I get it. We have to have a balanced budget. And I get it: raising the income tax is just something that few elected to office have the stomach to talk about, even if it means saving countless teachers and cops.
But that doesn’t mean there aren’t fair and reasonable steps the state could take to help offset the damage of these upcoming cuts – by giving cities and towns options to help deal with them locally.
I come from Swampscott. We’re one of the 45 or so communities this state has recognized gets treated unfairly in state aid for education. We’re 3 years into a 5 year phase in to bring us to the 17.5% level that, because of this economy, probably won’t happen for many more years now. It’s added up to millions upon millions lost since the last round of midyear cuts to local aid – and my town’s really sinking right now, right into our bay.
But, if we could create a 2% meals and hotel tax, things would be a lot easier. For the price of $1 on a $50 bill at our local Bertucci’s or one of the many other restaurants, our town would raise over $500,000 a year. 45 positions in the past 3 years have been cut from our schools alone – that’s a huge proportion of our total staff, servicing a town of just 14,500. There’s no where left to cut: trust me, I’ve seen the projections. We’ve closed an elementary school; we may be forced to close our 2nd in 3 years. We even got the town employees to agree to a GIC compromise in order to avoid layoffs this year (though, there would still be cuts to staff through attrition). A month ago, our hopes were high after we got the GIC, but they’re smashed again. State cuts to our funding will put us right back where we were before all that hard work to get the teachers to accept the GIC.
We can only take these major cuts so many years; you’ve got to throw us a bone. It doesn’t have to be this way. $500,000 from a local meals tax option, should Town Meeting approve it and the state allow it, would likely offset most of the cuts to state aid coming up. We could probably still avoid major layoffs. Isn’t it a political no-brainer?
It’s not as if the state is raising taxes – it’s just giving municipalities the option to do so. Many communities will choose not to exercise that option. It’s a new tool in the toolkit for towns to deal with structural deficits, especially when every community relies on property taxes with homes plummeting in value and who knows how many sitting vacant across the state?
With your leadership, we’ve reached many sensible compromises on these sorts of positions before. Closing unfair corporate tax loopholes was one of the best things this state did last year, especially since it was coupled with tax relief that will ultimately benefit our state’s struggling small businesses. That was a proud moment for this state – and it can be repeated with the meals and hotel option.
No one ever wants to raise taxes, but we can’t just keep cutting and cutting to deal with our state’s structural deficits. At least give cities and towns a choice in how they deal with their budget problems. That’s all the meals and hotel tax option would be – a choice. For some cities and towns, it may be their only choice, if they’re lucky enough to have it.
Revenues through December 2008.
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p>Revenues 2008 compared to Y-T-D 2007: down .7% or $68 million. By comparison, someone earning, say, $30K in 2007 with a .7% decrease would be earning $29,790.
Let’s include the agencies as well as the general funds and include receipts from all sources.
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p>While f/y 2008 receipts totalled 25.555 billion, f/y 2009 looks to be running around $27.913 billion.
What was the inflation rate, what do those dollars mean in comparison to today’s budget, or last years budget for that matter.
is that we have some Chicken Littles (We have to fore all the teachers, put 300 kids in a class, and have no police and fire protection!!!!!) who are using the economy to–surprise! — angle for a tax hike.
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p>Gazebos need bailing out, too.
and we are hearing about it here on this blog and it’s impact. So that’s the question, make the cuts and live with it until the recession is over. Then figure out the impact, did we need to spend that money to begin with? If not, then don’t fund it again.
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p>But the argument that we are bring in more dollars than last year is not being honest in this discussion.
Maybe the government is reducing its budgeted amounts, but fact is that the State is bringing in more total receipts $$ this year than last, and that point is relevant.
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p>It’s also relevant that tax receipts are decreased Y-T-D by only .7%.
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p>There ought be some honesty and reflection about these numbers before declaring the need for a tax increase.
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p>Health insurance and pension. Sure, the cost has gone up for insurance and the pension fund assets have dramatically decreasesd. Should the government employees be insulated from these increases.
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p>Similarly with automatic pay increases. The automation was contracted during good times. If the good times aren’t continuing should government employees be insulated.
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p>Fair question I think. But the starting point is recognizing that i) tax receipts have decreased only slight so far and ii) actual total receipts to the state year over year have increased.
if you level fund everything, do those receipts pay for what you had last year. If not, then saying we have more money is not being honest in this discussion.
