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Tax Cut Passes Overwhelmingly: Despite Retiree Opposition PDF Print E-mail
JANUARY 2001 - Election results in November for the eight statewide ballot questions proved to be a mixed bag for public retirees. Beyond the cliffhanger finish of the Presidential Election, several of the ballot questions would have an immediate impact on retirees.

As members know, Question 4, which cut the state income tax rate to 5%, passed handily. The final total was 1,486,839 in favor (59%) 1,015,812 against (41%), despite the heavy opposition put forth by this Association and the public employee unions. Thankfully, Question 6, which would have allowed for tolls and excise taxes to be deducted from state income taxes, was soundly defeated.

Our Association opposed both Questions 4 & 6, because of the dramatic impact they both would have on the state's ability to meet its obligation to public retirees. After Question 4 is phased-in over the next three years, over $1.2 billion dollars will be cut from the state's tax revenues. If Question 6 had passed, another $700 million would have been lost.

"There are far too many obligations on the table right now to havetaken nearly $2 billion away. In light of Question 4 alone, it will be hard to meet pension system funding, health care, and local aid obligations as they currently stand," explains Association President Ralph White. "As we pointed out in previous editions of the Voice, a large tax cut could result in reductions in local aid. In turn, a cut in local benefits or services may result. Let's not forget 1981 and Prop 2 1/2.

 


    "I realize that a number of our members voted in favor of Question 4. When it was pointed out that they don't pay state taxes on their pensions, a typical answer was: 'I'm looking out for my children and grandchildren who do pay high taxes.' Our members do tend to be unselfish people which I can't help but respect."

    Finneran Speaks Out

    Over the course of the past year, many state officials and members of the Legislature have spoken out against both Question 4 & 6. State Treasurer Shannon O'Brien, House Speaker Thomas Finneran, and Senate President Thomas Birmingham each debated Governor Paul Cellucci in opposition.

    All three officials share the Association's concern regarding the impact that the loss of revenue may have. Finneran will be the first elected official to be faced with the ramifications of Question 4 passing, when the governor files his Fiscal Year 2002 State Budget with the House in January.

    While not predicting fiscal chaos, the Speaker does believe that belt tightening will be required. "This will not necessarily be a pleasant experience, but it will certainly be a challenging one," said Speaker Finneran.

    Finneran also referred to Cellucci's involvement in the effort behind Question 4 as being "politically motivated". He went on to label the process of making public policy through the use of referendum questions as "pandering to raw emotions" of the voters.

    It is expected that the House, which is known to be fiscally conservative, will pass lean budgets for the next few years until the economic impact of Question 4 is fully realized.

 

 
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