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Massachusetts Liberal

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

Sunday, August 17, 2008

Another nail in the coffin?

Carla Howell can't buy herself better publicity.

Pay raises for MBTA executives is surely a great way to start. But how about telling angry home owners that their property taxes are still going up even though their home values are static at best -- or dropping at worst.

And that's because local property assessors can't keep up with the changes in the market. Remember this quote:

"Values go down and tax rates go up and everyone pays a little more and they aren't happy," said James C. Judge, the assistant assessor in Kingston, where the average bill jumped 9.8 percent, following a tax override, and assessed values dropped nearly 5 percent.

If you're looking for the "perfect storm" of events to catapult Question 1 to victory, you may need not look any farther than the twin lead stories of another wise sleepy August weekend.

Long after the feats of Michael Phelps fade from peoples' memories, these two stories and the direct or implied incompetence of public officials will fuel voter anger.

Hopefully those folks who plan to speak out against Question 1 are hard at work for a campaign that will launch right after Labor Day -- you know about the same time the Democratic convention ends, the Republican convention begins and the political media's focus on the presidential race obliterates all other discussion?

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Blogger Aaron Weber said...

If it passes, what do you think will get cut?

I mean, all the cultural stuff, probably. And the health & human services stuff. Health care, maybe?

August 17, 2008 3:25 PM  
Blogger Outraged Liberal said...

Try local aid -- meaning money cities and towns use for public safety and education. Public works -- street cleaning and trash pickup.

A lot of health care is tied up by federal matching dollars. You'd lose twice as much by cutting those programs.

August 17, 2008 5:32 PM  
Blogger Rich said...

As I've said in other people's blog comments, what the heck are you smoking and where can I get some? Does anyone really think for a second that the legislature won't immediately re-enact the income tax if Q1 passes?

August 17, 2008 11:50 PM  
Blogger Outraged Liberal said...

As I wrote Saturday, the damage would be instant, no matter how quickly the Legislature comes up with a fix. Bonds backed on the state's "full faith and credit"? You think the Turnpike Authority and the T are in trouble now?

The state's paper would be instantly downgraded to junk and the interest costs would be staggeringly higher -- even if they voted to restore the tax the next day.

The state could only hope I was smoking cigarettes so they could make some money back on a newer, higher tax there too.

August 18, 2008 4:38 AM  
Blogger Outraged Liberal said...

Make that Friday!

August 18, 2008 4:43 AM  
Blogger Rich said...

You say that, but you don't provide any reasoning for your claims.

First, a downgrade does NOT affect the interest rate the state pays on bonds currently in existence. It would only matter to bonds issued in the future (and to current bondholders).

Second, if the state re-enacted the tax literally the next day (which is what will happen), why would there be a downgrade in the first place? The state's ability to pay would be left unchanged and if anything the rating agencies should get warm fuzzies over the fact that the Legislature undid what the voters chose, thus demonstrating that current and bondholders don't have to worry about the state's income tax suddenly going away now or in the forseeable future.

I think the Chicken Littling (and that's what it is) is coming from the types that HubBlog's Jay Fitzgerald calls the "Hack/Progressive Alliance". They're all worried that if Q1 passes, they might actually have to cut back a little bit on do-nothing jobs for nephews, sops to various unions, and other pork-y spending, because if they don't pay a least a little lip service to a Q1 win (even though it'll immediately be undone), something they won't be able to get away with undoing (like a cut in the tax rate, or actual governmental reform) might actually eventually happen.

August 18, 2008 8:01 AM  
Blogger Outraged Liberal said...

Rich, let me point you to the Bond Buyer story I linked to on Friday
http://www.bondbuyer.com/article.html?id=200808133GJLGQV6&queryid=1304849193&hitnum= (Sorry, you'll need to cut and paste. I'll get the hang of this yet...)

I don't know that I consider Mike Widmer part of the Hack/Progressive Alliance -- and I certainly don't consider the measured but still pointed comments by analysts from Moody's and S&P to be part of it either.

Wall Street is skittish enough right now that any threatened loss of revenue to pay off obligations is going to be noticed.

The state would most certainly be locked out of the market on future borrowing -- including the short-term notes used to tide things over. Like local aid payments made in anticipation of tax revenue.

Whether or not it affects already sold issues is also immaterial -- when Wall Street gets antsy there is a price to be paid -- period.

August 18, 2008 7:08 PM  

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