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p>It’s insinuating that we are spending more needlessly. But we are not, we actually need to make cuts and can’t even preserve what we had in the previous year. That’s an honest starting point. Then, where do we go from here.
First of all, from the links I provided, you can see that state tax revenues are down slightly, but overall receipts from all sources are increased. So when I claim the state has more money compared to 2007 it’s precisely correct.
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p>Draw you own conclusion if that insinuates needless spending, but let’s, for purposes of this thread, pick on Swampscott, but only because it’s a town in which others in this thread appear interested.
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p>’09 to 10, Swampscott estimates that revenue will increase by nearly 3%. Increasing the school budget by 1 to 2% leaves a potential shortfall because i) higher health insurance ii) increased retiree costs. Automatic pay increases probably figure into the calculation also.
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p>So in this thread, the cry goes forth for more taxes.
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p>Yet, as I pointed out elsewhere, the Town’s unions didn’t join the GIC which would have saved several hundred thousand dollars (NOTE: elsewhere in this thread a poster has claimed the unions will join in 7/09; news articles say otherwise).
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p>Plus the Town increased employee pension benefits based by including previous non-included auto allowance.
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p>So if the town has increased it’s own expenses because it first, failed to opt for cheaper insurance and second choose to claim more pension, I’m not terribly sympathetic to the argument that now seeks to “share the pain” when it gives the impression that it’s not opting for very much pain.
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p>Stem the automatic pay increases, roll back the pension lard and join the GIC, then a tax increase might make sense.
is the increased costs. Health care. Contracted pay raises. Etc.
Even if I round off the .7% to 1.0%. I get the total budget being 6.8 trillion dollars. Somebody correct me please?
.7% decrease isn’t a budget decrease, it’s a decrease in y-t-d 2008 tax collections compared to 2007. Click the 2nd link.
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p>Total y-t-d collections in ’08 are $9.063 billion, 99.3% of 2007 collections through december.
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p>y-t-d collection in ’07 were $9.126 billion.
Look at it differently: $68 million equals 1,360 people earning $50k per year. What 1,360 people do you think the state should let go?
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p>Conversely, how about we split the difference and raise the income tax on that $30k person by 0.35%? It would only amount to $105 per year. They should be able to handle that, right? It would solve a lot of problems.
Or, the 90,000 state employees could forgo raises or take a furlough in an amount equal to $62 per month. They should be able to handle that and it would solve a lot of problems.
Funny how you had to switch to monthly figures in order to mask the the true nature of your suggested cuts.
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p>$62 per month equals $744 per year. You’re proposing to cut the annual salaries of 90,000 people by $744. Maybe you’d like to simultaneously increase their health care contributions as well?
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p>How about we agree to share the pain?
Hi, I’m a taxpayer. My 401(k) dropped by 25%, but by all means let’s share the pain so that you state employees are insulated from the 25% market drop that happened to your pension funds.
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p>BTW, we non-state employees pay more in health care contributions because, you know, health insurance costs went up. So by all means let’s share the pain so that the health care contributions of state employees don’t rise.
You want to lash out, not make things better. The problem wasn’t the pensions – the problem was the 401(k). This economic collapse showed the dangers of the 401(k) system. We need to replace that with a new-found prevalence of pensions, not the other way around. same thing with health care – instead of trying to find a solution that works for everyone, you suggest screwing over the working class/middle class population that actually has it semi okay in that department.
The MA pension fund lost $16.1 billion this year, down over 30%. Does that mean we should replace all pensions?
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p>The problem is not 401k’s.
No system is perfect, but a system that guarantees benefits is preferable to benefits by crap shoot any day of the week. There’s plenty of reform that should go into our pension system – the various entities involved (such as local munis) should be contributing more now, not this absurd phase-in. I think the 3 year top salary system could be flawed; I recognize why it exists, but perhaps a 5 or 6 year system would be more fair, etc. etc. etc. But, on the whole, it’s a better system, by far, than 401(k)s.
