Massachusetts legislators this week answered Gov. Deval Patrick’s ambitious plan to raise $ 1.9 billion for transportation and education with a $ 500 million plan of their own, which says the governor is asking for too much, too soon as the Bay State shakes off the effects of the Great Recession.
Who’s right? Should the state forge ahead in a bold plan to invest now? Or should it cautiously address the bottom line before embarking on bigger initiatives?
While Patrick’s plan includes funding for both the state transportation system and increased education funding from preschool through college, House and Senate lawmakers eschew new revenue for education, focusing solely on closing the transportation budget gap over the next five years.
The legislative leadership’s plan includes:
- 3-cent gas tax increase, indexed for inflation,
- $ 1 per pack increase on cigarettes along with excise tax increases on cigars and smokeless tobacco,
- new sales tax for businesses for software purchases,
- eliminating the “utility” tax classification,
- changing of the sourcing of the state’s sales factor system, which would require out of state companies that sell products in state to pay more in taxes.
In contrast, the governor’s plan includes:
- Increasing the income tax from 5.25 percent to 6.25 percent, while doubling personal exemptions,
- Lowering the sales tax from 6.25 percent to 4.5 percent,
- Eliminating 44 tax credits, deductions and exemptions, such as reinstating the capital gains tax on the sale of a primary residence,
- Indexing the gas tax to inflation,
- Eliminating the sales tax exemption for soda and candy,
- $ 1 per pack increase on cigarettes, like the legislative plan.
Patrick said Thursday he would veto the Legislature’s leaders bill in its current form, according to The Republican, because it doesn’t provide enough money for bigger transportation projects and he’s skeptical it provides enough funding to cities and towns for road and bridge projects.
At a press conference on Tuesday, Senate President Therese Murray said the governor “put out a 10-year vision. We’re just saying maybe 10 years is too ambitious right away … I think it’s good that there is attention on the fact that there are infrastructure needs. Nobody wants to go over a bridge that’s going to fall down. We want to invest on our infrastructure we just have a different plan on how to do that.”
The legislative leadership’s plan is closer to a report by conservative think tank Pioneer Institute, which proposes a 3-cent gas tax increase, MBTA fare hikes, halting major expansion projects until backlogs are taken care of, and reforms such as basing funding increments on the Massachusetts Department of Transportation’s performance, the Boston Herald reports. Supporters say those proposals are heading in the right direction with a mix of new revenue and reform, while detractors say it’d fall short of the investment needed in the state transportation system.
Meanwhile, the $ 509 million in new education funding for early education, public school districts and state colleges and universities that’s included in the governor’s plan is absent from the legislative leadership’s plan.
Noah Berger, of the Massachusetts Budget and Policy Center, told the State House News Service that in a change from the 1970s when industrial hubs had the highest wages in the U.S., higher education is closely correlated to high wages.
Is the governor’s plan what’s needed to ensure a growing Massachusetts economy? Or is the legislative leadership’s plan a more pragmatic approach, focusing first on current budget deficits? And should the Legislature also come up with a plan for increased education funding? Tell us your thoughts in the comments and mix-and-match the various proposals to come up with your own budget plan.