The Marblehead Reporter
Wednesday, October 15, 2008
A message, or just a mess?
Question 1 evokes strong feelings
By Kris Olson
Marblehead resident Barbara
Anderson and her organization Citizens for Limited Taxation have a
simple answer to Question 1 on the Nov. 4 ballot, which seeks to repeal
the state income tax: “Hell yes!” You can even print your own bumper
sticker with that slogan from CLT’s Web site.
But some local officials
have quite a different take on Question 1’s passage. They think it would
send the state to hell in a hand basket.
If approved by the voters,
Question 1 would first cut the income-tax rate in half, from 5.3 percent
to 2.65 percent, on Jan. 1, 2009, and eliminate it completely a year
later. When all is said and done, state tax revenue would be reduced
$12.5 billion, approximately 60 percent.
But that only begins to
tell the tale of the havoc passage of Question 1 would create, according
to opponents. Selectman Judy Jacobi, at her board’s meeting last
Wednesday, pointed to a recently released study by the Massachusetts
Taxpayers Foundation entitled “The Enormous Consequences of Question 1.”
Noting that “a significant
share of state spending is required by the state constitution, federal
requirements or legal operations,” the MTF estimates that passage of
Question 1 would result in across-the-board cuts of 71.1 percent to the
rest of state government.
“The cuts would impact the
31 state and county prisons, the entire court system, the wide range of
human services programs, transportation, state parks and environmental
programs, support for the University of Massachusetts and state and
community colleges, state employee pensions and health benefits, and the
Department of Revenue and Registry of Motor Vehicles, as well as many
other programs and services,” MTF said in a press release.
Marblehead, MTF estimates the town would lose $1.13 million in
non-education local aid.
Impact on the town’s
education aid is less clear but could be an order of magnitude higher.
While the Vote No on Question 1 Political Action Committee’s Web site
suggests the town would lose the entirety of its $4.9 million in Chapter
70 funds and another $1 million in special-education and other aid, both
the MTF and Massachusetts Municipal Association indicate that state
constitutional requirements would limit education cuts to somewhere in
the neighborhood of 27 to 29 percent statewide. However, the MMA adds,
perhaps ominously for a relatively wealthy town like Marblehead, “many
districts would lose all school aid.”
Given that 86 percent of
the town’s budget is spent on personnel, any significant cut in local
aid would mean layoffs, which in the schools would translate to larger
class sizes, noted School Committee Chairwoman Amy Drinker. She added
that, given that layoffs themselves come with their own costs of
providing unemployment benefits to former employees, the cuts would have
to go even deeper than a dollar-for-dollar match of salary to lost aid.
Drinker noted that this had
already been shaping up to be a difficult budget year, even if Question
1 fails. Gov. Deval Patrick was expected Wednesday afternoon to announce
his plans to address a budget gap possibly as large as $2 billion, after
the Reporter’s press deadline. Patrick has pledged to make reductions in
local aid a last resort but offers no guarantees.
“We’re doing our level best
not to go at either local aid or Chapter 70 funding,” Patrick told the
State House News Service Tuesday. “And so far I think we will be able to
do that or at least not touch it in a significant way.”
State reimbursement funds
for school-construction projects, like the Village School renovations
set to begin in January, should also be safe, Drinker said, noting that
the Massachusetts School Building Administration is funded by a portion
of the state sales tax, rather than the income tax. Indeed, the MTF
report lists the MSBA — along with the mandatory portions of the state
spending on Medicaid and Chapter 70, the MBTA and payments on
outstanding bond debt — as categories of spending that are required to
remain intact, even if Question 1 passes. But an MMA simulation, worked
out with state officials, lumps new school projects in with the $150
million annual Chapter 90 road-construction program that would grind to
a halt if Question 1 passes.
The MTF also notes that the
Patrick administration has instituted a cap on capital spending of 8
percent of annual budgeted revenues. If Question 1 passes, all the state
would be able to afford for the next seven years under that cap would be
payments on existing debt service, meaning no new projects until 2016.