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p>Why? 401(k)s are a dangerous excuse to get even more Americans praying to the altar of Wall Street, when they could be getting a safe and secure retirement. The average person neither has the time nor the expertise to run their own portfolio – and that’s why plenty of people this year have lost 40-50% of their 401(k)s, including many people who are nearing retirement. People may say ‘well, they should have put their money into safer places’ and maybe those people would be right. But that ignores the fact that we can’t and shouldn’t expect people to know enough about the markets to make those kinds of decisions; the people who generally do that for a living get years of education on it before they ever start, then do it for a living for most of their lives. And even most of those people lost tons of money on their stocks this year! We can do much, much better than that as a society.
Most 401k plans have a limited choice of funds to pick from. Most of which do not fall into the high risk category – you can’t buy stocks in your 401k (or at least I have never heard of one where you could).
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p>Don’t like your job or feel you are not being paid fairly? No problem with a 401k plan, they are portable. I believe most pension plans are not.
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p>Pensions plans fail. You would have to try really hard to drive your 401k down to 0.
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p>401k plans are fully funded. Most pension plans are not. Currently pension plans for companies in the S&P 500 are under funded by $362+ billion.
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p>401k plans reduce your taxable income. Pension plans do not.
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p>And then there are the myriad of other pension associated issues that you mention above.
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p>Whether directly (through 401ks) or indirectly (through pensions) we are participating in wall street.
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p>Getting rid of 401k plans and moving to pensions would be a disaster.
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all things you can fix with simple legislation, whereas 401ks are always going to be stuck on stocks, with no safety net should someone’s tank at the wrong time. Pensions not only have some safety nets, but are a safety net, and can be improved to be even safer than they are.
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p>401ks always rely on the singular individual to figure it out, whereas at least pension funds invested in stocks have the benefit of experts managing those funds. You brought up the Massachusetts fund – which lost a good deal of money, certainly, but it also lost significantly less than the market as a whole and far less than almost everyone I know who’s invested in 401ks. My mother’s 401k lost around what the state did – and 88% of her’s was locked up in ‘safe’ investments, or so she thought. I can’t stress how highly I disagree with the notion that you think 401ks are somehow simple for people to understand well enough to competently manage on their own. They’re not.
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p>But, regardless, this diary is not about pension reform. It’s about a restaurant and meal tax option, which is something the state house needs to allow. So I’m getting back on topic.
You have a choice of individual or expert management in 401 k and deferred comp. funds. And 401 k managers are the same people as manage pension funds, by and large. You mention that your mom and the state had a similar rate of loss. The state is invested in the same kind of safe investmetns. MOSTLY, treasurary bonds/bills, etc.
Who’s lashing out? I’m just saying that the private employees took a hit on their retirement funding. State employees, with a pension fund that lost 30% take no hit, and seek full pensions. You advocate a tax increase to give that to them.
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p>That means in addition to the retirement hit from the 401(k) drop, the non-state folks are being ask to make up the pension fund drop by paying more in taxes so the public employees don’t suffer.
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p>That’s really fair in your opinion?
And contrary to popular belief, I never did get any of that salary back. I worked in Taxpayer Service, and when it was Treasury’s ‘turn’ to furlough employees, it always fell on our division (let’s see – Collections brings in money, Auditing brings in money, Criminal Investigation brings in money, those Taxpayer Service people just siphon money away by telling people how to avoid penalties, and take money away from accountants like God intended, so who should we furlough…hmmm…). It wasn’t enjoyable, but still, a rotating furlough among agencies, three or four days in a week per division, kept services going and saved a great deal of money. To me, far preferable to the human service lay-offs being done now. Today’s paper says that 6 fo the 13 DMH workers who cover the entire Cape are laid off as of 1/30. They’re just closing cases and ceasing services, as there are no neighboring offices to send people to, and retaining only the worst mentally ill, cutting off the social clubs and retardation services.
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p>Sidebar story – they always walked through with the furlough notice around 10 am. Since I took a Caravan van from the Cape, I was stuck in the Kennedy Bldg, until 5 when this happened. Once, I walked out onto City Hall Plaza and Jerry williams was doing a live remote broadcast interviewing Studs Terkel about his new book WORKING. I hung around with the crowd watching, and Willimas began to ask us where we worked, why we were there, etc. Some were out of a job, retired, etc. When he asked me, I said I had just been furloughed mid-day from the IRS. Williams boomed out – GOOD! and the crowd cheered and clapped. It’s always nice to be appreciated.
