CLT
UPDATE
Wednesday, June 11, 2003
Proposition 2½ under increasing
attack
Cities and towns could impose local taxes on meals, hike towing and parking fees, and add a $1 entry fee at state parks under a municipal relief plan unveiled by Senate leaders yesterday.
The plan, which will be debated on the Senate floor tomorrow, would permit the taxes and fees to be levied without the approval of voters....
Senate Ways and Means Committee chairwoman Therese Murray, the Plymouth Democrat who led the team that put together yesterday's bill, said the package reflects the desires of municipal officials, who are desperate for revenue and dead-set against leaving the fate of such taxes to voters....
Municipal groups, led by Boston Mayor Thomas M. Menino, have been pushing hard in recent weeks for local taxing authority because most municipalities in Massachusetts face up to 20 percent cuts in state aid. The pressure will continue today, with public school teachers scheduled to arrive en masse at the State House to present legislators with a mile-long set of petitions protesting the budget cuts....
The Senate package went beyond the 1 percent meals tax Menino had sought, setting the ceiling at 3 percent. It also included a host of fee increases Menino had wanted, including one that would allow Boston to increase its towing fee from $13 to the state-allowed maximum of $75....
Senate Republicans and antitax groups were not so laudatory.
Senator Michael R. Knapik of Westfield, the top Republican on the Ways and Means Committee, said the Senate had thus far missed a "once-in-a-legislative lifetime opportunity" to enact serious reforms in the area of public construction rules and education, saying those could have delivered far more revenue to towns than the bill offered yesterday....
Barbara Anderson of Citizens for Limited Taxation said she was glad to hear that Romney would veto the Senate measure as it currently stands. A local meals tax, Anderson said, would result in a confusing patchwork of communities in which some would have a tax while others would not, and would ultimately send diners to those towns savvy or wealthy enough to avoid imposing the tax.
"You can answer it with three words," Anderson said. "Next town over."
The Boston Globe
Tuesday, June 11, 2003
Senate plan would OK local meals tax, fees
Clash with Romney set over approval by voters
Senate leaders aim to buck the no-new-taxes trend on display in the House last week by allowing cities and towns to boost local taxes without first polling voters.
The House shot down several similar local tax proposals last week and Gov. Mitt Romney has vowed to veto any measure that doesn't meet with local voter approval first.
The Senate version of a relief package for cash-strapped cities and towns lets local officials decide whether to boost the meals tax - it is now 5 percent - by 1 to 3 percent. Local officials would also decide whether to hike property taxes beyond the normal limits imposed by Proposition
2½....
Sen. Stanley C. Rosenberg (D-Amherst) said ... there is a recognition in the upper chamber, "however uneasy it is," that without the ability to raise fees and taxes on the local level, cities and towns will do serious damage to themselves by having to slash education and public safety.
He said the lack of political will on Beacon Hill to raise the statewide income tax means cities and towns must resort to "the most regressive tax there is, the property tax," for help paying the bills.
The Boston Herald
Wednesday, June 11, 2003
Senate gives town leaders power to tax
The state already levies a 5 percent sales tax on meals. The Senate's plan would give cities and towns the option of imposing an extra 1 percent to 3 percent tax on the sale of "prepared foods."
The meals tax proposal is one of 37 revenue-enhancing options Senate leaders want to offer to communities to help cope with deep cuts in state aid....
Peter Christie, president and CEO of the Westborough-based Massachusetts Restaurant Association, said the proposal unfairly singles out restaurants for a tax hike while sparing other retail businesses.
"This is an example of government at its worst," Christie said. "Once they cut you loose and isolate you from the sales tax, there's no stopping them. If the economy continues to struggle, they will need and want more next year....
The Senate relief bill overlaps with the House plan in many key areas. Both proposals, for instance, contain a plan that could allow cities and towns to collect higher property taxes by exempting overlay amounts from the Proposition
2½ levy limit.
The MetroWest Daily News
Wednesday, June 11, 2003
Tax idea eats into your wallet
As if to answer those annoying TV ads being run by the Massachusetts Teachers Association - you know, the ones that indicate civilization as we know it will end if we don't raise taxes - the taxpayers of Massachusetts are telling a whole different story to the Herald's pollster....