Over that span, some $20 billion in investment in the state’s
infrastructure will have been foregone, according to the MTF. The
recently passed $2.9 billion bridge bill to repair 250 structurally
deficient bridges would be just one such investment that would fall by
the wayside, the MTF added.
Perhaps the safest thing to
say, then, is that few programs, services or categories of aid would be
Beyond the impact on the
town’s bottom line, Jacobi said she is concerned about residents who
benefit from services funded at the state level. One such example is
senior services. On Tuesday, North Shore Elder Services Executive
Director Paul J. Lanzikos sent out an analysis of the impact of Question
1’s passage on the state’s elder population and painted a grim picture.
Among the consequences, said Lanzikos, would be that as many as 15,300
senior citizens could lose their home-care services and 3.4 million
“meals on wheels” could be lost statewide. Nursing-home care and drug
benefits for the elderly would also be affected, Lanzikos added.
It is consequences such as
these that lead Jacobi to believe that she and her colleagues have an
obligation to take a stance on Question 1. She said she intends to ask
for a vote when the board next meets Oct. 22. Drinker, too, said she
expects Question 1 to come up at tonight’s School Committee meeting, and
she indicated a willingness to vote if one of her colleagues made a
motion to take a position on Question 1.
“It’s like blowing up the
house when you need to remodel,” Drinker said. “I fundamentally disagree
with this as a tactic.”
The case in favor
If the impact would be so
dire and widespread, why would one consider voting in favor of Question
Anderson begins her answer
with a history lesson. After a “temporary” increase in the income tax
was enacted in 1989, CLT was at the forefront prolonged efforts to get
the rate back to 5 percent. Voters approved a phased-in rollback in
2000, but the Legislature repealed it in 2002, freezing the rate at 5.3
While Anderson emphasized
that not CLT but rather the Committee for Small Government headed by
former gubernatorial and Senate candidate Carla Howell is sponsoring
Question 1, CLT has jumped on board.
“If the politicians won’t
keep their promise of 5 percent, then let’s go for zero,” goes CLT’s
rationale, as expressed in a press release.
To Anderson, Question 1 is
a last resort, state government having “reached the point of no
“The system exists not to
provide services but to serve itself,” according to CLT. “Something has
to be done, and Question 1 is the only game in town, the only way to
save the Commonwealth from its corrupt and irresponsible politics.”
Anderson said she looks
with envy across the border to New Hampshire, where there is no income
or sales tax and a “very different political culture” that includes a
part-time Legislature. Yet the roads are well paved, and the state is
consistently voted one of the most livable and safest in the nation.
Anderson concedes that New Hampshire property taxes are among the
highest in the nation (third on a per-household basis), though
Massachusetts is not far behind (eighth), she added. On a per-capita
basis, Massachusetts state and local tax revenues are fifth highest, New
“Yet New Hampshire services
seem to be as good as ours or better,” says CLT.
CLT notes that eight other
states also do not have a personal income tax, but the Massachusetts
Taxpayer Foundation’s report suggests that many of these states have a
unique way to make ends meet. In several cases, these states have a
“strategic asset” — oil in Alaska, gambling in Nevada, tourism in
Florida — that brings large sums in to state coffers. Eight of the nine
(Alaska being the exception) also rely substantially more on taxes
generated at the local level than Massachusetts does, according to the
CLT offers another simple
theory for supporting Question 1: “We can use the money.”
“If there is no income tax,
we will have more for ourselves and our families,” reads CLT’s press
release. “We can apply our income tax money to our health insurance and
pensions plans, instead of supporting extraordinary benefits for
government workers. We can choose to support charities that do a better,
more efficient job than the state in helping others. We can apply our
savings to our property taxes, thereby helping Gov. Deval Patrick keep
his pledge of ‘property tax relief.’”
