Senate President Thomas Birmingham,
D-Chelsea, has said he'll take a look at the
possibility of freezing the income tax rollback
after the New Year.
Acting Gov. Jane Swift has vowed to
fight any effort to undo the income tax reduction.
Associated Press
Dec. 31, 2001
Tax changes to put more money in pockets...
"Tobacco companies, not the
public, must bear the financial burden associated
with smoking-related illnesses."
Attorney General Tom Reilly
AG files suit vs. tobacco firms
The Boston Herald
Jan. 1, 2002
But it proved a risk worth taking
when in 1998 the tobacco industry, in a historic
nationwide settlement that has ushered millions
into state coffers around the country, agreed to
settle the suit with Massachusetts by paying out
$8 billion to repay taxpayers for decades of
smoking-related health costs.
The Boston Herald
Jan. 1, 2002
Firm's suit paints Reilly into a corner
The board's decision to back off
means tough luck for former East Boston Rep.
Emmanuel "Gus" Serra, who was canned
from his $129,000-a-year strategic planning
director job, and now won't be able to add nearly
$20,000 to his annual pension take through early
retirement. Some have pointed to Serra as the
intended beneficiary of the special provision
largesse, which was inserted into the bill by the
House Ways and Means Committee - controlled by
House Speaker Thomas Finneran, a longtime Serra
ally....
Rank-and-file House members,
embarrassed by the media coverage, yesterday
voiced outrage that their leadership quietly
inserted the provision, then passed the bill on a
voice vote during an informal session where only a
handful of members were present.
The Boston Herald
Jan. 1, 2001
Embattled Massport won't accept $$ handout
In 1995, before [Finneran] took the
helm, 38 members were paid extra money for their
leadership posts or committee chairmanships, most
getting the minimum $7,500 in added pay. Now, 51
receive elevated pay, and Finneran helped double
the stipends for many of them to $15,000. While
most attest that they could never be bought with
such stipends, cooperation is certainly expected
of those elevated to leadership roles.
Joked Christopher Hodgkins,
Democrat of Lee, one of Finneran's staunchest
critics: "You'd be amazed what a legislator
does for free stamps."
The raises now supplement the
$50,000 salaries of not only committee chairs and
party leaders, but "floor division
leaders," whose job is to count heads for
floor votes.
The Boston Globe
Jan. 1, 2002
In survival test, speaker shows his skill...
Edging close to what has become a
third rail in Massachusetts politics, former Labor
Secretary Robert Reich said yesterday that if he
became governor, he would consider reinstating a
state capital gains tax of 4 percent, to make up
for gaps in the state's finances....
Reich also endorsed an increase in
gasoline taxes for Eastern Massachusetts residents
to make up cost overruns on the Big Dig, a plan
which has also the support of Secretary of State
William F. Galvin - a likely competitor in the
Democratic race for governor.
The Boston Globe
Jan. 1, 2002
Reich raises possibility of capital gains tax
 |
|
Chip Ford |
Associated
Press
Monday, December 31, 2001
Tax changes to put more money in
pockets
of seniors, workers, donors
By Leslie Miller
BOSTON (AP) -- Massachusetts residents will
see a little more money in their paychecks starting New Year's Day.
That's when the state's income tax drops by
0.3 percent. In 2000, voters approved a ballot question that cuts the state
income tax to 5 percent from 5.95 percent over three years.
"For most people, it won't be a whole
lot," said Timothy Connolly, Department of Revenue spokesman.
The typical family of four will save less
than $200 a year, tax cut opponents have said.
Many taxpayers, though, will be able to take
advantage of targeted tax breaks in 2002. Eligible seniors can take a credit
of up to $385 against their property taxes. For the first time, people will be
able to deduct charitable gifts from their state taxes. Renters, adoptive
parents and people with student loans will also pay less in taxes.
All the cuts will cost the state treasury
$600 million to $700 million for calendar year 2002, according to the
Massachusetts Taxpayers Foundation.
