Gov. Patrick’s Tax Plan Gets Mixed Reviews

BOSTON — In his State of the State address Wednesday night, Gov. Deval Patrick called for $1.9 billion in new taxes.

The tax restructuring plan would pay for $1 billion a year in new transportation projects, as well as a proposed $500 million in new education proposals next year.

During the address, Gov. Patrick asked legislators to imagine what he calls a “21st century transportation network.”

“Imagine if you could depend on a bus or subway that came on time, was safe and comfortable, and ran until a student at UMass Boston or a worker in a downtown tower finished up at 1 or 2 in the morning,” Patrick said.

The governor proposed extending the commuter rail to the south coast and Springfield, extending the Green Line to Medford, and the reopening of train service from Pittsfield to New York.

“Meeting those needs demands new revenue,” Patrick said.

Patrick is proposing that new revenue come from the sales tax. It would go down from 6.25 percent to 4.5 percent, and all of it would go to transportation, building schools and other infrastructure. To offset the lost revenue from cutting the sales tax, the income tax would go up from 5.25 percent to 6.25 percent, but personal exemptions would be doubled.

Republicans were openly hostile to the plan. House Republican leader Brad Jones said Patrick should have made this proposal when he was running for re-election.

“This is about the taxpayers funding the Deval Patrick legacy project,” Jones said. “Quite frankly, I don’t think the taxpayers want to or can afford to.”

Jones said he would prefer lowering both the income and sales taxes.

Democratic leaders in the Legislature were noncommittal. House Speaker Robert DeLeo agrees that the state has to modernize its transportation system.

“The governor gave us a lot of food for thought in terms of how we’re going to get there fiscally,” DeLeo said. “We’re talking about an income tax increase. We’re talking about a sales tax decrease, a doubling of the exemptions, so I think that right now, we, we as a House, we as a Senate and particular the Ways and Means, have a lot to do in terms of dissecting this plan.”

Senate President Therese Murray said she doesn’t know if it’s time to raise taxes.

“I think the governor feels that that’s the case, and when we discuss this with our members, we’ll know better,” Murray said.

Democratic members of the House and Senate seem split. Some are enthusiastic about the plan, such as Rep. Kathi-Anne Reinstein, of Revere.

“I’m not saying yes or no to anything, but I’m a realistic person and I think that if we want to have the high-class transportation system we need, we need to pay for it, and we need to figure out how we’re going to do that,” Reinstein said.

Others, such as Sen. Brian Joyce, of Milton, are worried their constituents can’t afford a tax increase. The median household income in Joyce’s district is about $80,000 a year. A 1 percent increase in the income tax would mean an extra $800 in taxes.

“Certainly we have a need to in our infrastructure,” Joyce said. “I just think that the ask might be a little bit too large, and I’m not sure there’s an appetite to put that much of an additional burden on Massachusetts families right now.”

Gov. Patrick will provide more details in his budget next week.

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  • X-Ray

    What deductions on the income taxes will he eliminate?

    • http://www.wbur.org/people/fthys Fred Thys

      He has not said which deductions he’ll eliminate.

      • X-Ray

        That’s why I asked. There seems to be a lack of specifics, just half-baked ideas thrown out.

  • Osservatore lucano

    Will the infrastructure he is proposing actually get used? Does it offer a viable return on investment? Will his legacy simply amount to a Spruce Goose or not?

  • jmlorimer

    I would love to have a better public transportation system. I live about 40 miles outside Boston, and it’s an 8-mile drive to the nearest train station, the schedule often doesn’t fit with the times I want to go to Boston, plus once I’m there I have to take a subway to get where I’m going – time and moneywise, it’s still faster and cheaper to drive, as much as I support the concept of public transport. I recently heard somewhere that there was a suggestion of raising taxes on capital gains and dividends, and I’d be all for that. It’s unearned income, which means that I did nothing to earn it except buy the stocks or mutual funds in the first place, Why should I get a tax break on income I did nothing to earn? I’d gladly pay the regular tax rate — I think ALL income should be taxed at the same rate. It would also make figuring out my taxes much simpler.

  • PB

    There are many different ways of funding public transport spending the best being that it actually makes money and supports itself. There are many models globally like the property and rail model used in Asia, most notably Hong Kong, that provides for one of the best transit systems in the world and makes a profit. Also the idea of integrated transport where the sensible use of mixing bus, train, taxi, minibus, tram, ferries and car parks in a system that is purposely interconnected and timetabled would be worth studying. Many places do this without raising any taxes but using commerically viable public transport models e.g. Hong Kong’s tax rate is a flat 15% yet it fantastic infrastructure. Of course it is not excatly the same as the Boston area but there are transport professionals out there who could make a system work here.

  • J__o__h__n

    The governor proposed extending the commuter rail to the south coast and Springfield, extending the Green Line to Medford, and the reopening of train service from Pittsfield to New York.
    “Meeting those needs demands new revenue,” Patrick said.
    How many people will be taking the train from Springfield to Boston? Not enough to justify the expense. Same thing for Pittsfield to NY. I wouldn’t classify these as needs.

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