LTE: Raising Revenues by Ferd Wulkan

Greenfield Recorder - February 11, 2010

Our state is at a crossroads. The budget Governor Patrick released on January 27 gives us a glimpse of the choices we face as we confront a budget deficit of more than $1 billion. It's great that his budget avoids cuts to local aid and schools, but he has proposed $800 billion in cuts to important programs such as job training, services for homeless families and public health programs that keep our communities healthy.  Relying on cuts during a recession will not help shorten the economic downturn.  There is another way.

There are more than $20 billion in exemptions and tax credits our state gives every year that are listed in a document called the Tax Expenditure Budget. Unlike the state budget, they are not voted on each year.  Many of these exemptions make very good sense, like deductions for student loans and making groceries and clothing exempt from the sales tax. Other exemptions and credits should be carefully re-examined, and Governor Patrick has proposed closing $151 million in such loopholes in our Tax Expenditure Budget.

We could close more of these loopholes. Tax breaks given to financial services firms like Fidelity could net us another $100 million. Reversing cuts to the taxes on dividends and interest could raise as much as $500 million.

The Governor’s budget is just the beginning of a long decision-making process. As our representatives and senators prepare their version of the state budget, they must close more of these loopholes and restore adequate funding to our communities.

Ferd Wulkan is the Organizing Director for PHENOM - The Public Higher Education Network Of Massachusetts