The income tax cut alone will cost about
$400 million annually, said Cam Huff, senior policy analyst at the foundation.
This year is also the final phase of the
state's capital gains tax reduction, enacted in the early 1990s. That will
cost another $75 million to $100 million, Huff said.
"People who held an asset for six years
or longer will go from 1 percent (capital gains tax) to zero," he said.
The impact of the charitable deduction is
harder to gauge because the Sept. 11 terrorist attacks changed giving habits.
One study estimated the cost to the state at between $180 million and $200
million.
"Who knows?" said Huff. "But
it's somewhere in that ballpark."
Falling tax revenues forced lawmakers to cut
human services programs as part of a $1.3 billion reduction in spending that
resulted in a $22.3 billion budget for the 2002 fiscal year.
Senate President Thomas Birmingham,
D-Chelsea, has said he'll take a look at the possibility of freezing the
income tax rollback after the New Year.
Acting Gov. Jane Swift has vowed to fight
any effort to undo the income tax reduction.
Taxpayers confused about their tax liability
for 2001 should call the Revenue Department's hot line or check its Web site,
said Joseph McDermott, taxpayer advocate.
Some important changes include the
charitable deduction, which can be claimed against state income taxes for the
first time on the 2001 tax return, McDermott said.
"Even if you don't itemize federally,
in Massachusetts you can claim a charitable deduction equal to the amount you
would get on the federal tax return," McDermott said.
People 65 and older considering the new
property tax credit face complex eligibility requirements.
Their total income not adjusted gross income
can't exceed $41,000 for single filers, $51,000 for head-of-household filers
and $61,000 for joint filers. The credit must be sought against a primary
residence in Massachusetts assessed at less than $412,000. Their total
property tax, including water and sewer bills, must exceed 10 percent of total
income.
The credit will increase next year,
McDermott said.
Renters will see their rental deduction
increase to $3,000 from $2,500, he said.
The full amount of interest on student loan
payments can be deducted, he said, and all adoption agency fees are exempted.
Return to top
The Boston Herald
Tuesday, January 1, 2002
AG files suit vs. tobacco firms
by Michael Lasalandra
Attorney General Tom Reilly is suing to stop
five overseas tobacco companies from selling their cigarettes in Massachusetts
until they put money into a special escrow account.
Tobacco companies that did not sign on to
the national tobacco settlement in 1998 are required by state law to put funds
into escrow each year to pay settlements or judgments in lawsuits that
Massachusetts may file to recover smoking-related costs.
Reilly's office said the suits, filed in
Suffolk Superior Court yesterday, seek a total of $5,500 from the companies -
the amount they should have paid into the account, plus penalties.
The companies named in suits filed yesterday
were cigarette makers Mohanial Hargovinddas, maker of Sher Bidi and Pahelwan
Bidi brands; China National Tobacco Import and Export Co., maker of Ginseng,
Daquianmen and Double Horses brands; Karelia Tobacco Co., maker of Karelia
brands; Sekap SA Greek Cooperative Cigarette Manufacturing Co., maker of GR
and Ideal brands; and Administrazione del Monopoli di Stato, the maker of the
MS brand.
Earlier in the year, Reilly's office sued
five other cigarette makers that have violated the escrow law.
"If cigarette sellers plan to do
business in Massachusetts, they must recognize and respect state laws,"
Reilly said in a statement. "Tobacco companies, not the public, must
bear the financial burden associated with smoking-related illnesses."
The escrow law works in conjunction with the
national tobacco settlement, signed by 46 states and under which Massachusetts
is estimated to receive $7.6 billion in payments over 25 years.
Return to top
The Boston Herald
Tuesday, January 1, 2002
Business
Firm's suit paints Reilly into a corner
by Maggie Mulvihill
Greed is good, said New York financier
Gordon Gekko, the money-crazed tycoon in the popular 1987 movie "Wall
Street."