That should lay to rest all those phony-baloney polls that have people in Massachusetts practically begging to have their taxes raised (where do they find those people?). Invariably those surveys seem to come from outfits dependent on public funding. Funny how that happens....
Myers' results are consistent with other findings in the poll, especially the one that showed 80 percent of voters worried that the economy is either stalled or getting worse and two-thirds worried more about their family's economic straits than about a terrorist attack.
Most of Beacon Hill's politicians have gotten the message that the only thing more tapped out than the state's coffers are the state's taxpayers.
A Boston Herald editorial
Wednesday, June 11, 2003
Tax hike train stalls
"There were no ifs, ands, or buts, and there was no fine print," said Elizabeth Vann, a former Chicago professor who now teaches bilingual education at Brockton High School. "There was no asterisk that said it was subject to the Legislature's continued budgeting."
But now Vann and about 200 other teachers who were due to get their next $4,000 installment in October have been informed by the state's education commissioner that the payment may be another victim of the state's financial decline.
Also in jeopardy is a $5,000 payment due to about 300 veteran teachers who participate in a mentoring program that promises participants up to $50,000 over 10 years for obtaining national certification and sharing their skills with less experienced colleagues....
That reality was much different in 1998, when the state Legislature used a portion of the state's ever-expanding surplus to create a $60 million teacher quality endowment fund to recruit new blood for the neediest school districts, where teacher shortages were the greatest....
Even the Massachusetts Teachers Association, which embraced the mentoring bonus program but was critical of the signing bonus for new teachers, opposes the state's decision to discontinue payments to those who are still owed money.
"It breaks the promise," said MTA president Cathy Boudreau....
Associated Press
Wednesday, June 11, 2003
Teachers due bonuses feel cheated by legislative action
Sixty Massachusetts banks have agreed to pay disputed back taxes worth more than $90 million by June 30, the end of the state fiscal year, said state officers and corporate executives who spent the past three months negotiating a settlement. Most of the money will go to the rainy day fund, which will help the state meet its obligations in the final days of the fiscal year....
"All but a couple" of the banks, said one government official, have agreed during the past week to a deal that calls for them to pay 50 percent of the taxes and 50 percent of the interest they owe by June 23. That allows the state to book the money before the end of its fiscal year....
So the subsidiaries avoided taxes, because of their status as REITs, and the banks largely avoided taxes, because of their status as parent companies....
Lining up behind the Massachusetts Bankers Association, the banks threatened to fight the demand for payments, which totaled at least $140 million industrywide. Public banking companies had to set aside provisions for the payments, which showed just how much the payments were affecting them.
State Street Corp., for example, reported that it was on the hook for more than $26 million.
The Boston Globe
Wednesday, June 11, 2003
Deal may end banks' tax fight
Banks OK $90m deal in tax fight
In the wake of the Senate's rejection of his governmental reorganization plan last week, Mr. Romney is poised to veto or substantially weaken a legislative pay raise bill sought by House and Senate leaders.
Supporters say the bonuses reward lawmakers for extra work and responsibility in key positions, while critics say the unchecked power to dole out extra money gives leaders too much control over rank-and-file legislators.
"What troubles the governor is that it takes the governor and the public out of the process in the future," said Shawn Feddeman, Mr. Romney's press secretary....
Lawmakers' base pay is $53,381, with leadership stipends ranging from $7,500 for a typical committee chairman to $25,000 for chairman of the Ways and Means Committee.
About 50 members of the 160-person House already get bonuses. Nearly all of the 40 senators get extra pay....
Barbara C. Anderson, executive director of Citizens for Limited
Taxation, has been lobbying Mr. Romney to turn back the bill, positioning the issue as one of checking the political power of the Legislature.
"The speaker already controls a third of the House, now this gives him the potential to control another third," she said. "We should not allow one man, Tom Finneran, to spend taxpayer dollars on his favored legislators without getting approval from the other branch and the governor."
