Groton rep blasts state budget proposal
By Christopher Scott
Lowell Sun, July 8, 2008
LOWELL -- Bob Hargraves, the region's only Republican representative, yesterday denounced the recently approved $28 billion state budget for fiscal year 2009, saying it relies too much on new corporate taxes and that it's bloated with pork.
"There are people on Beacon Hill who want to tax the air you breathe and the feelings you have, but people are struggling, and at some point, these lawmakers have to realize enough is enough," said Hargraves, a seven-term incumbent from Groton.
But Lowell Sen. Steve Panagiotakos, who played a key role in crafting the budget as chairman of the Ways and Means Committee, defended the spending plan that was passed late last week.
Hargraves, both in a prepared statement and in an interview, said the budget jumped about 5.3 percent from last year, an increase he called "exorbitant," with more than $290 million in revenue coming from new corporate taxes that were only approved two days previously.
He said he and the 18 other House Republicans "worked feverishly" to prevent passage of the new corporate taxes, convinced that the current state of the economy, combined with higher taxes, is a "recipe for disaster."
"Businesses are already leaving the commonwealth because they can't afford to be here," he said. "You combine that with high energy costs, already high taxes and now these new taxes, and they're going to run, not walk, right out of the state."
Hargraves said the state is essentially spending money it doesn't have but counting on tax revenue and the rainy-day fund to make up the difference. In fact, $310 million from the rainy-day fund was used to balance the ´09 budget.
According to Hargraves, "We need to stop spending money before we know whether or not we have it. We are banking on this new revenue. But what happens if that expected money is not generated? Then what? For instance, capital-gains revenue most likely will be depressed due to the bear market."
Michael Widmer, president of the Massachusetts Taxpayers Foundation, echoed a similar sentiment. "We think it's a very risky budget," Widmer said. "It's risky because it hasn't adjusted spending to reflect reduced revenue and some uncertainties that lay ahead."
With stocks flirting with bear-market territory, Widmer is concerned that revenue from capital-gains taxes will drop. The other uncertainty concerns health care and whether the federal government picks up several million dollars in Medicaid costs.
Gov. Deval Patrick has yet to sign the budget. Before he does, Widmer's group is recommending that he reduce the bottom line by about $300 million.
Panagiotakos defended the spending plan and said it's not pork-laden.
The overall increase, he said, is attributed to skyrocketing energy and health-care costs.
"All your bills to run a household have increased," Panagiotakos said. "So have the bills to run the state."
Earmarks, Panagiotakos said, represent less than 1 percent of the final budget. The majority of them, he said, are to fund up-and-running programs.
"Some might call $500,000 for the Jackson-Appleton-Middlesex Street project in Lowell pork," Panagiotakos said. "We call it urban revitalization that's important to the downtown."
