In 1998, voters approved a ballot measure proposing to cut the income tax from 5.95 to 5 percent. The Massachusetts Legislature froze the tax cut in 2002, to 5.3%, but by then a tax cut was in place that would reduce revenue by about $1.5 billion a year by Fiscal Year 2015. The Mass Budget and Policy Center has a clear explanation and excellent charts on tax policy. (http://www.massbudget.org/report_window.php?loc=tax_cuts_factsheet.html)
While voters voted for this tax cut, led by then-Governor Paul Cellucci, the (Democratic) Legislature passed tax cuts from 1992 to 1998 that led to almost $600 million in lost state tax revenue, by the following actions: 1992, estate tax cut, -$253m; 1995, Raytheon tax cut, -$61m; 1996, Fidelity tax cut, -$130m; 1998, dividends and interest cut, -$130m. Over the years, the loss of revenue from these tax cuts has only grown, as the people and corporations who most benefited from them have become richer.
Now, the horrific breakdowns and delays in MBTA service over the past two weeks have raised the effects of these budget cuts to the general public, in a way that wasn’t as mainstream as before. Of course, it’s not just transportation that has seen cuts, but almost every single state agency, program, or function that the state provides (check out the MBPC link again).
So what’s been going on at the State House, and across Massachusetts, over the past ten years?
First, almost every legislator is hesitant to raise taxes, in large part out of a fear that raising taxes will lead to defeat in the next election. Even though most issue polling shows that while taxes are of concern to the general public, that they are not a deal breaker in an election, it is taken very seriously on Beacon Hill. Further, most municipal officials, community leaders and business owners have done little to support efforts to, say, pass a progressive tax package.
Second, the public does not properly understand the connection between services and taxes. While it is most certainly state elected officials’ (both constitutional and legislative) responsibility to educate the public about this, more needs to be done by community groups, municipal officials, progressive organizations, and issue associations. It’s critical to remember that there was a time in the 1970s and 80s when the group Mass Fair Share had literally hundreds of activists across the state, educating voters about important issues being considered on Beacon Hill, including tax policy.
Finally, the Beacon Hill culture, infecting not only legislators and constitutional officers, but also many advocacy groups, leads to deferring decisions on state tax policy to a small circle of decision-makers, ranging from House and Senate leadership to business-backed groups like the Mass Taxpayers Foundation. While I acknowledge in politics that compromises occur that often fall short of comprehensive action or reform, the pendulum has moved so far to the right that the state, and the people of Massachusetts, are facing some serious crises.