Biz Slams Brakes on Deval Patrick’s $1.9B Plan
Gov. Deval Patrick’s $1.9 billion transportation plan has failed to win the support of business groups, which are lining up behind the Legislature’s $500 million bill, saying it maintains the state’s competitive edge while also putting crumbling infrastructure on sounder financial footing.
“We need a stronger, more efficient transportation system. There’s no question about the need and so the governor and Legislature are correct that that’s an important component that needs to be fixed,” said Chris Anderson, president of the Massachusetts High Technology Council. “The question is how do you fix it. You don’t fix it in a way that makes us less competitive in the process.”
While the Legislature’s plan needs “clarifying language” over a proposed software tax expected to raise $161 million, the proposal has “more alignment between the purpose of the money … and the source of the money,” particularly when it comes to a 3-cent gas tax increase, Anderson added.
Patrick’s plan involves increasing the state income tax to 6.25 percent while lowering the sales tax to 4.5 percent.
“Most of the states we compete with are lowering taxes on income and deriving their tax revenue from consumption taxes like sales. That’s kind of the trend,” Anderson said. “The governor’s proposal bucks the trend.”
The Legislature’s proposal, which was debated in the House yesterday, also calls for raising the tobacco tax to close an operational deficit in the state transportation system set to reach $548 million by fiscal year 2018, according to the Associated Industries of Massachusetts.
“Although AIM would have liked to see more reliance on transportation-related revenues and less on increased business taxes, we believe this plan represents a reasonable approach in the midst of a less than robust economic recovery,” said AIM President and CEO Richard Lord.
Last week, Greater Boston Chamber of Commerce President Paul Guzzi also threw his support behind the Legislature’s bill, which is backed by House Speaker Robert DeLeo and Senate President Therese Murray.
Patrick, who vowed to veto the Legislature’s bill if it reached his desk in its current form, has described the proposal as “neither sufficient nor fair.”