After years as a taxpayer activist, I am rarely
surprised by the strange things government does.
Voters still surprise me, though; being one myself, I relate and have
certain expectations. Most recently, I am surprised to learn that many
people voted for Deval Patrick because they thought he was going to cut
their property taxes.
They didn't notice that he merely used the phrase "property tax relief"
with no detail on how this was going to happen? True, he promised more
local aid to the cities and towns, but there was no explanation on how
this equates with lower taxes instead of just higher spending.
The details we are beginning to see still don't equate with "property
tax relief" for very many people. He is offering 25 percent of the
proceeds from his proposed new local option meals tax for an additional
abatement to certain lower-income senior citizens over 70. But these are
the seniors who already have tax relief that's not available to anyone
else, through their ability to defer their taxes until they're paid by
He also proposes expanding the senior "circuit breaker" to some younger,
lower-income homeowners - but this is an income tax credit, and their
property taxes will not go down. Of course, they can apply their income
tax cut to their property taxes; but if the income tax rollback passed
by voters in 2000 were honored, we could all apply that tax cut to our
property taxes, too.
His first budget does contain more local aid, but I can't imagine how a
corresponding property tax cut would be implemented. The phrase "relieve
upward pressure on the property tax" is generally meaningless. Under the
voter-passed Proposition 2½ each community's property tax levy is
allowed to increase only 2½ percent a year, plus new growth, unless
voters approve an override - which is another thing voters do that
amazes me. Then some of them complain about high property taxes, as if
experiencing a disconnect between cause and effect.
The natural concern about high property taxes makes the situation with
Red Hill Estates in Peabody a mystery to me. I've been reading accounts
of Peabody budget problems and, recently, an assessment challenge from
Brooksby Village that could cost the city a huge abatement. Of course,
the city could just raise the property tax rate enough to cover this
loss, so other Peabody taxpayers would make it up.
But if the owner of Red Hill Estates mobile home park was allowed to
sell his property to retail developers, the city would pick up the new
value as new tax revenue. Tenants there pay just $173.15 a month in
rent, which is artificially low by order of the Peabody Rent Control
Board. So the entire property pays artificially low property taxes,
based on controlled value -- $4,957 a year on 3 acres of land! If the
property were taxed on its true market value, there would be tens of
thousands of "found money" to the city, every year.
The owner, Ed Quinn, is a longtime personal friend of mine. When he
first told me about his quest to sell his own property as he reached
retirement age, I found it hard to believe. Last time I looked, Peabody
is still in America, whose entire economy is based on freedom and
property rights that are not supposed to be superseded by someone's need
for a governmental favor.
But the Rent Control Board says someone who owns property isn't allowed
to sell it unless he finds someplace else affordable for his tenants to
If society, as a whole, wants to provide "affordable housing," then all
of society chips in to pay for this. How can one person be held
responsible for providing it at his own expense? Landlords shouldn't be
forced to provide "affordable housing" any more than grocery store
owners should be forced to provide "affordable food," automobile dealers
to provide "affordable cars," and handymen to provide "affordable
carpentry and plumbing repairs" against their will.
It is now clear to me why there isn't more affordable rental housing in
Massachusetts: People who would be willing to provide it are probably
afraid that they'll be subsequently trapped in a web of tenants' needs,
waiting to be devoured by local bureaucrats.
While waiting for someone to offer "property tax relief," it's important
to do what we can to limit our own taxes. We can vote against overrides.
We can encourage government policies that are good for business; in
communities like Peabody that use higher tax rates for
commercial-industrial property, a prosperous business community carries
more of a share of the tax burden. The downside of this, of course, is
that in a slow economy, that tax burden gets shifted, often
dramatically, to residential property. This has been happening over the
past few years, surprising homeowners.
We should also support Gov. Patrick's proposed legislation to address
local "fixed costs" like health insurance and pensions and hope he
proposes even more. These reform initiatives won't lower property taxes
but can help sustain local services and prevent override attempts.
Barbara Anderson is executive director of Citizens
for Limited Taxation. Her column appears weekly in the Salem News and
Eagle Tribune, and often in the Newburyport Times, Gloucester Times, and
Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the
Providence (RI) Journal and other newspapers.