PRELIMINARY ANALYSIS OF THE GOVERNOR'S FY 2006 BUDGET

[paineinthearse]

MBPC BUDGET MONITOR
PRELIMINARY ANALYSIS OF THE GOVERNOR'S FY 2006 BUDGET

After four years in which funding for public schools, health care, and other public services has been cut by close to $3 billion, the budget proposed by the Governor today effectively uses money saved by those cuts to finance a large tax reduction. The tax break proposed, reducing the income tax rate from 5.3 percent to 5 percent, will deliver over 60 percent of its benefits to the 20 percent of residents with the highest incomes. As the proposed budget pays for only half of the annual cost of this tax cut, additional cuts may be needed in future years to pay the full cost.

This preliminary analysis of the House 1 budget proposal highlights specific program areas, compares proposed funding to last year and to prior years and describes some significant policy changes. The Massachusetts Budget and Policy Center will produce a more comprehensive analysis of the budget in the coming weeks.

The FY 2006 Budget: Preliminary Analysis of House 1 - http://www.massbudget.org/06HouseOne.pdf


Alyssa Na'im
Policy Analyst
email: [e-mail]
phone: [phone] x101

Jeff McLynch
Policy Analyst
email: [e-mail]
phone: [phone] x103

[Kikosexy2]

1. It's ..

Arhhhnolmonics--we're screwed!

[rockedthevoteinMA]

2. Ugh... that's mighty depressing.

Hopefully the Dems do a good job... and change some of it (or maybe all)
:shrug:

[paineinthearse]

3. National Report Shows Economic Cost of Irresponsible Tax Cuts

TAX CUTS AND CONSEQUENCES

In releasing his House 1 budget proposal on Wednesday, Governor Romney suggested that his proposal to reduce personal income taxes by $225 million in FY06 - and by more than $500 million annually in future years - would help to stimulate employment growth in Massachusetts. Specifically, the Governor claimed that "Lowering the personal income tax rate from 5.3 percent to 5.0 percent will make Massachusetts more attractive to both employers and employees."

A recent report from the Washington, DC-based Center on Budget and Policy Priorities offers a distinctly different perspective. The report, Tax Cuts and Consequences, finds that the six states that cut taxes the most during the late 1990s - a group that includes Massachusetts - suffered larger job losses, in the aggregate, than the other 44 states during the latest economic downturn. It further notes that total personal income in five of the six states that adopted relatively large tax cuts has fallen, after adjusting for inflation, even as it has risen in most other states.

The full text of Tax Cuts and Consequences can be obtained via the following link:

Tax Cuts and Consequences

In addition, when the Governor originally put forward his proposal to reduce the personal income tax rate last summer, the Massachusetts Budget and Policy Center produced a detailed analysis of the plan. That report, Four Key Questions on the Governor's Tax Cut Proposal, found that reducing the personal income tax rate would exacerbate the Commonwealth's structural budget deficit, forestall the restoration of funding to vital public services, and predominately benefit the wealthiest taxpayers in Massachusetts.

The full text of Four Key Questions can be obtained via the following link:

Four Key Questions - http://rs6.net/tn.jsp?t=bdueo8aab.0.kjojo8aab.iriz69n6.1374&p=http%3A%2F%2Fwww.massbudget.org%2FFINAL_Romney_Tax_Cut.pdf


Jeff McLynch
Policy Analyst
E-Mail: [e-mail]
Phone: [phone], ext. 103

[merbex]

4. Thanks for posting this

I see a letter to the editor shaping up