Spending plan uses $1 billion in new taxes, contains few reforms
BOSTON, MA – Sen. Robert Hedlund (R-Weymouth) last night voted against the Massachusetts State Senate’s $27.35 billion Fiscal Year 2010 budget calling it yet another irresponsible spending plan that treats taxpayers as little more than an ATM machine.
Despite sounding a “reform before revenue” mantra in recent months, the Senate’s actions this week reflected a “revenue, revenue, and more revenue before reform” attitude. Rather than adopting the $1 billion reform package offered by the Senate GOP Caucus, the Senate voted quickly and voted often for a slew of new taxes that will drain nearly $ 1 billion from the wallets of taxpayers. And rather than using the new revenue to restore local aid or eliminate the need to further drain our “Rainy Day Fund,” the Senate voted to add hundreds of millions in new spending.
“We have yet again squandered an opportunity to demonstrate true leadership and uphold our fiscal duties as responsible stewards of the people’s money,” Sen. Hedlund said. “This budget ignores the economic realities outside of the State House and embraces higher taxes and higher spending instead of reform and restraint. It is clearer now than ever that many of colleagues simply don’t get it.”
The Senate joined the House in approving a 25% increase in the sales tax, despite pleas from struggling Massachusetts retailers that doing so would further depress the state’s economy. Although Senate leadership expects the new 6.25% tax rate to generate approximately $623 million in new revenue, Sen. Hedlund says that figure likely will far short as more Bay State shoppers will either make purchases in New Hampshire, online, or won’t buy altogether.
“The only people who will benefit through this sales tax hike will be New Hampshire retailers,” said Sen. Hedlund who referred to the budget as the “New Hampshire Economic Stimulus Plan” during debate.
The Senate also voted to raise taxes on alcohol and telecommunications equipment, and gave cities and towns the ability to implement new meals and lodging taxes without requiring local voter approval.
“We have not been this anti-taxpayer since the late 1980’s. In two months, Massachusetts taxpayers will likely be paying more taxes on any retail purchase they make, more taxes on a meal at their local restaurant, more taxes on the vacation rental on Cape Cod, even more taxes on a six-pack of beer from the neighborhood package store,” Sen. Hedlund said. “Meanwhile, the status quo remains intact on Beacon Hill.”
The original version of the Senate budget released earlier this month did not include new taxes and – unlike the House budget — cut spending to reflect the state’s plummeting revenue estimates for the fiscal year starting July 1.
In an effort to free-up additional money to fund core services and local aid, Sen. Hedlund and the Senate Republican Caucus offered a package of reforms that would have provided the state with $1 billion in savings. These reforms included giving the state more contract flexibility in providing services, a statewide wage and hiring freeze, ending corporate welfare programs for the biotech and film industries, and eliminating the Lottery advertising account.
Rather than give serious consideration to these proposals, the Senate on the first day of debate cast several votes in favor of higher taxes.
Sen. Hedlund criticized his colleagues in the majority party for choosing to add millions in non-essential spending such as a loan forgiveness program for doctors, a state office on sports and entertainment, and local tourism councils, while not earmarking any of the revenue for local aid. An amendment adopted near the end of the three-day budget debate did restore $35 million in local aid – or about 10% of what is being cut – using money from the federal economic stimulus package.
Approximately $235 million of the anticipated additional sales tax revenue is being reserved to help pay for improvements to the state’s nearly-bankrupt transportation system.
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