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Obama’s ad on Romney’s fee-hike ‘mosaic’

at 06:00 AM ET, 06/27/2012

“As governor, Mitt Romney did reduce taxes — on millionaires like himself. But he raised taxes and fees on everyone else — $1.5 billion. Over a thousand fee hikes: on health care, on school-bus rides, on milk, on driver’s licenses, on nursing homes, on lead-poisoning prevention, on meat-and-poultry inspection, on fishermen, gun owners, on nurses, on electricians, on hospitals, on funeral homes, on health services, on hospice care...”

— Narration from Obama campaign ad

President Obama’s campaign team released this ad titled “Mosaic” last week, challenging the notion that GOP presidential candidate Mitt Romney reduced massive budget deficits without raising taxes. We wondered about the numbers it cited, as well as the specific increases named.

Let’s review what we found. Do Romney’s revenue hikes truly represent a 1,000-fee mosaic? While we’re at it, did the former governor really reduce taxes on Massachusetts millionaires?

The Facts

The tax reduction for millionaires refers to Romney repealing a law that would have applied a rate increase on capital gains retroactively — as in, you owe us for the past because we decided to raise the rate mid-year (and before Romney took office). The Boston Globe editorial board, the nonpartisan Massachusetts Taxpayers Foundation and eventually the Democrat-led legislature ended up supporting the governor’s repeal, as FactCheck.org mentioned in a recent article.

As for all those new taxes and fees, it’s a well-established fact that Romney proposed and approved a long list of tax-loophole closures and fee hikes during his time in office. But the exact number of increases — not to mention the total amount of revenue — varies depending on who you ask.

The Obama ad claimed that Romney raised taxes and fees by $1.5 billion. That seems to be a safe estimate, so long as the campaign is talking about total new revenue during the GOP challenger’s entire term — the ad is vague about this.

The Democratic National Committee and the independent Massachusetts Taxpayers Foundation have concluded that Romney’s loophole closures and fee hikes added up to $750 million per year by the time he left office. A handy table produced by the Massachusetts Democrats lays out the key elements.

About $543 million in hikes and loophole closings were enacted in 2003, Romney’s first year as governor — and all told, the increases brought in a total of $2.7 billion during Romney’s entire term. That’s nearly double what the Obama ad claims — a rare case of lowballing a figure in one of these attack ads.

Meanwhile, the ad also claims that Romney approved more than 1,000 fee hikes. That sum is by far the highest we’ve seen. An article from NPR, for example, put the number at “dozens,” for example.

Let’s take a closer look at what happened.

For the most part, Romney seems to have approved across-the-board rate hikes for each general fee category that was affected — hospitals, nurses, milk delivery and so forth. But the Obama campaign divided those categories into small subsections, giving the total number a big boost.

Hospital-licensing fees, for example, increased to different levels depending on the size of the facility: large, medium or small, essentially. The Obama team counted this as three separate fee hikes, even though hospitals had always paid varying rates based on their size.

It’s even worse for nurseries, which fall into six categories depending on size. The president’s reelection team counted this as six fee hikes.

Another example: the state raised fees for obtaining and renewing licenses in most cases. The Obama campaign counted that as two separate increases for each type of license.

We’ll give you one more example just to make it clear what’s going on here. The president’s campaign tallied 10 fee increases for lead-poison testing, because the state charges different rates depending on how many samples need testing (duh) and what type of substance is being checked — paint chips, glass, ceramics, urine and so on.

The Obama campaign did this with virtually every fee that went up during Romney’s tenure, dividing each general category many times over and vastly expanding the total number of increases. As such, the ad is technically correct in a sense but also misleading.

Obama campaign spokeswoman Kara Carscaden said this about the fee hikes: “Romney actually created new opportunities for fee and tax increases on Bay Staters, which is a clear contrast with what he said he’d do while he was running for office.”

Let’s turn our attention now to all the specific fee hikes mentioned in the ad.

We won’t go into the nitty-gritty details, but Romney does appear to have implemented 14 of the 15 increases that the narrator cited. The exception is with school busing, for which the former governor did not raise rates.

What happened in that case is that Romney eliminated state reimbursements for school transportation and granted new powers for school districts to assess their own busing fees. This by no means suggests that the rates went up, but it does mean that the costs shifted to the districts, some of which opted to cut back on services while others raised taxes.

“Romney allowed school districts to charge fees for transportation,” Carscaden said. “No such fees were allowed prior to Romney signing that bill. Then, school districts imposed fees for transportation.”

That’s all true, but the last sentence is critical: school districts imposed fees for transportation. That’s different from Romney imposing the fees. Still, Carscaden said the rates “couldn’t have been raised without [Romney’s] actions, and he should be held accountable for the things he signs.”

The Pinocchio Test

The Obama ad suggests to the average viewer that Romney tried to lower the tax rate for millionaires, but that didn’t happen. He merely stopped the legislature from applying a new capital-gains rate retroactively, and the legislature eventually agreed with his move.

As we noted, the ad actually has too low a figure for the money raised by Romney’s fees and tax loophole closings. But it greatly inflated Romney’s total number of fee increases by dividing each category into multiple parts. This created a misleading impression, even if the figure is factually correct in a sense.

Finally, the Obama video mentioned a fee hike for school busing, but Romney implemented no such thing.

Obama’s “Mosaic” ad earns two Pinocchios.

Two Pinocchios



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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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