The Common Wealth of Taxachusetts

And off we go down the path of tax hikes and toll hikes and falling short of making the necessary reforms to keep those hikes from happening.

Bay State consumers, already hard-pressed by a slumping economy, will be slapped with a 25 percent sales tax hike and nearly $1 billion in total tax increases Aug. 1, Gov. Deval Patrick said yesterday after signing a massive transportation reform bill.

Patrick had vowed to veto the sales tax boost if lawmakers didn’t enact transportation, pension and ethics reforms – but all three measures passed.

“I could not support a sales tax increase and ask people to pay for the status quo,” Patrick said in a statement. “Because of (the reforms), I will approve the new revenues we need to bring our budget into balance, offset the need for even more difficult cuts and expand opportunity throughout the commonwealth.”

The transportation measure also means an unpopular toll hike – scheduled take effect July 1 – will likely be averted. The Massachusetts Turnpike Authority board is meeting Monday.

I am not convinced, not in the slightest, that all possible options were considered to avoid increasing taxes. When times are tight for the rest of us, we have to cut our spending. Why can’t the state? I know too many people that have to endure pay cuts in addition to their own spending cuts and times are still rough. I know too many people that have become unemployed in the last year who will also bear the brunt of tax increases at the worst possible time. If they think the state has it rough, as around, they don’t have it so bad.

If someone can explain to me why perfectly good roads are getting repaved and perfectly good highway signs are getting replaced while taxes are being raised, then perhaps you have a shot of convincing me that the hikes are necessary. But I doubt it.

We’re all tired of the incessant rain that has been falling on the Commonwealth for weeks–but there is always hope in knowing that there is sunshine in our future…at least with regards to the weather forecast. As far as the forecast for the economy of the Commonwealth–I see that dreary days well into our future.

Remind me again, why do I bother to stay in Massachusetts?

The Kennedy Pork

It’s outrageous–a bill that was supposed to be free of earmarks not only is riddled with them, but contains millions to “help preserve the legacy of the Kennedys.” What?!?!

More than one out of every five dollars of the $126 million Massachusetts is receiving in earmarks from a $410 billion federal spending package is going to help preserve the legacy of the Kennedys.

The bill includes $5.8 million for the planning and design of a building to house a new Edward M. Kennedy Institute for the Senate. The funding may also help support an endowment for the institute.

The bill also includes $22 million to expand facilities at the John F. Kennedy Presidential Library & Museum and $5 million more for a new gateway to the Boston Harbor Islands on the Rose Kennedy Greenway, a park system in downtown Boston named after Kennedy’s mother and built on land opened up by the Big Dig highway project.

A spokeswoman for Sen. Kennedy, who at 77 is battling brain cancer, said he hadn’t requested the money for the library and institute, and that there are dozens of other earmarks in the spending bill for homeless services and community health centers.

The $22 million JFK library earmark was sponsored by fellow Massachusetts Democrat Sen. John Kerry, who is also a top sponsor for the money for the Kennedy Senate Institute. Kerry defended the library project, which he said is needed to upgrade the facility.

“This National Archives project will eliminate the worst archival storage space problem in the presidential library system and it will facilitate six years of work to expand the library,” Kerry said in a statement. “This shovel-ready project will also bring much-needed jobs to the area.”

Meanwhile, nearly every tax, toll and fee that exists in the Commonwealth is about to go up–but that isn’t stopping John Kerry from introducing a bill to bloviate the Kennedy legacy rather than do more to help those of us who did not marry ketchup heiresses.

Taxes, Taxes, Taxes…

When Beacon Hill pols talk about increasing taxes, it’s not long before it becomes reality. Brace yourselves, amidst talks of hiking up gas taxes, tolls, booze taxes and personal income taxes, the sales tax will soon jump to 6%.

Top state lawmakers are seriously considering a controversial and politically risky plan to boost the sales tax by one penny to 6 percent, socking it to Bay State residents already facing possible gas and booze hikes.

Both House Speaker Robert DeLeo (D-Winthrop) and Senate Ways and Means chairman Steve Panagiotakos (D-Lowell) are eying a sales tax of 6 cents on the dollar that they say would bring an additional $750 million a year into state coffers.

“I don’t think anything can be considered as off the table,” DeLeo said yesterday, later adding he plans to pass reforms before any additional taxes are considered.