The Telegram & Gazette
Wednesday, June 11, 2003
Romney has pay raises for legislators in his sights
Eleven votes defeated the proposal to build a $35.5 million Manchester Essex Regional High School.
Essex voters rejected the plan to construct a new high school-middle school complex on Lincoln Street in Manchester by a vote of 624 to 613 at yesterday's special election, which saw one of the town's largest voter turnouts. Manchester residents voted 1,085 to 624 to support the proposal yesterday....
Several Essex voters leaving the polls felt the cost of building a new school and upgrading town-owned athletic fields was too high. Residents already are obligated to pay taxes for the construction of a $27.2 million sewer system....
The school proposal, the lone question on yesterday's ballots, drew about 49 percent of registered voters in both towns to the polls. The Essex turnout was the highest in the last 14 years for a local election, Soucy said.
"I don't know when we've ever had a town election that high," she said....
Grace Babikian, who held signs showing her support for the project outside the polling site at Manchester Memorial School, wondered what would happen if the proposal failed.
"The alternative of not doing this is very scary," she said. "It's been said why we need a new school. If this doesn't pass, where does that leave us?"
The Salem News
Tuesday, June 11, 2003
Essex rejects new school by 11 votes
Voters in Ashburnham last night rejected Proposition 2½ overrides totaling almost $1.3 million that would have provided more money for schools and local government, deciding the issues by fewer than 50 votes. ...
For the cash-strapped school department, it was the fourth failed override in three years. A community effort was organized seeking support for the override, the loss of which will mean an impact of $1.77 million, according to school officials....
The defeat of the Ashburnham local government funding could mean the loss of one full-time firefighter, 19 call firefighters and two full-time police officers. The positions can be restored if state aid is higher than town officials have estimated.
Ashburnham voters did OK a new ambulance and road repairs, however.
The Telegram & Gazette
Wednesday, June 11, 2003
Towns split on school money
Chip Ford's CLT
Commentary
Tax hikes without fingerprints. That's what the
Legislature is doing these days, with its fee creations and increases
and its municipal relief packages. Being able to go home and say,
"Hey, don't look at us ... we didn't raise your taxes,"
seems to be the game plan on Beacon Hill even as the cost you pay for
government continues rising.
Proposition 2½ has never been under such ferocious
attack as it is this year -- though we saw it coming last year with the
proposals to amend or repeal it that were floated. There's little doubt
the big push to gut it is being additionally energized by the number of
attempts across the state that -- left in the hands of voters -- are
going down in flames. Too many on Beacon Hill now see that as a reason
to take the decision out of the hands of voters, as the Senate's latest
proposal attempts to do with the Overlay account requirement. They'd
prefer Prop 2½ to become Prop 4½ or 6½ or more.
*
*
*
Can you believe the greedy Massachusetts Teachers
Association has the brazen chutzpah to now whine about
"broken promises" over bonus pay ... after it did everything
it could for years to vehemently oppose our tax rollback petition -- twice
-- spending millions of dollars of its members' dues to kill it any way
they could ... kill the promise that the 1989 tax hike that's
still with us was to be "only temporary"? That shameless
organization isn't fooling anyone, anytime, any more with their
self-serving claim that they're only doing it "for the
children." The union has finally blown any semblance of credibility
and most of the public support for its members.
*
*
*
So Massachusetts Big Banking has finally agreed to
pay its "fair share" of its tax burden, settling to pay 50
cents on each dollar it owes. State Street Corporation alone
admitted it owes more than $26 million of the $140 million collectively
owed in back taxes. It's worth noting that Karen Kruck, its senior vice
president, is on the executive committee and board of trustees of ...
the Massachusetts Taxpayers Foundation. Anyone see a connection
with MTF's incessant call for tax hikes on average taxpayers like you
and me?
*
*
*
Proposition 2½ overrides were just defeated in the
towns of Georgetown (2), Essex, and Ashburnham (2) we've learned. Voters
in the latter approved a debt exclusion seeking $130,000 for the repair and rebuilding of town roads,
and to a $120,000 debt exclusion to buy a new ambulance for the fire
department.
|
|
|
Chip
Ford |
The Boston Globe
Tuesday, June 11, 2003
Senate plan would OK local meals tax, fees
Clash with Romney set over approval by voters
By Raphael Lewis, Globe Staff
Cities and towns could impose local taxes on meals, hike towing and parking fees, and add a $1 entry fee at state parks under a municipal relief plan unveiled by Senate leaders yesterday.
