DeLeo rules out new taxes, fees in House budget proposal


By Matt Murphy and Andy Metzger


STATE HOUSE, BOSTON — House Speaker Robert DeLeo on Wednesday ruled out any new taxes or fees in the budget his deputies will produce this spring, essentially nixing Gov. Deval Patrick’s resurgent call to expand the sales tax to candy and soda.

“We will pass a balanced budget that takes care of those in need while maintaining our fiscal discipline. We will do so with a budget that comes out of the House Committee on Ways and Means without any new taxes or fees,” DeLeo said in a speech to House members delivered before eight scheduled public hearings on Patrick’s budget.

DeLeo has partnered with Senate Democratic leaders and Gov. Deval Patrick over the years to enact a series of tax-raising laws, from the sales tax increase of 2009 to last year’s cigarette and gas tax hikes, while at other times taking hardline stances against new taxes. The governor has also proposed to expand the state’s bottle redemption law, which in past years DeLeo has put into the category of taxes and fees.

Groups like The Boston Foundation last week applauded Patrick for again proposing the candy and soda taxes.

“In an era when we know the multi-billion dollar burden obesity-related disease places on our people and the economy, it defies common sense that we classify these items as “essential,” alongside healthy food options,” foundation president and CEO Paul Grogan said in a statement. “We hope the Legislature will recognize the power of removing this 50-year-old exemption, and invest the revenue in bringing healthier foods and physical activity to children across the state – which would enhance the impact of the decision.”

Patrick’s budget, which relied on $97 million in new revenue streams, also proposed to apply the corporate tax to insurance subsidiaries and to charge room occupancy taxes on marked-up hotel rooms sold by online travel websites like Expedia, as well as vacation rentals and bed and breakfasts.

Delivering his own address a day after Patrick gave the State of the Commonwealth address, DeLeo committed the House over the next six months to accomplishing goals that have already been laid out by legislative leaders, including an economic development package, domestic violence reforms, and a bill to address gun violence.

The Winthrop Democrat also said the House will vote to raise to the minimum wage, but he gave no clues as to how high he might seek to raise the pay scale and said it must be connected with reforms to the state’s unemployment insurance system, which has been criticized by business as one of the most generous and costly in the nation. DeLeo forecast a freezing of unemployment insurance rates “as a first step.”

“Because economic growth requires both that jobs be created and that they pay a fair wage, any increase in the minimum wage must be paired with meaningful improvement to our UI system,” DeLeo said.

The speaker, entering his sixth year as the Democratic leader of the House, has made it a tradition to speak to his members on the anniversary of the day he was elected to the post in 2009. Patrick on Tuesday night also called for an increase in the minimum wage, and supports the House’s position to try to reach a compromise with business and labor on unemployment insurance reforms.

The Senate last year voted to raise the minimum wage to $11 an hour over the next three years. Asked about it on Wednesday, Patrick said, “I have a number in my head, yeah, but this is a negotiation. I think, more than anything, the role I want to play is to help the parties get to a good number.” He said there an opportunity this year for business and labor to “trade a little bit” to reach a compromise.

To highlight some of the accomplishments of which he was most proud, DeLeo invited several guests to the State House for the speech, including Katie Kaiser, a business management major from UMass Boston, who the speaker said will benefit from increased investment in higher education to freeze tuition and fees.

Ryan Mack, the site lead of Facebook’s new office in Cambridge, and New Balance’s Vice President Matt LeBretton also attended.

“We’ve taken decisive action to make Massachusetts work, to signal to companies near and far that we’re open for business to strengthen our economy and support our citizens during the worst fiscal downturn since the Great Depression,” DeLeo said.

DeLeo also described himself and his House colleagues as “angry” at the story of Jeremiah Oliver, the 5-year-old Fitchburg boy who disappeared late last year after the Department of Children and Families failed to provide the most basic of support services to his family.

Two House committees last week had an oversight hearing into the operations and management of DCF, looking into questions about caseloads, staffing, policies and procedures, and leadership at the agency. “If funding is the problem, we will address funding. Armed with the committee findings, this House will take action relative to that terrible tragedy,” DeLeo said.

Similar to the reception given to Patrick’s address the evening before, DeLeo’s forecast of passage of a minimum wage increase received the biggest cheers from the House members. Reps. Denise Andrews, Antonio Cabral, Harold Naughton and Claire Cronin were among the first to clap before seemingly the entire Democratic caucus stood and cheered as their Republican colleagues sat in silence.

Moments later, when DeLeo said, “At the same time we must also consider business,” the Republican caucus led the chorus of applause.

DeLeo received whoops and cheers for his pledge to balance the budget “without any new taxes or any new fees,” his plan to once again authorize $300 million in local road funding, and his call to expand economic vitality beyond Interstate 495 from Fall River to Fitchburg.

Lawmakers also gave the speaker a standing ovation for saying the House would take up comprehensive domestic violence legislation.

Rep. Shaunna O’Connell, a Taunton Republican, said she appreciated DeLeo saying the state is “open for business,” and believes Massachusetts can be more business friendly.

“With a 7 percent unemployment rate, I think we can do better. That’s why tomorrow I will be coming out with a small business bill of rights to really encourage job growth among small business,” O’Connell said. She said her proposal would make it easier for independent contractors to do business.

O’Connell also said she would be “very open” to DeLeo’s proposed pairing of minimum wage and unemployment insurance reforms.

“I’m glad to hear him talk about doing unemployment insurance reforms,” O’Connell said. She said, “I really think the overall focus needs to be on small business and the ability of people to create their own wealth. You can’t get minimum wage if you don’t have a job.”

That sentiment was echoed by Bill Vernon, Massachusetts state director of the National Federation of Independent Business, who said a minimum wage increase would have a bigger impact than UI reforms.

“For small businesses, and I represent small businesses, unemployment insurance savings are not going to compete with added costs from the minimum wage. They’re going to be much smaller,” Vernon said. He said unemployment insurance is still “a very important issue.”

Michael Norton contributed reporting.