February 3, 2011

Editorial

Taxes lite
Patrick eyes deposits, fees in ’12 budget

When is a tax increase not a tax increase? When it’s called a surcharge, fee, or deposit. Gov. Deval Patrick’s $30.5 billion budget proposal for fiscal 2012 did not come with any proposed increases in sales or income taxes, but it does rely on three revenue streams that may or may not flow as Mr. Patrick hopes. Chief among those, of course, is a continued recovery in revenues for existing state taxes. Those are running ahead of last year, and if the nation’s still-tentative economic recovery gains further strength, they may well support the governor’s spending blueprint — which, it should be noted, does contain significant cuts in many areas. Two smaller sources of revenue are much less certain. Mr. Patrick hopes to raise about $20 million by expanding the state’s bottle bill to include additional beverage containers. And he is proposing a fee of between $2 and $2.50 on each auto insurance policy in order to raise $4 million for a class of state police recruits. These are, to be sure, extremely thin slices of the state’s overall budget pie, but both are new costs on the private sector. The recycling and revenue goals of an expanded bottle bill represent an additional cost in handling for beverage distributors, and will impose additional burdens — in cost, handling and changed behavior — on consumers. Such costs are every bit as real as any tax and should be recognized as such. Imposing a fee on auto insurance transactions, however small, is equally real. And while the commonwealth has long required motorists to obtain insurance, adding a fee to what are essentially private financial transactions between motorists and insurers to finance public safety operations strikes us as a hard sell, legally and politically. Whether the bottle bill expansion or auto insurance fee ideas survive the budget process remains to be seen. Legislative leaders have hinted they’d prefer a straightforward budget constructed with no new fees. We agree. The governor and Legislature alike already have discretion to budget anticipated revenues however they see fit. In a year that calls for fiscal restraint, it would be simpler — and more palatable — to leave new taxes, by whatever name, out of the equation.

http://www.telegram.com/article/20110203/NEWS/102030807/1020