A conservative think tank blasted any talk of a sales tax hike in a tough economy, saying that even a one penny increase could mean a loss of 10,000 private sector jobs along with a $40 million drop in investment revenue.

“Any tax increase the state undertakes right now will have a negative effect on the economy because it will drive business to other states,” said Beacon Hill Institute Executive Director David Tuerck, who urged lawmakers to focus on cuts instead.

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Yesterday’s sales tax chatter comes as lawmakers issued more dire warnings, saying the state faces a $4 billion-plus budget deficit next year. Rep. Ellen Story (D-Amherst) said House leaders are also discussing raising the personal income tax to 5.4 percent from 5.3 percent, which she said would bring in an additional $200 million.

“We’re going to have to look at new revenues,” Story said. “The rainy day fund will absolutely not last that long.”

As I’ve said, as well as many others before, how about cutting spending first? Can you at least give it some serious thought?

When Beacon Hill pols vote for the sales tax hike–and we can reasonably assume they will–how will we respond? If your representative or senator votes to raise these taxes, are you going to continue to reward him or her with your vote?

Everybody Hurts–But Some Less Than Others

Five non-profit executives came out in support of the gas tax hike.

Why? The Boston Herald has an idea…. Five of those executives earn six-figure salaries.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, supports the drive to hike the gas tax even higher than Gov. Deval Patrick’s 19-cents-a-gallon proposal. Widmer rakes in $375,000 a year in salary, $19,000 in benefits and deferred compensation and was paid $2,837 for expenses, according to 2007 IRS filings. Widmer said his compensation includes a car allowance and reimbursement for fuel expenses.

“I understand these are very difficult times for people and I respect that,” Widmer said. “But the commonwealth has this huge problem where we have two agencies heading to bankruptcy – the (Massachusetts Turnpike Authoritiy) and the MBTA. We’ve been warning for years now that we’re sacrificing the transportation network around this state because we’re not investing enough in it.”

Joining Widmer’s call for the 25-cents gas-tax increase are:

Alan MacDonald, executive director of Massachusetts Business Roundtable Inc., who earns $317,000 plus $76,000 in benefits and expenses, which include a company car;

David Begelfer, chief executive officer of the National Association for Industrial & Office Properties Inc., who earns $426,000 plus $50,000 in benefits and other compensation, including a company car;

Paul Guzzi, president of the Greater Boston Chamber of Commerce, who earns a $331,000 salary plus expenses and other benefits, bringing his total compensation to $429,600; and

Richard Dimino, president of A Better City Inc., who earns $335,200.

It’s safe to say that for these executives, some of whom enjoy company cars and gas reimbursement, don’t quite understand what a 19 cents (or perhaps 25 cents) per gallon gas tax increase will feel like.

Begelfer said he didn’t factor his personal compensation into his decision to back doubling the gas tax.

“This is not just the top CEOs making this determination who could care less,” Begelfer said. “We have a fiduciary responsibility to our members and to the commonwealth. We need to do whatever we can right now to encourage the economy to turn.”

Guzzi, who does not have a company vehicle, defended the proposed hike, saying, “Our system is broken. To fix it, we need to step up to the plate. We need major reforms – painful but necessary. We need new revenue – painful but necessary.”

Yes, we need reform–but new revenue in the form of tax cuts? There is this saying that a penny saved is a penny earned. It’s time we cut spending and turns those saved pennies into earned pennies.

The Sinking Ship: Deval’s Ratings Tank

While the Massachusetts unemployment rate is going up, and talks of tax hikes and fees are rampant, Governor Deval Patrick’s approval rating is sinking like the stock market.

Gov. Deval Patrick’s ratings appear to have taken a serious nosedive following months of tax hike announcements, but one politico said the new SurveyUSA poll might not be reliable.

Roughly 68 percent of the 600 people questioned in the poll say they are dissatisfied with Patrick’s job as governor. That’s up 21 points from a poll in January.
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The poll found women in particular soured on the governor, with 31 percent rating him favorably, down from a 54 percent favorable rating in January.

Democratic consultant Michael Shea said the high unemployment and the number of taxes unveiled by Patrick also must have hurt his favorability. “It’s never popular to ask people to reach into their pockets, regardless of how necessary it is,” he said.

It’s always great to see a Democratic consultant admit that something like higher taxes has hurt a Democrat’s favorability. So, why do they still think that it is a good idea?