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State Fiscal Conditions & Our
                  Future




                    Massachusetts Budget and Policy Center
                 15 Court Square, Suite 700, Boston, MA 20108
                                 617.426.1228
                             www.massbudget.org


August 2, 2004
% of Personal Income




                                                            5.000%
                                                                     7.575%
                                                                                 10.150%
                                                                                            12.725%
                                                                                                      15.300%




August 2, 2004
                                                         NY
                                                         AK
                                                         ME
                                                         LA
                                                         DC
                                                          HI
                                                         VT
                                                        NM




                 Total State and Local Taxes, FY 2006
                                                          NJ
                                                          RI
                                                         WI
                                                         WV
                                                         CA
                                                         NE
                                                         OH
                                                          IN
                                                         ND
                                                        MN
                                                         CT
                                                         UT
                                                         AR
                                                         KS
                                                        U.S.
                                                         KY
                                                         DE
                                                         PA
                                                           IL
                                                         NC
                                                        MD
                                                         MS
                                                        WA
                                                          IA
                                                          ID
                                                         MT
                                                         MI
                                                         GA
                                                        MA
                                                         AZ
                                                         OR
                                                         NV
                                                          FL
                                                         VA
                                                         OK
                                                         SC
                                                        MO
                                                         CO
                                                         TX
                                                         AL
                                                         TN
                                                                                                                MA Taxes Lower Than U.S. Average




                                                         SD
                                                         NH
FY 2009: Initial Budget Gap




August 2, 2004
FY 2009: Initial Budget Gap

 40,000,000,000




 30,000,000,000




 20,000,000,000




 10,000,000,000




             0
                  Spending   Revenue



August 2, 2004
FY 2009: Initial Budget Gap

 40,000,000,000




 30,000,000,000




 20,000,000,000




 10,000,000,000




             0
                  Spending   Revenue



August 2, 2004
FY 2009: Initial Budget Gap

 40,000,000,000




 30,000,000,000




 20,000,000,000




 10,000,000,000




             0
                  Spending   Revenue



August 2, 2004
FY 2009: Initial Budget Gap

                                       40,000,000,000
 40,000,000,000




                                       30,000,000,000
 30,000,000,000




                                       20,000,000,000
 20,000,000,000




 10,000,000,000                        10,000,000,000




             0                                     0
                  Spending   Revenue                    Spending   Revenue



August 2, 2004
FY 2009: Initial Budget Gap

                                       40,000,000,000
 40,000,000,000




                                       30,000,000,000
 30,000,000,000




                                       20,000,000,000
 20,000,000,000




 10,000,000,000                        10,000,000,000




             0                                     0
                  Spending   Revenue                    Spending   Revenue



August 2, 2004
FY 2009: Initial Budget Gap

                                       40,000,000,000
 40,000,000,000




                                       30,000,000,000
 30,000,000,000




                                       20,000,000,000
 20,000,000,000




 10,000,000,000                        10,000,000,000




             0                                     0
                  Spending   Revenue                    Spending   Revenue



August 2, 2004
The Governor’s 9C Cuts

                  34,000,000,000

                                              952,000,000



                  25,500,000,000




                  17,000,000,000




                   8,500,000,000




                              0
                                   Spending    Revenue



August 2, 2004
The Governor’s 9C Cuts

 34,000,000,000                        34,000,000,000

                                                                   952,000,000



 25,500,000,000                        25,500,000,000




 17,000,000,000                        17,000,000,000




  8,500,000,000                         8,500,000,000




             0                                     0
                  Spending   Revenue                    Spending    Revenue



August 2, 2004
The Governor’s 9C Cuts

 34,000,000,000                        34,000,000,000




 25,500,000,000                        25,500,000,000




 17,000,000,000                        17,000,000,000




  8,500,000,000                         8,500,000,000




             0                                     0
                  Spending   Revenue                    Spending   Revenue



August 2, 2004
The Governor’s 9C Cuts

 34,000,000,000                        34,000,000,000




 25,500,000,000                        25,500,000,000




 17,000,000,000                        17,000,000,000




  8,500,000,000                         8,500,000,000




             0                                     0
                  Spending   Revenue                    Spending   Revenue



August 2, 2004
The Governor’s 9C Cuts

 34,000,000,000                        34,000,000,000

                                                                   952,000,000



 25,500,000,000                        25,500,000,000




 17,000,000,000                        17,000,000,000




  8,500,000,000                         8,500,000,000




             0                                     0
                  Spending   Revenue                    Spending    Revenue



