CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Tuesday, September 13, 2005

MTF Fat-Cats crusade for more
as voters demand tax cut


Twenty-five years ago, Massachusetts voters rebelled against high property taxes by capping them with Proposition 2. For good or ill, the cap achieved its purpose, but in recent years, property taxes have been rising steeply again as state aid for every municipal service but schools has been flat. To head off a new revolt or a steady deterioration in police and fire departments, libraries, roads, and parks, the state's towns and cities need help....

These changes are among the recommendations in a municipal finance task force report issued Wednesday....

The task force has produced a blueprint for a more rational municipal finance structure. Now it requires leadership to navigate the change. For example: If boosting local aid cannot be done without shortchanging the state's own responsibilities, legislators should look to an increase in one of the state's broad-based taxes. The property tax is the wrong vehicle for funding statewide needs; on this the tax revolters of the 1980s were right.

A Boston Globe editorial
Friday, September 9, 2005
Overtaxed towns


The Coalition is, of course, made up of the usual Gimme Guys, area mayors, including our own Tom Menino who just can't collect enough revenue from hard-pressed taxpayers, especially those who may work but not live in the city. The task force was headed by the respected John Hamill, chairman of Sovereign Bank New England, who really ought to know better than to accept the mythology that all cities and towns are lean operations, doing the best they can - if only they could get more help from the state and from a handful of new taxes....

Sadly, the report is long on ways to eke more money out of taxpayers and far too short on what municipalities can do to make those tax dollars go farther.

A Boston Herald editorial
Saturday, September 10, 2005
More new taxes a dreadful idea


Given current unrest over property taxes, cities and towns can't dig much deeper into homeowners' pockets as they struggle to keep their budgets in balance.

Yet with current revenues failing to keep pace with the increasing cost of employee salaries and benefits, and a major spike in heating costs looming this winter, "something has to give," according to Michael Widmer, president of the highly regarded Massachusetts Taxpayers Foundation. He spoke to the North Shore Chamber of Commerce last week about the slow economic recovery, the growing demands on the state budget and the implications for both on municipal budgets.

A Salem News editorial
Monday, September 12, 2005
Local pride forces cities and towns to pinch pennies


By a more than 2-to-1 margin, voters gave themselves a tax break yesterday in a special election.

The vote was 2,164-973 to support the rare Proposition 2 underride....

Sandwich becomes the 11th community to vote itself a lower tax levy since the state Department of Revenue began keeping statistics in 1995.

The Cape Cod Times
Friday, September 9, 2005
Prop 2 measure wins by landslide


Chip Ford's CLT Commentary

There goes the predictable Boston Globe editorial board again, taking the so-called "Hamill Commission Report" seriously, at least the recommendation calling for a hike in "one of the state's broad-based taxes." Any excuse for a tax increase is good enough for the elitist tax-and-spenders.

The more practical Boston Herald editorial saw through the report and what it lacked: reform of municipal spending habits.  Until those reforms finally happen, no more of our money should ever be considered as fodder for the rapacious beast, else it'll swallow the cash and be right back for more.

The Boston Globe did get one thing right, though:  "the tax revolters of the 1980s were right"! Who'd have expected such recognition, even if belatedly, from the ivy tower elites on Morrissey Boulevard?

Meanwhile, Michael Widmer, president of the so-called Massachusetts Taxpayers Foundation, is as usual out stumping on his never-ending crusade for higher taxes at the behest of his masters, Boston Fat-Cat Big Business, at the expense of everyone else.

This at the same time when voters, given the chance as they were last week in Sandwich, are electing in a landslide to lower their tax burdens.

Talk about Widmer and his Fat-Cats being completely out-of-touch.

Chip Ford


The Boston Globe
Friday, September 9, 2005

A Boston Globe editorial
Overtaxed towns


Twenty-five years ago, Massachusetts voters rebelled against high property taxes by capping them with Proposition 2. For good or ill, the cap achieved its purpose, but in recent years, property taxes have been rising steeply again as state aid for every municipal service but schools has been flat. To head off a new revolt or a steady deterioration in police and fire departments, libraries, roads, and parks, the state's towns and cities need help.

In particular, communities deserve higher and more consistent levels of aid from the state, plus greater freedom to control their own finances, whether by levying a meals tax or better handling health insurance costs.

These changes are among the recommendations in a municipal finance task force report issued Wednesday. Chaired by John P. Hamill, chairman of Sovereign Bank New England, the task force concluded that local leaders have generally done a good job of controlling costs. It is not wasteful spending but reductions in support from the state that are forcing local officials to rely more heavily on the property tax, a levy that is particularly burdensome for homeowners on fixed incomes.

According to the report, state aid peaked in 1988, when it was 31 percent of municipal revenues, while property taxes provided 46.1 percent. Now, local aid has dropped to 24.4 percent and property taxes are 52.9 percent. The state estimates that -- except for communities that have residential tax exemptions -- average household property tax bills have jumped $910 in the last five years. During that time, Massachusetts municipalities cut their payrolls more steeply than in any other state in the nation.

Most of the report's proposals for easing the pressure on the property tax are good ones. The percentage of state revenue going to local aid should be fixed as close as possible to the 20 percent peak of 1988, up from the 16.4 percent of 2004. The state should also have long since granted cities a right to tax meals, parking garages, and rental cars.

The report equivocates on whether state law should be changed to standardize local taxes on telecommunications equipment. It should be. And the proposal to generate more auto excise taxes for cities by slowing down the state's depreciation schedule for cars would be more socially useful if the excise were based on fuel efficiency, not resale value.

