Casey sez Patrick’s got a posse in the cities and towns:
Gov. Deval Patrick today launched an aggressive campaign to win passage of new local taxes on meals and telecommunications companies that he says would relieve pressure on sky-high residential property taxes.
The governor held a press conference with about two dozen Bay State mayors to argue that passage of his proposals is critical to short-circuiting average annual property tax hikes of 50 percent statewide.
“Increasing pressures on residential property taxes are squeezing seniors and many others?out of their homes,” Patrick said. “It has become a crisis, and we have filed a bill to help address it.”
Some of us have wondered if, when, and with whom Patrick was going to pick fights. This is a good one for him: He’s right on the facts, and he’s got powerful people on the ground supporting him. And really, legislators want to escape the blame from bar and restaurant owners who won’t be happy about the potential meals taxes. This should be taken as an invitation by Patrick to let him take the heat. And that’s OK — he’ll get the credit for helping stabilize local finances, too.
Meanwhile, the first Cape 2 1/2 override vote will be tonight in Yarmouth.
(including, of course, Cape towns), mayors have far more restaurants than selectmen.
Framingham, Natick, Brookline, some of the Western Mass communities, Seekonk officials have always been big supporters, and so on. Admittedly, not everyone is impacted.
I have no quarrel with local meals taxes. But doesnt anyone else think that we should first collect the low-hanging fruit in cutting expenditures? I know, I know: there’s no “fraud and waste” budget item. But why shouldnt cities and towns be forced to join the GIC (state healthcare plans) as a condition of getting more local aid? I think I remember reading that GIC’s cost increases have been only about 2/3rds as high as local plans, which would amount to a lot of savings in the future operating budgets of cities and towns. Which, in turn, means less pressure on property taxes. Also, we’re often talking about the benefits of single-payer-type healthcare: large groups for risk pooling; economies of scale for administration; market power for costs negotiation. These seem all applicable here. I wont pretend to be an authority on this issue, so I’d really appreciate it if someone could tell me why this is a bad idea. And why we should be thinking about raising any taxes before doing this.
… and I’m sympathetic to the idea that Gov. Patrick might have pushed harder on that.
Sal to the rescue?
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That’ll work.
Paddynoons,
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interesting points. here are a few thoughts. GIC suggestion while good is not low hanging fruit. I was speaking with a legislator last week who said there was strong pushback from firefighter union- they were worried about future health benefits. I totally agree that the GIC should be used to not only reduce costs to towns via employee benefits but to really open the door to savings. The other big barrier is that there is huge political capital hanging on health care reform. My personal belief is that opening the door to anyone who wanted to buy into GIC would have prevented creation of another complicated state system and increased the risk pool. But at this point given where we are- even if this happened, it ain’t low hanging fruit.
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As for local meal taxes- it does nothing for my small W. Mass town of 1,800 – we don’t even have a traffic light. But towns and cities are totally in crisis after years of republican generated deficits from the tax cuts. They need every tool to survive.
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Finally, the only real solution is to RESTORE broad-based taxes. Investing in society requires us all and while we may feel hard hit hard due to necessary (last resort) property taxes in our towns, as a Commonwealth we have not stepped up to the table re: investing in public goods – education, roads, public safety, health care, etc. Mass is well documented to be low on the tax rate among states. According to Mass Budget and Policy Center- had we never dropped from 5.95%, we’d have the extra $1 billion right now. So I would suggest that while we should consider these other measures right now as tools for the crisis, the only long-standing solution is broad-based participation, ie taxation of individuals and corporations. Perhaps we’ve graduated income tax like NY state- fancy that- giving according to ones means.
Michael,
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Thanks for the info. “Low-hanging fruit” is probably not the right term, as the local public employee unions are adamently opposed to this. I guess I meant it more in the sense that this appears to be an easy way to save money (vs., say, cutting programs and positions) that’s worth exploring before looking to raising revenue.
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I do and did understand this might be politically painful. Because of the way the plans developed, some people certainly have a vested interest in the status quo (in the same way that local pension managers want to keep their jobs even if they get 2% returns on their investments). But I still see it as a no-brainer from a policy perspective. It’s not like the GIC limits people to fly-by-night, high-deductible plans. It’s really good coverage; certainly better than that of 95% of people in the private sector. The local unions may want to bargain over the deductible for new eyeglasses (the example given me by someone in the at the state house), but it just doesnt make sense economically. Maybe there’s some other policy reason why this is a bad idea. And, if so, I’d certainly like to hear about it.
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As noted above, maybe Sal will step up and try to push this through.
Just for the record, expanding particiation in the GIC is a good thing. I’m thrilled to see the new post about DiMasi supporting this. The more I see, the more a path to single payor is the only way to make this work
“It’s really good coverage; certainly better than that of 95% of people in the private sector.”
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This makes me worry that it will be drastically cut in the future. “Why should we pay for these pigs at the trough to have better coverage than 95% of the private sector when our budget is in such crisis?”
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Haven’t we heard that refrain before? As if the profit over all else private sector should set the bar for what people SHOULD get.
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If it’s good, don’t tell anyone. They’ll say we can save money and still keep it “acceptable.”
Moving muni emplouees to the GIC is not cutting benefits “drastically.” And the collective bargaining power of all state and municipal employees will be able to prevent that from happening in the future (and suggesting that drastic reductions are reasonably plausible ignores the history and political economy of Massachusetts). Most of the savings of this move will come from what I said before: economies of scale, bargaining power with insurance companies, etc. From a benefits perspective, the plans are similar.
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But take a step back and think about this problem from a progressive public policy perspective. Because of the ridiculous growth of healthcare expenses (double-digit inflation. EVERY year.), other spending is being crowded out. For example, in the field of education, that means fewer teachers being hired, less investment in physical infrastructure, programs getting reduced or cut, user fees imposed, etc. I think that’s a bad thing; I bet most other readers of this site do too. So if you want to fix this program, you have to find some ways to curtail the cost increases. Looking only at the revenue side is not politically palatable and will only perpetuate this problem (i.e., insurance companies and providers will always seek more $, no matter how much you throw into the system). The GIC idea (which DiMasi has just come out in favor of) seems like a pretty fair, reasonable, and (relatively) painless way to do this.
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Well, relatively painless to the employees… the unions wont like losing a bargaining issue… but that doesnt mean it’s not a good idea.
I was being half-serious/paranoid. I worry that any benefit plan–especially for public employees–that a progressive describes as even just “good” will be the target of budget cutting someday because a nonprogressive sees it as “fat.”
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I think the move to the GIC sounds like a perfectly reasonable way to preserve benefits while saving money. The caveat is that I don’t know much about it and haven’t heard the contrary arguments.
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Your comment about the bargaining power of unions and the history and economy of Massachusetts as protection against cuts does worry me though. Unions, wages and benefits in Massachusetts have generally not met a drastically different fate than those in other parts of the country. We just started from a better place. But the nationalization* of businesses and their templates does not stop at the Massachusetts border. And the trends are being imported, not exported.
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BTW: I’m all for fighting the fight to reverse the trends. I do what I can personally and professionaly.
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*I don’t mean owned by the government, I mean the trend for businesses to become national, with universal policies and practices. The visible manifestation is being able to fly anywhere in the country and find something that looks exactly like the Wrentham Outlets, the retail/auto corridors of Rte 1 (both north and south of Boston). The economic manifestation is nobody gets a pension, everyone works no more than 30 hours or no less than 60, etc.