State Senate approves sales tax increase
By Lauren Folino
Published: May 21, 2009
The Massachusetts state senate voted by a veto-proof margin Tuesday to approve a 25-percent increase in the state sales tax. The 29-10 vote would raise the sales tax from 5 percent to 6.25 percent, as part of the state's effort to raise $1 billion in taxes. In addition to an increase in the sales tax, the senate agreed to lift the sales tax exemption on alcohol and to allow towns to raise taxes on meals and hotels.
These increases were passed despite Gov. Deval Patrick's threats to veto any broad-based tax increases sent to him before the legislature has acted to reform and improve state transportation, the pension systems, and ethics regulations.
Though senators originally opposed this tax increase and agreed with the governor that transportation, among other issues, must be addressed before the sales tax, several concessions were made, including earmarking $275 million of the expected new taxes for transportation spending.
Sen. Robert O'Leary, whose district includes Dukes County, voted for the sales tax increase. In a telephone conversation Wednesday morning, Mr. O'Leary told The Martha's Vineyard Times that the state has a responsibility to help those in need, and he said that the increase in the tax will work to accomplish that goal.
Sen. O'Leary also acknowledged that such an increase will ultimately result in a loss of jobs for the Commonwealth. "The impact [of the hike in sales tax] will create a loss of jobs in some areas," he said. "But, we have a responsibility to educate students, to provide health care. This tax increase is not unique to Massachusetts. It's happening across the country, and we have to come to grips with it."
Mr. O'Leary said the increase is "fairly reasonable," in part because additional tax increases were skirted by earmarking funds from the sales tax hike.
"We rejected the gas tax and the income tax and made an addition to the sales tax," Sen. O'Leary said.
Although senators reached a compromise in the terms of the sales tax increase, Mr. O'Leary said that the extra tax dollars extracted will lead to budget cuts across the state, which will become apparent at the local level.
"There will certainly be a struggle, and I'm sure you will notice it on Martha's Vineyard at town meetings, on how they absorb the cuts that are coming," Sen. O'Leary said.
The Senate action followed a similar vote in the House last month, which also approved the 25-percent hike in the sales tax by a veto-proof margin. However, the House did not address the alcohol tax or the local options taxes in its budget.
In earlier comments to The Martha's Vineyard Times, Rep. Tim Madden, whose district includes the Vineyard, said that he voted for the sales tax increase.
"It wasn't something I wanted to do, it was something I felt I needed to do," said Mr. Madden. "As much as I hate any tax, we needed to do something."