But I disagree with you when you say we’re going to need to raise taxes in order to guarantee those funds. Maybe a little, but it’s really a small sliver of the pie to make that guarantee. The anger directed at pension systems comes from people without pensions who are, in fact, jealous they do not have pensions. Nothing ever said during a discussion about said pensions has ever made me feel any other way.
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p>Ultimately, people who get angry about those discussions feel as though others should be left on their own to sort out their retirements (like they are), survival of the fittest style, instead of having this much better option of figuring out a way so everyone benefits, by working together. 401ks vs. pensions is at the very heart of the philosophical differences of what it means to be a democrat versus what it means to be a rethuglican. If you want to set up a system that’s going to leave people vulnerable and ready to fail just as they retire, 401ks it is. I disagree. Profusely.
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p>Sure, we need some pension fixes. But they are not going to require significantly more investment, especially if some of those fixes include cost-saving measures (some of which I’ve included in this thread).
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p>401(k) legislation was passed in ’78 and went into effect on January 1, 1980 during the Carter, a notorious Rethuglican, administration.
The federal government has been operating the TSP program for years and it is incredibly popular. You’re not setting up your own investments. You can choose percentages from five standard funds: http://www.tsp.gov/rates/funds… And they just added a target-date fund that will vary its investments over the years (more aggressive in early years; more conservative in later ones). As with private employers, the government will match your contributions. People aren’t daytrading with their retirement money.
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p>One huge and understated benefit of this system is that after a very short vesting period, the money is the employee’s. If he’s unhappy in his job, he doesn’t need to wait out his “20 years” or whatever for maximum benefits. Right now, we’ve set up a system that incentivizes people to stay in public employment even if they would rather do something else.
Somebody earning $30K in 2007, with a 0.7% decrease in nominal dollars, would be making $29,077 in inflation-adjusted dollars. Which is really what should be considered, because we all know that your $29,790 figure just won’t stretch as far this year as it would have a year ago.
meals tax and hotel occupancy tax by 2 % each and earmark that additional revenue as a supplement to local aid? Are the cities and towns with budgets that are hurting the places where the restaurant and hotel industries are flourishing? Cities and towns with flourishing restaurant and motel industries often are already benefitting from higher property tax rates applied to businesses.
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p>Or maybe the state could use the funds to reimburse only cities and towns that have joined the GIC. Create more incentive for cost savings on the local level. Or use the funds to supplement any municiple infrastructure spending. Earmark the money to help the construction and maintenance of schools, municiple buildings, or roads.
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p>I don’t disagree with the concept of increasing meals and hotel occupancy taxes to help out towns, but I think there are better ways to implement the idea than just punting to the towns to make the tough decision to actually raise taxes.
4 reasons:
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p>1. yes, many of the towns that could use the help are towns that have a lot of restaurants. Dartmouth and Saugus are the best examples: Dartmouth’s been closing about a school a year for the past 3-4 years (no joke), but have gazillions of restaurants. Saugus’s fiscal situation may be even more bleak, they don’t even have an accredited library anymore, and they may even have more restaurants than dartmouth. Lest you think this only help towns, cities would stand to do very well with a meals and hotel tax. The places that wouldn’t do well? Many of the truly elite towns that aren’t in as tough a situation – your Lynnfields and Westfields out there. Obviously, some places won’t benefit as well as others, but many of the towns that will benefit are the ones that have been unfairly denied their 17.5%
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p>2. the only tax that the state itself seems willing to even talk about raising is the gas tax – and even that is a big if at this point. This is a realistic plan that would allow politicians to say they didn’t raise taxes, just gave cities and towns the option.
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p>3. There’s little but property taxes for towns to rely on, which is the worst thing towns could rely on with a real estate market like this… and all these empty homes going into foreclosure. This would help towns not be so reliant on property taxes.
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p>4. Who says this has to be it? Part of the reason cities and towns are in the current mess they’re in – and have been for quite some time – is because they only have one main revenue source, property taxes. The others pale in comparison. If there’s other ideas, let’s bring them to the table and add them.