But not according to Attorney General Tom
Reilly, who blames greed for driving a group of Massachusetts lawyers to sue
the state last week for $282 million more in tobacco litigation fees.
Superlatives used by Reilly to describe that
suit ranged from "absolutely disgraceful" to "offensive."
But despite his protestations, Reilly is
stuck in a legal corner created for him by his own predecessor and the state's
former top lawyer - L. Scott Harshbarger, a fellow Democrat, who, ironically,
now heads Common Cause, an advocacy group known for deploring the influence of
money on public policy.
That legal corner is called a contract, an
enforceable contract according to the lawyers at Boston's Brown, Rudnick,
Freed & Gesmer, who filed the suit and led the Massachusetts legal team to
victory in the historic 1998 Big Tobacco settlement.
Brown Rudnick - which has been awarded $178
million in fees by a national arbitration panel - was one of very few Boston
firms willing to represent the state in its suit against Big Tobacco back in
1996.
It was a case many local lawyers refused to
take on, given the industry's endless supply of funds and its track record of
never losing a lawsuit.
But it proved a risk worth taking when in
1998 the tobacco industry, in a historic nationwide settlement that has
ushered millions into state coffers around the country, agreed to settle
the suit with Massachusetts by paying out $8 billion to repay taxpayers for
decades of smoking-related health costs.
There was just one small hitch, though -
Harshbarger had cut a deal with the lawyers that they would receive 25 percent
of any settlement or zero if the case was lost.
It's a deal that was denounced by many state
officials.
Former Gov. Paul Cellucci, a Republican,
made it a campaign issue as he bitterly battled Harshbarger for the governor's
office in 1998.
Reilly, who slid into Harshbarger's old AG
seat in that same election, has said repeatedly that the lawyers have been
more than amply compensated for their work and the state owes them not a penny
more.
But Brown Rudnick isn't taking lightly its
new quest for the additional fees.
One can just imagine the wads of cash it's
shelling out for the very pricey legal help it has hired for the case -
attorney Robert Popeo.
Neither Popeo nor Reilly are known for their
flexibility and willingness to compromise. So no matter what happens with the
$282 million claim, it will be unbridled fun to witness their unfolding legal
match.
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The Boston Herald
Tuesday, January 1, 2001
Goody bye: Embattled Massport
won't accept $$ handout
by Elisabeth J. Beardsley
Buckling under days of public outrage, the
Massport board of directors is rejecting the early retirement goodies state
lawmakers offered to their recently axed political cronies.
Phone calls have been flying back and forth
between acting Gov. Jane Swift and Massport board and staff, since the Herald
reported Saturday that the Legislature slipped a special Massport-specific
retroactivity clause into a statewide early retirement bill.
"The Massport board has no intention of
implementing the legislation," Massport spokesman Jose Juves told the
Herald last night.
The beleaguered agency, struggling with an
economic crisis after the twin Sept. 11 hijackings from Logan International
Airport, laid off 170 workers in November, including many notorious patronage
hires.
Had the Massport board implemented the
Legislature's special provision, the laid-off workers, particularly the
highly-paid political hires, could have padded their annual pensions by tens
of thousands of dollars - adding millions to Massport's bleeding bottom line.
The board's decision to back off means tough
luck for former East Boston Rep. Emmanuel "Gus" Serra, who was
canned from his $129,000-a-year strategic planning director job, and now won't
be able to add nearly $20,000 to his annual pension take through early
retirement.
Some have pointed to Serra as the intended
beneficiary of the special provision largesse, which was inserted into the
bill by the House Ways and Means Committee - controlled by House Speaker
Thomas Finneran, a longtime Serra ally.
Massport board chairman Mark Robinson and
other board members did not return calls yesterday.
But Juves said the agency is satisfied with
its plan to fill a $51 million budgetary hole, and doesn't need to bring early
retirement into the mix.
