Tuesday, February 9, 2010

Resorting to Tax Increases Again



A preliminary review by my office of Governor Patrick’s proposed budget for the next fiscal year, H.2, indicates he is resorting once again to increased taxes and fees to address the state’s fiscal challenges. We have compiled a new “top ten” list, which you can read by clicking on “Read more” below. You can hear my discussion of this list with WTKK talk show host Michele McPhee by clicking here.



Top Ten Taxes and Fees
Proposed By Governor Patrick in H.2


1. Increases the Medicaid co-pay for generic drugs from $2 to $3.
a. Cost to taxpayers: $8 million.
2. Repeals sales tax exemption for soda.
a. With candy, cost to taxpayers is $51 million, with proceeds dedicated to a “Health and Prevention Fund”
3. Repeals sales tax exemption for candy.
a. With soda, cost to taxpayers is $51 million, with proceeds dedicated to a “Health and Prevention Fund”
4. Imposes an annual surcharge on auto insurance to fund police training.
a. No cost estimate.
5. Expansion of bottle bill
a. Estimated taxpayer cost: $20 million, with $5 million dedicated to recycling and solid waste management.
6. Repeals sales and use tax exemptions for airplanes.
a. Estimated cost to taxpayers: $5 million.
7. Imposes the cigarette excise tax on cigars.
a. Together with the tax on smokeless tobacco, cost to taxpayers is $15 million, with proceeds going directly to the Commonwealth Care Trust Fund.
8. Imposes the cigarette excise tax on smokeless tobacco.
a. Together with the tax on cigars, cost to taxpayers is $15 million, with proceeds going directly to the Commonwealth Care Trust Fund.
9. Caps the job-creating film tax credit at $50 million for each of the next two fiscal years.
a. Estimated cost to job producers: $75 million per year.
10. Adds Managed Care Organizations to the list of groups subject to a surcharge to pay for the health care safety net.
a. No cost estimate.
• Caps life science tax credits at $20 million for each of the next two years.
Didn’t make top ten but of similar adverse impact on job creation as #10.