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p>In the future, we could try to create a system in which towns that don’t have many restaurants would be offset somehow, at least if they need the funds, but we shouldn’t let perfection be the enemy of good. We need quick relief now – and this is one way to help some of the cities and towns in this state that most need that help.
then the state could ensure that towns that receive this money would put it to good use. Sort of a state version of the federal stimulus being discussed. Make sure that the cities and towns are doing everything possible to save money (i.e. restrict the money to towns that have joined the GIC, towns that use flag men instead of police officers at construction sites in line with the state regulations). And use the new revenue to supplement infrastructure projects that are “shovel ready” but have been put on hold because of the recent economy (i.e. construction and maintenance ofmunicipal buildings, schools, roads, bridges, dams, etc.).
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p>Although Saugus and Dartmouth are good examples, I think that if you look at areas of central and western MA you’ll see several cities and towns with fiscal problems and without thriving restaurant and motel industries. It’s not just wealthy Boston suburbs that would be left out of the loop.
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p>And cities and towns rely on the property tax to raise revenue themselves, but also receive very significant amounts of revenue in aid from the state. It’s a decrease in that state aid that has caused the current angst, so the best way to eliminate that angst would seem to be restoring state aid. Instead you want to create a new revenue source that couldn’t be collected without further local approval and that is highly susceptible to economic ups and downs. On a state level the fund could hold a percentage of the revenues created during the up years to continue to provide relief to municipalities during the down years.
they’re worthy of collecting revenue that’s being collected in their own town. Or that many cities already collect today (boston, most of the cape, etc.)
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p>
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p>Did I promise a be all end all? What part of “don’t let the perfect be the enemy of the good?” don’t you get. If you have additional ideas, let’s here it. I brought an idea that would help dozens of cities and/or towns that are in absolutely, positively dire straights. Towns should be able to collect the meals and hotel tax if they want to. Even the state recognizes that – there is a process to get it – but it’s long and convoluted and geared so that only the tourist communities or a city like boston have been able to do that. Every city and town should be able to tap into it.
then I don’t think it’s unreasonable to expect them to take available steps to reduce their costs. If towns aren’t taking those steps then why should the state pass a law allowing them to raise taxes on MA citizens?
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p>These are my ideas that I think improve what you’ve proposed. How about we debate them without any defensiveness and hostility?
They still need union approval for GIC. Most communities have made dozens upon dozens of layoffs. I fail to see where there’s any fat to cut that towns can unilaterally cut this year. It’s as if you don’t understand the fact that expenses like health care, which towns have little to no control over, are rising far quicker than the ability of towns to deal with them. How do towns make cuts there? (Even the GIC isn’t a solution in the long term; that’s still rising well above the rate of inflation.) So just saying towns should make cuts isn’t an actual suggestion. It’s a goal, maybe, but not a suggestion. IE you’re not contributing, you’re trolling, like usual.
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p>Now, how do we move beyond “defensiveness and hostility?”
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p>How about this? Stop antagonizing people. I don’t appreciate having points ignored. I said that obviously this proposal doesn’t help everyone, but it helps many, so let’s not let perfection be the enemy of the good. Then you essentially say ‘well, it doesn’t help everyone,’ ignoring the fact that I already said it didn’t. That doesn’t score you points; it makes it seem like you’re just not interested in an honest conversation.
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p>Then your suggestion is to ‘take available steps to reduce their costs.’ Really? That’s nothing new and nothing specific. More antagonism and less contribution. I don’t like to waste my time. I’ll be less defensive and hostile when you agree to be more honest, forthcoming and reasonable.
1 is towns adopting the state regulations for flagmen at construction sites. Here’s what you’ve said on the state regulations regarding police details:
http://vps28478.inmotionhosting.com/~bluema24/s…
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p>In the same thread Pat Jehlen said this:
So it seems that you support the state police detail rules, and that lawmakers have acknowledged the potential that the state rules could guide municipalities.
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p>#2 is towns providing their employees with GIC insurance if its cheaper than the town’s current insurance coverage. In a post regarding Speaker DiMasi’s proposal to allow municipalities to join the GIC without negotiating with unions you stated:
http://vps28478.inmotionhosting.com/~bluema24/s…
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p>So it seems that you acknowledge that both my proposals are cost saving opportunities for municipalities and that you have actually supported both proposals in the past. I offered a plan that uses revenue from meals and hotel occupancy tax increases as a carrot to getting municipalities to implement these two measures that you have supported. You responded that there are no places where town’s can cut the fat and that I’m just trolling and not offering any real solutions. So are you ready to have that honest, forthcoming, and reasonable conversation yet? Since you have expressed support for both the measures I propose, why not require towns to implement these measures before they can get money from tax increases?
from April 11, 2007 and another from April 2, 2008 – without mentioning those ideas in this thread – as evidence that you’re actually coming up with ideas? or even being honest and forthcoming? How in the hell am I supposed to remember random threads from a year and a half ago?
