Back in the glory days of November 2006, I posted a little muse here[http://www.bluemassg…]that didn’t catch a flicker of attention, probably because it was so BORING. I had the luxury back then of thinking about little problems like the timing of House 1, the Lege and annual town meetings. The budget has been released, digested and those of us who haven’t fainted, want to puke.
Even with a $200 million dollar increase in Chapter 70 [http://www.mma.org/i…](education aide) overrides are being considered like vests on the Titanic.
Things are bad.
The Globe [http://search.boston…] is tracking the communities that are considering overrides at least in metro Boston area.
We are sinking.
The House 1 budget is a responsible fiscal document and there is little or no room for the Lege to upgrade state spending.
Did I say the ship is sinking?!?!
Municipal gov’ts have tightened every belt, nut, screw and contract possible.
Send Help.
I vow to never forget that this platform was a big fuckin’ lie [http://www.healeycom…] perpetuated to eliminate the middle class and destroy the poor.
All of it. For a very good review of the state of local aid, the MMA has a number of good reports. The fact is, the legislature has long tied the hands of local governments in terms of raising revenue and cutting costs…and then throw us off the Tobin when times get tough. Don’t get me started about the diversion of Lottery revenue. Talk about illegal.
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^5! Thanks for a great post!
One of them (Sanchez) was foaming at the mouth about anti-tax. No, nope, nada, nothing. No tax of any kind. Didn’t want to hear it, didn’t want to discuss it, and refused to take a personal stance — instead he insisted on speaking for the feeling of the entire legislature. Didn’t have anything else really to say; sort of a bummer in terms of tenor and engagement.
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The other (Moran) had a good point that he made after the meeting. When asked about the local option for 1 or 2% meals tax, he pointed out that the MA lege has banned smoking, increased the minimum wage, and that many commercial sites pay higher property tax rates than residential sites. His point: “Let’s give [restaurants and pubs] a break.” He suggested that going after the property tax on telephone poles, closing corporate loopholes, and increasing other revenue streams would be preferable. In a sense, he argued to prioritize other tax increases/loophole eliminations ahead of the meals tax, since the MA lege has done some things that have been particularly hard on the primarily locally owned and operated restaurant business lately.
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I can’t say I disagree. I agree that towns need to gain some functional revenue streams in addition to residential property tax. I also think that some should be pursued before others — namely those that are fair (telephone poles, loophole closures) before those that are simply effective at raising money (meals tax).
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Personally, I’d also like to see the state raise the limit towns can charge on parking fines and tickets. I know, that may help Cambridge more than Stockbridge, but it would raise substantial revenue in places of high auto traffic, and serve to help encourage people to not drive for local trips and instead T/bus/walk/cycle/carpool. I also wonder if instead of a 1% – 2% sales tax, if the state could allow the towns to tack on an additional $0.01 — $0.03 tax per gallon of gasoline, and then simply mail the town a check each quarter/year after collecting the entire tax themselves (perhaps minus administrative costs). I wouldn’t want to tack on much more than a few cents locally because you don’t want to encourage people driving to the next town for gas; if people are willing to drive 5-20 miles to save more than 50 cents on Gas, they’ve got bigger issues anyway.
When talking about the meals tax, keep in mind that Mike Moran (who I assume is the Moran you’re talking about) is part owner of at least one bar himself.
It’s least regressive – less regressive than sales tax, even. Poor people don’t drive Escalades and rich people don’t drive 1987 Delta 88’s (or if they do, they have bigger issues, like you say). You can’t avoid it, the town collects and keeps it without Boston’s sticky fingers getting into it, and the RMV provides a built-in enforcemtn mechanism (just ask Obama!).
…which has been shown to be regressive?
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Telling.
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Why not a local option sales or income tax?
Sales tax is the MOST regressive form of taxation. unless they do away with the cap on items more than $10,000 other than autos.
The automobile excise tax is a property tax. It is based on the value of a piece of property–the automobile. The fact that the property–the automobile–is movable does not mean that it is any less a piece of property.
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Yee gads, what private school did you graduate from?
I’ve never known anyone to use property tax to refer to anything but land/house.
…The automobile excise tax is a form of property tax. It is a tax based on the value of property. The property is of a class that is referred to as personal property (things) in contrast to what is referred to as real property (land and appurtenances–buildings)
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The auto excise tax is a property tax. Pure and simple, nothing more, nothing less.
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I’ve read that, in some parts of the Cape, towns also tried to impose a tax the value of furniture in peoples houses, but I don’t know how true that is. If they did, that would be another form of property tax–on personal property.
Huh – legally, auto excise is a form of property tax, as is business excise and personal excise (the tax we all collect on washashore’s furniture down here on Cape Cod). However, to call it property tax would be needlessly mystifying, and make a dry discussion a virtual Sahara.
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By trying to use the vernacular terms, in order to be clear instead of confusing, I have outraged Raj’s debate-team idiosyncratic rules.
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That should make his weekend.
…You admit that the auto excise tax is a tax based on the value of the auto, a piece of personal property, but you deny that it is a form of property tax.
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Um, OK. No intelligent person that I know would agree with you, but, um OK.
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If the auto excise tax was a fixed amount, you might have a point. Such per auto. Kind of like the cigarette excise tax, so much per cigarette. But the auto excise tax isn’t figured like that. It’s based on the value of the auto. I fail to see how that is anything other than a form of property tax. You might be able to persuade me otherwise, but I really doubt it.
Um, no, um intelligent person has to, um, bump into eery tree in their quest to see the forest.
excise tax:
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noun
a tax that is measured by the amount of business done (not on property or income from real estate)
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or try from
American Heritage New Dictionary of Cultural Literacy, Third Edition –
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A tax, similar to a sales tax, imposed on some goods, especially luxuries and cars
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here is where I got my stuff:
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http://dictionary.re…
I don’t smoke weed – PP
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And I am siding with you, what the hell are you jumping all over me for?
…and that’s why I gave you a ‘6’!
