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    Tax hikes aren’t always toxic; government inertia is worse

    It’s 1990 again at the State House, at least in the minds of many legislators. That was when the beleaguered outgoing Democratic Governor Michael Dukakis, proclaiming

    “taxes are like medicine,” signed a package of expansions of the income, gas, and sales taxes. As legend has it, that tax hike so enraged the public that 16 years of Republican governance followed.

    It’s a foolish, simplistic analysis, and it’s leading today’s legislators in the wrong direction. Dukakis’s tax hike came in the midst of a nearly unprecedented free fall in state revenue, as the bubble burst on the so-called Massachusetts Miracle. The state was in for a recession that turned out to be deeper and more costly than even the 2008 meltdown, which devastated the nation but had comparatively less effect here than in some other places. Now, Massachusetts is on the rebound. The situation couldn’t be more different.


    In times of economic turmoil, voters may indeed look for legislative scapegoats. Dukakis’s tax hike didn’t cause the recession in the early ’90s, but it became the focus of public dismay over it. Likewise, in the aftermath of the 2008 recession, the TARP legislation that saved the economy became a target of voter anger. So a more reasonable lesson for today’s legislators, fearful of the political ramifications of a tax vote, is that a tax hike can be toxic if it becomes a symbol of failure and frustration.

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    That’s even more apparent when voters feel like they’re getting nothing for their extra payments. The Dukakis hike only covered part of a yawning hole in the state budget. Services actually declined sharply, even while citizens were ponying up more in taxes.

    If these lessons apply at all to Governor Patrick’s request for tax increases to expand transportation, transform early-childhood education, and provide more help to higher-ed students, the takeaway should be that tax hikes, uncoupled with service increases, breed cynicism about government. They make voters feel that they, the taxpayers, are cleaning up messes left by incompetent legislators.

    And yet the House and Senate leadership in Massachusetts clearly feel more comfortable going to voters with a significant gas-tax increase (the least popular option, according to polls) on the grounds that the state absolutely, positively needs the cash to compensate for Big Dig debts and a sad history of patchwork fixes on the T. Forget about any increased services: Citizens would be paying more at the pump to make up for the deferred maintenance of the past. While true enough, that argument makes for a far less attractive political message than what Patrick is offering: A tradeoff of carefully targeted tax increases for tangible benefits, from the Green Line extension to South Coast rail to public education. Each of those investments should provide a long-term economic boost for the state.

    For Democrats in the Legislature, going to voters with a tail-between-the-legs message of government failure followed inevitably by tax hikes would perpetuate exactly the attitude that led to those 16 years of Republican rule — the idea that Democrats aren’t competent or creative enough to make government work on their own terms. Legislative leaders should be under no illusions here: They don’t need to rubberstamp Patrick’s proposals. Nor do they need to go as far as the governor does in raising taxes by $1.9 billion. But to reject his entire approach would be to invite peril. Most voters are ready to make a positive step forward, and are willing to pay for it. What they won’t tolerate is government inertia and inefficiency.