Governor Deval Patrick unveiled a nearly $35 billion dollar state budget proposal for fiscal year 2014. It includes more than one billion dollars in new revenue based on tax reforms. Most notably, it raises the income tax from 5.25 percent to 6.25 percent, doubles personal exemptions and lowers the state sales tax from 6.25 percent to 4.5 percent.
“This is not something I’m doing lightly, but it is something I’m doing because I reject the notion of this self-defeating strategy of not shaping our future,” said Gov. Deval Patrick (D-Massachusetts).
The governor’s budget also proposes to increase the cigarette tax from one dollar to $3.51 a pack, remove tax breaks on candy and soda, and cap the film tax credit at $40 million dollars per fiscal year. House Speaker Robert DeLeo is asking lawmakers to get ready for a vigorous discussion.
“We’ve got a lot of talk about and the only thing I ask members is to sort of keep your powder dry till you, till all the facts are out there and we know exactly what the House’s response, what our plans are going to be,” said DeLeo.
Patrick says the new revenue will go toward an economic investment strategy that invests nearly $7 billion dollars in education and nearly $715 million dollars in transportation. Policy experts are giving the tax reforms mixed reviews.
“These investments begin to move us further in that direction, being an economy that can produce and attract high wage jobs for our people,” said Massachusetts Budget and Policy Center President Noah Berger.
“I am concerned that there is a risk here,” said Massachusetts Taxpayers Foundation President Michael Widmer. “We have to deal with the short term realities of difficulties for homeowners and individuals across this state and a very fragile economic recovery.”
Governor Patrick’s budget also proposes to expand the bottle bill by tacking on a 5-cent refundable deposit to a longer list of drink containers like water and sports drinks.
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