July 21, 2010: Sales tax roll back

WHEN MASSACHUSETTS' VOTERS

HEAD TO THE POLLS THIS

FALL, THEY'RE WEIGH IN ON

QUESTION NUMBER THREE,

WHICH WOULD CUT THE STATE

SALES TAX FROM 6.25 TO 3%.

SUPPORTERS SAY THE

ROLLBACK WOULD BOOST SMALL

BUSINESSES, BUT OPPONENTS

WARN OF DIRE CONSEQUENCES

FOR ENTREPRENEURS AND

EVERYBODY ELSE.

CONVENIENCE STORE MAG NAT

CHRISTIE MILES IS SO EAGER

TO CUT THE STATE SALES

TAX, THAT HE HAS DONATED

MORE THAN $20,000 TO THE

ROLLBACK EFFORT.

>> WHAT IT DOES IS PUT

MONEY BACK IN THE PEOPLE'S

POCKET.

>> Rooney: HE IS SURE IF

THE ROLLBACK PASSES,

BUSINESS NEAR THE

MASSACHUSETTS BORDER WILL

START TO BOOM.

>> PEOPLE WILL BE FLOCKING

INTO NEW BEDFORD,

ATTLEBORO, SEACONK.

>> Rooney: NEW BEDFORD

MAYOR SCOTT LANG COULDN'T

DISAGREE MORE.

HE SAYS GOVERNMENT

SERVICES FUNDED BY THE

SALES TAX HAVE BEEN KEY TO

NEW BEDFORD'S REBIRTH.

>> WE OPENED OVER 40

BUSINESSES DOWNTOWN IN THE

WORST RECESSION SINCE THE

DEPRESSION.

THEY FEEL WELCOMED.

THEY KNOW THAT THE CITY IS

CLEAN.

THEY KNOW WE DO EVERYTHING

WE CAN TO MAKE SURE THE

POTHOLES HAVE BEEN

ADDRESSED, AND THE

LIGHTBULBS THAT ARE OUT

HAVE BEEN CHANGED.

>> Rooney: CUT THE SALES

TAX, AND SMALL BUSINESSES

WILL HAVE TO PAY EXTRA FOR

THINGS LIKE TRASH PICKUP,

AND DOWNTOWN WILL BECOME

LESS INVITING.

>> I DON'T THINK IT WILL

SAVE ANYBODY A DARN THING,

AND IT WILL CUT BACK ON

ECONOMIC GROWTH.

THEP YOU KILL YOUR TAX

BASE.

IF YOU KILL YOUR TAX BASE,

THE CITIES WILL EMPTY OWL.

>> Rooney: LANG ADDS

THAT PEOPLE NEED TO SEE

GOVERNMENT AS THE PEOPLE'S

ALLIE.

HE SITES THE CYTERIAN.

>> PERHAPS THEY STAY AT

THE NEW HOTEL IN NEW

BEDFORD.

IT IS THESE TYPES OF

ECONOMIC ENGINES AND

GENERATORS THAT HELP THE

ENTIRE PRIVATE SECTOR.

THINGS LIKE THE CYTARIAN

THEATER DON'T SURVIVE WITH

A CUT IN THE STATE

REVENUE.

>> Rooney: BY MYERS

INSISTS HIS FEARS OR

GROUNDLESS.

>> AS SOON AS YOU CUT

TAXES, YOU CREATE THIS

INCREDIBLE INNERIA OF

PEOPLE WANTING TO INVEST.

>> Rooney: WE MAY SOON

FIND OUT.

ACCORDING TO ONE POLL,

SUPPORT FOR THE ROLLBACK

IS RUNNING CLOSE TO 50%.

JOINING ME NOW ARE CARLA

HOWELL, WHO SPEARHEADED

THE INITIATIVE TO CUT THE

SALES TAX BACK TO 3%.

AND MICHAEL WIDMER,

PRESIDENT OF THE NATIONAL

TAXPAYERS' ASSOCIATION.

WELCOME TO BOTH OF YOU.

YOUR ISSUE IS GIVING MONEY

BACK TO THE INDIVIDUAL.

BUT WHEN YOU LISTEN TO

SOMEBODY LIKE SCOTT LANG

SAY IT WILL KILL THE

DOWNTOWN, HOW DO YOU

RESPOND TO THAT?

>> THE BIGGEST ISSUE IS

JOBS.

ROLLING BACK THE SALES TAX

TO 3%, IT WILL CREATE

33,000 PRIVATE AND

SUSTAINABLE JOBS.

