'08 tax holiday is not certain; Lawmakers weighing factors.


Byline: John J. Monahan

BOSTON - Once again, state legislators are keeping their cards close to their vests this spring on the question of whether consumers will be given a two-day sales tax holiday in August.

For each of the last five summers, the state has pulled the plug on the state sales tax for two days, giving consumers a chance to buy items worth up to $2,500 without paying sales tax.

But with spiraling energy costs and less than robust revenue growth and uncertainty about the impact a recession could have on state revenues through next year, leaders say it is uncertain.

Senate President Therese Murray told the Greater Boston Chamber of Commerce this week she believes the difficult economy makes the two-day holiday more welcome by consumers this year and she wants to see the Legislature approve the tax holiday one more time.

On the House side, Speaker Salvatore F. DiMasi, who has favored the summer break for consumers in the past, has been expressing uncertainty over whether the state budget and revenue picture will support a 2008 tax holiday.

As chairman of the House Revenue Committee, state Rep. John J. Binienda, D-Worcester, is a key player in the decision. He said yesterday he is worried revenues will get tight in the coming months and the state may not be able to afford the holiday.

"What we are waiting for is to see what the June revenues bring us," Mr. Binienda said.

So far, state revenues are running about $1 billion higher than anticipated revenues for the fiscal year, but much of that additional revenue has been used to counter rising energy and health insurance subsidy costs. Also, a looming recession could tamp down revenues next year and the state income tax rate rollback from 5.3 to 5.25 percent next year could lower revenues.

Once revenues from the last month of the fiscal year are in, the tax holiday will be easier to judge, Mr. Binienda said.

"We have to be able to balance a $28 billion budget. If we can afford a tax holiday, we could possibly do one," he said. But he added that if revenues taper off and the state has to adjust its revenue forecasts for the coming fiscal year, "I would say no, because it could have a potential of...

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