August 2, 2004
FY2010 Preliminary Budget Gap




August 2, 2004
FY2010 Preliminary Budget Gap

$4,000,000,000




$3,000,000,000




$2,000,000,000




$1,000,000,000




             $0
                  Spending   Revenue



August 2, 2004
FY2010 Preliminary Budget Gap

$4,000,000,000




$3,000,000,000




$2,000,000,000




$1,000,000,000




             $0
                  Spending   Revenue



August 2, 2004
FY2010 Preliminary Budget Gap

$4,000,000,000




$3,000,000,000




$2,000,000,000




$1,000,000,000




             $0
                  Spending   Revenue



August 2, 2004
August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
Spending Has Mostly Stayed
         Constant
                          8.60%
% Total Personal Income




                          6.45%



                          4.30%



                          2.15%



                            0%
                                  FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




         August 2, 2004
State’s Own Spending Has Declined

                          7.00000000000000102%
                                                 6.90% 6.80% 7.00%
                                                     6.80% 6.60% 6.80% 6.60% 6.70%
                                                                     6.40% 6.40% 6.60%
% Total Personal Income




                          5.25000000000000077%



                          3.50000000000000051%



                          1.75000000000000026%



                                           0%
                                                 FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08




             August 2, 2004
6.300%
% Total Personal Income




                          4.725%



                          3.150%



                          1.575%



                               0%
                                    FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




                          August 2, 2004
6.300%
% Total Personal Income




                          4.725%



                          3.150%



                          1.575%



                               0%
                                    FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




                          August 2, 2004
6.300%
% Total Personal Income




                          4.725%



                          3.150%



                          1.575%



                               0%
                                    FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




                          August 2, 2004
6.300%
% Total Personal Income




                          4.725%



                          3.150%



                          1.575%



                               0%
                                    FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




                          August 2, 2004
6.300%
% Total Personal Income




                          4.725%



                          3.150%



                          1.575%



                               0%
                                    FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




                          August 2, 2004
State Tax Revenues Have Declined

                          6.300%
% Total Personal Income




                          4.725%



                          3.150%



                          1.575%



                               0%
                                    FY98   FY99   FY00   FY01   FY02   FY03   FY04   FY05   FY06   FY07   FY08




                          August 2, 2004
Chapter 70 Education Aid
                       5,000
                                                                                     15% decrease from
                                                                                     FY02
                       4,125
Millions of $ (FY10)




                       3,250



                       2,375



                       1,500

                                FY01               FY03 FY04 FY05 FY06 FY07 FY08 FY09




                        Adjusted Using the Inflation Factor Identified in Chapter 70

                       August 2, 2004
Chapter 70 Education Aid
                       5,000
                                                                                     11% decrease from
                                                                                     FY02
                       4,125
Millions of $ (FY10)




                       3,250



                       2,375



                       1,500

                                FY01               FY03 FY04 FY05 FY06 FY07 FY08 FY09




                        Includes ARRA funding
                        Adjusted Using the Inflation Factor Identified in Chapter 70

                       August 2, 2004
During the Fiscal Crisis We Cut State
Education Aid More Than Most States




August 2, 2004
Higher Education
                       1,400
                                                                    32%
                                                                    decrease
                       1,250
Millions of $ (FY10)




                       1,100



                        950



                        800

                               FY01     FY03 FY04 FY05 FY06 FY07 FY08 FY09




                       August 2, 2004
Higher Education
                       1,400                                        20.5%
                                                                    decrease
                       1,250
Millions of $ (FY10)




                       1,100



                        950



                        800

                               FY01     FY03 FY04 FY05 FY06 FY07 FY08 FY09




Includes ARRA funding.


                       August 2, 2004
Local Aid
                       1,600
                                                                    29%
                                                                    decrease
                       1,200
Millions of $ (FY10)




                        800



                        400



                          0

                               FY01     FY03 FY04 FY05 FY06 FY07 FY08 FY09




                       August 2, 2004
Public Health
                       700
                                                                     20%
                                                                     decrease
                       600
Millions of $ (FY10)




                       500

                       400

                       300

                       200

                       100

                         0

                              FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09




                       August 2, 2004
Public Health
                       700
                                                                     19%
                                                                     decrease
                       600
Millions of $ (FY10)




                       500

                       400

                       300

                       200

                       100

                         0

                              FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09




                 Includes ARRA funding.