The plan, which will be debated on the Senate floor tomorrow, would permit the taxes and fees to be levied without the approval of voters. It sets up a confrontation with the House and Governor Mitt Romney.
The measure ignores Romney's threat to veto any local-option tax that doesn't require a ballot referendum for enactment. It was unveiled less than a week after House leaders issued their own municipal relief package, which had no such taxes.
Several House members tried to tack on a meals tax, local sales taxes, a so-called mansion tax on expensive new homes, even slot machines at race tracks, but all were defeated, although some by a narrow margin.
Senate Ways and Means Committee chairwoman Therese Murray, the Plymouth Democrat who led the team that put together yesterday's bill, said the package reflects the desires of municipal officials, who are desperate for revenue and dead-set against leaving the fate of such taxes to voters.
"The mayors and the selectmen have asked us to be at liberty to do this either on a city council vote, or a town council vote, or board of selectmen vote," Murray said. "Obviously, there will be amendments on the floor saying, no, it should be on the referendum. We'll see what happens."
Murray said she expects several senators to submit amendments similar to those defeated in the House, but guessed that the Senate may be more receptive to the notion of local-option taxes.
"We are the Senate; we are separate; we do our own thing," Murray said. She added, however, that a Senate bill on gaming as a way to raise revenue was not likely to take place until next month at the earliest.
Currently, meals in Massachusetts are subject to a 5 percent sales tax with all revenues going to the state. The measure proposed yesterday would allow city and town governments to create a second layer of meals tax, ranging from 1 percent to 3 percent. The money would go directly to the municipality.
The measure is expected to pass the Senate, but would then have to make it through compromise talks with the House. Ultimately, the governor would have to sign it, or both chambers would have to muster two-thirds majorities to override his veto.
Municipal groups, led by Boston Mayor Thomas M. Menino, have been pushing hard in recent weeks for local taxing authority because most municipalities in Massachusetts face up to 20 percent cuts in state aid. The pressure will continue today, with public school teachers scheduled to arrive en masse at the State House to present legislators with a mile-long set of petitions protesting the budget cuts.
Yesterday, municipal officials applauded the Senate bill for giving local governments more fiscal independence from the ups and downs of the state's financial fortunes.
Aides to senators in Boston's delegation said that, as of last night, Menino had no intention of submitting more amendments because he was so pleased with the bill. The Senate package went beyond the 1 percent meals tax Menino had sought, setting the ceiling at 3 percent. It also included a host of fee increases Menino had wanted, including one that would allow Boston to increase its towing fee from $13 to the state-allowed maximum of $75.
Menino could not be reached yesterday because he was traveling, but other municipal officials were all too happy to compliment the Senate.
"Clearly, this is a strong package," said Geoffrey Beckwith, executive director of the Massachusetts Municipal Association. "Certainly, by the leadership putting forth these proposals, they stand a much better chance today than they did yesterday."
Senate Republicans and antitax groups were not so laudatory.
Senator Michael R. Knapik of Westfield, the top Republican on the Ways and Means Committee, said the Senate had thus far missed a "once-in-a-legislative lifetime opportunity" to enact serious reforms in the area of public construction rules and education, saying those could have delivered far more revenue to towns than the bill offered yesterday.
Shawn Feddeman, a Romney spokeswoman, said the governor was certain to veto the bill as it now stands.
"If it doesn't have a local referendum, the bill will not get signed," Feddeman said.
Romney's municipal relief package, announced earlier this year, also called for no local taxes or higher fees. Instead, it proposed the elimination of civil service requirements and other measures to cut $50 million to $75 million annually from local expenditures.
Barbara Anderson of Citizens for Limited Taxation said she was glad to hear that Romney would veto the Senate measure as it currently stands. A local meals tax, Anderson said, would result in a confusing patchwork of communities in which some would have a tax while others would not, and would ultimately send diners to those towns savvy or wealthy enough to avoid imposing the tax.