I get it
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I get it
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I get it.
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At first I didn’t understand what you ment by Mr. Pot / Mr. Kettle. I get it now. Sorry everyone for the weed reference.
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Can someone delete my last comment?
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Sorry again
that is the one you want to delete????
More rich people are Republicans than Democrats. Could you please correct your playbook?
and either could provide a link. (I know I’m crashing the conversation)
Here you go
It is a tax on Chattel (personal property). Raj is correct here. It should also be done away with IMHO, but that’s for another day.
…what part of local option taxes do you not understand?
How is that regressive? It seems to me to be the most progressive tax that we have here in the Commonwealth.
I am quite in agreement with you on the auto excise tax. I intended to respond to the stange aha! advocating sales tax or meals tax as a more progressive-small p– form of taxation. “So, you advocate a tax that has been shown to be regressive” he said, apparently in reference to real estate taxes. Seems to me that an ad valorem tax on the automobile is the least regressive/most progressive option on the table here in the Commonwealth.
…since everyone pretty much needs an automobile to get around in the area, regardless of how clunky, you really don’t.
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I’d analogize it to the following. A Lexus is to a Trabant as a house in Weston is to a house in Codman Square. Both are assessed property taxes. The house taxes are considered to be regressive–the owners of the house in Codman Square would probably be paying a higher tax, in relation to their income, than the owners of the house in Weston. Why are not the automobile taxes considered similarly?
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There are many people in the Boston metro area who don’t own cars.
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Some walk, bicycle, rollerblade, jog.
Some take the bus, subway, streetcar, or trolley.
Some use ZipCar or rent a car when they need one.
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I happen to be “some” of all three of the above, and I’m certainly not the only one. I agree that the city, metro-area, and state should do more to enable people to choose to not own cars (by making the other choices more attractive than they are currently) — but to claim that everyone pretty much needs an automobile to get around in the area is patently false.
…Just to let you know, in our little hamlet 20 KM west of center city Munich, I do all of my grocery shopping on bicycle. (Gov’t regulation: all bikes have to have a light, a bell and a basket.) The town is set up for biking very few people do their shopping with cars. Everyone bikes there. They have bike stands all along the main street where people can lock their bikes up. They even have bike wagons there that are intended to be used as strollers for the children. It is a society that is based on bicycles.*
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In stark contrast, in our little hamlet 20 KM (that’s 12 miles) west of center city Boston (Wellesley) it is impossible to do any significant amount of shopping using bicycles. Totally impossible.
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*Interestingly, and just to let you know, a few years ago, a rollerblade organization was doing weekly tours of center city Munich Monday evenings in Summer. Each Monday, a different route. Yes, it disrupted traffic–a bit (they started late enough that the commuters would be out of town)–but it got people interested in the center city. I don’t know whether they’re still doing it, but obviously the rollerbladers weren’t carrying groceries home with them.
When I moved out of the hemisphere a few months back to a locale that is at least 15 years behind Boston in seemingly everything, I left my Wrangler in my parent’s backyard. I get around out here strictly by bike and bus. Granted, it is easier to get around here in the land of the eternal summer by bike in March than it would be back home. My hometown, where my Wrangler sits without me, would be slightly more difficult to get around with without a car but not impossible. Not even close. I love my Wrangler and its certainly a convenience, but I could and do live without it.
…Some areas are set up to be bike friendly, including for shoppers. Many towns in Europe seem to be, but I have yet to see a US town that is.
I don’t eat. Or rather, I only dine out. That’s my big secret.
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Oh wait — no it isn’t. So just how do I do it, you’re probably wondering. How do I manage to buy groceries?
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1. Local market. Not a supermarket, but a bit more than a spa. It’s got about 6 aisles, each maybe 60′ long. My wife or I duck in on the way home two or three times a week and spend $15-$30 each time, and either carry the bags home while walking (roughly .6 miles) or by bicycle.
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2. When I do have to rent a car to drive out of town, I often make a big run to Stop & Shop or some-such on the way back, grabbing $200 in groceries at a time, especially canned and dry goods.
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3. PeaPod. Again, I try to do $150 – $250 at a time, and focus on heavy stuff. Yes, they take coupons. They’re pretty good about picking good fruit and veg. Sales are reflected in the price I pay too.
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4. Farmer’s Market. Open once a week in my town, for 4 or 5 months. I hit it once a week, fill up a backpack and a cycle-milkcrate, spending about $40 on fresh fruit and veg, bread, and cheese.
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And for the record, my wife and I average less then $150/month on dining out, including pubs, takeout, etc. We eat at home.
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So seriously, what did you think — that I lie about not owning a car, that I don’t eat, or that I only dine out? Did it even occur to you that city people manage to shop for groceries without a car — and have been doing so, well, since people started living in cities?
While that’s a wonderful life, probably filled with fresh food, it takes a great deal of time.
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You visit a store or a market 3-4 times a week?
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That’s a lot of time spent food shopping. What about people who can’t visit a store every other day?
For instance, we get organic produce delivered every other week.
1. The store is small. They don’t offer 14 brands of baked beans.
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2. There’s never a line.
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3. It’s on a block that’s central to my neighborhood, abuts a T station, and my bike route. It’s “on the way.”
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I would my wife and I spend a combined 40 minutes or less shopping.* So, how much time does your family spend crawling down the aisles at Stop & Shop?
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I don’t know if I should be frustrated or amused. Why do folks not think I’m a real person? That I only eat in restaurants, or that my time isn’t valuable**? Give me a freaking break. I’m living proof that it’s just not that hard for lots of people to make the choice to live in Boston metro without owning a car.
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p> * Farmer’s market is more — but I go there to socialize, get fresh food, etc. I could cut it out from my routine completely (and in fact I do for half a year).
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** Short of posting on BMG, of course.
that was purchased 30 years ago, and which has since appreciated in value tenfold. So we don’t have the problem in which the value of a vehicle is outstripping the income of the owner.