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p>This is another case of you being antagonizing. If you wanted to suggest those ideas, perhaps you should have when I asked for your freaking ideas in this thread. But they’re both still out of the control of local cities and towns (you asked that cities and towns cut costs; they have little control over those costs atm) – and neither of them will save cities and towns enough to offset the expenses moving well past the rate of inflation. (Did I not already say that switching to the GIC was not a long term solution? At best, it’s a band aid that may spare a few layoffs in the short term. But please feel free to ignore what I have to say in every reply that you make. That’s not antagonizing at all.)
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p>I’m glad you have some ideas, but they neither solve the problem nor explain why cities and towns shouldn’t even be given the option to have a tiny local meals and hotel tax. Your solution is to cut, cut, cut, but you’re hiding behind a few measures that sound nice, but are so tiny in comparison to the scope of the problem as to be, well, either dishonest or ignorant.
That’s why my proposal includes additional funds to those towns from a state level increase in the meals and hotel occupancy taxes. I mentioned those measures in my second comment in this thread. Then you accused me of notputting forth any options. I think it’s outrageous to acknowledge that towns could take measures to cut costs (after first erroneously claiming that towns can’t do anything to cut costs) but to glibly dismiss the measures as insufficient and continue to push for a tax increase option. The two measures I proposed were widely discussed in this state and on this blog. It’s not unreasonable to expect you to remember the positions you took on them and to expect some consistency. If you supported those measures, then why not require those measures to be implemented before taxes can be increased?
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p>If discussing attempts to improve your attmitedly imperfect idea is “antagonizing” then you need to either grow thicker skin, defend your ideas better, or stop posting on political blogs.
…and we have DOZENS of restaurants – is this just another way to enhance our cash cow status? For cities that pay part-time selectman $29,000/yr.like Arlington, and need propping up, while we pay selectmen $1,000?
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p>Yeah, sure WE can get behind that…
my proposal does seem to force Cape Cod towns to bear more of the burden in increased taxes then they will get in increased revenue. If you want to add a salary cap for part time selectmen to the cost saving requirements that towns must take before they can receive this revenue then I’m on board. Could you support this idea if it were a temporary meals and hotel occupancy tax increase designed to prevent local aid declines for towns that have implemented cost cutting measures while adding an incentive for the remaining towns to do so?
Firt – temporary, hell. Repeal the 1989 temproary tax, and then we’ll talk. But for the sake of argument. Adn BTW – my arguments would apply equally to most of Berkshire and large parts of Bristol counties, as well as Barnstable.
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p>My town has an overwhelmingly residential tax base. Virtually zero hotels and restaurants, which are concentrated in a few towns like P-town and Yarmouth. And bupkis for local aid. We should tax our small businesses to get ENHANCED bupkis from the state? We ALREADY sell MILLION in lottery tickets and get hundreds in lottery aid. We have never – not once – gotten additional assistance money that is routinely handed out to ‘deserving’ towns.
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p>What cost cutting measures? We’ve already DONE our layoffs! And GIC rates are HIGHER than our BC/BS purchasing collaborative.
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p>And I have one thought about the rental tax – it’s a middle class tax hike. People with $5 million McMansions don’t rent out their house – but people who move out of their 3 bedroom ranch for the summer to rent it out do. Ed Lewis (Brewster Selectman, originator of the bill) was driven mad by Ocean’s Edge Golf Resort, wehre literally hundreds of condos, individually owned, were rented out on a commercial basis with the golf course management serving as rental agents and no rooms tax being collected. But he got greedy and made it EVERY rental. If the tax was on multi-unit buildings, he’d get to tax the condo complexes operating as sub rosa hotels, and wouldn’t nail the person who camps out at Nickerson State Park for 6 weeks to rent out their home.
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p>But one thing holds true, as far as the state collecting and redistibuting – a dollar sent to Boston is a dollar lost forever.