"You can answer it with three words," Anderson said. "Next town over."
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The Boston Herald
Wednesday, June 11, 2003
Senate gives town leaders power to tax
by Elizabeth W. Crowley
Senate leaders aim to buck the no-new-taxes trend on display in the House last week by allowing cities and towns to boost local taxes without first polling voters.
The House shot down several similar local tax proposals last week and Gov. Mitt Romney has vowed to veto any measure that doesn't meet with local voter approval first.
The Senate version of a relief package for cash-strapped cities and towns lets local officials decide whether to boost the meals tax - it is now 5 percent - by 1 to 3 percent. Local officials would also decide whether to hike property taxes beyond the normal limits imposed by Proposition
2½. The House approved a similar exemption but would require a referendum vote.
The Senate plan also would increase dozens of fees and let communities shift as much as half of their pension fund payments in 2004 to 2005 to the future.
Sen. Stanley C. Rosenberg (D-Amherst) said there is a recognition in the upper chamber, "however uneasy it is," that without the ability to raise fees and taxes on the local level, cities and towns will do serious damage to themselves by having to slash education and public safety.
He said the lack of political will on Beacon Hill to raise the statewide income tax means cities and towns must resort to "the most regressive tax there is, the property tax," for help paying the bills.
Medford Mayor Michael McGlynn said he appreciates the effort but was looking for more. "We're still left in the position of having to raise property taxes under the Proposition
2½ limit, cutting services and, by the way, by exempting the overlay account, we'll jack (taxes) up a little more. It's not a good solution."
The State House action came as a budget battle brewed between the Boston City Council and Mayor Thomas M. Menino. The council recommended $49.4 million in "restored" services, claiming that Menino's proposed budget projected a greater reduction in state aid than actually will occur.
Among the council complaints is Menino's plan to privatize school custodial services. The custodial cuts "are one area of disagreement among vast areas of agreement," said council budget chief Michael Ross.
About 150 school custodians packed the council chambers to roar approval for the recommendation that $2 million be restored to preclude privatization.
Steve Marantz contributed to this report.
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The MetroWest Daily News
Wednesday, June 11, 2003
Tax idea eats into your wallet
By Michael Kunzelman, Staff Writer
Restaurant patrons in some cities and towns could be required to pay an additional 3 percent tax on meals under a "municipal relief" bill released yesterday by leaders of the state Senate.
The state already levies a 5 percent sales tax on meals. The Senate's plan would give cities and towns the option of imposing an extra 1 percent to 3 percent tax on the sale of "prepared foods."
The meals tax proposal is one of 37 revenue-enhancing options Senate leaders want to offer to communities to help cope with deep cuts in state aid.
"We're trying to come up with creative ways to help out local communities. This is one idea that seemed to make sense to us," said Kevin O'Reilly, spokesman for the Senate Ways and Means Committee.
The Senate committee endorsed the municipal relief bill yesterday. The full Senate is expected to debate the legislation on Thursday.
Boston Mayor Thomas Menino aggressively lobbied the Legislature for the meals tax, but the restaurant industry is vehemently opposed to the idea.
Peter Christie, president and CEO of the Westborough-based Massachusetts Restaurant Association, said the proposal unfairly singles out restaurants for a tax hike while sparing other retail businesses.
"This is an example of government at its worst," Christie said. "Once they cut you loose and isolate you from the sales tax, there's no stopping them. If the economy continues to struggle, they will need and want more next year. It's just plain unfair."
Last week, House lawmakers approved a municipal relief package that hiked a wide range of fees but did not raise local-option taxes.
House lawmakers, by a vote of 93 to 63, rejected a proposal to raise the tax on meals by 1 percent.
Under the Senate's plan, any increase in the tax on meals would have to be approved by local government leaders, such as a board of selectmen or city council.
Natick Town Administrator Phil Lemnios said he worries that restaurants in Natick would lose business to neighboring communities if the town votes to raise the tax on meals.
"Vulcanizing your tax system like that could be problematic for the mom and pop operations we have in town," Lemnios added.