                       August 2, 2004
Environment
                       350
                                                                     29%
                                                                     decrease
                       300
Millions of $ (FY10)




                       250

                       200

                       150

                       100

                        50

                         0

                              FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09




                       August 2, 2004
Filling the FY2010 Budget Gap




August 2, 2004
Filling the FY2010 Budget Gap




                         Cuts and Savings
                               1.63




August 2, 2004
Filling the FY2010 Budget Gap




                            Cuts and Savings
                                  1.63




                 Revenues
                   0.59

August 2, 2004
Filling the FY2010 Budget Gap




                                         Cuts and Savings
                                               1.63


         Stabilization Fund
                0.59




                              Revenues
                                0.59

August 2, 2004
Filling the FY2010 Budget Gap
                   Federal Recovery Aid
                           0.71




                                            Cuts and Savings
                                                  1.63


         Stabilization Fund
                0.59




                                 Revenues
                                   0.59

August 2, 2004
A Tax System Should Be…




August 2, 2004
A Tax System Should Be…

                 Adequate




August 2, 2004
A Tax System Should Be…

                 Adequate

                  Stable




August 2, 2004
A Tax System Should Be…

                 Adequate

                  Stable




August 2, 2004
A Tax System Should Be…

                    Adequate

                      Stable

                 Simple/Eficient




August 2, 2004
A Tax System Should Be…

                    Adequate

                      Stable

                 Simple/Eficient




August 2, 2004
A Tax System Should Be…

                    Adequate

                      Stable

                 Simple/Eficient

                       Fair


August 2, 2004
MA State  Local Taxes are
                       Regressive
                       15.00%




                       11.25%
% of Personal Income




                        7.50%




                        3.75%




                           0%
                        Less than $18,000 Lowest 20%    $58,000 - $97,000   Fourth 20%   $526,000   or more   Top
                          Eect of Federal Deduction
                          TOTAL TAXES                                                    Top 20%
                       Source: ITEP, 2006 data


                       August 2, 2004
Sales Taxes are Typically
 Regressive
$140,000



                              Average annual income
$107,250                      Average annual expenditures



 $74,500




 $41,750




  $9,000
                     Lowest             20%         Third   20%   Highest   20%


 Source: Bureau of Labor Statistics, 2004
 data

 August 2, 2004
Who Pays the Sales Tax in MA?

                       4.0%
% of Personal Income




                       3.1%


                       2.2%


                       1.3%


                       0.4%
          Less than $18,000 Lowest 20%            $58,000 - $97,000   Fourth 20%   $203,000 -   $526,000   Next 4%




                                                                                                Top 20%
                        Source: ITEP, 2006 data


                        August 2, 2004
MA Income Tax is Progressive

                       4.500%
% of Personal Income




                       3.425%


                       2.350%


                       1.275%


                       0.200%
                        Less than $18,000 Lowest 20%   $58,000 - $97,000   Fourth 20%   $526,000   or more   Top




                                                                                        Top 20%
                         Source: ITEP, 2006 data


                         August 2, 2004
Who benefits from an Income Tax
                    Cut?
                                                            Tax Rate Cut From 5.95% to
                                                            5.3%
                  $12,000.0
                                                                                                               $10,226

                   $9,002.5
Average Tax Cut




                   $6,005.0



                   $3,007.5
                                                                                                     $1,776
                                                                                            $751
                                                                       $377
                                                             $214
                                                   $76                             $0
                      $10.0
                    Less than $19,800          Lowest 20%   $63,800 - $105,200 Fourth 20%   $218,000 - $562,500 Next 4%




                                                                                                    Top 20%
                    Source: ITEP, April 2008


                    August 2, 2004
Who benefits from a Dividends  Interest Tax
                   Cut?
                                                        Tax Rate Cut from 12.0% to 5.3%
                  $12,000
                                                                                                              $10,057

                   $9,000
Average Tax Cut




                   $6,000



                   $3,000
                                                                                                     $959
                                                                                           $242
                                                                      $109
                                                             $55
                                                  $27
                                      $2
                        $0
                     Less than $19,800        Lowest 20%   $63,800 - $105,200 Fourth 20%   $218,000 - $562,500 Next 4%