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For the most part, high net worth people are not going to drive a 1992 Tercel; the urban poor are not going to drive a Mercedes 500. Because of its relatively short life span and its propesity to depreciate rapidly in value, the value of an automobile is problably a better measure of wealth and income than is ownership of real property, or for heaven’s sake, a sales tax. In addition, the steepness of the slope of taxes assessed against value, at least in the jurisidictions that I have lived, means that the excise tax due on the Mercedes 500 is orders of magnitude greater than the excise tax on a car worth only a few grand.
An automobile has an absolute value, be it in Duxbury-by-the-Sea or Dorchester. Auto excise is assessed per $1,000 of value, with a minimum of $25.
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However, relative property values are influenced by EQV, market desirability, etc. A $300,000 house in Lunenberg is worth $1.2 million in Nahant.
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But the book value of the Saturns in their driveways is identical.
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And – again, and this cannot be stressed enough – each muicipality collects and retains the tax, without having it pass through the Big Collander in Boston, where some of the holes are plugged up for retainage.
…the automobile excise tax is a property tax.
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Your inability to recognize that is mystifying.
No one has. Of course the auto excise tax is a property tax; hence the “excise” in excise tax. But that is neither here nor there.
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All anyone wrote is that, in common usage, people refer to their “property taxes” and to their “auto excise taxes.” When they say the former, they mean RE tax, and are not describing the latter.
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Your inability to recognize that is likewise mystifying.
…an excise tax can be based on the number of units being taxed. The number of cigarettes. The number of cans of beans. The number of units, regardless of their value.
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What I heard above is that many of the commenters here were taking issue with the fact that the auto “excise” tax was something other than a property tax–a tax based on the value of the property being taxed.
Here’s the problem with hiking the excise tax — it doesn’t allow communities to diversify their revenue streams all that much. A poor community with low property values is going to realize less revenue than a rich community with high property values. Hiking this tax would mean that wealthy communities would be able to outdistance poor communities even further.
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In my opinion, the ideal approach here is to allow many different options for taxation. No community is going to exercise them all at once because not only is it not necessary, but like businesses, they realize that they are in competition with each other for residents and businesses. Any city or town that taxes too much just to be able to lavish themselves with unnecessary services will learn the hard way via decreased demand for the community.
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With a wide variety of options, that increases the odds of there being a revenue stream that fits with a city or town’s natural advantages. Where would Dover be if they were not allowed to raise taxes based on property values, but instead could only get money from the sales tax? Well, communities with low property values are starving for money (and therefore dependent on the state for aid) because the state has given them a singular method to raise revenue, and they are at a disadvantage because of it.
I agree that the excise tax is likely more progressive than the gas tax, although I don’t have any numbers to satisfy my hunch.
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However, there’s something else at play: an automobile parked on the side of the street isn’t much of a negative on society. It’s not causing traffic in the roads. It’s not much of a risk to severely injure another driver, passenger, cyclist, or pedestrian. It isn’t inflicting wear and tear on the roadways. It isn’t consuming a limited resource. It isn’t negatively impacting our trade balance. It isn’t polluting the air or the water*.
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So, since people who drive more are inflicting more detrimental externalities on society than those who drive less, and since gallons of gas purchased are a really good proxy for weight of vehicle damaging roads/pollution emissions/damage caused to others in a collision, taxing gasoline is a really efficient way to take all of these into account.
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My suggestion: take the current auto excise tax, and tack on x% for every MPG less than y MPG in efficiency. You could even go so far as reducing z% for every MPG more than y MPG in efficiency, although I’m not as big a fan of fee-bates as others. Play with x, y and z as needed to make the new taxation revenue positive or revenue neutral, and feel free to change the numbers every year according to some formula if that makes sense.
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Still, I would support creeping up the gas tax a penny a year (and I’d also support adjusting the gas tax to eliminate the Mass Pike tolls, for the record).
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The problem there is that the original discussion centered around how localities can get more revenue; raising the gas tax just puts more money into the state coffers.
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Giving more aid to cities and towns is certainly great, but as cities and towns get more dependent on that aid, let me tell you, the down years suck. If 90% of your budget comes from property taxes, in the down years you still get 90% of your 2.5% increase. But if 70% of your budget comes from the state, then you only 30% of your budget has a 2.5% increase, the rest is either frozen, or worse yet, reduced.
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Add to that the stigma of being constantly characterized as a “ward of the state”, to the point where every out-of-towner feels entitled to criticize anything your city does because “their income taxes are supporting your lazy ass”, and I’d far prefer more local options over more state aid.
I’d support a local gas tax option of $0.001 – $0.03 (or something close to that). The town could vote to tack on an additional 0 to 3 cents per gallon in gas tax. The gas station would simply “up” the state tax by that value, and of course reflect it in the price. The state would keep collecting the tax, and since the state knows exactly how many gallons each town (in fact, each gas station) sold in time period t, it could simply cut the town a check for x gallons sold times y cents per gallon. This plan could also allow the state to keep 25% of that “boost” to spread around like they’re talking about with the meals tax, or whatever.
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As for the technological feasibility of my excise tax proposal (to respond to raj), it’s really quite simple. The MPG is published by the Feds. It’s not at all ambiguous. The “current tax” for each car is determined by some governing body, just as it is now (sticker price times a percentage as a function of the car’s age). You take the “current tax” and then make the really simple (think: 8th grade) adjustment based on MPG.
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Example:
x = 2% for each MPG below threshold.
y = 25 MPG threshold.
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The car in question currently pays $300, and gets 19 MPG according to Federal standards. Since 25-19 is 6, we simply do the following:
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$300 * (1.02*6) = $336.
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Seriously — was that hard? A technological nightmare for a 7 fingered mathmoron, but I assure you that the good people at the RMV and the taxman could work it out. In fact, since multiplication is commutative, they could simply take the base value of the car and do the MPG shift then, and then simply multiply the 90/60/40/25/10 to the modified base vehicle value. Easy peasy, lemon squeezie!