NOT GOVERNMENT JOBS, WHICH

ONLY LAST AS LONG AS THE

BAILOUT KEEPS FLOWING.

>> Rooney: HOW WOULD IT

DO THAT?

>> FIRST OF ALL, WHEN THE

PRIVATE SECTOR SPENDS

MONEY, VERSUS WHEN THE

GOVERNMENT SPENDS IT, IT

IS MUCH LESS WASTE FULL.

WE HAVE A STATE GOVERNMENT

WHERE FOR EVERY ABLED BODY

PERSON WHO IS DOING A

PRODUCTIVE JOB IN THE

STATE GOVERNMENT -- FOR

EVERY PRODUCTIVE PERSON IN

THEÒr GOVERNMENT SECTOR,

THERE IS SOOTD PERSON ON A

PENSION MAKING ABOUT AS

MUCH MONEY OR MORE.

YOU HAVE TWO ABLE-BODIED

PEOPLE BEING PAID, OFTEN

MID-50s, WHO ARE DOING

ONE JOB.

THEY'RE OFF ON PENSIONS.

THAT DOESN'T HAPPEN IN THE

PRIVATE SECTOR.

THEY HAVE NO EMPLOYER-PAID

PENSION.

AND THEY'RE HOPING FOR

SOCIAL SECURITY.

>> Rooney: ON THE JOB

ISSUE, DO YOU THINK THAT

THE SALES TAX ROLLBACK --

FORGET WHETHER THE STATE

CAN AFFORD IT, WILL IT

CREATE JOBS?

LION ABSOLUTELY NOT.

ON THE OTHER HAND, WITH

THE MASSIVE CUTS IN AID TO

CITIES AND TOWNS, THERE

WILL BE LAYOFFS OF

THOUSANDS, TENS OF

THOUSANDS OF POLICE,

TEACHERS, FIRE, PUBLIC

WORKS -- IT WILL BE A HUGE

ECONOMIC DETERRENT AND

BLANKET IF YOU CUT THE

SALES TAX.

IT WILL BE JUST THE

OPPOSITE.

IN ADDITION TO THE CUT IN

SERVICES, IT WILL BE A

DAMPENING EFFECT ON OUR

ECONOMY.

>> Rooney: THIS ARGUMENT

REMINDS ME A LITTLE OF

PROP 2.5, AND OF NAFTA.

THE ARGUMENT WAS WE'RE

GOING TO LOSE ALL OF THESE

JOBS AND THERE WILL BE

OUTSOURCING, ANDES WILL

BECOME A THIRD WORLD

COUNTRY.

AND THERE ARE PEOPLE WHO

ARGUE THAT IS WHAT

HAPPENED.

AND OTHER PEOPLE ARGUE

THAT DIDN'T HAPPEN.

>> THERE ARE BUSINESSES

THAT PROFIT FROM THE STATE

GOVERNMENT, SO OBVIOUSLY

HE IS ADVOCATING, AS

USUAL, AGAINST TAX CUTS,

TO EVEN TRY TO CLAIM, WHEN

ANY HONEST ECONOMIST KNOWS

HIGH GOVERNMENT SPENDING,

HIGH GOVERNMENT TAXES

DEFLATES THE ECONOMY,

HURTS THE INVESTMENT, AND

HURTS JOBS.

TAX CUTS STIMULATE THE

ECONOMY.

WHEN YOU LOOK AT NEW

HAMPSHIRE, WHERE THEY HAVE

6.5% UNEMPLOYMENT, VERSUS

MASSACHUSETTS, 9.5%.

UP THERE THEY HAVE NO

SALES TAX OR STATE TAX.

OVER ALL THEIR TAX BURDEN

IS 45th IN THE NATION,

AND OURS IS 5th.

>> WE'RE IN THE MIDDLE.

>> NO.

WE ARE NOT IN THE MIDDLE.

THAT'S A MANIPULATION.

WE ARE FIFTH HIGHEST IN

THE NATION.

>> IF YOU CUT THE SALES

TAX TO 3%, IT WILL BARELY

CREATE ANY JOBS.

ON THE OTHER HAND, IT WILL

DECIMATE LOCAL SERVICES.

WHAT IS OUR COMPETITIVE

ADVANTAGE IN

MASSACHUSETTS?

EDUCATION AND HEALTH CARE.

LOCAL SCHOOLS AND HIGHER

EDUCATION.