"The board feels comfortable with that
original plan. Wall Street felt comfortable with that original plan,"
Juves said. "There's really no need to change it."
Working from her western Massachusetts home,
Swift signed the statewide early retirement bill into law last night -
Massport clause and all - but only after securing promises from the
independent agency's board that it would not opt into the system.
"The governor felt that it was
inappropriate for Massport to implement the early retirement bill with the
retroactive date," said Swift spokesman Sarah Magazine. "She's
pleased that Massport has said that they intend to follow her
directions."
The media furor that erupted over the
Massport handout sparked frustration among Massport officials who feel
unfairly set upon over a porky item that wasn't of their own making, sources
say.
"This wasn't something that Massport
had requested," said one State House observer. "Naturally, because
of the media coverage, it further stained Massport's reputation in the public
eye."
The latest Massport controversy has also
sown high tensions between Swift and a pack of Democratic gubernatorial
rivals.
Secretary of State William Galvin and
Treasurer Shannon O'Brien - the acting governor's gubernatorial rivals - had
demanded that Swift send the bill back to the Legislature with an amendment
stripping out the Massport provision.
Galvin continued to insist last night that
Swift kick the bill back, warning that since Massport has until April 1, 2002,
to opt in, the board could sneak the provision through after the dust settles.
"The surest way to fix it is to send it
back," Galvin said.
Swift spokesman Jim Borghesani blasted the
calls to send the bill back to lawmakers, pointing out that Democratic
legislative leaders are to blame for inserting the perk in the first place.
"There's no reason to think the very
Legislature that put in the clause would take it out," Borghesani said.
"It's very possible the bill would never have come back."
Rank-and-file House members, embarrassed by
the media coverage, yesterday voiced outrage that their leadership quietly
inserted the provision, then passed the bill on a voice vote during an
informal session where only a handful of members were present.
"It's just typical," said Rep.
Carol Donovan (D-Woburn). "Things are done without any consultation,
without any openness. They're done behind closed doors."
Finneran declined comment through a
spokesman.
Aimed at reducing the state workforce by
5,000 with as few layoffs as possible, the early retirement period opens
tomorrow.
The Treasury will have applications
available at three locations in the McCormack state office building, and
Saturday hours will be available for the next month.
Treasury spokesman Dwight Robson said there
wouldn't be a repeat of the long lines that marked the state's last early
retirement effort in 1992.
"No one should feel as though they need
to show up bright and early on Wednesday morning," he said.
David R. Guarino contributed to this
report.
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The Boston Globe
Tuesday, January 1, 2002
In survival test, speaker shows his skill
Uses carrot and stick to keep foes in check
By Stephanie Ebbert
Globe Staff
Representative Christopher Fallon of Malden
got $790,000 for a technology park in this year's austere state budget.
Representative Alice Wolf of Cambridge gained a second legislative aide after
voting to eliminate term limits for House Speaker Thomas M. Finneran. The
speaker helps Representative Paul Kujawski campaign in his conservative
Webster district each time he faces reelection. And he offers freshman
Democrats steep campaign contributions, which conspicuously dry up if their
cooperation wanes.
Renegade House members flirted with
insurgency against their commanding leader in recent weeks, protesting a
delayed, closed-door budget process that left even legislators out of the
loop. But their retreat in the face of pressure left voters with a curious
image: 159 ambitious politicians who came to Beacon Hill to make their own
marks willingly ceding control to one.
Yet interviews with an array of legislators
exposed a host of rationales for the House's continued allegiance to Finneran
- from sheer pragmatism, to agreement with his fiscal conservatism, to lessons
learned about the futility of striking out against a speaker with less than a
critical mass behind them.
Finneran, who declined to be interviewed for
this story, maintains power with a masterful mix of charisma and control. Not
every politician can get away with taking off his shoes and performing
stretches during a meeting with business leaders. And he metes out just enough
perks, just in time, to keep objectors in check.
