Coakley: No immediate plans to seek graduated tax
BOB SALSBERG, Associated Press
BOSTON (AP) — Democratic gubernatorial candidate Martha Coakley and Republican rival Charlie Baker sparred Wednesday over tax policy, with Coakley insisting that she would seek to raise taxes only as a last resort and has no immediate plans to seek a graduated income tax in Massachusetts.
Coakley raised the possibility of a graduated tax during a debate Tuesday night with Baker. On Wednesday, after a tour of a homeless shelter for veterans in Boston, the attorney general said she hoped as governor she would not have to raise taxes, but, if necessary, she would look to a solution that would not hurt middle-class taxpayers.
The state has a flat income tax rate of 5.2 percent. Changing that to impose a graduated income tax — under which wealthier residents would pay a higher percentage of taxes — would require a change in the state constitution, a process that would take at minimum several years to complete.
A legislative commission on tax fairness recommended this year that Massachusetts scrap the flat tax in favor of a graduated tax, which advocates argue is more progressive because it places less of a burden on middle- and low-income taxpayers.
Coakley indicated Wednesday that she had no immediate plans to push for a constitutional amendment on taxes.
“I hope taxes go down,” she added. “I support the income tax going down if the economy improves.”
Coakley has also acknowledged during the campaign that she would consider tax increases if current revenues are insufficient to cover state investments in education, transportation and other key government services. On Wednesday, she chided Baker for calling for targeted tax reductions without saying how he would offset hundreds of millions in lost revenue.
“I say it’s a typical Republican playbook … cut taxes and hope for a trickle-down effect,” she said.
Baker, the former CEO of Harvard Pilgrim Health Care, promised during Tuesday’s televised debate that, if elected, he would not raise taxes on middle-class taxpayers, though he has declined to take a “no-new-taxes” pledge as he did during his unsuccessful gubernatorial campaign four years ago.
“She said during the debate last night that she was interested in pursuing a graduated income tax, something that the voters have rejected soundly at the ballot box several times over the course of the last 20 or 30 years,” Baker said Wednesday after a private meeting with mayors and other municipal officials.
“I think what voters want right now is a state government that is as thrifty as they are, and they will get them from me,” he added
Democratic Gov. Deval Patrick opted not to seek a third term.
The election is Nov. 4.
Massachusetts candidate presses foe on investment
BOB SALSBERG, Associated Press
BOSTON (AP) — Democratic gubernatorial candidate Martha Coakley said Wednesday that Republican rival Charlie Baker should take steps before the Nov. 4 election to disclose details of an investment made by the state of New Jersey in a venture capital firm with ties to Baker.
Coakley, the state attorney general, said the case raised “public integrity” questions. Baker has repeatedly said there was no wrongdoing.
Baker made a $10,000 donation to the New Jersey Republican Party in 2011, shortly before that state’s pension fund invested in General Catalyst at a time when Baker was an executive-in-residence for the firm.
The investment, which was sold last month for $4.5 million, is the subject of an ongoing review by auditors for the New Jersey treasury department to determine if General Catalyst complied with state regulations regarding the disclosure of political contributions from employees, according to Christopher Santarelli, a treasury spokesman.
Santarelli said findings would not be made public before the next meeting of the State Investment Council, which is scheduled for Nov. 19.
Coakley said Baker may have been in violation of so-called pay-to-play rules in New Jersey. She called on the Republican to release his employment contract with General Catalyst, and to urge New Jersey Gov. Chris Christie, a political ally of his, to make the review public before the election so voters can weigh the findings.
“Whether he is in violation or not of that statute is incredibly important to someone who wants to be governor of Massachusetts,” Coakley told reporters after visiting a homeless shelter for veterans Wednesday.
“All I know is that looking at it, it does not look good. He owes the voters … an explanation,” Coakley added.
Santarelli said it would not be accurate to call the review a pay-to-play investigation.
Baker said Wednesday he has been fully transparent about his role in the investment.
“I asked the former general counsel of the Federal Election Commission to determine if I needed to take corrective action on this. He reviewed it and wrote a report that said no, and I shared that with the public,” he said.
Baker maintains he was not an employee of General Catalyst at the time the donation was made to the New Jersey GOP, but that his role was to identify potential business opportunities for the company. He was previously listed, however, as a partner in the company on campaign finance reports.
Asked about Coakley’s request that he seek release of the audit prior to the election, Baker responded that he had no control over the actions of New Jersey pension officials.
Associated Press writer Jill Colvin in Hackensack, New Jersey, contributed to this report.
Judge dismisses Coakley federal housing lawsuit
STEVE LeBLANC, Associated Press
BOSTON (AP) — A federal judge has dismissed a lawsuit filed by Attorney General Martha Coakley against the Federal Housing Finance Agency and mortgage giants Fannie Mae and Freddie Mac, saying the court doesn’t have oversight of the matter.
Coakley sued the agencies earlier this year for refusing to comply with a state law designed to ease the tide of foreclosures in Massachusetts.
Coakley said Fannie Mae and Freddie Mac violated a 2012 Massachusetts law allowing the sale of homes in foreclosure to nonprofit organizations who intend to restructure the loan and sell the property back to the original homeowner.
U.S. District Court Judge Richard Stearns dismissed the lawsuit, saying federal lawmakers have “expressly removed such conservatorship decisions from the courts’ oversight.”
“However well intended the stated goals of programs like the SUN Initiative, Congress has removed from the purview (of) the court the power to second-guess the FHFA’s business judgment,” he wrote, referring to the Stabilizing Urban Neighborhoods initiative, a buyback program by the nonprofit Boston Community Capital.
Brad Puffer, a spokesman for Coakley, said she’s weighing her options.
“We brought this case to protect Massachusetts homeowners facing foreclosure, help stabilize communities, and to give all families the protection provided by state law,” Puffer said in a statement. “It’s a shame that this decision puts Fannie and Freddie out of the reach of our law and that’s why we are seriously considering an appeal.”
Coakley, a Democratic candidate for Massachusetts governor, had argued that the state law has worked in Massachusetts.
“It just makes sense to take action that will continue to keep people in their homes,” Coakley said when she filed the lawsuit in June. “It makes commercial sense. It makes financial sense, and it’s frankly the law and not to do it is really unfair.”
The 2012 state law explicitly forbids banks and lenders from refusing to consider offers from legitimate buyback programs merely because the property will be resold to the former homeowner.
Critics of the Massachusetts law have argued that allowing homes to be sold back to homeowners who were unable to maintain their original mortgage would create a “moral hazard” by essentially allowing the homeowner to benefit from a bad contract.
Coakley has said that argument is outdated given that the state is still trying to dig out of the foreclosure crisis.
Charlie Baker, Republican gubernatorial candidate, has criticized Coakley, saying she didn’t do enough to disclose that the lawsuit could benefit a nonprofit housing agency run by her campaign finance committee co-chair Elyse Cherry, who also donated to Coakley’s campaign and is the CEO Boston Community Capital.
Coakley said those contributions were public. She faulted Baker for refusing to say whether he supported the lawsuit.
In the complaint, Coakley had alleged two of FHFA’s policies violate state law. One, intended to keep Fannie and Freddie in an “arm’s-length transaction,” prohibits property sales to nonprofits who resell to the original homeowner. A second “make whole” policy prevents Fannie and Freddie from accepting anything less than the outstanding loan amount from the former homeowner or anyone seeking to resell or rent to the former homeowner.
