and the
Citizens Economic Research Foundation

Barbara's Column
September #4

Mihos offers Massachusetts voters a pig in a poke
by Barbara Anderson

The Salem News
Wednesday, September 27, 2006

Ostriches don't really bury their heads in the sand - but if they did, and I were an ostrich, I'd bury my brain deep enough that it wouldn't know Christy Mihos is running for governor. Then I could enjoy the fall campaign without fearing a third-party spoiler will elect my next tax increase.

However, I can't hide from the Mihos "Proposition 1" television ad, in which he tries to give away an imaginary number of tax dollars to specific cities and towns, while looking and sounding like a used car salesman: Come on down, Boston. Get your $219 million!

And suburban voters will want to give Boston $219 million more of our hard-earned dollars ... why?

But that's a minor point. There is so much wrong with "Christy's Proposition 1" that it's hard to know where to start.

First, what's with the numeral one? One what?

This is how Christy's Web site describes "Proposition 1: It will cap property values from the time of purchase until the property is sold, thus providing more certainty to homeowners, who will not experience unpredictable increases in property taxes due to reassessment."

Sure, if I didn't know better, I could see the appeal: My plan at the moment is to die someday in my bed at this address. Since my house is small, I don't need to downsize. So if Christy's proposal worked as advertised, my assessment would be frozen at its present $410,400 and I would pay the Marblehead tax rate applied to that amount til death and tax relief became certain.

Since the existing Proposition 2 allows the local property tax levy to increase 2.5 percent a year, regardless of what is happening with assessments, those who buy a home here from now on would pay part of my share of the total taxes, and the share of the others who've stayed put. Sweet of them.

Doesn't seem quite fair, though. I will soon be on a fixed income myself, but I don't have a mortgage anymore -- while most of the new homeowners do. But of course, their assessments would be frozen, too, after the initial huge leap upwards, and the next person to move into or across town would pay more of the total. How long, I wonder, before people stop moving, from other towns or other states?

California's Proposition 13 does freeze assessments, but people still want to move to sunny California. Our population, on the other hand, isn't growing.

Of course "Proposition 1" could keep it stable -- we might not be able to sell our homes and leave. And if I did want to move closer to my grandchildren, who could afford to buy my little house and then pay higher property taxes to cover the town McMansions whose assessments are frozen?

Even if I stayed, my town's property tax rate would keep adjusting to account for the lower assessments. The rate would go up as far as necessary to get the same amount of money from all taxpayers. This is the way it used to be in Massachusetts before 1974, when the Supreme Judicial Court ordered revaluation: Many assessments were artificially low, and tax rates were high.

That SJC decision is a big problem for Mihos' signature issue. The Massachusetts Constitution requires that all property be assessed at full market value. Christy can't change that without a constitutional amendment. He says that he can, but he can't.

He also says that if the Legislature won't pass "Proposition 1" he will put it on the 2008 ballot. But a constitutional amendment takes four years, and legislative support, to get on the ballot. As we know from the gay marriage amendment, that legislative support is hard to get.

When asked about this constitutional issue in interviews, Christy says that I'm wrong, that he told me to look up "Sylvester vs. the Commissioner of Revenue."

Well, I did. And "Sylvester" concerns a veteran in Danvers who challenged the five-year residency required for his property tax exemption, and lost. The court ruled that a state can have residency requirements. Can't see what this has to do with the constitutional requirement that all property be assessed at full market value.

Right now "reasonable property tax exemptions and abatements" are allowed for low-income seniors, veterans and the blind. But the tax break for someone living in the same house for a lifetime would be huge, not "reasonable"!

Even if "Proposition 1" did get past the Legislature to the ballot, would fair-minded voters want to give such a large exemption to some young (inherited the house), wealthy, sighted, non-veteran stay-putter at the expense of a blind senior veteran who for some reason had to change homes?

Property taxes are too high in Massachusetts, even with Proposition 2. Mihos and Deval Patrick insist that more local aid is the answer.

In fact, the state money sent to communities is often used to increase "fixed costs" with higher pay and benefits, leading to either a Prop 2 override or service cuts.

If you want to cut property taxes, guys, show us a tax-cut proposal -- not obscure and unworkable "plans."

Barbara Anderson is executive director of Citizens for Limited Taxation. Her syndicated columns appear weekly in the Salem News and other Eagle Tribune newspapers; bi-weekly in the Tinytown Gazette; and occasionally in the Lowell Sun, Providence [RI] Journal and other newspapers.