A permanent 1% increase in the meals and hotel occupancy taxes earmarked into a fund. For the immediate future, say as long as tax revenues aren’t keeping up with inflation, the fund will be used to supplement municipal aid for towns that take deliniated cost saving measures. Once tax revenues catch up with inflation, the fund is used to create a tax swap. Continue yo have mandatory vostvsavings in order to wualify, and reimburse towns on a dollar for dollar basis (capped at available funds) for decreasing property taxes. Tax swaps have been popular recently, passing in TX, IN, FL and being proposed in GA and a few other states. Still doesn’t help Cape towns out in the immediate future, but long term it would hopefully make towns across the state get tough with unions to save some money, then it would finally deliver some long awaited property tax reduction.
potential cuts to the municipal aid to all towns, Cape towns included, will be avoided, and Cape towns will be compensated in the future if they reduce property taxes. It’s not “when Boston decides,” Cape towns, or any towns for that matter, can take advantage when (1) the economy turns around and (2) the town reduces property taxes.
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p>Do you support the local option to raise meals and hotel occupancy taxes? I’m trying to understand where you’re coming from here. My proposal would avoid bifurcating meals and occupancy tax collections among separate soverigns while achieving the goals of forcing towns to reduce costs and preventing local sid cuts.
My town, northeast of Boston, pays the Selectmen zero dollars annually.
When I ran for Selectman, my boss in Cambridge asked me if I’d be quitting if I won. I told him $300 really didn’t replace what even HE paid me, and he told me they paid the part-timers in Cambridge $28,000/yr. And that was more than 10 years ago. Last time I checked, Cambridge spent $997,000 on their part time councillors and one full time staffer and cost of office operation. No WONDER they need so much local aid! It’s for the CHILDREN!
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p>And it’s all in the town reports which are on-line. Hidden in plain sight, as it were.
I am the Chair of the Swampscott School Committee. Thank you Ryan for your advocacy.
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p>David Whelan
I can imagine the dearth of sympathetic taxpayers in Swampscott when the two biggest line item increases is retirement and health care.
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p>Correct me if wrong but Swampscott teachers’ union hasn’t voted to join the GIC in Swampscott, and the public pension benefits haven’t suffered a whit while private 401(k)s have been slaughtered.
Gary:
Swampscott’s unions agreed to join the GIC effective 7/1/09. The estimated savings to the community equate to about $600k. Pensions benefits have not changed.
Dave Whelan
This is old news? And this one dated 12/31?
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p>And re: pensions. Isn’t Swampscott the town that larded up the pensions last year or year before by adding personal use of auto into the pension base.
And is this latter issue re auto use true? It certainly seems typical of these negotiations:
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p>Employees union: give us a raise
Town/City: sorry, we don’t have any money
E: we deserve a raise!
T: I know, but there’s not much I can do
E: Then give us more money in pensions. It won’t cost any money now, and when the bill comes due in 20 yrs, it will be someone else’s problem. And if you help us out, we’ll pitch in for your re-elect.
T: [pause] It’s a deal!
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p>All public pensions should be 1) centrally run by the state for economies of scale and 2) modeled after the federal TSP system — defined contribution with matching dollars. (http://www.opm.gov/retire/pre/fers/index.asp)
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p>This will do a lot of good things. First, it will get rid of this pathology above. If a town/city wants to give more generous retirement benefits to its employees, then they have to make the expenditures in the current year, not 20 years later when it’s someone else’s problem. Second, it will get rid of the pathology of people sitting around, waiting to hit their 20 years so they get a better percentage. I can’t think of a worse system than one which encourages unhappy public sector employees to remain at their jobs. Third, it will get rid of all this fringe benefit crap like car and housing allotments, “top three years”, etc.
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p>Seriously, who objects to this?
operate according to PERAC rules. So the state controls the operations of pension boards across the state. If those boards are breaking PERAC rules, the state really oughta hear about it.
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p>So, Paddynoons imaginary “negotiations” betweeen employees and management makes no sense. Management cannot “increase your pension” without increasing your salary and Paddy has management saying they can’t do that. And it ends with an imaginary quid pro quo for votes? Sure, Paddy, add calumny to illogic and you’ve got a great post.
