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Wed January 16, 2013
Gov. Patrick Calls for Income Tax Increase, Sales Tax Decrease
It was a highly anticipated and yet still surprising announcement during the State of the Commonwealth address last night: Governor Deval Patrick proposed a significant increase in the state income tax and a hefty cut to the sales tax. WGBH's Anne Mostue had this report from the House Chamber.
The crowd of lawmakers responded to the governor's figures with silence. A pensive pause. Raising the state's 5.25 percent income tax to 6.25 percent, and reducing the 6.25 percent sales tax to 4.5 percent may not have been what they expected.
"There will be debate. I encourage it. Every one of us here has to think twice before asking people who already feel strapped to contribute a little more," Patrick said. "But this time, instead of sinking into the same old slogans, let’s have a serious, fact-based debate. The people we work for want the schools I have described; they want the rail and road services we have laid out; and above all they want the opportunity and growth these investments will bring. We on their behalf have choices to make. I choose growth."
To explain his proposal, Patrick said the tax changes would make Massachusetts more comparable and competitive with other states. And he focused on the two issues he's spoken publicly about this week – transportation and education. He says new funding and new initiatives are necessary.
"I would not ask if I did not believe in my heart that investing meaningfully today in education and transportation will significantly improve our economic tomorrows," Patrick said. "Because we all have a stake in that future, we should all contribute to paying for it."
Patrick's office released detailed numbers after the speech. The cut in the sales tax would mean a loss of $1.1 billion a year. The increase in the income tax and taxes on corporations would raise about $3 billion. So the net, the governor says, would be an increase in state tax revenues of $1.9 billion a year.
Patrick boasted that no administration has ever delivered more sweeping reform of state government than his. What remains to be seen is whether the House and Senate will approve the proposal. Afterward, even his Democratic supporters said they'd have to take a long, hard look at the plan.
STATE OF THE COMMONWEALTH