CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

 

CLT UPDATE
Thursday, February 26, 2004

Gov. vows veto of Prop 2 assault


Moments after Democratic lawmakers endorsed a series of local option proposals to help senior citizens cope with rising property tax burdens, Republican Gov. Mitt Romney said he's open to helping elderly homeowners but believes a key provision of the new plan undermines the tax-limiting Proposition 2.

"I will veto anything which tinkers with Prop. 2," Romney said after meeting in his office with the chief sponsors of the 1980 ballot law, Barbara Anderson and Chip Ford. "What's on the table now does more than tinker. It undermines in a serious way the intent and purpose of Prop. 2 and therefore I will fight it in every way I possibly can." ...

"Its purpose is to take the burden away from senior citizens and keep them away from the voting booth to stop Prop. 2 overrides, and instead causing hardworking families on limited incomes to be stuck with higher tax bills," Romney said. "That's the wrong way to protect senior citizens." A harmful side effect of the proposal, the governor said, would be to pass the burden of local tax hikes onto the unemployed....

Anderson said lawmakers are using seniors to increase the likelihood of approval of local tax overrides.... "There's something wrong here," said Anderson. "And it's obvious. It's transparent. And we're going to fight it because it's an assault on Prop. 2 and in the long run isn't going to do anyone any good, including the seniors." ...

Laura Russell of Sharon, a volunteer with the Massachusetts Councils on Aging, said she has voted for local overrides largely because her son attends middle school in the town. But Russell said she has sympathized with the impact of overrides on senior citizens and believes the bill will address their needs.

"The Legislature would be wise to pass such a constructive bill," Russell said. "We need to help seniors who find they have no flexibility to be able to stay in their homes without going bankrupt. I know senior after senior who have been forced to move and pull up their roots."

Russell said the statewide councils on aging group voted unanimously Friday to endorse the tax relief proposals approved by the committee Thursday.

State House News Service
Thursday, February 26, 2004
Senior tax relief plan ignites new battle
over voter-approved tax law


Gov. Mitt Romney is criticizing a plan by Democratic lawmakers to let cities and towns give senior homeowners extra property tax breaks, saying it only shifts the burden to other taxpayers.

Supporters say the plan will give older residents much needed relief from soaring property tax bills and allow some seniors on fixed incomes to stay in their homes.

But critics, including Romney, say the real goal of the plan is to make it easier for cities and towns to pass overrides to Proposition 2 -- which limits how much communities can raise property taxes -- by undercutting opposition from older voters.

"If we can find ways to reduce the tax burden on seniors, I'm all for that," Romney said. "But we will look very carefully at, and very critically at, any effort which is a cynical or transparent attempt to kill Proposition 2 in the process." ...

Diehard defenders of Proposition 2 say the bill is designed to split supporters by giving seniors, who typically oppose overrides, a reason to stay away from the ballot box when an override is put to voters.

"If this passes, seniors will stay at home and will not be a part of our first line of defense of Proposition 2," said Barbara Anderson of Citizens for Limited Taxation.

The bill faces an uncertain future. It must be approved by the House and Senate before heading to Romney. A two-thirds vote in both chambers is needed to override a Romney veto.

Associated Press
Thursday, February 26, 2004
Romney, lawmakers at odds over senior tax relief plan


Gov's new conference - Feb 26, 2004

Barbara Anderson and Chip Ford, Proposition 2 supporters with Citizens for Limited Taxation, join Governor Romney in front of Romney's State House office Thursday, voicing their opposition to proposed legislation affecting property tax rates for seniors.

Photo by State House News Service

Chip Ford's CLT Commentary

It was a busy and productive day that started early, real early. At 7:30 this morning Barbara and I were seated at a table in the Burlington Marriott Hotel for the Massachusetts High Technology Council's annual meeting and breakfast. Governor Romney was the keynote speaker at our ally's large gathering and, when the meeting broke up just after nine o'clock, the departing governor said to Barbara, "See you in a few minutes back at my office."

Just before 11:00 we were greeted by Gov. Romney in his office foyer and escorted into his office, where we spent the next forty minutes with him, Secretary of Administration & Finance Eric Kriss, and other members of his administration discussing the assault on Proposition 2. At 11:30, the governor, Barbara and I walked out to greet the media throng awaiting in the State House corridor just outside the governor's office.

Governor Romney and his aides had immediately recognized the threat to Proposition 2 that the Legislature's proposal intends, which is why we were asked yesterday to come in and meet with him. He was prepared to veto the bill before we arrived; we only confirmed what he and his staff had concluded.

To correct the record, Barbara was asked by a reporter what made her think seniors wouldn't turn out to vote if they were exempted from a tax increase. She replied that it wasn't human nature to go out of one's way to take action on something that doesn't effect one -- not " due to 'human nature,' [seniors] often vote against local tax increases," as reported.

CLT has taken no position on the other tax relief proposals passed by the Taxation Committee, but we do wonder how many seniors would qualify for the "circuit breaker" tax credit if the home value requirement is increased from $432,000 to $750,000. Seems like a majority of them would, but that's a direct payment out of the state treasury -- so spending reductions in other areas of the state budget will need to be made to compensate for it.

