Stop the presses! Officials announce no tax break -- again

September 16, 2008 05:01 PM Email| Comments (0)| Text size – +

By Michael Levenson, Globe Staff

Here's a development sure not to shock anyone in Massachusetts: You won't get a tax break this year.

State officials said today that, for the 21st consecutive year, Massachusetts taxpayers will not get a tax credit under a 1986 voter-approved law. Even backers of the law conceded it's an all-but-obsolete relic of a long-ago battle.

“It didn’t work," said Barbara Anderson, the executive director of Citizens For Limited Taxation, who was a chief backer of the plan in 1986. "But if it had worked," she said, "it would have been neat.”

The obscure Tax Cap Law says that if state tax revenues grow faster than the average three-year growth in Massachusetts wages and salaries, the surplus must be returned to the taxpayers.

The law triggered a rebate only once – in 1987 – when the state was forced to return $29 million, or about $5, to every taxpayer, state officials said.

But decades of rising wages and tax-cutting on Beacon Hill have precluded any further relief.
Today, state Auditor A. Joseph DeNucci announced that the state collected $21 billion in taxes last year, $2.4 billion under the allowable limit.

So no cash back. Again.

In the mid-1980s, Anderson and a coalition of high-tech businesses pushed the measure to prevent state taxes from growing faster than workers’ wallets.

Governor Michael S. Dukakis tried to quash the idea by passing an alternate version in the Legislature, but his measure failed.

Human service groups worked hard to defeat the measure, as well, calling it, in the words of one activist in 1986, “nothing more than gum tossed in the smoothly running machinery of the Massachusetts economy.”

Voters approved the law, then promptly forgot about it.

“It is invisible," said Michael J. Widmer, president of the Massachusetts Taxpayers Foundation. "And nobody knows about it until we actually hit it."

Anderson said the law could one day trigger a rebate if lawmakers dramatically increase taxes or if wages plummet. “It could still work," she said. "But terrible things would have to happen.”