The Boston Herald October 6, 2002

Tax talk is taking over

By Elisabeth J. Beardsley Heavy-duty tax talk - hiking taxes, cutting taxes, even outright abolishing taxes - has suddenly overtaken the gubernatorial race as the state's fiscal crisis deepens. Republican Mitt Romney has morphed his message into all-taxes-all-the-time, while fending off charges of tax squishiness from Democrat Shannon P. O'Brien - who has a history of backing tax hikes. Meanwhile, Libertarian Carla Howell, newly admitted to some televised debates, is rising on the right flank with a ballot question to get rid of the $ 9 billion income tax. The candidates are all publicly decrying recession-era tax hikes, but at the State House, where the dollars are doled out, activists are already agitating for stacks of new levies. And legislative leaders - struggling to plug a structural deficit in excess of $ 1 billion are increasingly desperate for ways to ward off hundreds of millions of dollars in looming budget cuts. Pro-tax and anti-tax forces agree: The tax hikes are coming, and might well dwarf last year's $ 1.2 billion dive into taxpayers' pockets. "It's all but inevitable - it will not be a trivial tax increase," said Tax Equity Alliance for Massachusetts Director Jim St. George, who is organizing a drive to repeal business tax breaks and ratchet up the income tax - again. Added tax-cutting crusader Barbara Anderson: "We're looking at tax increases for the rest of our lives." Recovering from what some have called a weak debate showing Tuesday night, Romney has tried to seize the conservative high ground by accusing O'Brien in every other breath of being a reflexive tax-and-spender. Yesterday, Romney highlighted the high-tax plight of a Lynnfield family that's struggling to raise four kids on a $ 50,000 income. But after a short stint on that high ground, Romney - who raised the ire of party hardcores by refusing to sign a "no new taxes" pledge - will be back on the defensive this week when he faces down the tax-abolishing Libertarian candidate. Slated to take the debate stage for the first time on Wednesday during a debate on WB-56

TV, Howell says she'll come out with guns blazing - trying to peel away Romney's conservative base and force O'Brien Democrats to see the light. Like O'Brien, Howell pointed to chinks in Romney's anti-tax armor - policy proposals like higher taxes for SUVs and new "assessments" on green space developers. "He's a high-tax, big-government Republican," Howell said. "He's perfectly happy to be the guy in charge of a bloated, greedy ever-growing state government. Same with Shannon O'Brien." The sudden outbreak of tax talk isn't merely political rhetoric - the new governor will determine the veto dynamics in the Legislature, and therefore whether and which tax hikes can be pushed through. Lawmakers last year struggled to scrape together the two-thirds majority vote necessary to override acting Gov. Jane M. Swift's veto of a $ 1.2 billion package that hiked five separate levies. But legislative leaders were never able to round up two-thirds support for even steeper tax hikes - even though a majority of members in both branches backed raising the income tax rate to 5.6 percent. Lawmakers are already whispering that a Democratic governor would mean they could get away with hiking taxes on a simple majority. In the state Senate - where a new president will be elected in January to replace losing Democratic contender Thomas F. Birmingham - leaders are openly calling to hike the income tax to 5.6 percent, repeal corporate tax breaks, and impose new taxes on gas and alcohol. The tax-hike sentiment is growing as the damage from last year's $ 900 million in program cuts begins to sink in, said Senate Health Care Committee Chairman Richard T. Moore (D-Uxbridge). "It's not going to be something we'll be thrilled about, but it's something we're going to have to look at," said Moore, a candidate for Senate president. But the movement could falter in the more conservative House - where members appear to be exhausted with tax hikes after going along with Speaker Thomas M. Finneran's $ 1.2 billion package last year. Finneran said it's "too early" for a general discussion of taxes - but he put an immediate spike in liberals' drive to foist new taxes onto businesses, which escaped last year's increases unscathed. The so-called "Fidelity tax break" and its parallel tax break for manufacturers make an easy "symbolic" target, but don't involve a "significant sum" of money, Finneran said.

The last thing the state needs is to exacerbate the economic weakness that's causing all the fiscal woes, said Finneran - the only Beacon Hill leader who will be left standing in January. "One of the things we should keep in mind is that certain actions can do a lot more harm than any good," Finneran said.