…I had been presuming that you were going to do the adjustment at the gas pump, not at the excise tax.
I was at a reception for one of our selectmen who is running for reelection next month. Our state rep showed up. At least he was more honest. He’s not going to support the Governor’s tax proposals, not on principle, but because he had his earmarks taken away. “Why should I do anything for him…”. Lots of cracks about the Cadillac and the drapes, etc. I held my tongue because I’m now on the town’s state relations committee and I have to work with this guy, but it really made me sick.
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You don’t have to name names, of course, but what district are you in?
A) Our high school sports program is in jeopardy
B) Rep appeared with Kerry Healey at bill signing last fall
He is one of the good guys. Why the poke at him?
But I did read in the Globe the other day that Stoneham’s sports program (and a host of other things) are in jeopardy if an override doesn’t pass there. I’m pretty sure Festa is the state rep up there. It was a guess, not a poke.
No joy in Mudville, eh?
…So? Maybe your town should start charging people for the privilege of engaging in sporting activities. It’s not as if sporting activities are particularly–academic, are they?
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What is a school for? Academics?
In Lowell they have an organization called “The Friends of Lowell High” which takes a large burden off of the school budget for extra curricular activities.
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Perhaps that’s what Stoneham should do.
The students already have to kick in almost have the cost of running the program. But keep the ideas coming, we’re ready to listen to anything that will help
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I imagine it depends on the high school, but I believe that high school athletics (and after school arts programs, academic clubs, and social clubs) are really important in high schools. Not only do they reinforce the idea that being well rounded is important for most people, but they result in a connection with more kids — more kids have that one thing in school that they love, that keeps them excited in the morning to go, that serves as a carrot to keep them doing well in school.
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I don’t think a high school should just be for academics. I don’t think you should be allowed to play ball (or theatre, or be active in the GLBT club, or whatever) if you’re getting Ds and Fs, but I do think that all of these things are necessary to help young people grow, understand the complexities of our society, help decide what’s important to them (and not merely their parents), and provide them some structured enjoyment as part of their high school experience.
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That’s why the idea of “pay for play” really rubs me the wrong way. Easier to complain than offer solutions of course, but it does strike me as a middle class tax* — the poor are exempted from paying, the middle class pay their share and raise funds for others, and the rich are more likely to be at a private school.
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I’ve seen many a “student-athlete” program at high school and college levels promote such a link, which I’ve always found a bit spurious.
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If a student has the time and energy to play after-school sports, this indicates they can easily change their schedules. This means that transport is available, meaning their family is well supplied with automobiles. Also means they do not need to devote many hours to jobs. I’m just saying that the group of students able to engage in such activities is predisposed to have higher graduation and lower drug usage than the larger student body before athletics come into the question.
but what about city schools? Schools that serve a neighborhood where, more or less, transportation consists of the city bus, most kids are poor, many only have one parent, etc.? There’s also problems where the 16 year olds can’t get jobs even if they want them (unemployment plus tight schedules), and there’s even those who believe that basket/foot ball is their only real way out.
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I agree that a real study should control for all of those demographical things, and I wonder: what do these studies show?
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Besides — rich suburban kids do drugs too. To rich suburban athletes do drugs less frequently than rich suburban non-athletes?
The Lege has NEVER produced a budget in time for town meetings, some of which are in March! And yet, DLS wants that tax rate certified…
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The recognition of this went dormant in the 1990’s because of the taxes groth spurred by the tulip-bulb-like dot.com economy. every year, local aid went up so using the prior yer’s figures was actually responsible, as it was always a little less than the reality when the budget was done in Aug./Sept.
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This all fell apart in 2001, when Jane Swift had to cut local aid after receipts and the ecomomy fell off a cliff. Ever since then, selectment have had to be more careful as they realize that the projection that we would ALWAYS collect more money was false.
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One thing that would be helpful – ONLY ONCE did the Gov., House and Senate all use the same bottom line figure. The Gov. was always low, the House a little more, and the Senate pie-in-the-sky – reality was usually House plus 10%. BUT – all the calls were ‘Support the SENATE version!’, with no recognition that they could be so generous because they were using a bottom line $2-3 billion higher!
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So – an earlier and agreed upon budget figure would give towns a realistic projection. But, it would rob Senators and Reps of their press releases. You tell me – will it happen?
when the income tax rate was cut, period.
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Cut from 5.95% to 5.6%, then from 5.6 to 5.3%.
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The second cut was the year of the 20% across the board local aid cuts in FY04.
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To be sure, revenues were down cyclically, too, but the cuts explain all of the local aid cuts. There really was nowhere else the state could cut that much.
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You might approve of that income tax cut, even though it does force a choice between cuts in local services and higher property taxes. But pretending there wasn’t a linkage is ignoring half of the ledger sheet.
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And for school funding, we’ve got a fairly big problem, because the constitution, our standards, and our accepting the Federal government’s No Child Left Behind mandate pretty much require that we establish a baseline for funding at all schools across the state; and Prop 2.5 prevents the state from forcing localities to pay equal shares of the burden. With big chunks of school costs accelerating above the rate of inflation – health care costs, etc – there’s a losing race going on.
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The state has been squeaking by with regulations that grab whatever revenue from whichever locales they can, for example, to reallocate it to regional schools away from local schools, or to limit growth of aid (and force higher contributions) to some locales, where comparable locales that managed to have a lower Prop 2.5 baseline make out like bandits. There are about sixty towns that will receive less school aid than in FY2003 next year – even though the allocation formula says they should receive that much aid or more, if only the state could follow through on its obligations.
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I guess you could put me in the column of supporting a 0.25% income tax rate increase so the burden on towns across the state for schools could be better equalized.
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Maybe save by causing with the teachers to bear a larger % portion of the health costs? (how impossible do you think that would be?) Or perhaps a bit of that nasty inflationary etcera ?
If people can keep more of their own money, aren’t they more likely to subsidize their own town instead of the ones that the Stuffed Gods of Bacon Hill deem worthy?
