believe this Bill strikes the proper balance between providing government with the limited, but necessary tools to deal with a pandemic. By removing many sections of the original Senate Bill and providing a due process mechanism to people who wish to challenge the actions of a government official, this Bill is now in an acceptable form. If the Senate does not adopt the improvements and protections made by the House today, I will not support the Bill in the future.”

Misplaced Priorities?

Beacon Hill is once again showing its priorities are incredibly misplaced. Today, three significant issues have hearings including; transportation reform, health care payment reform and most importantly revenue.

Yet despite this packed day, Democratic leadership in the House decided to schedule a full formal session to take up a bill that has been kicking around in Ways and Means since April, an Act Relative to Public Health Emergency Preparedness and Response in the Commonwealth. This bill has been filed in some form several times over the last few years. This is certainly not an urgent matter that could not wait one more week. The topics of the hearings being held today are critical to the economic recovery of the Bay State and deserve complete attention from all lawmakers on Beacon Hill.

The Commonwealth is facing a projected $1 billion tax revenue shortfall this fiscal year and this grim piece of reality needs to be addressed in a swift and responsible manner. The people of Massachusetts are worried about staying in their homes, keeping their jobs and putting food on the table. Those issues are top on the priority lists of taxpayers and should certainly be the focus of Beacon Hill today, tomorrow and indefinitely until the economy is moving in the right direction again.

Deja vu All Over Again

Once again, Governor Patrick is pushing to allow some immigrants to pay in-state tuition. Apparently, Governor Patrick hasn’t received the memo that Massachusetts and the country as a whole are dealing with a massive recession and the last thing people want is their tax dollars going to people here illegally.

Just when you think Governor Patrick has shown complete disregard for Massachusetts taxpayers, he goes even further with a slap in the face like this. Patrick, whose poll numbers are dismal (to be kind), told State House News Service, “I am on record with the leaders, as I am publicly, that I think this is important for us to do as a matter of fairness and a matter of economics as well.” The Governor also said he had spoken with leadership and said, “They do not have consensus yet on moving it.” No kidding, Governor!

Eagle-Tribune: “Cutting Taxes is Key to Economic Growth”

The Lawrence Eagle-Tribune ran an editorial in today’s edition urging Beacon Hill to take a new approach to the current economic crisis saying, it’s time to cut taxes, not raise them! The editorial was apparently written after more than a dozen mayors from across the Commonwealth last week encouraged Beacon Hill lawmakers “to pass laws that would promote development and job creation — economic growth, in other words.”

In a state where the expected reaction to any economic downturn is to raise taxes, these mayors said the majority of cities and towns are rejecting the local tax options because raising taxes won’t stimulate the local economies.

So, the Eagle Tribune, using a basic argument says since raising taxes hasn’t been improving the economy, why not try the opposite? The editorial says, “Cut the income tax. Cut the sales tax. Maybe something different will happen.”

Click here to read the editorial in its entirety.

Governor Out of Touch: Don’t Worry Be Happy

As The Capitol View reported earlier, the state’s revenue numbers came in $243 million below projections. Following that announcement, Governor Patrick talked with the press about the economic outlook.

According to the Boston Herald, Governor Patrick said, “State revenue always recovers more slowly than the private economy. The good news is that the private sector is on the road to recovery.” On the road to recovery? Are you kidding? If this is Governor Patrick’s idea of a road to recovery, then it is a road full of potholes, speed bumps, oil slicks, snow and ice patches.

Every time Governor Patrick speaks, it highlights not only his disconnect with the people of Massachusetts but his complete lack of competency and leaderships skills. Governor Patrick came in with a significant rainy day fund, restored cuts made previously by Mitt Romney and began a spending spree that even Hollywood’s top earning celebrity couldn’t keep up with.

While Governor Patrick is busy rallying the special interest groups to boycott Hyatt hotels, working families are trying to figure out how they’ll make this month’s mortgage or rent payment. Glad to see his priorities are in order! It’s time for this Governor to step up to the plate. Seeing as though he hasn’t been able to do that almost three years into his tenure, it’s doubtful he’ll all of a sudden start leading now.

Bigger Fish to Fry, Governor!

For the last several weeks, Democrats on Beacon Hill have been dedicating their time, effort and taxpayer money on appointing an interim Senator, making the Fluffernutter the official sandwich of the Bay State and boycotting Hyatt hotels. In more normal times those might all be heady issues to address but Republican lawmakers are here to remind all of those Democrats that there are bigger fish to fry!

Today, Governor Patrick announced that September revenues were $243 million below projections, far worse than his administration estimated. This grim piece of fiscal news is not a surprise, since Governor Patrick and Democratic leadership based the FY10 budget on overestimated tax revenue numbers. This news is disappointing to say the least. Towns and cities across the Bay State are already struggling to keep teachers, cops and firefighters on the payroll and another cut to local aid could be the final nail in the coffin.

Governor Patrick will now have to make drastic cuts, only three months into the new fiscal year. Over the next several weeks, Republicans will be pushing cost savings initiatives that were overwhelmingly rejected only six months ago during budget debate. It’s time for innovation and creative thinking. Slashing local aid and other important state accounts will be devastating to say the least and would be further proof that Beacon Hill Deomocrats are out of touch with the people they are elected to represent.

While we recognize cuts will need to be made, lawmakers must work diligently to come up with cost savings measures to offset the magnitude of the budget deficit. Republicans vow to continue bringing new and fresh ideas to the table. Whether or not Democrats will want to roll up their sleeves and do the tough work remains to be seen.

Governor Patrick: Two Steps Behind the Curve

Struggling cities and towns across the Commonwealth should no longer suffer because of poor decisions made by Governor Patrick and the Democratic-controlled Legislature. A few days ago, The Capitol View commented on what is expected to be a dismal September in terms of tax revenue collections.

Now, on the first day of October, the Telegram & Gazette is reporting that Governor Patrick doesn’t want to make any decisions on budget cuts until the final numbers are in. Governor Patrick is consistently two steps behind the curve. When will he and the Democrats on Beacon Hill learn that being proactive is far better than having to respond to bad economic news. Had the Democrats heeded Republican warnings over the last two budget cycles, it is very likely the Bay State would be better off. Republicans in both the House and Senate have been pushing fiscal responsibility for years with dozens of cost savings proposals being filed every budget cycle. Yet, the Democrats continue to spend beyond the state’s means while simultaneously increasing taxes and fees.

Our communities deserve better. They shouldn’t be forced to make more cuts because of the irresponsible behavior of the tax and spend Democrats on Beacon Hill. They deserve innovative, cost saving programs, sound leadership and solid decision makers working on their behalf. Massachusetts’s towns and cities are struggling to stay afloat and if Governor Patrick cuts local aid again, the responsibility of that decision lies squarely on the laps of the Democrats on Beacon Hill led by Governor Patrick.