                                                                                                   Top 20%
                   Source: ITEP, April 2008


                   August 2, 2004

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Mass Budget Briefing 4/1/09

  • 1. State Fiscal Conditions & Our Future Massachusetts Budget and Policy Center 15 Court Square, Suite 700, Boston, MA 20108 617.426.1228 www.massbudget.org August 2, 2004
  • 2. % of Personal Income 5.000% 7.575% 10.150% 12.725% 15.300% August 2, 2004 NY AK ME LA DC HI VT NM Total State and Local Taxes, FY 2006 NJ RI WI WV CA NE OH IN ND MN CT UT AR KS U.S. KY DE PA IL NC MD MS WA IA ID MT MI GA MA AZ OR NV FL VA OK SC MO CO TX AL TN MA Taxes Lower Than U.S. Average SD NH
  • 3. FY 2009: Initial Budget Gap August 2, 2004
  • 4. FY 2009: Initial Budget Gap 40,000,000,000 30,000,000,000 20,000,000,000 10,000,000,000 0 Spending Revenue August 2, 2004
  • 5. FY 2009: Initial Budget Gap 40,000,000,000 30,000,000,000 20,000,000,000 10,000,000,000 0 Spending Revenue August 2, 2004
  • 6. FY 2009: Initial Budget Gap 40,000,000,000 30,000,000,000 20,000,000,000 10,000,000,000 0 Spending Revenue August 2, 2004
  • 7. FY 2009: Initial Budget Gap 40,000,000,000 40,000,000,000 30,000,000,000 30,000,000,000 20,000,000,000 20,000,000,000 10,000,000,000 10,000,000,000 0 0 Spending Revenue Spending Revenue August 2, 2004
  • 8. FY 2009: Initial Budget Gap 40,000,000,000 40,000,000,000 30,000,000,000 30,000,000,000 20,000,000,000 20,000,000,000 10,000,000,000 10,000,000,000 0 0 Spending Revenue Spending Revenue August 2, 2004
  • 9. FY 2009: Initial Budget Gap 40,000,000,000 40,000,000,000 30,000,000,000 30,000,000,000 20,000,000,000 20,000,000,000 10,000,000,000 10,000,000,000 0 0 Spending Revenue Spending Revenue August 2, 2004
  • 10. The Governor’s 9C Cuts 34,000,000,000 952,000,000 25,500,000,000 17,000,000,000 8,500,000,000 0 Spending Revenue August 2, 2004
  • 11. The Governor’s 9C Cuts 34,000,000,000 34,000,000,000 952,000,000 25,500,000,000 25,500,000,000 17,000,000,000 17,000,000,000 8,500,000,000 8,500,000,000 0 0 Spending Revenue Spending Revenue August 2, 2004
  • 12. The Governor’s 9C Cuts 34,000,000,000 34,000,000,000 25,500,000,000 25,500,000,000 17,000,000,000 17,000,000,000 8,500,000,000 8,500,000,000 0 0 Spending Revenue Spending Revenue August 2, 2004
  • 13. The Governor’s 9C Cuts 34,000,000,000 34,000,000,000 25,500,000,000 25,500,000,000 17,000,000,000 17,000,000,000 8,500,000,000 8,500,000,000 0 0 Spending Revenue Spending Revenue August 2, 2004
  • 14. The Governor’s 9C Cuts 34,000,000,000 34,000,000,000 952,000,000 25,500,000,000 25,500,000,000 17,000,000,000 17,000,000,000 8,500,000,000 8,500,000,000 0 0 Spending Revenue Spending Revenue August 2, 2004
  • 15. FY2010 Preliminary Budget Gap August 2, 2004
  • 16. FY2010 Preliminary Budget Gap $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0 Spending Revenue August 2, 2004
  • 17. FY2010 Preliminary Budget Gap $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0 Spending Revenue August 2, 2004
  • 18. FY2010 Preliminary Budget Gap $4,000,000,000 $3,000,000,000 $2,000,000,000 $1,000,000,000 $0 Spending Revenue August 2, 2004
  • 20. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 21. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 22. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 23. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 24. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 25. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 26. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 27. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 28. 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 29. Spending Has Mostly Stayed Constant 8.60% % Total Personal Income 6.45% 4.30% 2.15% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 30. State’s Own Spending Has Declined 7.00000000000000102% 6.90% 6.80% 7.00% 6.80% 6.60% 6.80% 6.60% 6.70% 6.40% 6.40% 6.60% % Total Personal Income 5.25000000000000077% 3.50000000000000051% 1.75000000000000026% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 31. 6.300% % Total Personal Income 4.725% 3.150% 1.575% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 32. 6.300% % Total Personal Income 4.725% 3.150% 1.575% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 33. 6.300% % Total Personal Income 4.725% 3.150% 1.575% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 34. 6.300% % Total Personal Income 4.725% 3.150% 1.575% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 35. 6.300% % Total Personal Income 4.725% 3.150% 1.575% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 36. State Tax Revenues Have Declined 6.300% % Total Personal Income 4.725% 3.150% 1.575% 0% FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 August 2, 2004
