In the article, Widmer says that Mihos’s proposal, to freeze the tax assessment on a property when it is bought until the time it is sold, is “totally unrealistic” and would require a constitutional amendment. Is that surprising to anyone?
Widmer says that Healey’s plan to roll the income tax back to 5% “will reduce local aid by removing almost $700 million in revenue from a state budget that is already projected to be out of balance.” YIKES! This confirms Patick’s position that a rollback of the income tax will put pressure on the property tax.
This is what Widmer says about Patrick’s proposal:
Among several initiatives, Patrick has proposed that a portion of local aid be dedicated to “direct property tax relief.” Widmer said he doubted that is feasible, given local control over how local aid is spent and other aspects of the budget process.
Huh? Not really a scathing indictment of Patrick’s plan. It may not be feasible? If, among other things, the local aid formula is reworked, as Patrick has maintained it should be, there would be some property tax relief. In any event, the article is actually generally favorable towards Patrick’s proposals and generally unfavorable towards Healey, but you could not tell that from the headline.
And, now that Patrick has said his intentions how many voters in the towns and cities would sit by and let their elected leaders turn down Patrick’s proposal? It’s funny, both Patrick and Murray have said that this proposal is affirmation of a certain amount of trust in local government. The media is so used to cynicism towards Government (a cornerstone of the Republican platform) that they seem unable to understand Patrick’s plan. They can’t contemplate that anyone would advocate trusting the Government. Their cycnical reaction would be funny if it were not so sad.
Mike Widmer ought to know that Massachusetts’s 351 cities and towns are all subdivisions of the Commonwealth with powers and obligations spelled out by the General Laws.
<
p>
If state lawmakers so decide, they can (and do) tell local police chiefs and school systems how they must do their jobs. If a city screws up badly enough, the Legislature can (and has) put it into complete receivership.
<
p>
If the Legislature and the Governor want to earmark some local aid for property tax relief, they can do that too. Heck, make it local-option and watch the cities and towns race to see who opts in first.
<
p>
This is neither to disparage the tradition of local control nor to minimize the task of steering this plan through the Legislature.
<
p>
However, there is absolutely no institutional barrier to preemption of local government by the state–Massachusetts is not a federal system with municipal rights that the state cannot supersede.
<
p>
And who better to get this agenda done than our guy, elected with a mandate for property-tax relief?
In most cities and towns, the rate would be reduced almost automatically even without controls…why?
<
p>
Because local officials are always under more pressure than state and national incumbants.
<
p>
In my city, I guarrentee the property tax rate would go down. If not, there’d be a hue and cry that would make the Cox affair (not everyone will get the reference, but those who do know what we went through) look like cakewalk. And those councilors would lose their jobs next election. The seniors, if no one else, will make sure of that (since they’re the ones who vote the most consistantly in off-year elections).
If local aid is reduced, cut the schools.
If local aid increases, the city side gets what it wants and the rest is used to lower taxes.
You should send this in a letter to the editor in response to the article.
but here is the letter I did send to the Globe today:
<
p>
<
p>
TheOpenSociety–the author if this diary–is absolutely right to say, It’s the property tax, even if Healey’s nauseating antics inspire more heated responses.
<
p>
Healey gains by shifting the debate to her tactics from our issues. Bottom line: I vented about her thugs all day, but I wrote about local aid and the property tax.
If Patrick is going to lower property taxes so much by local aid to municipalities, then he will have to increase the income tax. Voters would not like to see an income tax increase, so if he becomes Governor, he will probably increase business taxes despite his claims of being business-friendly. The Commonwealth is currently experiencing an anemic economic recovery. Under Governor Patrick I suppose it will become even more anemic.
Patrick can help raise revenue through several other means, including the following – without even touching income tax:
<
p>
Repealing the Raytheon and Fidelity tax breaks to generate more than an additional $220 million in revenue for the state.
<
p>
Closing corporate “combine reporting” loopholes to generate over $97 million for the state.
