In 2002 while Mitt Romney was running for governor of Massachusetts, Romney found himself engulfed in a "will-he-won't-he" controversy that bears some similarities to the pressure mounting on him to release his tax returns in today's campaign.
Romney's 2002 tax-return controversy dealt mostly with his residency status in Massachusetts.
According to state law, Romney had to have established permanent residency in Massachusetts for the seven years prior to running for office — but Romney had spent the previous three years in Salt Lake City, Utah, running the 2002 Winter Olympic Games. According to a March 18, 2002, Boston Globe article (behind paywall), Romney filed tax returns listing Utah as his primary residence, but maintained "official residence" in Belmont, Mass.
In May, questions about his residency status started to pick up, and gained steam when it was revealed that he paid property taxes in Utah from 1999-2001, and he received a huge discount as a result.
By listing Utah as his primary residence, he saved a total of $54,000 in taxes on the home he owned in Utah, according to a Boston Globe investigation published on June 5, 2002. That's because in Utah, non-residents pay taxes on 100 percent of the assessed value of their homes, while residents only pay taxes on 55 percent. Romney's then-deputy campaign manager Eric Fehrnstrom, who is now a senior adviser to Romney's presidential campaign, tried to explain:
"Mitt was underbilled for his property tax," Fehrnstrom said. "If, as a result of the county's error, Mitt has to pay additional taxes, he will do so."
Fehrnstrom said Romney never noticed the tax break when he received it.
"He, like most taxpayers, just cursed out loud and wrote the check," Fehrnstrom said.
Romney refused to release his returns, and the Massachusetts Democratic Party launched a month-long investigation that backfired. The state Ballot Law Commission ruled unanimously in June that Romney was still eligible to run for governor because he had "never severed his ties to Massachusetts," despite the primary-residency filing in Utah for three years.
Questions continued to pile on Romney over the next several months, but he stood firm in his denial to make his tax returns public. In a debate, he responded to a student's question about not releasing them with the same answer of "privacy." (He had attacked Sen. Ted Kennedy for giving the same reasoning during his 1994 U.S. Senate run.)
All the while, Romney called on his Democratic opponent Shannon O'Brien to release her husband's tax returns, according to an April 17, 2002 article in The Boston Globe, O'Brien had already made her tax returns public.
At the time, Fehrnstrom defended the disparity:
He suggested O'Brien was being disingenuous by releasing only her returns, whereas Romney took a "principled position" against releasing his tax returns at all, by citing privacy concerns.
The defense apparently worked with voters — Romney won the election with 50 percent of the vote to O'Brien's 45 percent.
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