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Example – My town pays Selectmen $1,000 per year. Why should I subsideize the City of Cambridge’s choice to spend $997,000 this past fiscal year of their city councillors and two part time staffers? It’s their choice to make – but why should my income tax, translated into local aid, subsidize it?
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BTW – keep in mind – there is nothing to prevent you from paying 5.95% if you think the Stuffed Gods make good decisions, and there’s nothing to stop you from giving a check to your own school principal for the difference to be spent on kids needs, either.
True story. We (as trustees of a private foundation) tried to give money directly to a school principal to fund the purchase of computers. The town wouldn’t let us. The money had to go to the town treasurer and funded to the school through the budgetary process.
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Ended up not doing it because we could receive no assurances that our gift would result in additional money to the computer program we sought to endow.
will make sure donor intent is followed……
It would probably be easier say, with a Charter. But contributions for a specific program to a Public school is darn near impossible.
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Administrators seem to feel that the donors is infringing on their policy making (maybe they’re right). They want the money, but they also want the right to direct the money.
and they too honor donor intent.
Ours will allow donations guided by the donor, as long as it’s going to a reasonable goal. I think this is the norm among small and medium-size school districts in Western MA.
i’ve never had donations of actual supplies (3-ring binders, useful computer books, file folders, etc) turned away. but then again they weren’t expensive items that may have required changes in infrastructure to accomodate. sorry to hear your org was turned away. and i’m sure the school was reaally sorry.
Cambridge generates much more state tax revenue than your town. You aren’t subsidizing Cambridge in any meaningful sense.
What is the per-capita cost of the city council in Cambridge vs. your town? Cambridge has 101,355 people, so their cost is about $9.80 per resident. How about a comparison to their total tax revenues, since their city council presumably deals heavily with businesses, etc.?
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How much does your BOS cost per capita? And don’t think I didn’t notice that you have a per-selectman cost for your town, and an aggregate total for Cambridge, perhaps as a way to bias the readers since $997,000 sounds like a hell of a lot more than $1,000.
When chapter 70 aid allocations were cut by 20% across the board, with just a few exceptions. Lottery aid also was cut off, I believe in the same year.
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Our little town, which doesn’t pay its selectmen, has seen nothing but cuts in services and override votes since then.
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I don’t trust the legislature all that much more than you, but at least I understand that education and local aid, as two of the biggest categories, are inevitable losers when state tax revenues are cut.
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And I do also recognize that the chapter 70 funding formula is waiting for about $300 Million of additional revenue, all of which is allocated towards increasing taxpayer equity, and those equity differences tend to be bigger in the hinterlands than in larger cities.
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BTW, for your information; Cambridge reported DOR income of something over $3.5 Billion in FY 2004, meaning at 5.3% income tax rate, they added about 183 Millon of income tax revenue. They’ll collect 8 million of chapter 70 school support this year. Their target is a bit over $10 million, waiting for sufficient revenue to show up at the state level to complete the target local share reform.
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For most towns, the ratio of income tax revenue to chapter 70 aid is more like 6 to 1 than Cambridge’s 23 to 1. That is to say, it’s quite likely Cambridge is subsidizing your town, rather than vice-versa.
…the stranglehold that the state has on the types of revenue sources that are available to cities and towns.
Here’s a simple fix that has a relatively small cost to the state. Cap target local share at 110% of a town’s target local share.
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This would lop off more than half of the “excess effort” in the chapter 70 budget, while only kicking in about one-eighth of the total additional aid that moving to target local share will eventually entail. But it would untie the hands of about 100 towns, particularly those in regional schools, where the formula for the past few years has gotten incredibly skewed. Some of that would have to be covered as chapter 70 aid to regional schools, to bring the schools back to foundation. But why should this aid have any lower priority than maintaining huge exess subsidies elsewhere in chapter 70? And why should some towns have to pay 50% more than others, relative to the allocation the formula says is correct, for sending kids to the same schools?
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A bit of the aid would go to localities that would have additional aid owed to them as a result of reducing their mandated spending to 110% of target. But for those locales, they’re due a whole additional 10% of foundation beyond what this fix would trigger “when the state can afford it”. Why should Pittsfield continue to receive $3 Million a year less aid than the formula says it is due? Same for Greenfield, Chicopee, etc.
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If the state can’t afford to provide a fair distribution of assistance yet, it at least ought to untie the hands of localities on the burdens they have to bear.
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In nearly every regional school district across the state, there is at least one town asked to subsidize the state and other member towns to the tune of 15% or more, beyond that town’s calculated ability to pay. It ought to be fixed, this year.
Heartland,
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Many districts are locked into deals where salaries and benefits rise at 5% to 6% per year. (Though maybe not yours, I realize. I have an overly Boston-centric view of the state).
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Inflation is about 3%. The state’s income will increase about 3% over the next few years.
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I just don’t get how that will ever work in the long term.
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I.e., even if you get enough $ for this year, next year wouldn’t you be behind the 8 ball again?
The metaphorical ship sinking in calm seas: in a time where the past decade we’ve (Massachusetts) had continued and significant increases to local aid, continued and significant local and state spending, and the economy has enjoyed nearly full employment.
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Assuming you have a library, it must by law be funded at the same rate your town’s levy increased. Let’s say 2.5%.
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Assuming you have a school, it’s a very safe bet that its budget increased at a rate greater than 2.5% per anum.
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Check out your union (non-teacher) pay/benefit increases. I’d be amazed if the increase from 05 to 06 to 07 was less than 2.5% per year. I’m also amazed when selectmen magnanimously give annual raises that exceed 2.5% and praise the hardworking individuals who’ve earned it. I don’t deny they’re hardworking. I just wonder if the selectman has a clue where the money’s coming from.
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So what do you want? More money? A life preserver? Someday there will be a recession. What then? Any interest out there in cost saving measures?
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I’ll take on Goldstein’s, Gary’s and MCRD questions and answers. Let me approach this assbackwards as it seems most fitting.
