In submitting his $34.8 billion budget to the Legislature on Wednesday, Gov. Deval Patrick said the proposed income tax hike is part of a comprehensive package aimed at investing in the state's infrastructure and in driving growth.
The proposal asks for an increase in the income tax from 5.25 percent to 6.25 percent coupled with a reduction in the sales tax from 6.25 percent to 4.5 percent. It also doubles personal exemptions.
Despite the proposed income tax hike, Patrick says that low and modest-income workers will pay less in taxes under his proposal, and only the "more fortunate see a larger increase."
"I do not submit this proposal lightly. I understand that many households in Massachusetts continue to struggle from the impact of the Great Recession, but I am confident that investing meaningful in education and transportation today will significantly improve and expand job growth and economic opportunity tomorrow," he said.
Patrick's budget calls for a total investment of $6.79 billion in education next year, with $131 million going toward early education, $226 million in Chapter 70 local aid, and $152 million toward making college more affordable and accessible.
In transportation funding, Patrick is asking for a $13 billion capital investment over 10 years, including money to repair roads and create a public transportation system that is modern and reliable.
"This is what the people of the commonwealth have asked for," he said. "Ask any of the folks who were outside in the cold at Arlington Street today whether they want those kinds of investments. They totally get this."
According to information available, the balance of Local Aid accounts will be level funded under the Governor’s proposal, said Northborough's Town Administrator John Coderre.
"Given the relatively small proposed increase of $85,103 in Local Aid for Northborough," said Coderre in a letter to the Board of Selectmen, "and the fact that we do not know how much assessments will go up, it appears that we are basically looking at level funding. However, as detailed in the MMA summary, the Governor’s budget proposal is predicated on significant new tax revenue, which the Legislature is already indicating they may not support."
Coderre added that Patrick has been unsuccessful in advancing his proposed tax increases in the past.
"The bottom line is that municipalities will continue to have a difficult time planning for FY2014," said Coderre, "until we get some indication from the House and Senate about what their plans are for Local Aid."
The $34.8 billion state budget reflects a 6.9 percent increase from last year and would create $828 million in new revenue.
Still, Patrick said, many programs – including some for seniors – will not get the funding that many people want. And "hardly any line item is back at the pre-recession level."