House weighs new taxes to address $2b shortfall

Ways and Means budget due out

by Daniel J. Fitzgibbons, Chronicle staff

earching for ways to close a $2 billion state budget shortfall, House leaders this week floated a list of more than 150 possible fee and tax increases, although only about a dozen large-scale options are under serious consideration.

     According to a report in the Boston Globe, representatives are most likely to consider freezing or increasing the income tax; raising taxes on cigarettes, gasoline and alcohol; raising the tax rate on long-term capital gains; cutting the personal tax exemption from $4,400 to $2,200 and repealing the deduction for charitable giving.
Starting next week, House members will begin debating ways to increase state revenues. That effort will follow the release later this week of the House Ways and Means Committee's $21.8 billion budget proposal for Fiscal 2003.

     House Speaker Thomas Finneran (D-Mattapan) has warned for several weeks that the proposed budget calls for cutting about $2 billion in state spending, including a 10 percent reduction in aid to school districts. Finneran and other House leaders also warned that the budget plan could cost thousands of state employees their jobs.
Meanwhile Senate President Thomas Birmingham (D-Chelsea) is calling for returning the income tax rate to last year's level of 5.6 percent, many lawmakers appear to support freezing the rate of the current 5.3 percent.

     While support for a freeze on a voter-approved rollback of the income tax and higher cigarette taxes are gaining favor among legislators, any hikes must pass by a two-thirds majority in both the Senate and House to insure against threatened vetoes by Acting Gov. Jane Swift.

     As budget discussions continued on Beacon Hill, the Save UMass coalition was planning a rally on Thursday at the State House. Contingents from the Boston and Dartmouth campuses were also expected to take part in the effort to generate legislative support for the UMass system.

     Organizers plan to lobby individual lawmakers during the event.

     Later this week, events are planned statewide to raise the public profile of the University system and publicize its role in strengthening the economic vitality of the state.