City, Finance & Economy, News

Governor Patrick’s proposed tax hikes polarize politicians

Mass. Gov. Deval Patrick spoke to state legislators Feb. 13, asking them to support his reformed tax plan which would generate an additional $1.9 billion annually for the Commonwealth. The plan was met with mixed responses.

Patrick addressed a crowd outside the State House and asked them to consider the financial future of the Commonwealth.

“We must — each of us — sacrifice a little today so that we may all share in a better and stronger tomorrow,” he said.

Glen Shor, secretary of the Executive Office for Administration and Finance, who works to manage Massachusetts’s finances and worked closely on preparations for the budget recommendation, said the increased taxes would not be put into place immediately.

“The tax will take effect midway through fiscal 2014,” he said. “So the full $1.9 billion on an annual basis will not occur until fiscal 2015.”

Shor said higher earning income groups would carry the majority of the financial burden of the new tax plan.

“Households that make $60,000 or less, which is about half of all Massachusetts residents, will pay about the same or less,” he said. “Households that make $200,000 or more will experience an increase.”

The revenue from the tax increase would go toward improving various state infrastructures, including transportation and education, Shor said.

“The revenue would help to modernize and strategically expand the underserved parts of the transportation system,” he said. “The revenue would also go toward investing in early education and public college as well as investing in programs to make college more affordable.”

Patrick said in a statement Wednesday some of the revenue would aid the Massachusetts Bay Transportation Authority, which is suffering from a $140 million budget gap that must be corrected by April 15.

“I have proposed one series of ideas,” he said. “And I am open to others, but what I am not open to is doing less that what’s necessary to assure ourselves a 21st century transportation network and schools that reach every child.”

MBTA General Manger Beverly Scott said in a statement that she supported Patrick’s reform package as opposed to returning to old debt reduction plans.

“We will not shrink from reform,” she said.

Tim Buckley, communications director for the Massachusetts Republican party, said taxes are high enough now, and the party was displeased with the proposed tax reform package.

“Massachusetts residents carry the fourth highest tax burden in the country,” he said. “Now you are going to saddle them with a stagnate economy, medium income is still dropping and we will have to carry the largest tax in the history of the state. It is irresponsible and reckless policy making.”

Buckley said there are other ways to fix the transportation and education systems beyond instituting a tax hike.

“We need an incremental approach,” he said. “Reform before revenue. We can do better with the money we already have, be more efficient with our current revenue. We don’t need to go back to the tax payers asking for more.”

Despite the Republican objections, other Massachusetts legislators said they are pleased with Patrick’s plan.

Alison Mills, spokeswoman for U.S. Rep. Mike Capuano, said the congressman fully supports the governor and his proposed reforms.

“Rep. Capuano appreciates that the Governor has put these issues on the table for discussion,” she said. “His tax reform plan deserves a thorough and thoughtful debate.”

The reception of the proposed tax plan has so far been positive, Shor said.

“The reaction by the legislators was to digest the details and take it back to their constituents, as opposed to dismissing it immediately,” he said. “Which is a good start to the tax conversation.”

Shor said he acknowledges that tax reform is always a difficult and polarized debate.

“It’s difficult,” he said. “But we need to have an honest conversation about the type of future the Commonwealth wants to invest in.”

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