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p>And yet, Swampscott did just that. By voting to include previously excluded auto allowance into pensionable base, the Town increased the Pension to its employees, over the objections and criticisms of the Town Administrator.
that entering into calculations of “compensation.” If they do not then Swampscott violated the rules. There’s an answer to that.
Enforce Perac rules and make such allowances not pensionable. The idea that the state should control public pensions already exists. Municipalities may manage pensions, but according to state PERAC rules.
What is your source for what you just posted about Swampscott?
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p>Here
then called the Swampscott Town Administrator. The original plan of the local (Swampscott) retirement board was to include perks such as auto allowances to be included in pension calculations. Clearly a horrible decision. That decision was reversed immediately and never became the practice in Swampscott.
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p>By the way Gary, I am understand how to use Google. Why the hard guy response?
I agree with much of Peter’s comments. I just went out for dinner tonight here in Falmouth, we’re just starting to get a few good restaurants here. Tax them and the year-rounders (like myself) might lose this incremental progress. Ten years ago it was pretty bad around here for restaurants… Similarly on rentals, we’ve got a lousy residential year-round rental market here causing lots of problems with affordable housing.
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p>BUT I have been thinking a lot about Massachusetts’ lack of a Homestead tax rebate. I help run a family rental property house in Maryland and wow, they really stick it to out-of-state property owners/landlords. You’d think they’d support rental properties there in the DC suburbs (talk about affordable housing problems), but no, and they do it through a Homestead tax rebate. Many states have Homestead tax rebates that typically allow a significant decrease in property tax rates for primary residences. In Montgomery County Maryland its almost a 50% decrease if you get the rebate (for which we’re not eligible obviously). But if you look at this carefully what they’re really doing is raising the non-primary resident property taxes significantly, while helping the primary resident with the rebate.
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p>Everyone has heard about the loss of young people from Massachusetts, and how housing prices are a big part of this. A Homestead Tax Rebate could really help reverse this. Plus, it would also create a two tier system to increase property taxes on the vacation homes, or if worded more specifically, just the out-of-state vacation home owners. We’ve got low property taxes on Cape relative to the rest of the state (fewer year round residents needing services), and I’ve heard that an outer Cape town voted down a proposed tax on the out-of-state or vacation homes thinking it wasn’t fair. But the cape has a chronic problem of recruiting and retaining young people. Plus there are a lot of McMansions that Peter mentioned here on cape. If those were built in the owners’ home states for example near the Maryland shore or the NJ shore instead, they would be hit with a much higher tax rate (not eligible for a Homestead Tax Rebate in MD if it is the vacation or second home). So, the net effect is that Massachusetts is subsidizing the vacation homes of people from other states (who don’t vote here obviously). A Massachusetts Homestead Tax Rebate, if designed carefully, could actually increase tax revenues in Massachusetts, while helping to retain young families.
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p>Sorry for the mega long comment, I’d been meaning to write a diary about it, but hadn’t got to it and this thread inspired. I’m curious to see what others think/where the holes are.
Massachusetts already allows such a rebate. It is called the Residential Exemption, and must be affirmatively passed by the municipality each year. Here is a link to Boston’s program.
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p>It allows up to 20% of the average residential property’s value to be exempted from every owner-occupant for property tax purposes (some communities can go to 30% — I’m not sure why). Boston has been doing this since 1983.
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p>The way I understand it, if the average residential property is worth $200k, then every homeowner would deduct $60,000 from the value of the home they live in, and would pay taxes on the rest. The community does not lose that tax revenue — it shifts to the non-owner-occupants.
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p>It is mostly used in Boston/Cambridge and surrounding towns, but also some Cape Cod communities (Barnstable, Nantucket) take advantage of it. I think only 15 municipalities in the entire state take advantage of it. Why? I’m not entirely sure. I think it isn’t well-publicized, and I also think that 90% of Massachusetts communities don’t have a lot of rental property.
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p>I can’t figure out why Springfield doesn’t take it — 50% of its housing units are renter-occupied, and in this latest real estate boom a lot of housing was purchased by Eastern MA interests, effectively pricing housing out of reach compared to the city’s income level. I think that some big local real estate interests may be entrenched with many city councilors, and those parties don’t want to pay higher taxes on the properties they own.
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p>There was even a classic case a few years ago when someone running for Massachusetts office in one district claimed residency on his Cape house to get the exemption. Filed the homestead documents and everything.