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CAMPAIGN 2012

Romney hailed tax hikes similar to ones he now slams

Presentations aimed at Mass. rating upgrade

By Mark Arsenault
Globe Staff / August 12, 2011

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As a presidential candidate, Republican Mitt Romney says he opposes revenue-boosting tax increases. But back when he was Massachusetts’ governor, he bragged about them.

The Romney administration in 2004 and 2005 quietly highlighted the state’s recent tax and fee hikes as part of an effort to persuade the financial rating agencies Standard & Poor’s and Fitch Ratings to improve the state’s bond ratings.

The administration’s bullet-point presentations to the agencies, made public through freedom of information requests, sought to make the case that Massachusetts had “acted decisively’’ to address the state’s fiscal problems with a combination of streamlining, belt-tightening budget cuts, and revenue enhancements. The enhancements included closing “tax loopholes’’ that would add “$269 million in additional recurring revenue’’ to state coffers, along with $271 million in increased fees, according to copies of the presentations. They also referred to 2002 tax increase approved before Romney took office.

But on the campaign trail this summer, Romney has blasted President Obama’s call for similar revenue boosters to help reduce the nation’s debt.

“When I was governor,’’ Romney said in a statement Monday, “S&P rewarded Massachusetts with a credit rating upgrade for our sound fiscal management and the underlying strength of our economy. That didn’t happen by accident.’’

The Romney campaign yesterday strongly objected to the suggestion the candidate was being hypocritical.

“They key point here is that Governor Romney never signed a tax increase into law,’’ said campaign spokeswoman Andrea Saul. She insisted fee hikes are not the same as tax hikes.

Politico first revealed the Romney administration’s past hailing of tax increases in a posting Wednesday night, after obtaining the 2004 S&P presentation. The Globe obtained a second presentation yesterday. It was pitched to Fitch on June 6, 2005, with similar arguments.

A question left unanswered by the Politico report is whether Romney was in the room for the presentations to the rating agencies. A June 3, 2005, memo to Romney from the Executive Office for Administration & Finance states that the governor was scheduled to join the presentation to Fitch after the first hour and would deliver remarks of 10 to 15 minutes.

Yet Romney criticized the deal Obama struck with congressional leaders to raise the amount the US government may borrow, because the agreement “opens the door to higher taxes and puts defense cuts on the table.’’ He has blamed Obama for S&P’s downgrade of the nation’s bond rating.

Romney communication director Gail Gitcho declined yesterday to discuss the difference between higher taxes and higher fees. “I’m not playing pop quiz,’’ she said. “He has never supported a tax increase, never signed one into law.’’

Romney addressed tax “loopholes’’ yesterday in Iowa. “If there are taxpayers who find ways to distort the tax law and take advantage of what I’ll call loopholes that are not intended by Congress or intended by the people, absolutely I’d close those loopholes,’’ he said. “But there are a lot of people who use the word loophole to say, ‘let’s just raise taxes on people.’ And that I will not do. I will not raise taxes.’’

The campaign followed up with a written statement, saying Romney “cut taxes 19 times’’ in the Bay State.

“The rating agencies rewarded Massachusetts during Gov. Romney’s term with a credit rating upgrade,’’ the statement said. “They cited an improving state economy and prudent financial management. It’s a sharp contrast to the failures of President Obama, which has resulted in millions of lost jobs, a broken budget, and America’s first-ever [credit rating] downgrade.’’

Michael Czin, a spokesman for the Democratic National Committee, said that Romney’s opposition to the recent debt deal “is an example of political pandering at its worst.

“As governor he bragged to the S&P about the hundreds of millions of dollars in taxes and fees he raised,’’ Czin said in an e-mail. “But as a candidate he’s following the extreme Tea Party Republicans who denounce any reasonable approach to solve our nation’s financial difficulties.’’

Glen Johnson and Matt Viser of the Globe staff contributed to this report. Arsenault can be reached at marsenault@globe.com

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