Beginning with MCRD, my skin is a little prickled with the suggestion
since I volunteer about 20-30 hours a week engaged in municipal operations (sacrificing about 45K/year in income-working my ass off the rest of the hours for pay) along with a crew of other elected officials and committee volunteers. Some who are retired or making similar choices. What I want are some simple things like a sustainable planet for my children and grandchildren, my parents to die in the home they built and have paid taxes on for 60 years. Our children to have a least half as good of a public education as I had (think disco) in the Commonwealth. Teachers to have respect and appreciation for the monumental challenges they face every single day. Health care workers, human service providers, laborers and attorneys for the indigent to make a decent wage, not just the CEO’s. That’s what I want before I even think about it.
Gary your remarks are tempered and realistic especially your opening paragraph, except the issues of mandates and spiraling health, pension and utilities weren’t mentioned. Since you asked,
the answer is yes we want more money. I live in the third economy of the state and there has never NOT been a recession in the past twenty years. With Climate Change [http://www.epa.gov/c…]continuing, a life preserver may not be a bad idea and WE will own beachfront property. Right now infrastructure decay is past any imaginable turnaround. ~15million/year in TIP for the entire Pioneer Valley Region with ~500million projects waiting. Um, that’s when I have to figure that my tax money pooled with your tax money is going to go further in supporting society than a $60 or $600 tax break pour moi. Selectmen are painfully aware keeping municipal raises @ 2%. The School Committee not so much ~3.5% for teachers. Still way below metro Boston, RT 495 or even RT291, RT84 pay scales (how many know the last one without looking at a map-quest?)
Dear GGW, you are spot-on with the Q about next year it is a major consideration for managing this year’s shortfall. Ch. 70 formula did not turn out to be the gem it was promised (nor was it fully funded in House 1), low wealth communities are porked.
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I think the fix is easy, and impossible.
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First, freeze the pension plans for new hires. Inititate for them instead, a 401(k) with match. That’ll slowly reduce the need for PRIM/PRIT and completely elimiate an agency within 30 or 40 years and in the meantime reduce overheads of 107 statewide pension plans.
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Second, if an employee (teachers, Union…) is getting a health insurance subsidy then reduce the subsidy and give him a raise equal to the subsidy taken away.
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Say an employee is getting 85% subsidy and the total is $1000 per month. Cut the subsidy to 70% or $700 and put $150 subsidy that was taken away back into the employee’s wage as a one-time increase. That’ll not save current money but will off-load the state’s future inflationary somewhat.
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Over years, the savings will be huge. But, it’s politically impossible I think, particularly with this Governor and strong ties to Union and MTA.
at least for health care. I agree it’s a reasonable way to help control one of the biggest above-inflation rate costs, and it would align schools and other municipal employees with benefit trends in the rest of the world.
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And I guess this doesn’t happen in many places without a revenue squeeze that coincides with a negotiation.
The only way a meaningful decrease to the subsidy will happen is through a crisis–recession, drop in tax revenues…
…Second, if an employee (teachers, Union…) is getting a health insurance subsidy then reduce the subsidy and give him a raise equal to the subsidy taken away.
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I’ll point out the painfully obvious. The “subsidy” is actually income that is not subject to income taxation. Why is that? Because the “subsidy” income doesn’t show up on your W-2.
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That became obvious to me about 15 years ago, when my then-current employer offered to shift from an x% co-pay (employee pays x% of the health insurance premium) to a 0% co-pay, with a corresponding decrease in salary. (I figured that was true beforehand, but this made it obvious). Of course, I leaped at the option, since it would reduce my income that was subject to income taxation, with no net difference in pay from the company.
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Conversely if, as you are proposing, the employer reduces the subsidy income, while increasing the W-2 income by the same amount, what you will have is a net increase in income subject to income taxation, meaning an increase in income tax paid by the employee.
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If all medical expenditures made by an employee were tax deductable to the employee, it would be a wash. The sad fact, however, is that they aren’t. There are a number of ways in which that distorts the medical insurance market, but that’s the long and short of it from the standpoint of employer provided medical insurance and income taxation.
If that money were put into a Health Savings Account (assuming public employees can do this and they are not already maxed out) it would be a wash. It would also achieve a more proportional sharing of the increased health insurance costs that I believe Gary is suggesting.
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The adjustment would have to be tax neutral, either through a HSA or else by making insurance premiums tax deductible for all.
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The central point of my idea is to take some of the future inflationary risk away from the State and give it to the employee. Not a very popular idea, which is why I think’s it’s politically impossible, absent a financial crisis.
Reduce current subsidy by $100, give them a current raise, say, of $139, so that after-tax they’re left with $100 in extra wage. I’m not trying to reduce State worker wages, just trying to push future inflation risk away from the State.
…the inflationary risk, to the extent that it can be eliminated, can be eliminated to the state by having the employee pick up the full cost of his medical insurance. Buy it on the open market on an individual basis–not through the employer.
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It’s not going to happen. Because medical insurers in the USofA don’t want to spread the risk. That was clear from a series of stories in the LATimes a couple of months ago. Medical insurers in the USofA want to collect premiums from healthy people, and don’t want to pay when they get sick. Hell, if I were they, I’d do the same, if I wanted to maximize my profit.
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I presume that consumers could, just could, band together to negotiate with the insurance companies. Before employer-provided health insurance came into vogue (primarily as a result of wage and price controls during WWII–non-wage income was exempted from the controls), that’s what happened. The main draw for communal organizations such as the Rotary Club, etc., was that they would negotiate “insurance”-like rates for medical insurance with medical providers. Now, things like that are about the only reason for small legal practitioners to join the Mass Bar Association.
Sure. That’s the best answer, to push 100% to the employee. I only offer a reduction of the subsidy as a compromise, to rein in inflationary state entitlements.
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But I don’t think the Insurance companies would resist it. I think the Public Sector Unions would resist it. Medical insurers would love it. It’s easier to keep prices high when negotiating with lots of individuals rather than large group plans.
