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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Saturday, October 21, 2006

Taxing debate

Am I surprised that Deval Patrick's plan to stem the growth in property taxes in Massachusetts doesn't add up? No. Am I glad he raised the subject as a campaign issue? Yes. Am I surprised that Kerry Healey's response was to trot our Barbara Anderson to raise fears about the sanctity of Proposition 2 1/2? Puhleeze.

The mindless no-new taxes mantra is part of parcel of the Republican playbook, along with raising fears about personal security. Massachusetts has paid the price for the focus of four GOP governors on doing all the could to reduce (or eliminate) the income tax. That price can be found in our schools, on our streets and highways -- and in the lack of adequate police and firefighters to keep us safe.

Selected facts:
  • Since 1990, local property taxes have risen on average more than 5 percent per year for single-family homeowners in the state to $3,801 in 2006, according to data compiled by the state Department of Revenue.
  • Local governments reliance on the property tax has gone from 46 percent during 1986-87 to 49 percent in 2002 and 53 percent today, according the Geoff Beckwith of the Mass. Municipal Association. State contributions have fallen from 28 percent four years ago to 24 percent this year.
  • Steep cuts in local aid during 2003-2004 have never been fully restored, Beckwith said, and nearly a third of the state's communities are receiving less from the state than they did in 2002. percent
Patrick and Christy Mihos have responded to this reality by making local aid and property taxes an issue. And Patrick in particular has done this by correctly tying property taxes to income taxes and local aid.

Mike Widmer of the Mass. Taxpayers Foundation is THE respected voice on tax policy on Beacon Hill, even more so after the Romney-Healey administration tried to denigrate his credibility. He simply states:
"It's unrealistic to say property taxes can be reduced in a broad-based way," Widmer said in an interview with the Globe. "Maybe they can slow the rate of growth or target certain categories of taxpayers for relief, but not across the board."
Patrick's proposal fall into this category. The "circuit breaker" for example is a measure that works mainly for low-income or seniors, by offering income tax cuts based on property tax obligations. Does it have pitfalls. Yes. Is it more thoughtful than Healey's contention that seniors are "overhoused" and should move to smaller homes? You decide.

Same problem with Patrick's call for other "targeted" property tax relief. But the candidate deserves credit for offering thoughtful if flawed proposals.

Contrast that with Healey. She rolls out the grandmother of Proposition 2 1/2 (sorry Barbara!) to raise the quadrennial specter of Democratic tinkering with the 26-year-old law that limits a town's collections to 2.5 percent of assessments.

The "non-partisan" Anderson had carpet bombed Mihos several days earlier in a Globe op-ed (the Globe only offered him a letter, not a full rebuttal). Yesterday, Healey brought her to the podium to insist Patrick hasn't offered alternatives and to have Anderson accuse of being soft on 2 1/2.
"Proposition 2 1/2 is staying just as it is for as long as I am in charge," Patrick said. "If somebody smarter than I comes up with a better way to moderate property tax, then I am open to that. But I have no interest and have made no proposal to do away with Proposition 2 1/2."
So let's look at Healey's alternatives. Oops, there aren't any. As Brian Mooney writes:
Healey has offered no specific plans for property tax relief, but has proposed initiatives that could save municipalities hundreds of millions of dollars, potentially lessening pressure to increase property taxes. If underperforming local pension boards joined the state's giant $43 billion pension fund, improved returns would also generate "more than $200 million in savings to cities and towns to cut property taxes." Allowing municipalities to join the state's Group Insurance Commission would result in "likely millions of dollars in annual cost savings" by increasing the state's buying power for employee health insurance coverage, her website states.
Check back in 20 years. If you can still afford your home.

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