Mass. House OKs $1-per-pack hike in cigarette tax
The House yesterday overwhelmingly approved a $1 per pack increase to the state cigarette tax, easily surpassing the two-thirds threshold needed to override a promised veto by Acting Governor Jane Swift and positioning Massachusetts to install the highest
But House leaders acknowledged that it may have been the only easy tax vote members will take this week.
For the first time since the Dukakis era, the Legislature faces major decisions on taxes. Although consensus has been reached on about $750 million worth, House Speaker Thomas M. Finneran is trying to find agreement on several hundred million dollars more - possibly in a single package.
''People are all over the place,'' said House majority leader Salvatore F. DiMasi, a North End Democrat. ''When you try and put everything together, in a package, it becomes even more tenuous. It's very tricky. Right now, there is no package. The package is being developed.''
Finneran is promising a marathon session of tax debate today. House members will meet in caucus at 10 a.m. for a final round of negotiations before all of the tax issues are thrown to the body at large.
''If we don't go with a package, it'll be one tax at a time, up or down,'' said House Taxation Committee chairman Paul C. Casey, a Winchester Democrat.
The tobacco tax increase passed without debate by a vote of 125-29. Eight Democrats joined 21 of 22 House Republicans voting in opposition. The measure would place the cigarette tax at $1.76 a pack in Massachusetts - well above New York's $1.50-a-pack tax, now the nation's highest.
House leaders said the bill could be scaled back today, with a final version adding only 50 or 75 cents to the current 76-cent state levy. But unlike proceeds from the current tax, money from the increase would not automatically fund health-care programs under the proposal that passed yesterday.
House assistant minority leader Bradley H. Jones Jr. predicted the new tax would help balance New Hampshire's budget by driving Massachusetts smokers across the state line to buy cheaper cigarettes. He and other Republicans maintain that the state doesn't need new taxes to cope with a $2 billion budget gap in the fiscal year that begins July 1.
''This crisis, if you want to call it that, is able to be solved through a combination of cuts, existing revenues and reserve funds, and some new revenues,'' said Jones, who represents North Reading.
Republicans propose to collect those new revenues through the establishment of casino gambling in Massachusetts and limiting state Lottery payouts, but those ideas have gotten a cool reception from House Democratic leaders. Yesterday, House Ways and Means chairman John H. Rogers rejected the Lottery concept in a letter to his colleagues, writing that it would ''wreck the most successful state lottery in the world.''
Finneran and his top deputies met behind closed doors into the night yesterday, periodically summoning selected House members and outside budget analysts for their input. In an indication of how elusive consensus has been, House leaders polled all members for the third time in four days.
Casey said the original list of more than 150 revenue sources has been narrowed to less than 10 that will receive serious consideration today. On top of the cigarette tax, there is strong support in the House for freezing the income tax rate at 5.3 percent and for a proposal to tax capital gains like regular income, he said.
Those proposals, plus a tax amnesty program, would free up just $750 million - well below the $1 billion that many members feel is necessary to ease the fiscal crunch, Casey said. The next tier of taxes could include a repeal of the deduction for charitable contributions, a 1 percentage point increase in the sales tax, imposing a sales tax on alcoholic beverages or halving the personal tax exemption.
Jones mocked the Democrats' inability to find agreement.
''There's consensus for doing something, but that's where the consensus breaks down,'' he said. ''It's not really a tax splurge. It's more like a sputter.''