The task force has produced a blueprint for a more rational municipal finance structure. Now it requires leadership to navigate the change. For example: If boosting local aid cannot be done without shortchanging the state's own responsibilities, legislators should look to an increase in one of the state's broad-based taxes. The property tax is the wrong vehicle for funding statewide needs; on this the tax revolters of the 1980s were right.

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The Boston Herald
Saturday, September 10, 2005

A Boston Herald editorial
More new taxes a dreadful idea


Timing, as they say, is everything. And the recent report and recommendations by a task force set up by the Metro Mayors Coalition couldn't be more poorly timed - or more ill-advised.

The Coalition is, of course, made up of the usual Gimme Guys, area mayors, including our own Tom Menino who just can't collect enough revenue from hard-pressed taxpayers, especially those who may work but not live in the city. The task force was headed by the respected John Hamill, chairman of Sovereign Bank New England, who really ought to know better than to accept the mythology that all cities and towns are lean operations, doing the best they can - if only they could get more help from the state and from a handful of new taxes.

As to the first premise, let's look no further than Springfield, say, where a professional consultant's report released on the same day as Hamill's found that the city could save $17 million over five years with a few basic reforms of just its school system. An upcoming report by the Boston Municipal Research Bureau will take another look at some avenues for cost-trimming here too.

Yes, property taxes can be burdensome. But residential exemptions - an item completely ignored by the task force in doing its calculations - do help ease that burden. But nearly unfathomable at a time when gasoline prices have risen to usurous levels and home heating oil is about to do the same, is their recommendation that what is really needed here is to allow communities to levy an additional meals tax, parking excise taxes, rental car surcharges and find a way to squeeze more money out of the motor vehicle excise tax. The group wisely walked away from an economy-killing proposal to tax telecommunications equipment.

Sadly, the report is long on ways to eke more money out of taxpayers and far too short on what municipalities can do to make those tax dollars go farther.

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The Salem News
Monday, September 12, 2005

A Salem News editorial
Local pride forces cities and towns to pinch pennies


Given current unrest over property taxes, cities and towns can't dig much deeper into homeowners' pockets as they struggle to keep their budgets in balance.

Yet with current revenues failing to keep pace with the increasing cost of employee salaries and benefits, and a major spike in heating costs looming this winter, "something has to give," according to Michael Widmer, president of the highly regarded Massachusetts Taxpayers Foundation. He spoke to the North Shore Chamber of Commerce last week about the slow economic recovery, the growing demands on the state budget and the implications for both on municipal budgets.

The outlook as far as mayors and selectmen are concerned, is not good.

All of which prompted former 6th District Congressman Michael Harrington, who was in the audience at the Peabody Marriott, to pose the question: Whither regionalization? Does Massachusetts, he wondered, which is relatively small in size, really need 351 separate governmental entities, many of which operate their own school systems, their own public works departments and their own police and firefighting forces?

The answer is of course it doesn't. But given the fact that many of these separate and fiercely independent jurisdictions have been around a lot longer than the United States of America, effecting change is seen as being exceedingly difficult, if not impossible.

As a result, potential economies of scale are sacrificed to the desire to maintain traditional political boundaries. It doesn't make sense, and it costs a lot of money, but voters have yet to indicate they want to change things.

Widmer knows all too well how "very, very difficult" it is for one community to intrude on another's turf, having served for many years on the Belmont Finance Committee. When it was suggested that his town and neighboring Watertown get together and hire a single animal control officer to serve both communities, he related, it was like proposing a merger of Jordan Marsh and Filene's.

Of course the latter, once unthinkable, is now reality as the company that owns Macy's which took over the Jordan Marsh chain years ago prepares to absorb its former competitor. The difference? That's the private sector where what makes the most economic sense usually prevails over sentiment and self-interest.

Indeed, it's that same private sector that subsidizes municipal spending to the tune of an estimated $1 billion a year as a result of a system that allows commercial and industrial property to be taxed at a higher rate than residences. Take that away, one local businessman rightly observed, and there might be more support for taking a regional approach to things.

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The Cape Cod Times
Friday, September 9, 2005

Prop 2 measure wins by landslide
By George Brennan, Staff writer


SANDWICH - By a more than 2-to-1 margin, voters gave themselves a tax break yesterday in a special election.

The vote was 2,164-973 to support the rare Proposition 2 underride. Voter turnout was low, with 22 percent of the town's 14,948 voters going to the polls.

Sandwich becomes the 11th community to vote itself a lower tax levy since the state Department of Revenue began keeping statistics in 1995....

Selectmen put the Proposition 2 underride on the ballot after the town learned in June it would receive an additional $480,000 from the state in aid. In supporting the underride, selectmen said if they'd known the town would be getting that extra money before the May election, they would have sought a $2.6 million override instead of the $3.1 million voters narrowly approved in May.

Selectman Thomas Keyes, who first proposed the underride, said it was an impressive victory for taxpayers. "The numbers tell us we're on the right track. We are listening to our taxpayers," he said.

Both the finance committee and Town Administrator George Dunham argued the underride was shortsighted. Dunham said the extra levy capacity would give the town, which has some unknowns in its budget projections, some flexibility. Taxpayers would get a break anyway because there were no plans to spend the state windfall, he said.

That Proposition 2 override in May added $300 to the tax bill of a home assessed at $370,000, the town's median price. The underride will save the same taxpayer an estimated $46 per year off that $300 increase when tax bills are mailed in January.

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