<
p>
Applying a transfer tax to sales of higher end real estate to generate over $500 million for the state.
<
p>
Repealing the sales tax exemption on services such as lobbying, legal and accounting services, engineering services, business consulting, public relations and financial management to generate over $530 million for the state.
<
p>
Implementing a 30 cent per pound tax on the top ten carcinogens to generate over $115 million for the state.
<
p>
Assessing an intangible property tax on financial instruments of $2 per $1000 with a $50,000 deductible to generate nearly $500 million for the state.
<
p>
I grant you that he shall need the legislature’s aid to do this, unfortunately – which is why the Democratic legislature, far more than any gubernatorial administration, bears ultimate responsibility for your burden in terms of taxes and fees –
<
p>
But I just showed you how more than $2 billion may be raised without ever raising even the state’s income tax!
<
p>
“… if he becomes Governor, he will probably increase business taxes despite his claims of being business-friendly. The Commonwealth is currently experiencing an anemic economic recovery.”
<
p>
That’s what I said, and that’s what your proposals amount to. The Massachusetts Taxpayers Foundation complains that state business taxes are already too high. So Patrick will make them even higher, at a time when, as I said, the economic recovery is anemic.
Do you understand that ALL of your proposals, aimed at the big, bad super-rich, can be evaded by them with ease? It will merely drive more money, jobs, and equity to RI and NH. And the eroding middle class will be left to pcik up the pieces.
if this happens:
<
p>
How will they do that?
<
p>
Create a real estate trust, and place property in it for below market rate to avoid tax – like building a 9,999 sq ft building to avoid zoning restrictions.
<
p>
Define ‘higher end’ – what was purchased in 1930 for 20 thousand and is now worth 3 million? Or purchased last week?
<
p>
Again – you aim to hit the rich between the eyes, and by the time the law is passed, you arm as drooped and you hit the middle class right in the gut.
The owner of the land could simply continue to hold the land, and lease it to prospective ‘buyer’ over 20, 50, 100 years.
<
p>
Or, put the land in a Corporation, then sell the shares.
<
p>
Doesn’t really matter, any excise/transfer tax on high value sales is only going to create an economic barrier to transfer. Owners are going to be more reluctant to sell; sellers, more reluctant to buy.
<
p>
The unintended consequences of extra business taxes will just slow down business.
<
p>
Big business is so big it’ll just look at the economic environment of a particular state, and pick the lowest cost environment to operate.
<
p>
Middle sized and small sized businesses can’t choose their location so easily and will be compelled, more or less, to stay and those are the businesses who’ll foot the bill for the new taxes.
You’re referring to the combined reporting loopholes that I have urged be closed precisely to bar them from moving all of the funds out of state as they’re doing now.
Personally, I’d cheer for an increase to the income tax that was used to lower the property tax. But, that’s just me. It’s definitely not Patrick’s plan or position and is not what is on the table.
<
p>
Instead, he has been pretty clear that he is opposed to cutting the income tax. That is not a tax hike however you want to spin it.
<
p>
Or maybe you just mean to say that the amount of property tax relief possible without raising taxes is small. On that score I would just say that even just stopping the bleeding–by which I mean forestalling the next override–would be a cause for celebration.
<
p>
You are right to suggest that there is an inverse relationship between the property tax and the income tax, at least in the short term. In New Hampshire, the property tax pays for lots more stuff than it does here–there is no revenue sharing. And, no income tax!
<
p>
I am just glad that the issue of what the right balance might be is finally back on the radar screen. Thanks to our guy.
Abolish the income tax and all other state fees and such – AND ONLY PAY THE COST OF MY LOCAL GOVERNMENT BASED ON THE VLAUE OF MY HOUSE?
<
p>
Let Boston pay for itself>
<
p>
Wheeeee!!!!!
Patrick’s economic package also includes, among other things, a proposal to cut spending in certain areas with an expected annual savings to the taxpayers of upwards of $735 million. Your “analysis” (and I use that term very very loosely) is way too simplistic and not based on any facts. You should read the proposal.