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Opponents will challenge Massachusetts tax cap law in court

IT took a lot of teamwork by thousands of Massachusetts voters to clamp a lid on state spending. But now a different type of TEAM work could put that effort in jeopardy. The Taxpayers Equity Alliance of Massachusetts (TEAM) - a new coalition of civic, labor, consumer, and human-service advocacy leaders - is asking the commonwealth's highest court to wipe off the books a year-old law restricting growth in state revenue. The measure, launched through an initiative-petition drive led by Citizens for Limited Taxation (CLT) and the Massachusetts High-Tech Council was approved in the November 1986 election a margin of almost 140,000 votes.

Legislation to remove the cap is unlikely. While a number of lawmakers are not enthusiastic about the law, politically it would make no sense to get rid of something that more than 860,000 Bay Staters favored just a year ago.

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Thus opposition forces had little choice but to accept the measure or challenge its validity. The suit, filed Nov. 3 in the state Supreme Judicial Court, argues that since the Massachusetts constitution forbids use of the initiative petition process to pass laws that involve the appropriation of funds from the state treasury, the tax-cap statute was improperly enacted, and is void.

At issue in the challenge is whether returning to taxpayers those state revenues that exceed the cap is really an act of appropriation and therefore beyond the measure's scope.

The current TEAM effort, regardless of its outcome, will force the CLT and the High-Tech Council to invest considerable time and money in the court battle. At the same time it serves notice that anti-tax-cut forces may for the first time have their act together.

TEAM members include leaders from the Massachusetts Human Services Coalition, the Massachusetts Teachers Association, Massachusetts Fair Share, the Building Trades Council, Mass/PIRG, Massachusetts Teachers Federation, Professional Firefighters Association, the League of Women Voters, and the American Federation of State, County, and Municipal Employees.

Since there is no telling when the TEAM suit will be resolved, the state Department of Revenue is proceeding in accordance with the tax-cap law.

The 1987 income tax forms and accompanying instructions, now at the printers, provide for tax credits based on what the commonwealth took in last year beyond what the statute allows.

If TEAM wins its case, it could cost about 4,000 Bay State taxpayers from $1 to, in some instances, several hundred dollars, depending on how much in taxes they paid the commonwealth last year. Massachusetts would get to keep $29.2 million, the amount of over-collected revenue as certified by the state auditor under the tax-cap law.

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Although the funds in question are not that great, in contrast with the more than $11 billion already appropriated for the fiscal year ending June 30, it would give lawmakers a bit more to spend. Various politicians and interest groups have suggestions on how to spend it. And that may be the key driving force behind the TEAM suit - perhaps not so much what the tax cap might cost the state this year but in future fiscal years when the so-called over-collections might be greater.

It is hard to imagine that the loss of the $29.2 million now at stake would put Massachusetts government in a fiscal bind. And it is questionable how much the tax cap might give individual taxpayers, since rebates will amount to less than $10 in most instances.

Considerably more important, however, is the law's potential for checking the state's spending spiral. That is what the tax cap is all about. For too long it has been too easy for state lawmakers to spend every dime in the treasury, as well as plenty of dimes not yet there.

Despite some of the problems caused by its built-in restraints, Proposition 2, the municipal spending lid, has proved to be something the commonwealth and its communities can live with, quite comfortably.

The tax-cap challenge is the logical next step toward getting a handle on climbing public spending.

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