YOU CUT $2.5 BILLION IN

THE SALES TAX, AND YOU

ALREADY HAVE A $2 BILLION

HOLE IN THE WORST FISCAL

CRISIS IN THE STATE'S

HISTORY.

WE WILL DECIMATE PUBLIC

HIGHER EDUCATION, AND

WE'LL DECIMATE PUBLIC

SCHOOLS.

THAT IS OUR VERY STRONG

COMPETITIVE ADVANTAGE IN

THIS CASE.

>> WHAT YOU'RE DOING IS

THREATENING TO CUT

EDUCATION.

>> Rooney: WAIT --

>> $52 BILLION IN STATE

SPENDING, AND A TINY

FRACTION OF THAT GOES TO

EDUCATION.

>> Rooney: EVERYBODY

SAYS THAT IS THE SACRED

COW, BUT WHY?

WHY WOULD YOU CUT SPENDING

FOR EDUCATION?

WHY NOT.

>> WE SHOULD TAKE THE

$52 BILLION, NOT THE

$28 BILLION, BECAUSE

THEY'VE GOT ANOTHER

$24 BILLION OR SO

OFF-BUDGET, ACCORDING TO

EITHER OF THE FINANCIAL

STATEMENTS FROM THE COMP

TROLLERS OFFICE.

A LITTLE GOES TO HIGHER ED

FROM THE STATE BUDGET AND

TO COMMUNITY COLLEGES.

VERY SMALL PERCENTAGE OF

THE BUDGET. WE'RE TALKING

TENS OF BILLIONS OF

DOLLARS THAT HAVE

ABSOLUTELY NOTHING TO DO

WITH ESSENTIAL SERVICES.

>> Rooney: LIKE WHAT.

>> LIKE WHAT?

LET'S BE CLEAR ABOUT WHAT

THAT IS.

THERE IS A CHART IN THE

COMPTROLLER'S REPORT.

YOU KNOW WHAT ONE EXAMPLE

OF THE $52 BILLION IS?

IT IS ALL OF THE MONEY

THAT THE CITIZENS OF THE

STATE BET IN THE LOTTERY.

SO $3.5 BILLION -- THEY

BET $4.5 BILLION, AND

1 BILLION GOES TO THE

CITIES AND TOWNS, AND

$3.5 BILLION GOES DOWN TO

THE TOWNS.

>> OF COURSE IT IS

SPENDING, AND WE AGREE

THAT SHOULD NOT BE CUT.

YOU SHOULD PAY PEOPLE

THEIR PRIZE MONEY.

IT IS ABSOLUTELY PART OF

THE BUDGET.

IT IS PART OF THE

EXPENDITURES AND NET

PROFITS AND WHAT IS USED

BY THE STATE.

IN AN ORDINARY BUSINESS IT

WILL BE BE TREATED AS AN

EXPENDITURE.

WE AGREE THAT $3.5 BILLION

WE SHOULD NOT TOUCH.

AND WE SHOULD NOT TOUCH

ANY ESSENTIAL SERVICES.

>> IN ALL OF THE COMPAIGNS

YOU NEVER IDENTIFIED HOW

YOU WOULD CUT $2 BILLION,

LET ALONE $3.5 BILLION.

>> ONE IS GOVERNMENT

PENSIONS.

THAT'S IS DRAMATICALLY

UNFAIR.

>> Rooney: THAT'S A

LEGAL ISSUE.

YOU CAN'T JUST GO IN THERE

AND CUT IT.

>> AND IT'S A LEGAL ISSUE.

>> BUT THAT'S WHAT THEY

SHOULD BE DOING.

THEY SHOULD STOP

CONTINUING TO HAND OUT --

>> CARLA KEEPS TALKING

ABOUT CUTTING PENSIONS --

>> THEY'RE LEGALLY

OBLIGATED.

>> OH, WE CAN'T DRUG TEST,

EVEN THOUGH WE FOUND IT IS

ENDANGERING PEOPLE AND

FIREFIGHTERS, AND WE

DEMAND A PAY RAISE --

>> Rooney: I NEED TO

HAVE MIKE MAKE HIS POINT.

>> THOSE PENSIONS HAVE BE

LEGALLY EARNED.

ARE THERE PENSIONS ABUSES?

OF COURSE THERE ARE.

BUT THE VAST MAJORITY OF

THE FUNDING FOR PENSIONS

THAT THE STATE MAKES HAVE

BEEN LEGALLY EARNED.

IF WE CUT THOSE PENSIONS,

BACK INTO THE COURTS WE

GO.

