Race for governor returns to tax talk

Lieutenant Governor Kerry Healey said yesterday that she would review the raft of fee hikes approved in 2003 and reduce any found to be excessive, continuing a duel over state finances.

``Fees are in place to provide services, and so, to the extent there are fees in place that are higher than it costs to provide those services, then I think they should be rolled back," she said. ``That's something I would have to take a look at when I'm governor."

It was the second time this month that the Republican candidate put some distance between herself and the revenue policies of Governor Mitt Romney, whom she hopes to succeed. Healey told the Globe in an interview earlier this month that she would consider changes to so-called loophole closing tax legislation that has squeezed additional revenue from small businesses.

Meanwhile, her Democratic opponent, Deval L. Patrick, steadfastly refused to be drawn into a debate yesterday about what he would have done differently to close the projected $3 billion budget deficit Romney and Healey faced when they took office. After being asked repeatedly by reporters, Patrick abruptly ended a 25-minute press conference at his Charlestown headquarters.

``I'm not talking about government back in 2003, I'm talking about today," Patrick said after an extended back-and-forth with a reporter on the fiscal crisis that year. ``And today, if we roll that income tax back, we will get exactly the result that the Romney-Healey administration delivered, which is sharply higher fees and property taxes, and that isn't working." After saying the rollback would harm economic growth, he said, ``Thank you, thank you, all," and left the podium.

Romney and the Legislature, which is controlled by Democrats, approved millions of dollars in fee increases and tax crackdowns that helped close a gaping budget deficit in 2003. Patrick has pointed to the fees to blunt Healey's charge that he would not cut the state income tax rate.

At campaign events yesterday, Healey emphasized her backing for veterans benefit programs, and Patrick touted his support for more affordable housing. But the discussion returned to taxes and fees. Earlier in the week, Patrick highlighted the Romney-Healey team's past support for about $800 million in fee and corporate tax increases -- an independent watchdog group set the figure closer to $700 million -- as part of what he called a ``shell game" in the debate about reducing the state's income tax.

Later, answering questions after a South Boston event where she was endorsed by a group of military veterans, Healey slammed Patrick for obstructing the will of voters who approved the rollback in 2000. ``We know he's going to raise taxes," she said.

But she also said that reduction of the scores of fees that were increased will be on the table if she is elected. Fee reductions would take an additional bite out of state revenue, on top of the $675 million price tag of the income tax rollback that Healey supports.

In an e-mailed response later, Libby DeVecchi, a spokeswoman for Patrick, said Patrick has no plan to raise the income tax. ``In fact, he has proposed increased local aid to take pressure off the property tax and to reduce fees at the local level," she wrote .

On another front, the candidates sparred over negative television ads. Healey's campaign led off by complaining about the Patriot Majority Fund, a so-called 527 organization that for about two weeks has been airing an ad that is harshly critical of her. Campaign manager Tim O'Brien sent Patrick a letter urging the candidate to demand that the funders of the group disclose their identity.

At a later event, Healey said: ``I'm not asking them to pull the ads. I'm asking them to disclose who is behind the ads, and Deval Patrick . . . certainly should demand to know, because they're working on his behalf."

By law, however, independent groups cannot coordinate in any way with candidates or political parties. Exploiting a loophole in state campaign finance laws, the groups may spend unlimited amounts as long as they do not advocate expressly for the defeat or election of a particular candidate. The Patriot Majority Fund is bankrolled primarily by pro-Democratic labor unions that have said they may spend up to $2 million here by Election Day. By Oct. 15, the fund must file a quarterly report with the Internal Revenue Service, detailing the amounts and identities of its contributors.

Patrick countered yesterday by saying the 527s ``ought to stay out of the race." But his campaign later issued a statement saying that ``it is hypocritical for Kerry Healey to call for an end to 527s, while at the same time she is spending millions of dollars on negative advertisements" critical of Patrick.

Yesterday, his campaign called on Healey to stop the negative ads, two days after Patrick's campaign launched a negative ad about negative ads in which Patrick states: ``My opponent is part of the failed politics of Beacon Hill, and now she is running negative ads to distort my record and hide from her own." Healey's campaign manager, O'Brien, twisting Patrick's slogan and tying it to the 527 ad, retorted: ``Together we can -- run an anonymous smear campaign against Kerry Healey while I feign disgust about negative attacks."