Time to STOP the State Budget Cuts
Year after year for the past three years, the state has faced multi-billion dollar deficits. EVERY program -- public schools, fire fighting and police forces, rent subsidies, child care vouchers -- has been and continues to be on the chopping block. We cannot expand, let alone protect the programs we care about, without addressing this deficit.
So WHY do we have such a big deficit? Because of over-spending in the 1990’s, as the Governor claims?
Not really
• The last decade was the biggest & longest boom in the state’s history
• But the legislature was very cautious about spending increases
• In fact, spending on many human services and affordable housing WENT DOWN during the boom
Instead of using the surplus of the boom to address human needs, the Governor and Legislature passed 42 tax cuts – most to our state’s wealthiest corporations and individuals – that cost the Commonwealth $3.7 Billion a year in lost revenue. The most unfair losses in revenue come from Corporate Tax Loopholes.
• In 1968, corporate taxes made up 16% of the state’s revenue. Today their share is only 4%. One third of the 50 largest employers in Massachusetts only pay the minimum corporate tax of $456 a year. They are definitely not paying their fair share!
• This drop in corporate revenue is the result of tax avoidance through creative accounting, and special interest tax breaks passed in the 1990’s.
Example: Tax breaks to Raytheon and Fidelity: The legislature passed tax breaks that allow manufacturers and mutual companies to no longer pay state taxes on their property and payroll. Despite these tax breaks, there have been consistent net LOSSES of manufacturing jobs. Corporate taxes are much less important to where companies locate their business, according to corporate consultants themselves, than the quality of tax-funded services like education, transportation, and public safety.
Corporate tax loopholes and avoidance cost the state hundreds of millions of dollars A YEAR! Over the past five years, we lost at least as much revenue as the size of the current deficit!
So what can we do about it?
• Close the biggest loopholes! The legislature should ensure that corporations making money in MA are paying their fair share of taxes on all their profits. We already won a ban on Passive Investment Corporations last year – now we need to require “combined reporting.” 16 states, including Maine, NH, and California, already do.
• Roll back special-interest tax breaks! We need to repeal the “single sales factor” for companies like Raytheon and Fidelity if they do not provide new jobs for Massachusetts workers.
Neighbor to Neighbor, a statwide organization fighting for working families and grassroots democracy, is leading the struggle to pressure our state legislators to close corporate tax loopholes. With the support of the AFL-CIO and other statewide organizations, we CAN win this fight! Contact Lena Entin at the Western Mass Neighbor to Neighbor office to join the struggle: Westernmass@n2nma.org.