  • 37. Chapter 70 Education Aid 5,000 15% decrease from FY02 4,125 Millions of $ (FY10) 3,250 2,375 1,500 FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Adjusted Using the Inflation Factor Identified in Chapter 70 August 2, 2004
  • 38. Chapter 70 Education Aid 5,000 11% decrease from FY02 4,125 Millions of $ (FY10) 3,250 2,375 1,500 FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Includes ARRA funding Adjusted Using the Inflation Factor Identified in Chapter 70 August 2, 2004
  • 39. During the Fiscal Crisis We Cut State Education Aid More Than Most States August 2, 2004
  • 40. Higher Education 1,400 32% decrease 1,250 Millions of $ (FY10) 1,100 950 800 FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09 August 2, 2004
  • 41. Higher Education 1,400 20.5% decrease 1,250 Millions of $ (FY10) 1,100 950 800 FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Includes ARRA funding. August 2, 2004
  • 42. Local Aid 1,600 29% decrease 1,200 Millions of $ (FY10) 800 400 0 FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09 August 2, 2004
  • 43. Public Health 700 20% decrease 600 Millions of $ (FY10) 500 400 300 200 100 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 August 2, 2004
  • 44. Public Health 700 19% decrease 600 Millions of $ (FY10) 500 400 300 200 100 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Includes ARRA funding. August 2, 2004
  • 45. Environment 350 29% decrease 300 Millions of $ (FY10) 250 200 150 100 50 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 August 2, 2004
  • 46. Filling the FY2010 Budget Gap August 2, 2004
  • 47. Filling the FY2010 Budget Gap Cuts and Savings 1.63 August 2, 2004
  • 48. Filling the FY2010 Budget Gap Cuts and Savings 1.63 Revenues 0.59 August 2, 2004
  • 49. Filling the FY2010 Budget Gap Cuts and Savings 1.63 Stabilization Fund 0.59 Revenues 0.59 August 2, 2004
  • 50. Filling the FY2010 Budget Gap Federal Recovery Aid 0.71 Cuts and Savings 1.63 Stabilization Fund 0.59 Revenues 0.59 August 2, 2004
  • 51. A Tax System Should Be… August 2, 2004
  • 52. A Tax System Should Be… Adequate August 2, 2004
  • 53. A Tax System Should Be… Adequate Stable August 2, 2004
  • 54. A Tax System Should Be… Adequate Stable August 2, 2004
  • 55. A Tax System Should Be… Adequate Stable Simple/Eficient August 2, 2004
  • 56. A Tax System Should Be… Adequate Stable Simple/Eficient August 2, 2004
  • 57. A Tax System Should Be… Adequate Stable Simple/Eficient Fair August 2, 2004
  • 58. MA State Local Taxes are Regressive 15.00% 11.25% % of Personal Income 7.50% 3.75% 0% Less than $18,000 Lowest 20% $58,000 - $97,000 Fourth 20% $526,000 or more Top Eect of Federal Deduction TOTAL TAXES Top 20% Source: ITEP, 2006 data August 2, 2004
  • 59. Sales Taxes are Typically Regressive $140,000 Average annual income $107,250 Average annual expenditures $74,500 $41,750 $9,000 Lowest 20% Third 20% Highest 20% Source: Bureau of Labor Statistics, 2004 data August 2, 2004
  • 60. Who Pays the Sales Tax in MA? 4.0% % of Personal Income 3.1% 2.2% 1.3% 0.4% Less than $18,000 Lowest 20% $58,000 - $97,000 Fourth 20% $203,000 - $526,000 Next 4% Top 20% Source: ITEP, 2006 data August 2, 2004
  • 61. MA Income Tax is Progressive 4.500% % of Personal Income 3.425% 2.350% 1.275% 0.200% Less than $18,000 Lowest 20% $58,000 - $97,000 Fourth 20% $526,000 or more Top Top 20% Source: ITEP, 2006 data August 2, 2004
  • 62. Who benefits from an Income Tax Cut? Tax Rate Cut From 5.95% to 5.3% $12,000.0 $10,226 $9,002.5 Average Tax Cut $6,005.0 $3,007.5 $1,776 $751 $377 $214 $76 $0 $10.0 Less than $19,800 Lowest 20% $63,800 - $105,200 Fourth 20% $218,000 - $562,500 Next 4% Top 20% Source: ITEP, April 2008 August 2, 2004
  • 63. Who benefits from a Dividends Interest Tax Cut? Tax Rate Cut from 12.0% to 5.3% $12,000 $10,057 $9,000 Average Tax Cut $6,000 $3,000 $959 $242 $109 $55 $27 $2 $0 Less than $19,800 Lowest 20% $63,800 - $105,200 Fourth 20% $218,000 - $562,500 Next 4% Top 20% Source: ITEP, April 2008 August 2, 2004