In an op-ed in today’s Boston Globe, Senator Brown shares with us his recollection of how, a decade ago, Massachusetts pulled itself out of recession using only spending cuts and bipartisanship.
In 2001 to ’02, the bursting of the technology bubble hit the Massachusetts economy hard. Our unemployment rate was growing faster than any other state in the country, and we faced a fiscal crisis that many experts said was the worst since World War II. The projected deficit for 2003 was nearly $3 billion.
But instead of raising taxes, Democrats and Republicans worked across the aisle: We tightened our belts and balanced the books by cutting spending. It wasn’t easy, but after some tough negotiations and re-setting of priorities, we turned our deficit into a surplus and the economy and jobs started coming back.
A pretty story that neatly coincides with the Senator’s campaign platform. The only problem is that it’s not true. The state did raise taxes on income, capital gains and cigarettes in 2002, increasing revenues by $1 billion to help close the deficit.
We in the reality-based community always stand ready to help with the fact checking, Senator.
A post on LiL. Great catch, hester!
Now, will the Globe do a followup, so their readers don’t remain misinformed? I mean, isn’t that their job?
It sounds like he definitely only listened to the people who paid to see him on his “jobs tour”. Well, that and the closed door meetings he had with some corporations. Also, most of what he said sounds like the same policies that have caused our problems over the last 30 years. More neo-liberal BS.
That being said the Globe is probably going to do nothing to fix it, since all the media cares about these days are access to celebreticians like Scott Brown. They don’t want to hurt his feelings by doing something as brazen as exposing truth.
which is edited by very serious people, but most newspapers and magazines don’t fact check or correct editorials. It’s been a very effective loophole for conservative propagandists.
Expect The Globe to follow up with a story headlined with something like
Brown,Dems Disagree on Flatness of Earth
But it should be followed up with a hard hitting article correcting the facts, since the fact that Scott Brown lied or ignored facts is TOTALLY news-worthy, and also, important for us voters to be able to make up our minds this election season.
And I vaguely recall a debate question aimed at Scott Brown questioning his voting to raise taxes while in the State House. His answer was that fees are not taxes. Romney does basically the same thing. It’s quite the dodge.
Maybe the Globe did us a favor by shunting Brown’s bogus Op-Ed to Saturday, which incidentally, is among the lowest read papers of the week. The paper is smaller and only has the most important news on a local/state level. Nothing that really draws readers except for the odd story nobody is talking about buried on page C5.
To expand on Hester’s original post, these are the details of the tax increases. The values of the tax increases are documented in the Commonwealth’s bond prospectuses. For example, see http://www.mass.gov/Ctre/docs/debt/bondarchive/GOOS08_09/2006OS/Series2006ARef.pdf, issued while Mitt Romney was still governor. The following taxes were raised in 2002 (from pages A-12 to A-14 of the bond prospectus):
The tax on long-term capital gains tax was raised from a sliding scale of 0% to 5%, to a flat rate of 5.3% ($820-$870 million in tax increases by FY2006, more in later years as the stock market boomed until the 2008-9 crash).
Personal exemptions were reduced by 25% ($325 million in tax increases in FY2003, down to $140 million in FY2006). As the economy recovered from the 2001-2002 recession, the personal exemption reductions were reversed, per the statute cited by Hester.
The charitable deduction was suspended ($190 million in tax increases by FY2006).
The cigarette tax was increased from 76 cents to $1.51 ($155 million in tax increases by FY2006).
The referendum-approved income tax reduction from 5.3% to 5.0% was suspended. This was not strictly a tax increase (since rates hadn’t gone down from 5.3% yet), but resulted in $595 million in additional tax revenues in FY2006 compared to what would have been the case had the referendum been implemented.
All of these tax increases (or delaying of tax cuts, which was labeled a tax increase by Acting Governor Swift, Republican legislators and candidate Romney at the time) were implemented in the summer of 2002 to balance the FY2003 and subsequent budgets. All were vetoed by Swift and overridden by the Legislature. (Doesn’t Senator Brown remember his votes?) Virtually all revenue from these tax increases was received starting in 2003 (due to the typical lag between tax law changes and receipt of revenue, as tax returns are filed and withholding tables are adjusted), just as Governor Romney came into office. Romney did not attempt to repeal any of these tax increases in his annual budget proposals (see FY04, FY05, FY06, and FY07 ) — although he did propose in his FY06 budget to reduce the the income tax rate from 5.3% to 5.0%, per the referendum. In fact, Romney cited the tax increases in rating agency presentations as one of the reasons MA should receive a bond upgrade (see 2004 S&P Commonwealth presentation, page 6).
In addition, Romney’s first three budget proposals included tax “loophole” closing recommendations. The following loophole closings for 2003, 2004, and 2005 (pages A-15 to A-16 of the April 2006 bond prospectus):
Cigarette tax: ($71-$81 million in FY2006)
Corporate tax: ($196 million in FY2006)
Financial Institutions tax: ($40-$60 million in FY2006)
The final loophole closing package proposed by the Governor in his FY06 budget (estimated by the Administration at $170 million annually) was withdrawn after Grover Norquist objected that it was a tax increase.
Other than the personal exemption decrease, all the 2002 tax increases are still in effect, as is the suspension of the income tax rate reduction from 5.3% to 5.0% (though there is mechanism for phasing that in), and all the tax increases implemented in 2008-9. So to say that Massachusetts has balanced its budget without raising taxes — under either Republican or Democratic administrations — is preposterous. Romney, to his credit, recognized though did not publicly acknowledge that those tax increases were necessary — in fact his budgets would have been out of balance without them and the Commonwealth probably would not have received an upgrade. But now that he is part of team Grover and has signed Norquist’s no new tax pledge, his past actions have been erased, possibly even in his own mind.
for the very detailed corroboration.
One more brief item: here’s what the Massachusetts Taxpayers Foundation had to say about the 2002 tax increase, which was accompanied by budget cuts in the FY 2003 budget:
Like Fox NEWS? his take on facts are fitted into what he is pedeling at the time…Thruth is very hard to rewrite !!!