Mass. Senate may vote today on sales tax increase to 6.25%
Republicans call hike inevitable
Senate leaders appeared increasingly open yesterday to following their counterparts in the House and approving a hike in the state sales tax to 6.25 percent as a means of raising $900 million to stave off deep budget cuts.
"The House took a very difficult and courageous vote at 6.25 percent, and the Senate will have to act," said Senator Stephen M. Brewer, vice chairman of the Ways and Means Committee, as the Senate prepared for a possible tax vote today. "We cannot do this with cuts alone. It would be physically and fiscally impossible to do that."
Republican leaders, while offering a menu of tax alternatives designed to save the state $1 billion, said an increase in the sales tax, now 5 percent, was all but inevitable.
"Once the smoke clears in that room, it's clear we're going to do what the House did and increase the sales tax," said Senator Richard R. Tisei, the Republican leader, motioning toward Senate President Therese Murray's office, where Senate Democrats deliberated in a closed-door caucus.
Brewer cautioned there was still "no clear consensus on the T-word" in the caucus.
Governor Deval Patrick repeated yesterday that a sales tax increase "is not my first choice." He said he prefers removing sales tax exemptions on select items such as candy, soda and alcohol. But Patrick said he would sign a sales tax increase if the Legislature simultaneously overhauls the pension system, transportation agencies, and ethics laws.
"Whether they move on targeted tax measures that we have proposed or the more broad-based tax measures, let's deliver a change in the status quo here, a change in how we do business," Patrick said outside his office, after huddling with legislative leaders. "And if we do that, I will support those taxes. If we do not, I will not. I will veto them."
Brewer said that, in addition to considering a sales tax increase, the Senate supports a series of local-option taxes on items such as hotels and meals. Those taxes, which have not cleared the House, have been sought by Patrick and by local officials to bolster local budgets hit by the recession.
The Senate deliberated as the State House halls filled with activists lobbying on both sides of the tax issue. Dozens of demonstrators, organized by unions and liberal groups, wore stickers saying "Raising Revenues=Reducing Cuts" and urged the Senate to raise taxes beyond a 6.25 percent sales tax. They chanted, "Raise Revenue," and lobbied lawmakers to reverse proposed cuts in services for the poor, elderly, and disabled.
"Let's talk about what is better: Do you want to pay a little more on a particular item and not cut these services, or do we want to face the consequences of having less police, fire, and social service programs?" said Mayor Lisa Wong of Fitchburg, one of the demonstration leaders.
"Unfortunately, right now we're going to have to talk about new revenue sources," Wong said. "We are realistic."
Citizens for Limited Taxation distributed memos recalling that seven senators were ousted from office in 1990, after the Legislature approved increases in the income, sales and gas tax, pushed by Governor Michael S. Dukakis. The group warned that senators could face the same fate if they approve new taxes.
Representatives of the Retailers Association of Massachusetts met with aides to Murray and outlined their concerns that a sales tax increase would drive consumers to tax-free New Hampshire and tax-free online vendors. The association prefers Patrick's menu of targeted sales taxes, which it says would be less damaging to the economy.
"It's clear that raising the sales tax 25 percent is going to cost us a lot of small business jobs," as many as 12,600, according to the Beacon Hill Institute, said Jon B. Hurst, president of the Retailers Association. "They really need to think about Main Street in each of their districts before they take this vote."
The Republican proposal recommends 13 tax alternatives, such as repealing the so-called Pacheco Law, which would make it easier to privatize state services, selling surplus state land to raise $25 million, and repealing a $110 million tax credit for the film industry.
Republicans also want to drop the sales tax on cars to 3 percent for 6 months to help struggling auto dealers, dozens of which have been slated for closure in Massachusetts.
"The auto industry is pretty much on its knees," Tisei said. "Why not help them?"
Lobbying is expected to intensify today as the Senate begins formal debate. Peter Yarrow and Noel Paul Stookey of the legendary folk trio Peter, Paul, and Mary, are scheduled to lend their star power (and thier singing voices) to a demonstration on the State House steps against cuts in services for the elderly and disabled. 