THE COURTS WILL SAY

THEY'RE LEGALLY EARNED,

AND THE MONEY WILL BE

REINSTATED.

SO YOU CANNOT CUT THE

PENSIONS.

>> SURE YOU CAN.

IN FACT, IT IS GOING TO

IMPLODE.

IT IS NOT A MATTER OF IF,

IT IS A MATTER OF WHEN.

THERE ARE CITIES ALL OVER

THE COUNTRY WHERE THEY'RE

JUST GOING BROKE.

THAT'S WHERE THIS STATE IS

HEADING BECAUSE OF THE

HIGH GOVERNMENT SPENDING.

AT THE STATEMENT, WE'RE

LOSING JOBS.

WE'RE LOSING JOBS.

WE'RE LOSING REVENUE.

THE PRIVATE SECTOR IS

HURTING.

>> Rooney: CAN I JUST

CUT DANGEROUSLY HIGH

HERE -- THIS IS GOING TO

END UP BEING A FAIRLY

EMOTIONAL ISSUE FOR

TAXPAYERS.

THIS THING HAS ALMOST

PASSED THE LAST COUPLE OF

TIMES IT HAS BEEN ON THE

BALLOT.

I THINK PEOPLE ARE GOING

TO LOOK AT IT FOR REAL.

MAYBE IF IT ROLLED BACK TO

5%, I THINK IT WOULD BE A

SHOO-IN.

BUT PEOPLE ARE GOING TO

LOOK AT IT AND THINK I DO

THINK THE STATE IS TAKING

TOO MUCH.

6.25 IS TOO MUCH.

SO WHAT'S GOING TO HAPPEN

IF IT PASSES, WHICH IS A

LIKELIHOOD.

>> I DON'T KNOW IF IT IS A

LIKELIHOOD.

I CERTAINLY TAKE IT

SERIOUSLY.

THE VOTERS ARE UNHAPPY.

I THINK THIS IS A SERIOUS

QUESTION IN TERMS OF THE

POSSIBILITY OF IT PASSING.

I DON'T THINK IN TERMS OF

THE RESPONSIBILITY THAT IT

IS A SERIOUS ISSUE.

IN FACT, IT IS ABSOLUTELY

IRRESPONSIBLE BECAUSE THIS

WOULD LEAD TO MAJOR, MAJOR

CUTS IN THE MIDDLE OF THE

WORST FISCAL CRISIS IN THE

STATE'S HISTORY.

WE'VE ALREADY SEEN

$2 BILLION OF CUTS.

ANOTHER $2 BILLION IN

FISCAL '12.

>> Rooney: MAYBE IT IS

OKAY WITH PEOPLE.

>> THEY DO NOT UNDERSTAND

THE CONSEQUENCES.

THEY WILL VOTE FOR IT, BUT

THEY DON'T UNDERSTAND THE

CONSEQUENCES --

>> THE CONSEQUENCES IS

THIS IS THE ONLY WAY WE

CAN FORCE THEM TO CUT

WASTE.

WE'VE BEEN IN ONE OF THE

MOST SERIOUS RECESSION

SINCE THE DEPRESSION IN

THIS COUNTRY.

WHAT HAS THE STATE

GOVERNMENT DONE?

FAMILIES HAVE BEEN GETTING

LAID OFF, FURLOUGHED, LOST

CLIENTS, CUT IN PAY, NO

BONUSES.

WHAT IS THE STATE

GOVERNMENT DOING?

IT IS INCREASING SPENDING.

IT HAS CONTINUED TO

INCREASE SPENDING.

IT GRANTED FEDERAL BAILOUT

MONEY AND CONTINUES TO

COUNT ON THIS AND

OVERSPEND --

>> Rooney: OKAY, THIS IS

JUST THE BEGINNING OF THIS

CAMPAIGN.

WE HAVEN'T EVEN SEEN THE

ADVERTISEMENTS YET.

WE'LL STAY ON TOP OF THIS

STORY.

THANKS FOR COMING.

>> THANK YOU.

>> Rooney: THAT IS IT

FOR "GREATER BOSTON."

DON'T FORGET MY RADIO

SHOW.

GARY GUNTLEY, AND BOB

POSEN, CHAIRMAN OF M.S. F.

INVESTMENT MANAGEMENT.

WE'LL ASK HIM ABOUT THE

RECALLBACK. --

ROLLBACK.

AND TOMORROW AT 1:00, A

LOOK AT THE LIFE OF GEORGE

CARLIN.

I'M EMILY ROONEY.

GOOD NIGHT.c