ON RESISTANCE TO NEW TAXES, DeLEO TAKING WAIT-AND-SEE APROACH FOR 2013 By Matt Murphy and Mike

Deehan STATE HOUSE NEWS SERVICE STATE HOUSE, BOSTON, OCT. 4, 2012….After holding the line on new taxes since 2009, the pledge by legislative leaders to not upset the delicate economic recovery by increasing broad-based taxes or fees on residents and business is showing signs of cracking. House Speaker Robert DeLeo told the News Service this week he doesn't yet know if his proscription against new taxes or fees will apply to the 2013 legislative year when the Legislature is expected to address long-term financing of the state's transportation system and may need to look to new sources of revenue. DeLeo said he wants "to see where the numbers fall on next year's budget" and with transportation financing before making a decision on whether to rule tax hikes in or out, a line the Winthrop Democrat has drawn the past several years, and which Democrats have followed, prior to the release of the House budget in April. "That's never been a desire of mine to increase taxes. But on the other hand . . . I'm smart enough to know that until you see the figures of what you're working with, you don't make any pledges." DeLeo, the former House budget chief, said after a meeting Tuesday afternoon with UMass officials and local entrepreneurs. Senate President Therese Murray last year deferred to the House, noting tax bills originate in there, while working to craft the Senate's spending blueprint for the year that began July 1, though she showed no signs of appetite herself for higher taxes. Through a spokesman, Murray declined comment on the appetite for taxes next session. Flat tax collections in September have left state government trailing budgeted revenue benchmarks by $95 million one quarter of the way into the new fiscal year, according to figures released Wednesday by the Department of Revenue. Collections last month of more than $2.2 billion were up $8 million over September 2011, but were still $32 million shy of the monthly

benchmark. Tax collections are up 0.03 percent over the first quarter of fiscal 2013. Murray and DeLeo over the past few years have embraced the no-new-taxes approach after voting in 2009 to boost the sales tax by 25 percent to 6.25 percent. Though some more liberal Democrats on Beacon Hill have advocated for higher cigarette taxes to pay for health programs, members of the House and Senate from both parties have largely cheered the reluctance of leaders to force votes on new revenue, particularly in an election year. House Minority Leader Brad Jones of North Reading on Thursday said DeLeo's reluctance to rule out tax hikes next year was "disappointing." "I will say that I am well aware that numerous discussions have been going on about increased taxes and that obviously members of the majority party don't want to have those go public until after the election but they are absolutely underway and going on," Jones said. DeLeo has used his position over the past few years to thwart proposals by Gov. Deval Patrick to tax candy and soda, raise taxes on cigarettes and expand the scope of the state's five-cent bottle redemption law, an idea encouraged by some environmentalists to improve recycling rates and generate $20 million in new revenue. Any new debate over taxes in Massachusetts will also likely play out over a backdrop of the national discussion about how to address the federal debt and deficit, including the looming expiration of tax cuts on Jan.1 that could increase payroll taxes on Massachusetts residents and millions of Americans. With unemployment at 6.3 percent after having risen moderately over the past two months, legislative leaders like DeLeo, if he wins reelection as anticipated, will be challenged to come up with a justification for new revenue after years of touting their reluctance to raise taxes as a selling point of their fiscal discipline and rationale for new businesses to locate and grow in Massachusetts. In May, DeLeo published an open letter in the local Menlo Park, California newspaper to Facebook CEO Mark Zuckerberg suggesting the company, and others like it in Silicon Valley, consider expanding in Massachusetts. "Unlike California, where Governor Brown just announced a $16 Billion budget deficit sure to mean massive cuts in services and increases in government revenues, Massachusetts leaders have passed budget-after-budget on-time and with no new taxes or fees," DeLeo wrote. "There is no denying California's strengths, but a lot has changed in Massachusetts in the eight years since Facebook moved out. It's a place where young workers, start-up companies

and innovation entities want to be." Jones said that in addition to consideration of raising gas taxes, he has heard mention of raising the state income tax from 5.25 percent to 5.95 percent. "Unfortunately the Democrats don't want to have that discussion before the election because they know the public isn't going to be welcome to it, isn't going to be open to it. People are still hurting. They're very apprehensive. We have a fragile economy," Jones said. Jones said there is a "reasonable consensus" that some people would like to put more resources into transportation and infrastructure, but said the idea of "going down the tax path is a dangerous one." "I think we're going to be faced with the false choice of, well, we have to raise taxes to do this as opposed to, well, isn't some of it maybe reprioritizing spending?" Jones said. Citizens for Limited Taxation earlier this week rolled out endorsements of 40 legislative candidates, including 17 incumbents - all Republicans - who scored well on the group's issues test and signed a "Taxpayer Protection Pledge" to "oppose and vote against any and all effort to increase taxes." Through its political action committee, CLT also gave maximum donations of $500 to many of its endorsees, including candidates challenging Sen. Murray and Reps. Thomas Calter (D-Kingston), Thomas Sannicandro (D-Ashland), Carolyn Dykema (D-Holliston), John Rogers (D-Norwood) and James O'Day (DWest Boylston. -END10/04/2012 Serving the working press since 1910

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