And we suspect that any such "awareness program" will go the way of the multitude of local "tobacco education" programs without constant, vigilant monitoring. The latter evolved into local tobacco-control fiefdoms -- swarms of new bureaucrats "sent hither to harass our people and eat out their substance," to paraphrase the Declaration of Independence.

The situation got real strange yesterday, when we learned that another bill -- separate from H.4519 that passed in the House's informal, vacation-week, session last week without objection -- was to be released from the Taxation Committee today. Along with other property tax relief for seniors, it also includes that exemption from consequences of future Prop 2 overrides. Barbara got a draft copy yesterday, and an official version this morning after the committee approved it in executive session, just before our meeting with the governor.

Now, there are two bills floating around the State House to exempt seniors from Prop 2 overrides -- for whatever reason or strategy.

*                    *                    *

How about that Laura Russell of Sharon, "a volunteer with the Massachusetts Councils on Aging"? She admits to voting for overrides "because her son attends middle school in the town," then bemoans those poor seniors she's chosen to harm, "who find they have no flexibility to be able to stay in their homes without going bankrupt.... I know senior after senior who have been forced to move and pull up their roots." This is a stark example of a liberal's "compassion" -- after they've extracted what they want.

Yesterday, Howie Carr told me he'd just checked with the state Department of Revenue to see how our voluntary tax check-off is doing so far this year. As of yesterday, 782,000 state income tax returns had been processed: only 248 taxpayers had elected to pay the old 5.85 percent rate. I strongly suspect the "compassionate" Laura Russell of Sharon was not one of those 248.

Chip Ford


State House News Service
Thursday, February 26, 2004

Senior tax relief plan ignites new battle
over voter-approved tax law
By Michael P. Norton


Democrats and Republicans have waged [battle] this year over spending, reforms, and budget cuts. Now a new fight is brewing on Beacon Hill over tax relief.

Moments after Democratic lawmakers endorsed a series of local option proposals to help senior citizens cope with rising property tax burdens, Republican Gov. Mitt Romney said he's open to helping elderly homeowners but believes a key provision of the new plan undermines the tax-limiting Proposition 2.

"I will veto anything which tinkers with Prop. 2," Romney said after meeting in his office with the chief sponsors of the 1980 ballot law, Barbara Anderson and Chip Ford. "What's on the table now does more than tinker. It undermines in a serious way the intent and purpose of Prop. 2 and therefore I will fight it in every way I possibly can."

The House last week, on a voice vote, approved legislation exempting some senior citizens from tax increases passed on override votes. On Thursday, the Legislature's Taxation Committee endorsed a series of senior tax relief proposals, including the one approved by the House, and the broader package of tax law changes will soon be debated by the full Senate, according to committee members. 

The bill's supporters say too many senior citizens are being forced to sell their homes and move from their hometowns because while their incomes are fixed, their property taxes are soaring due to the roaring real estate market. But Romney says Democrats are more concerned with passing local tax hikes, and alleged the primary purpose of the bill is to convince senior citizens to stop voting against overrides.

"Its purpose is to take the burden away from senior citizens and keep them away from the voting booth to stop Prop. 2 overrides, and instead causing hardworking families on limited incomes to be stuck with higher tax bills," Romney said. "That's the wrong way to protect senior citizens." A harmful side effect of the proposal, the governor said, would be to pass the burden of local tax hikes onto the unemployed.

The governor did not endorse specific tax relief ideas, but said many are on the table and he is "very committed" to the idea of using government spending and tax policies to help senior citizens, especially those with low or fixed incomes. "We'll be open to the widest array of ideas to do that," said Romney.

The governor suggested that cities and towns can do more to control costs and negotiate more favorable prices to avoid overrides. "Let's limit the size of government, limit the expense in our municipalities, be tougher in our negotiations with the people who are providing resources to cities and towns, get our costs under control, as opposed to raising taxes continually in property taxes or in other taxes," Romney said. 

Legislators say their ideas have been hashed out over four months in response to demands from senior citizens throughout Massachusetts and municipal officials who are both sympathetic to the plight of seniors and looking for ways to get tax overrides approved to offset cuts in state aid from Beacon Hill. In addition, lawmakers said, the proposals would take effect only if adopted by the local governing body.

Anderson said lawmakers are using seniors to increase the likelihood of approval of local tax overrides, which require a two thirds vote to pass [sic - requires only a majority]. "There's something wrong here," said Anderson. "And it's obvious. It's transparent. And we're going to fight it because it's an assault on Prop. 2 and in the long run isn't going to do anyone any good, including the seniors."

Based on her experience with local override efforts, Anderson said senior citizens are often not the direct beneficiaries of override votes and due to "human nature," often vote against local tax increases. She said that if the legislation is approved, seniors may not longer be part of the "front line defense" of Prop. 2.

Laura Russell of Sharon, a volunteer with the Massachusetts Councils on Aging, said she has voted for local overrides largely because her son attends middle school in the town. But Russell said she has sympathized with the impact of overrides on senior citizens and believes the bill will address their needs.

