In a strongly-worded warning to voters, State Treasurer Tim Cahill urged voters to resist “the election-year appeal of a call for lowering taxes,” noting that the Massachusetts economy is “not out of the woods yet.”
At a press conference outside the state house with Sen. Susan Fargo (D-Lincoln), the chair of the Local Affairs Committee, and Robert McCarthy, president of the Massachusetts Firefighters Association, Treasurer Cahill noted that the state lottery returned a record $900 million in revenue to the state. “When I assumed the chairmanship of the state lottery commission, lottery revenues were flat. The importance of this revenue stream to our cities and towns necessitated changes to protect this valuable revenue source,” he said. “We made these changes which, along with a renewed focus on efficient management, have resulted in the positioning of the lottery to have its best year ever.
“With the lottery's strong showing, as well as other positive indicators, there is reason to be cautiously optimistic about the Commonwealth's fiscal health next year,” he added. “With this optimism comes a word of caution: It is important that we avoid the election-year appeal of a call for lowering taxes, for we are not out of the woods yet.” Treasurer Cahill warned that this is not the time to further reduce revenues or spend the state's unexpected surplus.
“As your elected CFO, it is my responsibility to help achieve a balance between raising revenues and the election-year appeal of a tax cut by identifying ways to make government work more efficiently for all its citizens,” Cahill said, adding that the collaborative work between his office and the Legislature resulted in major reforms to the school building assistance program.
“We all want more money in our pockets – everyone can agree on that,” said Sen. Fargo. “But the truth is, if we roll back the income tax right now in this unstable economy, every homeowner in this state is going to get stuck paying higher property taxes in order to keep our police and firefighters, to repair our bridges and roads and to hire teachers for our public schools.
“It's all a shell game where Bush shifts the tax burden to the state and then the governor moves it over to our cities and towns. It is then the responsibility of these financially-burdened communities to come up with the money to support basic services. And guess what? It's the taxpayers in Boston , Quincy , Hyannis , Lowell and everywhere else who has to make up the difference in their property taxes.
“In this economy, with less money coming into the state through the income tax, we will have to make up the difference somewhere and that somewhere will very likely be our property taxes,” Sen. Fargo added. “The Massachusetts Taxpayers Foundation – a nonpartisan organization – has reported that the governor's tax proposal would increase the state's budget deficit by as much as $750 million over the next three years. A deficit of that size will require enormous cuts in state services, or increases in other forms of taxation. That's not something I want to see.”
Robert McCarthy, president of the state's firefighters' union, explained that reducing the state income tax in the next fiscal year as the governor has proposed “will require even deeper cuts in basic government services. “Without the necessary revenue coming into the state, cities and towns will bear the burden once again of maintaining municipal services. Teachers who were laid off will not be re-hired, firefighters who lost their jobs two years ago will not return to duty,” he said.
“And who will actually benefit from an income tax rollback?” McCarthy asked. “The income tax is a progressive tax, meaning that reductions disproportionately benefit upper-income taxpayers – like the governor.”
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