Gov. Mitt Romney has vowed to veto any local-option tax increase that has not been approved by voters.
Senate leaders balked at requiring voters to approve a tax increase for meals.
"It's not cheap to run a local referendum," O'Reilly said. "We didn't want to create a process that is both lengthy and expensive for cities and towns."
In addition to imposing a meals tax, the Senate's municipal relief bill would hike a range of fees and fines, including:
l Imposing a daily $1 "impact" fee for visiting parks, forests, reservations and other "natural resources." The fees would be deposited in a fund for cities and towns that host the state land and must provide police and fire coverage for the property.
"That's an added cost for those communities that we expect them to cover on their own," said state Sen. Pamela
Resor, D-Acton.
l Allowing municipalities to charge parents of vocational school students a fee for transportation services.
l Increasing the fine for certain motor vehicle violations. The fine for blocking an intersection, for instance, would increase from $50 to $200.
l Increasing the cost of a liquor license fee from $50 to $100.
The Senate's relief package also adopts a plan, drafted by state Sen. Cheryl Jacques, aimed at streamlining revenue collections for cities and towns.
Under the plan, the Registry of Motor Vehicles would be able to collect unpaid parking tickets and excise taxes rather than referring scofflaws to the cities and towns that are owed the money. Under the current system the RMV cannot collect money, and often drivers ignore the fine.
"They lose a lot of people who might otherwise pay off the debts," said Jacques, D-Needham. "This is a surefire way of collecting that money."
The Senate relief bill overlaps with the House plan in many key areas. Both proposals, for instance, contain a plan that could allow cities and towns to collect higher property taxes by exempting overlay amounts from the Proposition
2½ levy limit.
"I think this is a good first round," Jacques said of the Senate's bill. "There are a lot of substantive changes here, a lot of things that will help cities and towns cope with the financial Pressures they're under."
Senators have until noon today to file proposed amendments to the bill.
"I doubt this (bill) will make up anywhere near the cuts in local aid, but it does provide some additional flexibility," said state Sen. Richard Moore, D-Uxbridge.
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The Boston Herald
Wednesday, June 11, 2003
A Boston Herald editorial
Tax hike train stalls
As if to answer those annoying TV ads being run by the Massachusetts Teachers Association - you know, the ones that indicate civilization as we know it will end if we don't raise taxes - the taxpayers of Massachusetts are telling a whole different story to the Herald's pollster.
Some 412 registered voters were surveyed by RKM Research & Communications on a number of issues, including this one: "Should funding for certain programs be restored by increasing taxes or should cuts be made in spending necessary to prevent tax increases?"
A solid 52 percent of those surveyed were for budget cuts, only 32 percent favored raising taxes. Even Democrats weren't wild for tax hikes with a slight plurality choosing cuts, according to pollster R. Kelly Myers.
"Voters continue to want politicians to impose the discipline to control spending," Myers said.
That should lay to rest all those phony-baloney polls that have people in Massachusetts practically begging to have their taxes raised (where do they find those people?). Invariably those surveys seem to come from outfits dependent on public funding. Funny how that happens.
Myers' results are consistent with other findings in the poll, especially the one that showed 80 percent of voters worried that the economy is either stalled or getting worse and two-thirds worried more about their family's economic straits than about a terrorist attack.
Most of Beacon Hill's politicians have gotten the message that the only thing more tapped out than the state's coffers are the state's taxpayers.
As for the Mass. Teachers Association, it should ask for its money back for those wretched commercials, which happily no one believes.
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Associated Press
Wednesday, June 11, 2003
Teachers due bonuses feel cheated by legislative action
By Jennifer Peter
When they answered Massachusetts' call for "the best and the brightest" to join the teaching profession, they were made a promise.
Make a four-year commitment to the state's neediest school districts and get a $20,000 bonus.
"There were no ifs, ands, or buts, and there was no fine print," said Elizabeth Vann, a former Chicago professor who now teaches bilingual education at Brockton High School. "There was no asterisk that said it was subject to the Legislature's continued budgeting."