"The Legislature would be wise to pass such a constructive bill," Russell said. "We need to help seniors who find they have no flexibility to be able to stay in their homes without going bankrupt. I know senior after senior who have been forced to move and pull up their roots."

Russell said the statewide councils on aging group voted unanimously Friday to endorse the tax relief proposals approved by the committee Thursday. Committee co-chairwoman Sen. Cynthia Creem said municipal officials also sympathize with senior citizens and would welcome a chance to offer relief.

"We're really excited about this," Creem said. "We know it will come out of the Legislature in one form or another and it will give seniors a break." She said the Senate Ways and Means Committee is likely to rework the bill, before it hits the Senate floor for debate and consideration of amendments.

Sen. Robert O'Leary (D-Barnstable) said he hopes the bill "will help us pass some necessary overrides" and make more seniors eligible for tax credits by raising income and home value eligibility standards.

"We need relief," said O'Leary. "There are people that are really in trouble."

Here's a rundown of the bill's main provisions:

l  Allowing municipalities to exempt homeowners who qualify for the so-called circuit breaker tax credit from increases in property taxes resulting from Proposition 2 overrides. To qualify for the circuit breaker credit, a person must be 65 or older, or would need to own a home with an assessed value of $700,000 or less. The income threshold is $43,000 for single filers and $64,000 for married filing jointly.

l  Making owners of homes valued up to $750,000 eligible for the so-called circuit breaker tax credit. The bill also indexes the eligibility standards to housing rather than consumer price indexes. The current eligibility threshold is $432,000.

Allowing cities and towns to charge less than the mandated 8 percent interest rate to entice more seniors into using an existing property tax deferral program. Under the bill, 8 percent would be the ceiling.

l  Allowing cities and towns to offer a property tax exemption to eligible seniors equal to 10 percent of the average assessed value of residential property;

l  Allowing municipalities to extend property tax hardship abatements to individuals based on age, infirmity or poverty eligibility standards. Currently, individuals must meet all three standards.

l  Extending an existing property tax exemption of up to $500 for individuals 70 and over to disabled individuals of any age;

l  Allowing seniors who volunteer for city or town governments to work off $1,000 of their property tax bill, up from the present $750 allowance;

l  Creating an awareness program to provide more information to older taxpayers.

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Associated Press
Thursday, February 26, 2004

Romney, lawmakers at odds over senior tax relief plan
By Steve LeBlanc


Gov. Mitt Romney is criticizing a plan by Democratic lawmakers to let cities and towns give senior homeowners extra property tax breaks, saying it only shifts the burden to other taxpayers.

Supporters say the plan will give older residents much needed relief from soaring property tax bills and allow some seniors on fixed incomes to stay in their homes.

But critics, including Romney, say the real goal of the plan is to make it easier for cities and towns to pass overrides to Proposition 2 -- which limits how much communities can raise property taxes -- by undercutting opposition from older voters.

"If we can find ways to reduce the tax burden on seniors, I'm all for that," Romney said. "But we will look very carefully at, and very critically at, any effort which is a cynical or transparent attempt to kill Proposition 2 in the process."

Exempting seniors from tax hikes will impact families who may not be in any better position to shoulder higher tax bills, said Romney, who vowed to veto any bill that "tinkers with Proposition 2."

Seniors said they welcome the proposed changes.

"Many of those seniors (who would benefit) helped build the infrastructure of their communities, helped build schools," said Norma Simons Fitzgerald, executive director of the Council on Aging in Sharon.

The plan, which was approved Thursday by the joint House and Senate Taxation Committee, would let communities take several steps to insulate seniors from tax hikes, including exempting elderly homeowners whose property is valued at less than $750,000 from overrides. Current law sets the exemption level at $432,000.

The plan would also let cities and towns charge a lower interest rate for seniors who defer payment of their property taxes, and create a new senior property tax exemption equal to 10 percent of the average assessed value of residential property in the community for lower income seniors.

Democratic lawmakers say that given the state's soaring property values, raising the cap to $750,000 makes sense. The average selling price of a single family house in Massachusetts was $376,360 in 2003.

"There isn't a single home on the Vineyard or Nantucket that can take advantage (of the exemption) under the current cap," said Sen. Robert O'Leary, D-Barnstable.

Romney was less sympathetic to that argument.

"A $750,000 home is well above the median home price in Massachusetts," he said.

The House earlier this month passed a bill to boost the exemption cap from $432,000 to $500,000. Supporters said the change was needed to keep pace with rising property values.

Diehard defenders of Proposition 2 say the bill is designed to split supporters by giving seniors, who typically oppose overrides, a reason to stay away from the ballot box when an override is put to voters.

"If this passes, seniors will stay at home and will not be a part of our first line of defense of Proposition 2," said Barbara Anderson of Citizens for Limited Taxation.

The bill faces an uncertain future. It must be approved by the House and Senate before heading to Romney. A two-thirds vote in both chambers is needed to override a Romney veto.

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