House Democrats kill income tax cut

Arguing that Massachusetts desperately needs the money, the House last night rejected Governor Mitt Romney's proposed income tax cut by an overwhelming 135-21 margin.

Republicans offered Romney's tax cut as an amendment to the fiscal 2006 state budget, which the House began debating yesterday. State representatives are expected to work into the night all week as they consider about 1,300 proposed amendments to the $23.6 billion spending plan House leaders put forth earlier this month.

The House spending plan, which is about 2.5 percent larger than this year's budget, relies on an anticipated modest uptick in tax revenues to boost spending on schools and social services, but does not come close to fully restoring programs Beacon Hill cut by about $3 billion during the fiscal crisis that gripped Massachusetts between 2002 and 2004.

For nearly a year, Romney has been urging the Legislature to reduce the state income tax to 5 percent. In 2000, voters approved a gradual lowering of the income tax rate, which was 5.85 percent at the time, to 5 percent. But in the depths of the state's fiscal crisis in 2002, the Legislature froze the rate at 5.3 percent.

The tax cut would cost $226 million in fiscal 2006 and $587 million in fiscal 2007, according to the Department of Revenue. In fiscal 2007, the cut would be worth about $146 to a married couple earning $60,000 and $133 to a single person earning $50,000.

''Don't you think at some level, it's a little dangerous for elected members of the House and Senate to ignore the will of the voters, to think somehow that we know better than what they told us to do in the year 2000?" said Representative Jeffrey David Perry, a Sandwich Republican.

Supporters noted that in the last fiscal year, the state collected $700 million more in tax revenue than it had predicted. But foes say that figure masks the gap between the state's mandatory spending and the revenue it can count on every year. The House budget relies on $380 million from the state's reserves to close the gap.

''We all watched as the cities and towns laid off 14,500 teachers, police, firefighters, librarians, and other important municipal officials. We've watched people in Massachusetts lose their healthcare because of the tightening of eligiblity requirements we were forced to make," said Representative Ruth B. Balser, a Newton Democrat.

In order to deny the Republicans a straight up-or-down vote on the tax cut, which might be used by the Republicans as political ammunition, the Democrats attached a ''further amendment" calling for a study on the impact of the tax cut. The Democrats then voted for the amendment, knowing they had delayed the cut indefinitely.

The House also last night delayed debate on a measure that would increase revenue by $170 million. Last January, Romney proposed wringing $170 million more out of corporations by closing what he called loopholes in the tax code. But the governor subsequently proposed a stripped-down package of $85 million, after protests from the business community. Representative Jim Marzilli, an Arlington Democrat, planned to offer an amendment restoring the original plan.

But Representative John J. Binienda, the House chairman of the Revenue Committee, said the House delayed discussion of the measure because his panel has not had time to fully examine it.