Massachusetts Governor Deval Patrick outlined a controversial proposal in his State of the Commonwealth address this week that would both raise and lower taxes. The proposal has been met with mixed reaction from business and municipal leaders.
Patrick says his proposal would give the state nearly $2 billion a year in additional revenue, which he would devote to transportation and education initiatives. Income taxes would rise 1 percent to 6.25 percent, while sales taxes would decrease from 6.25 percent to 4.5 percent.
Jeff Ciuffreda, president of the Affiliated Chambers of Commerce of Greater Springfield, says he thinks the state needs to invest more in infrastructure. But, he says, after a recent 2 percent rise in federal payroll taxes as part of the fiscal cliff deal, Patrick’s proposal will hurt the local economy.
“I think you have to consider that people do have 2 percent less of their paycheck in their pocket right now, and then to take out more, I know he’s trying to make it progressive, I just don’t think it’s a positive step for the economy.”
But some municipalities in the region could benefit from additional state investments. Marcos Marrero, director of Planning and Economic Development in Holyoke says while the governor’s proposal will have to be publicly debated, he supports state initiatives in education and infrastructure.
“It is important to invest in our own future going forward, and of course a lot of the things that the governor has proposed, infrastructure and education, is part of building a stronger economy and a stronger future, that ultimately businesses will use, either the infrastructure or the workforce of the future.”
Critics of the governor have argued that the proposal will hurt private investment in Massachusetts. The proposal comes as Patrick prepares to release his budget for the 2014 fiscal year.