Witness that in the face of continued
criticism last week, he relented and scheduled a special election for a
liberal district seat he'd left open for eight months.
"The reason that the people who want to
challenge Finneran cannot do it is because he's quite skilled at getting the
majority of the members of the Democratic caucus what they want," said
Mickey Edwards, a former Republican congressman and a lecturer in public
policy at Harvard University's Kennedy School of Government. "Getting
them on committee assignments that they like, helping them to advance
legislative programs ... that's the part that gets overlooked. Finneran holds
that power because he's really very good."
Sharing the wealth
and consolidating power
Over six years as speaker, he also has
brought many more members into the fold, as leaders or committee chairs. In
1995, before he took the helm, 38 members were paid extra money for their
leadership posts or committee chairmanships, most getting the minimum $7,500
in added pay. Now, 51 receive elevated pay, and Finneran helped double the
stipends for many of them to $15,000. While most attest that they could never
be bought with such stipends, cooperation is certainly expected of those
elevated to leadership roles.
Joked Christopher Hodgkins, Democrat of Lee,
one of Finneran's staunchest critics: "You'd be amazed what a legislator
does for free stamps."
The raises now supplement the $50,000
salaries of not only committee chairs and party leaders, but "floor
division leaders," whose job is to count heads for floor votes.
Consider the fates of one such floor leader,
Maryanne Lewis of Dedham, and a counterpart, Kay Khan of Newton. Both women
Democrats were elected in 1995, but Khan's fortunes took a dramatically
different turn when she backed Finneran's onetime rival for speaker, Richard
Voke.
Now, Lewis helps set the agenda on the Rules
Committee, earns more than $65,000, and enjoys a spacious ground-level office
staffed by three aides.
Khan earns entry-level pay of $50,122 and
toils with one staffer in the State House basement - wedged into an office pod
beside another legislator. Khan, a trained psychiatric nurse, can't win a spot
on the health care committee, and her seat was nearly wiped out this year in
redistricting.
As legislative leaders chopped the state
budget this year, Lewis reclaimed $720,000 to move a historic house and
restore a cemetery in her district - nearly the same sum given to the entire
Massachusetts Historic Commission, whose budget was decimated. Khan,
meanwhile, was weakly encouraged that Finneran had agreed even to entertain
the idea of having a resolution read into the record praising the idea of more
funding for food stamps and home health care.
In her first years in office, Khan could
attract Finneran to a fund-raiser, she said. But the single contribution she
received through the speaker's fund for House Democrats was never repeated.
George Pillsbury, who heads the
Massachusetts Money and Politics Project, pointed to the speaker's
contributions and noted that 90 percent of the representatives who received
the cash voted to remove term limits for the speaker, essentially allowing
Finneran's reign to continue.
In 2000, the fund doled out more than
$33,000, mostly to Finneran allies, newcomers to office, and freshmen facing
re-election campaigns.
"He'll give it to people in the hopes
that it will get them into the fold," Pillsbury said. "If you're not
in the fold after your first term, there's little chance of coming back to
that pot of money."
Pillsbury also noted that Finneran renamed
the political action committee intended to benefit House Democrats for
himself.
"If you're running for office, your
first contact with the speaker is a $500 check in his name," said
Pillsbury. "People are excited ... They have no donor bigger than Thomas
Finneran."
Republicans, who make up a minority and are
inclined to back Finneran's fiscal conservatism, are contented by raises he
ushered in for minority leaders and other perks. This year, Finneran redrew
minority leader Francis L. Marini's district to encompass Marini's fiancee's
home, so he could stay there after they marry.
Democrats not only get leadership posts or
earmarked items in the budget, but sometimes can claim residual perks. When
former legislator and key Finneran ally Susan Tracy ran for Congress, Finneran
and some of his lieutenants helped her with fund-raising.
Finneran's fans and critics say they can't
discount the speaker's charisma and mastery of the game. Kujawski said that
just a few hours after his father died, Finneran was on the phone consoling
his mother. Others say that the speaker makes personal connections.
