Mass. House Approves State Sales Tax Hike

Raising the sales tax will be part of a budget the House will send to the Senate in May. The increase from 5 percent to 6.25 percent cleared the House by a veto proof margin, a threshold House leaders rushed to secure after Gov. Deval Patrick surprised them with his first veto threat.

Debate about whether to raise the state’s sales tax was back and forth between lawmakers. Some said the state must not push more citizens to the edge; others argued the state can’t ask more from residents who are already living on it.

"The people who are working, the people who are struggling to make it," says Jeffrey Perry, a Republican from Sandwich. He says this sales tax increase would cost the state at least 10,000 jobs.

"How about those people," asks Perry. "Who’s representing them when they lose their jobs because businesses have to thin out a little bit."

Perry says these residents expect the state to tighten its belt as they are doing.

"I stand with the children of the Commonwealth. I’m not going to ask them to tighten their belts," Perry says.

Democrat Ruth Balser of Newton says the state must protect the homeless, mentally ill, disabled or elderly residents who will suffer if all the cuts needed to balance a budget without new revenue go through.

"I’d rather chip in a penny and a quarter on a dollar and just begin to restore local aid to level it should be," says Balser.

The House is expected to vote Tuesday to dedicate about $200 million from additional sales tax revenue to cities and towns. But Jon Hurst, president of the Retailers Association of Massachusetts, says the fight to keep the sales tax hike out of the Senate’s version of the budget is just beginning.

"This is as important a small business issue as we’ve seen in the last two decades," says Hurst. "And we would be remiss not to take every step possible to fight this very aggressive, 25 percent tax increase, which, ironically, is a tax any consumer can avoid."

By shopping online or across the border in New Hampshire, which Hurst says would undercut the $900 million the House hopes to raise.

About 100 members of the “Stop the Cuts” coalition moved through the marble hallways Monday urging lawmakers to raise even more money through new taxes.

They moved from the House chamber to Gov. Deval Patrick’s office after word spread that the governor was threatening to veto the House sales tax increase.

"I don’t believe that we can go to the public and ask for any broad based tax increase unless we get meaningful outcomes on the reform measures that are pending," says the governor, referring to transportation, ethics and pension reforms.
Gov. Patrick's letter to the House (PDF)
The governor’s letter sent House leaders scrambling for enough votes to override a veto. And they got them, just barely.

The letter also frustrated many House members. Patricia Haddad, a Democrat from Somerset says it read like an order.

"Here’s the line, I’ve drawn it," Haddad says. "I don’t think any of us have the luxury, in the situation that we find ourselves in, to decide that any way to proceed is wrong or right."

Frank Smizik of Brookline, one of the governor’s earliest and strongest supporters, sees a political motive.

"The tone of the letter seemed to indicate that he’s running against us for his campaign for governor; making it seem like we’re causing all the problems," Smizik explains. "That’s what he did last time and it was successful for him."

The governor stepped up the pressure later in the evening, saying that he’s ready to veto a transportation bill if it doesn’t reach his desk with more savings and accountability than he’s seen so far, and will do the same with a pension bill that only applies to new state employees.

"I’m not interested in some papered over victory," explains Gov. Patrick, "Something that is halfway there that we can claim is victory and then move on. I’m not about fighting with the legislature. It’s about fighting for our values and priorities."

Senate leaders dispute the governor’s numbers on transportation savings. On the pension bill, House leaders say they can not legally apply pension changes to current state employees.

Word that the governor is also talking about vetoes on these two major bills in addition to rejecting a sales tax increase took many lawmakers by surprise. The governor says he's maintaining a pledge to fix state government and change the way elected leaders do business.