But the MTF report raises
the question of whether those most in need would feel much relief from
passage of Question 1. Proponents tout $3,700 in savings for the
“average” taxpayer from Question 1, but the MTF said that number, while
correct, does not tell the entire story. For a majority of the state’s
taxpayers, the $3,700 figure overstates — by nearly $3,000 — the benefit
they would receive from approval of Question 1, according to MTF. For
the 65 percent of the state’s taxpayers who earn under $50,000, the
average state income tax payment is $850. Meanwhile, tax filers earning
in excess of $100,000 pay an average of $16,295, meaning they have
nearly 20 times as much to gain from Question 1’s passage.
Given that average incomes
in Marblehead are higher and that the town does not get back in state
aid what it contributes in taxes, some argue that residents should
support Question 1 and keep their money in their own pockets. Drinker,
for one, finds such “secessionist” talk disheartening, noting the
rationale is no different from arguing that Neck residents should fund a
disproportionate share of the recent causeway project, because they use
CLT’s Web site, and you will see
another image that explains the organization’s support of Question 1, a
“gravy train” being ridden by public employee unions. Anderson said it
is little surprise the unions are leading the opposition to Question 1,
noting that they have a lot to lose if it passes. This particularly true
with a sitting governor who has shown a willingness to take on the
unions on issues like instituting civilian police details, dismantling
the Massachusetts Turnpike Authority and cutting the unions out of the
decision to join the Group Insurance Commission, which Anderson noted
has caused quite a stir in neighboring Swampscott and elsewhere.
Where the candidates
Asked at a forum last
February, the three candidates running to fill the state-representative
seat vacated by Doug Petersen — Democrat Lori Ehrlich, Republican John
Blaisdell and independent Mark Barry — all said they opposed Question 1,
though Blaisdell said he thought the Legislature should not have voted
to void the 2000 referendum vote to reduce the tax rate 5 percent (from
its current 5.3 percent).
Blaisdell, who is back to
challenge now-incumbent Ehrlich on the Nov. 4 ballot, said that he has
since changed his tune on Question 1.
“There has to be a clear
message sent to Beacon Hill: Enough is enough,” he said.
Blaisdell said it was “easy
to reach” that decision, having had a chance to review the Legislature’s
work over the last several months, particularly the overrides of the
governor’s budget cuts.
The current deficit the
state is facing was foreseen, said Blaisdell, “And yet the Legislature
continued to spend, spend, spend.”
He added, “If you, as an
individual, operated your lifestyle that way, your checkbook would be in
big trouble. If you can’t pay the rent, you shouldn’t be out buying a
new car. If you can’t pay the food bill, you shouldn’t be going on
Ehrlich agreed that “waste
and redundancy are never acceptable,” but noted that Patrick’s imminent
cuts make clear that Question 1 goes way beyond eliminating such waste.
“Taking a sledge hammer to
the budget at a time the state is cutting to the bone and municipal
budgets are at their breaking point would only make a bad situation
worse,” Ehrlich said, noting that even prominent House Republicans like
Minority Leader Brad Jones of North Reading and Brad Hill of Ipswich
oppose Question 1.
The governor’s cuts were
already likely to impact public safety, senior services and special
education, Ehrlich noted.
“Question 1 would take it
so much further,” she said, calling the concept behind Question 1
“radical and reckless.” “It would have a negative impact on everyone in
If they find themselves
sitting in the Legislature after voters Question 1, Ehrlich and
Blaisdell each said the challenge would be great.
“The sudden and severe loss
of revenue would somehow need to be replaced, but not before it takes
its toll on public safety, public education, employees and our bond
rating,” Ehrlich said.
She added, “When confronted
with a budget crisis, your only choices are to cut spending, raise
revenue or some combination of the two.”
If she is reelected and
Question 1 passes, Ehrlich said she and her colleagues would “explore
the few options we have in those areas, and fast.”
Faced with the same
challenge, Blaisdell acknowledged that, with $18 billion left to work
with, “There [would] have to be changes made in the way we fund schools,
fire, police and other town services…. We would have to do something to
increase investment in schools and local services.”