SalemNews.com, Salem, MA

January 17, 2013

Bracing for new taxes, fees

Lawmakers react to reports prior to governor's address

BY ETHAN FORMAN
STAFF WRITER

---- — On the day of Gov. Deval Patrick’s State of the Commonwealth address, some North Shore lawmakers reacted to reports that the governor may propose new taxes and fees to fix the state’s ailing transportation infrastructure, build more projects and boost education spending.

In his remarks last night, Patrick asked the Legislature to hike the state’s income tax from the current 5.25 percent to 6.25 percent, while also calling for a reduction in the state sales tax.

The proposed changes would help support $2 billion in new spending on transportation and education, he said.

“Certainly, my eyes have really opened as to what the next year or two is going to look like,” said state Rep. Brad Hill, R-Ipswich, who said he has received “correspondence” from constituents who are struggling financially and say tax hikes “will be very detrimental to their lives.”

Hill favors making the transportation system more efficient rather than raising taxes.

“We want to look at reforms, and we want to look at where our dollars are spent, now,” Hill said.

State Sen. Thomas McGee, D-Lynn, the Senate chairman of the Joint Committee on Transportation, did not address the notion of tax or fee increases, but said: “We have a real need to address what is a pretty big crisis in Massachusetts.”

McGee said that crisis is a structural deficit in the state’s transportation infrastructure, something that was identified back in 2007.

“Our future is really linked to having a safe and efficient transportation system,” said McGee, who said of any talk of fees and taxes, “I think it’s all part of the discussion of transportation.”

McGee noted that the state’s commuter trains date back to the 1970s and need to be replaced. Five bridges along the Newburyport/Rockport line are about 100 years old. Discussions about transportation funding involve talk of a new interchange at Brimbal Avenue in Beverly, changes to Route 128, and new MBTA parking garages in Beverly and Salem. The question of how to pay for these projects is not an easy one to answer, he said.

State Sen. Bruce Tarr, R-Gloucester, said that from all indications from the administration, spending on education and transportation would require an additional $1.5 billion to $2 billion a year, and that it would not be unreasonable to expect proposals to increase taxes and fees.

“I am deeply concerned about that,” said Tarr, who said he is concerned about the rate of unemployment and the need to reduce the state budget by $540 million this year.

“The first thing we need to do is separate what we need from what we don’t, because the taxpayer is not a limitless source of funds for the state government,” Tarr said. “We have in the past put on the table additional proposals for reform.”

To his credit, Patrick has also called for reforms, Tarr added.

“What is being left out of the equation is we can actually increase revenue for spending priorities by growing the economy rather than increasing taxes,” Tarr said.

When it comes to transportation spending, Tarr said he favors fixing what is already in need of repair, such as the Rockport train station and the MBTA drawbridge over the Annisquam River.

“Is it responsible if you can’t support the things you already have and the things you depend on to talk about billions more in new projects?” Tarr asked.

Other North Shore lawmakers reached yesterday were waiting to see what the governor had to say last night.

“I think the governor and the administration has to take a harder look at the impact on small businesses,” said Hill, who said he has heard from a landscaper who would be hurt if vehicle registration fees go up. While the MBTA always seems to be cash-starved, Hill said he recently took a crowded train into Boston and saw that half the riders in the car did not get their tickets punched by the time the train arrived, meaning they rode for free.

The governor’s plans are heavy on transportation and education, said state Rep. Ted Speliotis, D-Danvers.

“It’s the most ambitious state of the state I’ve heard in decades,” said Speliotis, a veteran lawmaker. “To me, it’s almost a signature statement from him.”

As to tax hikes, “I don’t think the Legislature is as anxious to raise taxes as he is,” said Speliotis, who said lawmakers have been cautious about raising taxes, when compared to other states.

The state did raise the sales and meals tax in 2009 from 5 to 6.25 percent, giving cities and towns the local option to raise the meals tax another 0.75 percent. At that time, cities and towns like Danvers were also given the option to raise the hotel/motel room tax another 2 percent from 4 percent to 6 percent.

“I don’t want to raise any taxes,” Speliotis said. “I know there are needs. I know we have to be careful.”

State Sen. Joan Lovely, D-Salem, said she did not want to comment before she heard from the governor. She was aware of the state’s significant challenges and the need to grow jobs. She said that when she campaigned, she described herself as socially liberal and fiscally conservative.

“I am obviously concerned about working families,” Lovely said.

State Rep. Jerry Parisella, D-Beverly, said in an email that he could not respond to the governor’s “budget or specific tax proposals” until he has heard them.

“However, I do think investing in transportation and education are ways to boost our economy and enhance the state’s ability to compete in the global marketplace,” Parisella said. “Beverly is a hub for transportation, with five commuter rail stops, Route 128 cutting through the city and an airport, so it is in the city’s best interest to have a well-run transportation system. The question is, where do these funds come from?”

Parisella said he is urging the Massachusetts Gaming Commission to work as diligently and as “expeditiously as possible” to grant gaming licenses that would generate more revenue for vital state programs.

Material from The Associated Press was used in this report.

Staff writer Ethan Forman can be reached at 978-338-2673, by email at eforman@salemnews.com or on Twitter at @DanverSalemNews.