Institute Outlines Plan To Plug Likely 'Tech Tax' Gap Without New Revenues

As lawmakers and Gov. Deval Patrick consider ways to find revenues to replace $160 million that would be foregone if the new tech tax is repealed, the Pioneer Institute on Thursday issued a policy brief recommending savings initiatives to plug the gap.

The research organization recommended exempting the MBTA from the state’s law governing privatization of services, reducing labor costs by using proof-of-payment smart cards on the commuter rail, deregulating taxi and livery services, and using Bureau of Labor Statistics data rather than area collective bargaining agreements to help set prevailing wages.

Knocking obstacles posed by the state’s “restrictive anti-privatization law,” the institute said the T could save more than $250 million over six years by outsourcing bus maintenance work to bring costs into line with comparable bus transit agencies.

Efforts to overhaul the state’s privatization law have repeatedly failed over the years in the face of opposition from Beacon Hill Democrats.

The institute also noted New York Mayor Michael Bloomberg’s plan to deregulate taxi and livery services, saying it would generate more than $1 billion for the city over five years and allow the city to sell 18,000 new permits to for-hire livery vehicles.

House Speaker Robert DeLeo and Senate President Therese Murray have suggested plugging any gap created in the fiscal 2014 budget by the repeal of the software tax with surplus revenues or one-time tax settlements from fiscal 2013 or 2014. Patrick said Wednesday that he did not reach consensus with the leadership on Monday when they discussed the plan.

“We did talk about how the surplus, it’s not all it appears on its surface in the sense that half is already committed by the Legislature and we’ve got exposures in the current budget everybody is thinking about, including the legislative leadership, so that’s not without its challenges,” Patrick told the News Service.