House Rejects Plan To Phase In Income, Sales Tax Cuts
The House, leading a debate on a $33.8 billion annual state budget proposal, rejected a Republican-led plan to reduce the sales and income tax rates to 5 percent over five years.
“I would call it the death by a thousand cuts proposal,” said Rep. Jay Kaufman, a Lexington Democrat and co-chairman of the Revenue Committee.
House Minority Leader Bradley Jones (R-North Reading) said that under the amendment, the 5-percent income tax rate would be achieved 19 years after voters approved reducing the rate to 5 percent through a ballot initiative.
Invoking last week’s Boston Marathon bombings, Kaufman argued that the amendment would deprive the state government of $2 billion in revenue critical to providing funding for public safety and other programs. The amendment failed on a largely party-line vote, with 35 representatives supporting it and 118 voting against the proposal in the Democrat-dominated House.
“I’m a little disappointed that it only took until the third speaker of the day to bring up the events of last week as to why we should or shouldn’t do things this week and frankly I think it’s disappointing,” Jones said.
Rep. Timothy Toomey, a Cambridge Democrat, called it “fundamentally irresponsible” to lower taxes, worried that it would impact job training used to support technology start-ups in Cambridge.
The fiscal 2014 budget debate, expected to continue through much of the week, started with debate over revenue and tax amendments plucked from the 888 amendments filed to the budget bill.
The House earlier this month approved a package of $500 million in new taxes for transportation, a proposal now being worked out in conference committee with an alternative proposal approved in the Senate.
The Legislature and Gov. Deval Patrick raised the sales tax rate to 6.25 percent from 5 percent in 2009. A ballot question calling for a 5-percent income tax rate passed in 2000, but was not fully implemented – the rate is 5.25 percent.
House Ways and Means Chairman Brian Dempsey, of Haverhill, started Monday’s deliberations with an introduction of the bill that he said increased spending by 3.9 percent over last year’s budget, and comes in about $1 billion lower than Gov. Deval Patrick’s budget filed in January.
Dempsey called the budget a “fiscally prudent” spending plan that recognizes the “economic difficulties facing our commonwealth and our nation.”
While relying on $350 million in reserves to balance the bottom line, Dempsey the budget proposed by the Ways and Means would increase unrestricted local aid to cities and towns for the first time since 2010 and make significant investments in higher education to avoid fee and tuition hikes at UMass and public universities and community colleges.
“These investments reflect our belief that higher ed is important to the future of the commonwealth and important to our workforce,” Dempsey said.
Dempsey said the House leadership’s budget also increases spending on child and adolescent mental health services, community-based adult day and work programs and family assistance.
In addition to spending, the Ways and Means budget also proposes some reforms, including photo IDs for electronic benefit transfer card recipients to crack down on card trafficking and a task force established to standardize the benefit eligibility determination process across state agencies.
House Democrats also prevented votes on Republican-sponsored amendments to exempt municipalities from the gas tax offered by Rep. Marc Lombardo (R-Billerica) and to extend a five-day meals tax holiday to benefit restaurant worker this summer by Rep. Shaunna O’Connell (D-Taunton).
The House voted to study both issues, adopting amendments that prevented votes on the underlying proposals.
House Democrats plan to start debate on amendments dealing with education and local aid, constitutional officers and housing by holding private meetings on the many amendments.
Rep. Thomas Sannicandro, co-chair of the Committee on Higher Education, tweeted that he was discussing education amendments with colleagues in advance of the released of a consolidated amendment.
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