NORTH ADAMS, Mass. — First Berkshire District candidate Gail Cariddi is warning that passage of two statewide ballot questions coupled with the loss of federal stimulus funds and a vastly depleted rainy day account could force massive cuts to local aid and other state programs with a $5 billion hole in the next state budget.

“According to projections by the Massachusetts Taxpayers Foundation (MTF), cutting the sales tax from 6.25 to 3 percent will result in an annual loss of $2.4 billion and if voters repeal the sales tax on alcoholic beverages, we are looking at another $100 million per year in lost revenue,” Cariddi noted. “Even if both referendum questions are defeated, MTF estimates that we will still have a structural deficit for the FY 2012 state budget of $2.5 billion.”
 
“As a city councilor, and a financial manager in my family’s business, I know how to balance a budget and as a state representative, I will push hard to enact some needed budget cuts and close tax loopholes so we can minimize the fiscal pain soon to be faced by our seniors, students and communities,” Cariddi said.
 
According to Cariddi, two areas in need of budgetary belt-tightening are the Legislature and the Probation Department. “The Legislature maintains a $32 million, little-publicized ‘reserve fund’ which is the product of surpluses in legislative accounts accumulated in recent years. This can be trimmed. I would also cut $4.5 million from the Probation Department for bloated positions. Between 1998 and 2008, spending for this agency grew eight times faster than any other public safety agency. Probation now comprises nearly a third of the judiciary’s 7,000 employees.”

Cariddi said that tough fiscal times demand a re-examination of certain state tax breaks. “Corporate income taxes account for just four percent of state tax revenue today compared with about 16 percent in 1970. Adopting a tax accounting method called “combined reporting”, currently used in 16 states, including California, Maine and New Hampshire, would more accurately assess a corporation’s economic activity in a particular state, and make it more difficult to shift income from a high-tax state to a low-or no-tax state. Such a system could increase tax revenues in Massachusetts by as much as $200 million a year.”

Cariddi said she is also in favor of expanding the 1981 ‘Bottle Bill’ law to include waters, teas and sports drinks which would bring in about $58 million annually with the redemption of an additional 1.5 million containers a year, or $20 million more than under current law. Municipalities would save as much as $7 million in disposal and solid waste costs.

The state’s generous film tax credit is another place for savings, Cariddi said. “I am all for supporting the ‘creative economy’ but new data from the Tax Foundation indicates that we are rolling out the red carpet to enrich Hollywood filmmakers at the expense of state taxpayers.”

Cariddi pointed to numbers compiled by state Rep. Steven D’Amico (D-Seekonk), a critic of the film subsidies, which show that last year, the state spent $113 million in subsidies but created only 1,076 full-time equivalent (FTE) jobs and brought in only $17.5 million in new tax revenue.

Telecom tax fairness is yet another area that should be considered next year, Cariddi said. “I would end the property tax exemption for machinery owned by telecommunications companies. Ending this special tax break would generate an estimated $25 million for cities and towns, and that is money we could put to better use building the infrastructure for ‘last-mile’ broadband for the rural communities of western Franklin and northern Berkshire counties.”