The fall political season began here with the release
of the Hamill Commission task force report on municipal finance — all 96
pages of it.
As expected, and undeterred by gas prices exceeding $3 a gallon, the
report recommends an increase in the annual auto excise tax. However,
instead of a rate increase, it states that "a more realistic
depreciation schedule would require only a slight modification to
current law while generating significant new revenues for
municipalities" and argues for an increase in assessed vehicle values.
Yes, drivers, a "slight" tax hike equals "significant" new revenues,
just as they all do, all the way to the fourth highest per-capita tax
burden in the nation.
The report also argues that "special excise taxes, such as local option
meals taxes, parking excise taxes or rental car surcharges, would give
municipalities help with their financial bottom lines and diversify
municipal revenue streams."
As for the taxpayers' bottom lines? Never mind, let's celebrate
diversity.
"Local option" sounds so innocuous, doesn't it? Only those communities
that want an additional meals tax will choose it. But wait! That was the
argument on smoking bans — until consumers took their business to a
neighboring community. Then "fairness" demanded that the ban be
instituted statewide.
Prediction: The same thing would happen with "local option" taxes.
Eventually, no matter where we eat, we'll pay a local meals tax on top
of the already existing state meals tax.
The report doesn't come right out and demand higher taxes of other
kinds. Instead, it just mentions in passing that continuing the
voter-mandated income tax rate rollback would "diminish annual state
revenues by approximately $500 million," while "increases in the state's
two broad-based taxes — the income and sales taxes — are appealing
because of their potential for generating significant additional
revenues that could help ease the pressure on municipal finances. For
example, a one-half-percent increase to the income tax rate would bring
in approximately $950 million and a one-cent increase in the sales tax
rate would raise about $800 million in revenue".
Lest some taxpayers not find this "appealing" at all, the report gives
the impression that these suggestions are due to concern about property
taxes, which are 9.1 percent above the national average. Interesting,
coming from a task force, some of whose members have long been enemies
of Proposition 2½, which at least got our
property tax burden down from third highest in the country to its
present rank of 17th.
Yes, the Hamill Commission task force that is so concerned about high
property taxes includes representatives of the Massachusetts Mayors
Association, and the so-called Massachusetts Taxpayers Foundation, the
Massachusetts Federation of Teachers, along with the former head of the
Massachusetts Municipal Association, whom I debated during the 1980 Prop
2½ ballot campaign. Further, the task force
does not recommend actually lowering property taxes in return for all
these "appealing" new revenues.
It does, eventually, address the spending side of municipal budgets. Try
to follow this sentence: "Although some observers occasionally suggest
that some municipal employment contracts have been overly generous in
recent years, it seems that most have been conservative enough to
produce annual average growth per employee of only 0.7 percent, in
inflation-adjusted terms between 1994 and 2003, compared to 1.8 percent
for private sector and 1.0 percent for state employees over the same
period."
What the heck does that tell us? Add health care and pension benefits.
Then ask the private unions and us nonunion average taxpayers if we are
doing so much better than local teachers. Also, In 96 pages, shouldn't
the task force have found a place to compare municipal pay with
teachers' pay, which other recent reports place above the national
average?
There's a good section called "Giving Municipalities the Tools to
Control Costs," with tentative recommendations for additional
flexibility in collective bargaining, health care, regionalization,
joint purchasing, and other reforms that have been talked about for
years. They don't get done because members of the task force support tax
hikes; and once they have new revenues, the Legislature and
municipalities don't ever get around to the "tools" part.
Bottom line: The Municipal Task Force report is the usual Boston
business community and mayor's association statement against the
income-tax rollback, a stealth attack on Massachusetts drivers, and the
first step in mandatory local taxes.
While it seems obvious why mayors might take these positions, I'm often
asked why many Boston business leaders want higher taxes. One answer is
that they fear that if individual taxes are cut, business taxes will
rise to fill the gap. Another answer is that business leaders get
support for their own legislation by kissing up to politicians who enjoy
spending our money. But it is also important to note that some Boston
banks finance the municipal and state bonding that high taxes support.
One member of the task force, Michael Widmer of the taxpayers
foundation, took this municipal finance show on the road to the North
Shore Chamber of Commerce (where I no longer get invited to speak)
recently. Hey guys, did he tell you about the tax-hike part of their
plans?
Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem
News, Newburyport Times, Gloucester Times, (Lawrence) Eagle-Tribune, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence
Journal and other newspapers.