"I could spend an hour - and I have -
talking to him about how to prune grapes. When you can do that, there's a
bond," said Representative Michael Festa, Democrat of Melrose, who
developed a rapport with the speaker over gardening. Still, Festa is among the
moderates who are aiming to curb the speaker's control.
"I am just disappointed, in a profound
way, with the way I see this Legislature becoming an institution which is not
functioning at the level it needs to function at," he said.
"Representatives are mere shadows of the leadership."
When career ambitions
meet Beacon Hill reality
The reason for their submission lies
somewhere between their districts, where they are local luminaries, and Beacon
Hill, where their political fortunes, fund-raising potential, comfort level,
and odds of making a difference depend largely on their level of cooperation
with the speaker.
"Everybody goes in there wanting to be
a star," said John McDonough, a Jamaica Plain Democrat who served the
House from 1985 through 1997. Wide-eyed members, however, quickly learn the
protocol, McDonough said.
"Your committee assignment is your
legislative career," he said. "Being a chair or not being a chair or
even being part of a committee that has some significant policy action is
solely at the discretion of the speaker."
Many others take cover under the speaker -
most notably, in the battle over the Clean Elections law. While many members
quietly loathe the campaign finance reform measure that would fund their
challengers, they let Finneran take the heat for opposing it. Others describe
themselves as pragmatists. Representative William M. Straus, a Mattapoisett
Democrat, said he did not back Finneran in his race for speaker in 1996 but
reached out to him afterward by sending him a note pledging his support - and
asking to join the health care committee, which Finneran agreed to do.
Straus recently won backing for a bill - not
signed by the governor - aimed at saving money by buying prescription drugs
for state agencies in bulk.
"I don't always get what I want,"
Straus said of his approach. "But it has allowed me to be effective in
representing my district."
Some of the Democrats who have learned to
negotiate with Finneran suggest that their more confrontational colleagues
aren't trying hard enough - and should learn to go along to get along.
Representative David Linsky of Millis said
he helped usher in a buffer zone bill that protected women visiting abortion
clinics from protesters - despite the speaker's opposition to abortion rights.
"I have to be somewhat critical of some
of my colleagues who have sat back and allowed the leadership to usurp some
power and authority, because the speaker is only as powerful as the membership
allows him to be," said Linsky. But Linsky cosponsored the measure that
eradicated term limits for Finneran last year. It was, he said, a move he made
for ideological purposes only.
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The Boston Globe
Tuesday, January 1, 2002
Reich raises possibility of capital gains
tax
By Yvonne Abraham and Frank Phillips
Globe Staff
CAMBRIDGE - Edging close to what has become
a third rail in Massachusetts politics, former Labor Secretary Robert Reich
said yesterday that if he became governor, he would consider reinstating a
state capital gains tax of 4 percent, to make up for gaps in the state's
finances.
Reich, who said he is "very, very
likely" to run for governor this year, has set himself apart from other
likely candidates with that openness to a tax increase. The last three
governors, all Republicans, pushed for tax cuts. Similarly, Democrats seeking
the nomination have studiously avoided talk of reinstating or raising taxes.
Reich was careful to say he would reinstate
the capital gains tax only as a last resort, and "only on the people who
can afford it," if trimming government and reducing "corporate
welfare" failed to make up what he expects will be a $2 billion shortfall
in next year's budget.
"There are many, many steps that can be
taken before we get to that stage," he said in an interview yesterday.
Reich also endorsed an increase in gasoline
taxes for Eastern Massachusetts residents to make up cost overruns on the Big
Dig, a plan which has also the support of Secretary of State William F. Galvin
- a likely competitor in the Democratic race for governor.
In 1994, legislators and then-Governor
William F. Weld rolled back, and in some cases eliminated, the 6 percent
capital gains tax. Now, assets held for six years before being sold are not
taxed at all....
Return to top
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