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Consumers could band together as you suggest, but such co-ops are difficult to organize and assemble and you end up with lots of little groups, like your Rotary, Chamber of commerce, various professional groups.
Accessed with a specialized Visa card, which only recognized drugstore and medical expenses.
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So there is ALREADY the HSA, AND the 15% contribution rate, AND the salary lowered, AND the sick leave banks, AND….
As far as I can tell, MSAs have no insurance component–they have no risk sharing component. If you could buy medical insurance via an MSA, why go to an MSA at all? Just buy the insurance. If the feds would let you deduct the premium, regardless of whether it is through an MSA, why not go through that route*.
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I’m sorry, but these little supposedly tax-advantaged personal accounts, such as MSAs and so-called Social Security privatization, never made any sense to me.
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One, regarding MSAs, why not just have all medical expenses tax deductable to the persons paying the expenses, and get over whether or not they are supposedly paid for by the employer?
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Two, regarding SS privatization accounts, why go through that folderol when we already have IRAs (regular and Roth), 401Ks, Keough plans, retirement trusts, and so forth? Increase the tax-deductable contribution limits on those plans and get over it. There is no need for yet another type of account for SS. What I figure is really going on is that, since the SS tax is half paid for by the employer, what will really happen is, if the employee chooses to pay x% of his SS tax into a private account, the employer’s tax obligation will be reduced accordingly. A tax reduction on employers.
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I don’t know whether or not that was part of the plan, because there never was a serious plan presented. But that’s my supposition.
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But my main point remains. MSAs are just another form of special purpose account, meaning, pretty much, nothing.
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*Oh, I know why. People would have to pay somebody to set up and maintain the MSA. It is those people who are pushing MSAs. Same with SS privatization accounts. Follow the money, people. Follow the money.
On point one I don’t necessarily disagree although I’m not properly informed with all the down and up stream consequences of it.
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You lost me on point two. SS privitization accounts to my understanding are completely different from FSA’s (perhaps not from HSA’s – I’ve never used an HSA). FSA are year to year money put aside tax free (administered by the insurance company and your employeer?). There is little or no rollover of money in FSA’s – it is use it or lose it each year. I have used FSA’s to fund my health insurance deductables and additional expenses (prescriptions, co-pays etc) with tax free money. We have saved thousands of tax dollars using FSA’s.
Government is inefficient. There is no incentive to skrimp and save.Shut out the lights, close windows & doors in winter turn down thermostats, and that’s not even a scratch. I’ve worked for the feds, state government and the dreaded private sector. Government waste is numbing.
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The state legislature uses the state treasury to reward their friends, families and synacures. The state payroll in some sectors could be cut by as much as 30% and the remainder of the folks if they worked diligently and efficiently could get the same job done. legislators dole out millions of dollars to non profits who have redundant, overlapping or no purpose at all. Legislators spend millions on pork and unnecessary and unwanted projects (unless you’re the one who is geting his pockets lined) The Big Dig is a grotesque example of criminal abuse by Beacon Hill (the idea was Fred Salvucci’s & Mike Dukais’s the thievery was aided and abetted by Republican governors)
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Few of the citizenry exercise their civic responsibilty to vote in primaries and in general elections. Their tired excuse is “it’s the same old hacks, same old story, why bother?” Another plaintiff cry of the taxpayers is “I’m too busy, I have to work too much.” Many will agree the average American carries too much debt for crap they will never need.
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I am not as glib, erudite or cogent as many of the posters here, but much of what our citizenry are complaining about can be layed at their own feet. Yes, we are in trouble, and yes we may have tough times ahead, but don’t expect government to fix it. Get off your ass and show some leadership and sacrifice and we will all pitch in to make changes. You don’t get what you deserve, you get what you get.
He was able to streamline 34 seperate state social service agencies into 17. He did a great job.
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Deval, on the other hand, created a new state department Feb. 28.
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Not a good trend.
Since when is a single point a “trend”?
…if it happens AGAIN, can I call it a trend? Jimmy Carter DID create Education AND Energy…
…the creation of the departments of energy and education represented little more than re-organizations of the executive branch. They were not particularly substantial changes to pre-existing government agencies, other than the re-organizations.
…but probably not as much as Bush’s HeimatSicherheitAmt did.
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But, in regards DoEnergy and DoEduations there was no substantial change in responsibilities of the various departments. The DoEnergy got the power to make nukular bombs, which was previously DoD, the AEC and the NRC. The DoEducation was formerly part of HEW (Health, Education & Welfare), so I’m not exactly sure why there would be many additional employees there.
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Government contractors would have gotten a bit of benefit because a couple of more buildings would have had to be built to house the new agencies. But that’s about it.
And he got rid of veterans Affairs
The Veterans Affairs position was not eliminated as I posted http://www.bluemassg… in response to a fellow Republican’s snark remark. Could you guys quit that crap, it makes Veterans and their families stress…unless that is your goal?
…Corporations aren’t any more or less efficient than government, particularly large corporations. Or corporations that are close to politicians.
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The hard part is when corporations become close to politicians. That’s what made the robber barons of the late 19th century. And that’s what’s making the robber barons of the defense/industrial/congressional complex and the prison/industrial/legislative congress today.
The stockholders eat the incompetence, failure to compete, avarice and greed
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What happens when the state fails, who wins that prize?
…Actually, corporations that collude with government rarely fail. That was one of my points.
I just checked my binoculars and thought I spotted another one off the coasts of integrity,
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Ryan. Maybe you should have chosen a paddle-wheeler, though, just to rub in a bit more salt.
is if I did a reference to Moby Dick with Deval as the Dick, since the most recent hash of stories have been about New Bedford – and since I’m going to be performing in Moby Dick the Musical in April.
The MSM has already done it’s utmost to characterize Deval as in the role you cite. Old news.
What are you, gay?
