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Status on potential MA tax hikes
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With the current economic conditions affecting the Massachusetts budget, different options have been looming as a way to make up for projected deficits, none of them popular. The first part has been especially painful with all sorts of programs being affected from teachers and police to programs for the disabled and recovering addicts. No one has emerged unscathed. Here is a rundown of the current proposed solutions to the deficit.
Toll Hikes
One of the most controversial plans was the toll hikes announced in November 2008 by the Mass Pike. The toll hikes would especially affect Boston residents as the tolls would double in both tunnels, Sumner and Williams, hit taxi drivers, and increase at both the Weston/Allston interchanges. This plan sparked a lot of debate due to the fact that many people contend that the Big Dig project, the initial reason for the tolls, has been paid off. Additionally, a lot of local Boston residents were upset by the apparent targeting of them, although they are suffering in this economic downturn, and not all of the residents who use these roads, including out-of-state drivers. A lot of organized opposition has arisen, with the Stop the Pike Hike group leading the pack.
Income Tax Increase
Another plan that has been floated as a more even way to spread the burden was an increase of the state income tax from 5.3% to 5.95%. Supporters claim this could help save vital services for the disadvantaged and disabled. This plan has also met opposition with the counter-claims that hitting people's income at this time will only worsen the problem and put the burden on certain residents more than others. Some people are also still angry at the fact that the income tax was supposed to go down from 5.3% to 5.0% as passed on the ballot way back in 2000, something that has yet to materialize for Massachusetts residents.
Gas Tax Increase
The gas tax increase proposal was actually set forth by Governor Patrick and has thus far proved to be much more unpopular. The Governor proposed to increase the gas tax 19 cents, which would have given MA the highest gas tax in the country, at 42.5 cents per gallon, as the New York Times pointed out in its assessment. The Governor had hoped to avoid increasing tolls by putting the burden on the drivers but again, many claimed that this was the wrong time to increase any taxes as drivers and residents are hurting enough.
Sales Tax Increase
It would seem that the proposal that has the most legs right now is the sales tax increase, which would raise the state sales tax from 5% to 6.25%. As of today, the Massachusetts State Senate rejected both the income tax increase and the gas tax increase. Additionally, the toll increase had previously been pushed to July in the hopes that a solution could be found before they would go into effect. The Massachusetts House has already approved the increase in the sales tax so it would appear to be the one tax that might make it through the legislature.
What's going to happen?
Although there is an additional proposal to increase the meals and hotel tax, it would seem that the increase in the sales tax is the most likely, due to the legislative support. This means get ready for your taxes to creep up whenever you buy anything, unless you go to New Hampshire of course!
For articles from the Boston Globe and Boston Herald, please follow those links.
For the New York Times article, please go here: www.nytimes.com/2009/02/21/us/21mass.html
If you want to know more about MA taxes and tax hikes, please see: Sales tax increase, MA tolls, and Boston City Council updates
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