mass budget briefing 4/1/09
TRANSCRIPT
August 2, 2004
State Fiscal Conditions & Our Future
Massachusetts Budget and Policy Center15 Court Square, Suite 700, Boston, MA 20108
617.426.1228www.massbudget.org
August 2, 2004
MA Taxes Lower Than U.S. Average
5.000%
7.575%
10.150%
12.725%
15.300%N
Y AK ME LA DC HI
VT NM 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 SD NH
% of
Per
sona
l Inc
ome
Total State and Local Taxes, FY 2006
August 2, 2004
FY 2009: Initial Budget Gap
August 2, 2004
FY 2009: Initial Budget Gap
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
August 2, 2004
FY 2009: Initial Budget Gap
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
August 2, 2004
FY 2009: Initial Budget Gap
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
August 2, 2004
FY 2009: Initial Budget Gap
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
August 2, 2004
FY 2009: Initial Budget Gap
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
August 2, 2004
FY 2009: Initial Budget Gap
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
Spending Revenue0
10,000,000,000
20,000,000,000
30,000,000,000
40,000,000,000
August 2, 2004
The Governor’s 9C Cuts
0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
Spending Revenue
952,000,000
August 2, 2004
The Governor’s 9C Cuts
0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
Spending Revenue
952,000,000
Spending Revenue0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
August 2, 2004
The Governor’s 9C Cuts
Spending Revenue0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
Spending Revenue0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
August 2, 2004
The Governor’s 9C Cuts
Spending Revenue0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
Spending Revenue0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
August 2, 2004
The Governor’s 9C Cuts
Spending Revenue0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
952,000,000
Spending Revenue0
8,500,000,000
17,000,000,000
25,500,000,000
34,000,000,000
August 2, 2004
FY2010 Preliminary Budget Gap
August 2, 2004
FY2010 Preliminary Budget Gap
Spending Revenue$0
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
August 2, 2004
FY2010 Preliminary Budget Gap
Spending Revenue$0
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
August 2, 2004
FY2010 Preliminary Budget Gap
Spending Revenue$0
$1,000,000,000
$2,000,000,000
$3,000,000,000
$4,000,000,000
August 2, 2004
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
Spending Has Mostly Stayed Constant
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
2.15%
4.30%
6.45%
8.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
State’s Own Spending Has Declined
0%
1.75000000000000026%
3.50000000000000051%
5.25000000000000077%
7.00000000000000102%
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08
6.90%6.80%6.80%6.60%7.00%6.80%
6.40%6.60%6.40%6.70%6.60%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
1.575%
3.150%
4.725%
6.300%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
1.575%
3.150%
4.725%
6.300%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
1.575%
3.150%
4.725%
6.300%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
1.575%
3.150%
4.725%
6.300%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
1.575%
3.150%
4.725%
6.300%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
State Tax Revenues Have Declined
FY98 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY080%
1.575%
3.150%
4.725%
6.300%
% To
tal P
erso
nal I
ncom
e
August 2, 2004
Chapter 70 Education Aid
1,500
2,375
3,250
4,125
5,000
FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
15% decrease from FY02
Adjusted Using the Inflation Factor Identified in Chapter 70
August 2, 2004
Chapter 70 Education Aid
1,500
2,375
3,250
4,125
5,000
FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
11% decrease from FY02
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
800
950
1,100
1,250
1,400
FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
32% decrease
August 2, 2004
Higher Education
800
950
1,100
1,250
1,400
FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
20.5% decrease
Includes ARRA funding.
August 2, 2004
Local Aid
0
400
800
1,200
1,600
FY01 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
29% decrease
August 2, 2004
Public Health
0
100
200
300
400
500
600
700
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
20% decrease
August 2, 2004
Public Health
0
100
200
300
400
500
600
700
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
19% decrease
Includes ARRA funding.
August 2, 2004
Environment
0
50
100
150
200
250
300
350
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Mill
ions
of $
(FY1
0)
29% decrease
August 2, 2004
Filling the FY2010 Budget Gap
August 2, 2004
Filling the FY2010 Budget Gap
Cuts and Savings1.63
August 2, 2004
Filling the FY2010 Budget Gap
Revenues0.59
Cuts and Savings1.63
August 2, 2004
Filling the FY2010 Budget Gap
Stabilization Fund0.59
Revenues0.59
Cuts and Savings1.63
August 2, 2004
Filling the FY2010 Budget GapFederal Recovery Aid
0.71
Stabilization Fund0.59
Revenues0.59
Cuts and Savings1.63
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/Efficient
August 2, 2004
A Tax System Should Be…
Adequate
Stable
Simple/Efficient
August 2, 2004
A Tax System Should Be…
Adequate
Stable
Simple/Efficient
Fair
August 2, 2004
MA State & Local Taxes are Regressive
0%
3.75%
7.50%
11.25%
15.00%
Less than $18,000 Lowest 20% $58,000 - $97,000 Fourth 20% $526,000 or more Top 1%
% of
Per
sona
l Inc
ome
TOTAL TAXESEffect of Federal Deduction
Top 20%Source: ITEP, 2006 data
August 2, 2004
Sales Taxes are Typically Regressive
$9,000
$41,750
$74,500
$107,250
$140,000
Lowest 20% Third 20% Highest 20%
Average annual incomeAverage annual expenditures
Source: Bureau of Labor Statistics, 2004 data
August 2, 2004
Who Pays the Sales Tax in MA?
0.4%
1.3%
2.2%
3.1%
4.0%
Less than $18,000 Lowest 20% $58,000 - $97,000 Fourth 20% $203,000 - $526,000 Next 4%
% of
Per
sona
l Inc
ome
Source: ITEP, 2006 dataTop 20%
August 2, 2004
MA Income Tax is Progressive
0.200%
1.275%
2.350%
3.425%
4.500%
Less than $18,000 Lowest 20% $58,000 - $97,000 Fourth 20% $526,000 or more Top 1%
% of
Per
sona
l Inc
ome
Source: ITEP, 2006 dataTop 20%
August 2, 2004
Who benefits from an Income Tax Cut?
$10.0
$3,007.5
$6,005.0
$9,002.5
$12,000.0
Less than $19,800 Lowest 20% $63,800 - $105,200 Fourth 20% $218,000 - $562,500 Next 4%
$10,226
$1,776$751
$0$377$214$76
Aver
age
Tax
Cut
Tax Rate Cut From 5.95% to 5.3%
Source: ITEP, April 2008 Top 20%
August 2, 2004
Who benefits from a Dividends & Interest Tax Cut?
$0
$3,000
$6,000
$9,000
$12,000
Less than $19,800 Lowest 20% $63,800 - $105,200 Fourth 20% $218,000 - $562,500 Next 4%
$10,057
$959$242$109$55$27$2
Aver
age
Tax
Cut
Tax Rate Cut from 12.0% to 5.3%
Source: ITEP, April 2008 Top 20%