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I had did an HTML tag with the following, but it got erased…
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[/Good Lord please let the folks see what this is, a good spirited no harm intended joke in an attempt to be good humored and funny]
“What are you, John Edwards?”
…use the angle brackets with a pseudo-HTML tag. If you do, it will be ignored in an HTML page
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/tic
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/sarcasm
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/good lord
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No angle brackets.
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But why the slash with “good lord” in your comment? Slash means “end”
So many people are concerned about possible prop 2 1/2 overrides, supposed low funding in H1, municipal taxes being levied on meals, etc., I just have to ask a somewhat simple question. Why are we always being asked for more? Where is the discussion about reducing the services that these towns and cities and state offer at the taxpayer expense? If I had more money in my pocket I could easily spend more capital on my kids’ hockey equipment, a tutor, piano lessons, etc. As long as politicians and activist can barrage us with their high and mighty discourses about “doing good” and never be challenged on the means they use, the size and power of government will never be controlled.
Why is the ONLY recourse raising taxes/revenue enhancement? Just as a hypothetical, let’s assume that twenty percent of our tax dollars are simply wasted (I’m being kind). Why not go after stopping that hemmoraging?
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Is it impossible or perhaps just inconvenient?
As was brought up, the larger the entity (government, corporation, etc.), the more waste there will be. It doesn’t matter if it is a corporation or a government. Do you think that Halliburton runs as a well-oiled machine, no waste going on there, no one making personal phone calls or personal copies on the copy machine?
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Size has its advantages, but also its drawbacks. A large government can do much more than a lot of smaller organizations, and it can do it more cheaply, but the price is the inherent inefficiency. You just can’t expect a large organization to be as efficient as a small one. You’re just not going to be able to squeeze out that 20% or whatever the percentage no matter how you try.
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That’s not to say you won’t find wildly inefficient organizations that CAN have inefficiency squeezed out, but there’s a point where the large organization can’t get any more efficient, especially when it is paying for middle-of-the-road employees.
…Why are we always being asked (by local government) for more?
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Two boondoggles. One, the Big Dig. Two, the US govt’s war on Iraq. Both diverted billions of dollars of resources from, respectively, state and federal government that could have been supplied to local governments. So local governments are directly asking for more money from their taxpayers to do what they’re supposed to be doing.
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I live in Wellesley, near the intersection of Route 9 and Route 16. The intersection is an overpass (Rt. 16 passing over Rt. 9), which has been under renovation for at least 3 years. Because of the diversion of resources to the Big Dig–much less Iraq–there have been insufficient resources to complete the job, whoever is supposed to be doing it.
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Just to let you know, when we moved into the house here in 1983, the property taxes were on the order of US$2500 per year, a manageable amount. Now, they are approaching US$7000 per year. The property taxes on our house just outside of Munich Germany is on the order of US$300 per year. That is not a typo. We are sincerely considering emigrating–leaving the house here and living in Germany full time, in part because of the property tax issue.
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Whoever buys the house here will likely have kids, which will add to the burden on the public schools–we don’t and never had burdened the schools with children. I’ll relate a story about an article in the Glob a few years ago regarding Acton. The Acton town official who was interviewed decried the fact that pretty much their sole source of revenue was the property tax. Why? Because of the ever-increasing tax burden. Why was that a problem? Because it was driving elderly people out of town. And who would they be replaced by? Younger people–people with children. And why was that a problem? Because they would put their children in public schools.
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And why was that last a problem? Because the tax revenue from each house was insufficient to cover the cost of the increased burden on the public schools. The town official opined that was a descending spiral.
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The sad fact that you have is that elderly people have one or more of the following characteristics: fairly fixed incomes (which means that it is difficult for them to support the ever-increasing property tax payments), no children currently in public schools (reduced burden on town resources), and mobility (if they’re retired, they can live anywhere). Increase the property taxes too high, and they leave. Implement a local option income tax instead of ever-increasing the property tax, and they might not leave.
for $6500 a year? Even in part? That’d be a really freaking small part. I mean, come on Raj — you’re personally a very Germanic cultural person, based on references all over BMG. Being away from (or closer to) family will cost you as much as thousands a year in flights alone. There’s employment salary issues, cost of living issues, income/use taxation issues, etc. $6500/yr differential is a drop in the bucket when one is considering becoming an ex-pat.*
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Semi-retired ones can, too, and, to conjure up the ghost of Paladin, have computer–will travel. What I do, I can do from anywhere that has a computer and a telephone line.
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If we were to sell the house here and the furniture, we’d easily get US$600K. That, plus our other sources of revenue, would make it very easy to move to our house (inherited, no mortgage) and live a very nice life.
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*That was the point of my Acton reference.
if you were to move to Germany, you’d bank at least $600k.
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Now, the $6.5k a year in property taxes are peanuts, and therefore shouldn’t be weighing very heavily in your decision. So why make it seem like the property taxes are a [reasonably sized] “part” of your decision making process? It just seems disingenuous.
annual property tax hikes do matter to many retired folks. i settled into Arlington back in 2000, and met many a neighbor who opined that they were seriously thinking of leaving for just this reason. the cost of living in their old home town has surpassed their budgets (which were generally blue collar). or getting uncomfortably close, anyway. and since many of their kids can’t afford to live in the neighbordood either due to explosive housing costs, why stay? sell out for a nice chunk of change, and retire elsewhere in worry-free comfort. so whether it affects Raj or not, his point is valid.
…That high property taxes do effect peoples’ decisions of whether to remain in a town in Massachusetts. That was the point of the Glob article I mentioned somewhere here regarding Acton.
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If I did not make myself clear, I apologize.
My bio family chooses to live in Ohio and Florida. Two states that we will never visit because of their gay-bashing ways. They have been invited to come visit us in Germany and they have never taken us up on the invitation.
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I’m not particularly estranged from my bio family–we just talked to them last night over the telephone–but I’m not particularly close to them, either. My spouse’s family–what remains of it (his mother) is in the upstairs apartment in Munich DE.
1929 by comparison is going to look like good times.