But now Vann and about 200 other teachers who were due to get their next $4,000 installment in October have been informed by the state's education commissioner that the payment may be another victim of the state's financial decline.
Also in jeopardy is a $5,000 payment due to about 300 veteran teachers who participate in a mentoring program that promises participants up to $50,000 over 10 years for obtaining national certification and sharing their skills with less experienced colleagues.
"I feel betrayed," said Jessie Maeck, 50, a teacher at Lawrence High School who was due to receive her final installment in October. "I've done my part. I've been giving my all for three years. Can't they finish up?"
The House version of the state budget eliminates all funding for the two programs, while the Senate's version includes just $1 million. The programs together owe teachers $2.3 million as of Oct. 1.
Education Commissioner David Driscoll sent a letter to the teachers in the bonus program in late May, warning them that the next installment may not arrive, depending on the outcome of a legislative conference committee that is now drafting a budget compromise.
Legislative budget and education officials did not return calls for comment.
"I wouldn't call this reneging on a promise," said Department of Education spokeswoman Heidi
Perlman. "We recognize that in a tight budget year, if this can't be sustained, it can't be sustained. In a perfect world, we'd like to keep it going, but we realize the fiscal realities we're facing this year."
That reality was much different in 1998, when the state Legislature used a portion of the state's ever-expanding surplus to create a $60 million teacher quality endowment fund to recruit new blood for the neediest school districts, where teacher shortages were the greatest.
It was also an attempt to improve the reputation of Massachusetts teachers, who had become the butt of jokes after hundreds of aspiring educators failed a certification exam.
Over time, the program was tweaked. The fund's total was increased to $70 million, with the interest used to pay the annual bonuses. In response to criticism that too many of the teachers were going to suburban districts, the program was redirected to serve only the neediest localities.
This spring, the state decided not to enroll any new teachers in the program because of financial concerns.
Even the Massachusetts Teachers Association, which embraced the mentoring bonus program but was critical of the signing bonus for new teachers, opposes the state's decision to discontinue payments to those who are still owed money.
"It breaks the promise," said MTA president Cathy Boudreau. "They pay lip service to the importance of attracting and retaining teacher, but when it comes to funding, it slips away."
Many of the teachers are also frustrated by the fact that legislative leaders are now considering a bill allowing them to give extra stipends to their top deputies.
"It's just very callous," said Susan Haltmaier, a former energy economist who now teaches ninth-grade math at Lawrence High School. "They can give raises to their committee chairmen but then forget about us."
When Haltmaier took the teaching job, her salary decreased from the low six figures to $38,000. If the bonus payment doesn't come through, Haltmaier said she would remain a teacher but would have to take on more after-school and weekend tutoring.
Susan Daniels, a 54-year-old manufacturing supervisor-turned-math teacher at Brockton High School, said she too would remain with her new career if the last installment of her bonus isn't paid.
"It would hurt, but it wouldn't cause me to change careers again," said Daniels. "But I believe the state's reneging on a promise. They're backing out on a contract."
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The Boston Globe
Wednesday, June 11, 2003
Deal may end banks' tax fight
Banks OK $90m deal in tax fight
By Scott Bernard Nelson, Globe Staff
Sixty Massachusetts banks have agreed to pay disputed back taxes worth more than $90 million by June 30, the end of the state fiscal year, said state officers and corporate executives who spent the past three months negotiating a settlement. Most of the money will go to the rainy day fund, which will help the state meet its obligations in the final days of the fiscal year.
This week, Governor Mitt Romney asked the Legislature for permission to tap the fund for as much as $150 million. The agreement could help replace that money, keeping the stabilization reserves at or near the current $175 million level. The banks have been battling the Massachusetts Department of Revenue for months over real estate subsidiaries they set up in the late 1990s. A loophole they used was marketed heavily by KPMG, one of the nation's largest accounting firms, and helped them avoid state taxes on as much as 10 percent of their income between 1999 and 2002.
"All but a couple" of the banks, said one government official, have agreed during the past week to a deal that calls for them to pay 50 percent of the taxes and 50 percent of the interest they owe by June 23. That allows the state to book the money before the end of its fiscal year.
