EagleTribune.com, North Andover, MA

March 22, 2013

Patrick's tax plans play to mixed reviews at Valley event

By Bill Kirk
bkirk@eagletribune.com

---- — HAVERHILL — Gov. Deval Patrick was intent on selling his sweeping tax plan to Merrimack Valley business and political leaders yesterday, but it met with mixed reviews.

Speaking to about 300 people at a Merrimack Valley Chamber of Commerce breakfast at DiBurro’s Function Facility, Patrick said his plan is needed to pay for upgrades to the state’s transportation and education systems. It includes raising $1.9 billion in revenue through a series of changes to the state tax code.

“While I understand the governor’s position and his reasoning for it, it’s too ambitious, knowing the concerns in my district of working families who have seen their property taxes increase, federal taxes increase and meals tax hikes,” said freshman state Rep. Diana DiZoglio, D-Methuen.

She said she wanted to wait and see what the budget looks like after it comes out of the Ways and Means Committee.

Rep. Linda Dean Campbell, D-Methuen, said the state can’t afford the governor’s transportation plan.

“I see transportation spending like a mortgage on the house,” she said. “And he’s recommending we put an addition on the house before we pay for what we have now.”

Lawrence City Council President Dan Rivera, during a question-and-answer session between the governor and audience members, said while he appreciated the emphasis on transportation and education, he felt the state needs to overhaul the public safety system in the same way education reform overhauled the state’s school system in the early 1990s.

“If state support for public safety goes down, the ability for us to keep our streets safe goes down,” he said. Lawrence Mayor William Lantigua was not at the breakfast, saying at an event later in the day that he had a “previous engagement.”

Other audience members mentioned the cost of health care as continuing to have a stranglehold on business growth.

In his remarks, the governor said, “If we want growth, we need investment. Reforms have saved billions, but reform is not enough to deliver a 21st Century transportation system.”

He said his plan, which includes increasing the income tax on people making over $62,000 a year, will also eliminate the list of 33,000 children waiting to get into early education programs and increase the number of high school students who can pay for college.

“Failing to invest in education in Massachusetts is like Texas not investing in the oil industry or Iowa not investing in corn,” he said, noting that Massachusetts already has one of the most highly rated school systems in the country.

He noted that under his plan, families making $100,000 would pay an additional $300 to $400 in annual taxes. People making less than $62,000 — about half the state — would see no increase in taxes.

Meanwhile, small businesses would be helped with a drop in the sales tax, families would benefit by seeing no increase in tuition at state colleges, MBTA riders would see more modest fare increases and driving commuters would see long-delayed road and bridge projects completed.

Not everyone was thrilled with the governor’s plan, however.

Some business executives and lawmakers said taxpayers cannot afford another tax increase on the heels of the recession and following the Social Security tax hike. The governor proposes raising the income tax to 6.25 percent and lowering the sales tax to 4.5 percent, along with a host of other tax law changes.

Rep. Brian Dempsey, D-Haverhill, chairman of the Ways and Means Committee, said the governor is “really passionate” about his proposal, which has been reviewed by the committee. “It’s complicated tax policy, as there are 44 deductions to eliminate along with an increase in taxes.”

He said Ways and Means would release its budget April 10.

“There is no question transportation is an area we have to do more with,” Dempsey said, adding that the proposals on education, particularly increasing access to early education and higher education are “hard to argue with.”

However, he said, “the question is, what is the impact on families still struggling? We are sensitive to that. We are hearing it from families.”

John Albert, president and chief executive officer of Home & Health VNA Inc. in Lawrence, said he was against the timing of the plan.

“I think when you put it in context of all the other tax increases from the federal government, there is a whole host of tax increases that are going to come about from the Affordable Care Act, and then to add another tax into the equation, I think the timing is probably not good,” he said.

Other business people at the breakfast seemed to favor the plan.

Ronald Pollina, a business consultant in Haverhill, said tax hikes are tough but the goals are worthwhile.

“We need all those things. The infrastructure of our highways and byways, those are needed. And of course, education has got to be number one,” Pollina said. “Again tax increases are always tough, and this time makes it even tougher because we have so much pressure.”

Patrick, in comments to The Eagle-Tribune after the event, said legislators are “appropriately careful” about increasing taxes to pay for his transportation and education plan.

“But everybody seems to agree these are worthy investments ... that will accelerate job growth,” he said. “Are we prepared to sacrifice for that growth? If not, are we prepared for slow or no growth? People are trying to get their heads around that.”

He admitted the payoff for an investment in education is slower than for transportation.

“One of the things I observed in business that has crept into the way we govern is the focus on the short-term,” he said. “We are sacrificing long-term for short-term results. That’s one of the reasons I ran for office, to bring a slightly different approach. It won’t be for my political benefit, but it will make for a better Commonwealth.”

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Materilal from the State House News Service was used in this report.