The settlement, though, could still fall apart. Under its terms, the Department of Revenue has to receive at least $90 million from the banks before the deal is official. If some change their mind and the total drops below that level, state regulators have the right to call off the deal and send everyone to court to battle over a law, approved in March, that closed the loophole.
One bank executive involved in the talks said "it is extremely unlikely" the deal will collapse. He said most banks are happy to get the legal question behind them and to avoid paying all of the taxes the state says are owed, while the state is happy to get cash up front during a budget crisis.
"Both sides want to avoid what would probably be protracted litigation," the executive said. "That could go on five years, seven years, who knows? Nobody wants that." Besides, he said, "the state needs the money for its coffers, and it needs it now."
Guided by tax consultants during the 1990s, banks created real estate investment trusts, or
REITs, and made them subsidiaries.
Like mutual funds, REITs don't pay taxes. Instead, they pass their earnings to shareholders, who have to pay the taxes. But under state law, dividends that subsidiaries pay their parent companies receive a 95 percent waiver on income taxes.
So the subsidiaries avoided taxes, because of their status as REITs, and the banks largely avoided taxes, because of their status as parent companies.
State officials say this all came to light in 2000, when the Department of Revenue audited the banks' 1999 tax returns. The state says the department challenged the use of the exemption immediately. The banks, though, have argued that they heard about the state's complaints much later.
When Revenue Commissioner Alan LeBovidge came on the job in early 2002, he brought the issue to the attention of the administration of the acting governor, Jane Swift. "We had to stop the pipes from leaking," he said at the time.
In March, the Legislature eliminated the loophole for the current tax year. Romney signed the bill March 5.
In the process, LeBovidge also got the Legislature to say that allowing a double exemption was never the original intent of the law, a provision that effectively outlawed use of the loophole for every year since 1999. The issue had never come up before then. LeBovidge calls this lookback provision "a clarification." The banks see it differently. The industry argued that the tax treatment it received had been tacitly approved by regulators. The banks also bristled at the fact that the Legislature not only closed the loophole, but made the change retroactive, changing the rules of the game midstream, they said.
Lining up behind the Massachusetts Bankers Association, the banks threatened to fight the demand for payments, which totaled at least $140 million
industrywide. Public banking companies had to set aside provisions for the payments, which showed just how much the payments were affecting them.
State Street Corp., for example, reported that it was on the hook for more than $26 million. Investors Financial Services Corp. said it owed $13.9 million, and Seacoast Financial Services Corp., the parent of Compass Bank and Nantucket Bank, reported that the state wanted $11.2 million.
By agreeing to the deal, which was brokered by the statewide trade group, they pay only 50 cents on the dollar. For banks that send in checks by the deadline, assuming all goes according to plan, the case is closed.
For the handful of holdouts, however, the cases are likely to head to court. One government official involved in the talks said the remaining banks, which he did not name, "aren't likely to come to the table," even after their peers sign on the dotted line.
Under the new legislation, money collected for tax years 1999 through 2001 will go into the rainy day fund. Money for the 2002 tax year will be folded into the general fund. Last night, none of the officials and executives who spoke to the Globe knew how much fell into either category, although one said "most" came from the earlier tax years.
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The Worcester Telegram & Gazette
Wednesday, June 11, 2003
Romney has pay raises for legislators in his sights
By Shaun Sutner
In the most recent sparring match between lawmakers and Gov. Mitt Romney, it is the governor's turn to deliver the next blow.
In the wake of the Senate's rejection of his governmental reorganization plan last week, Mr. Romney is poised to veto or substantially weaken a legislative pay raise bill sought by House and Senate leaders.
Supporters say the bonuses reward lawmakers for extra work and responsibility in key positions, while critics say the unchecked power to dole out extra money gives leaders too much control over rank-and-file legislators.
"What troubles the governor is that it takes the governor and the public out of the process in the future," said Shawn Feddeman, Mr. Romney's press secretary.
Ms. Feddeman said the governor has no problem with setting up new committees of Homeland Security and Medicaid, as Mr. Finneran wants to do, but "compensation is another issue."
The measure would allow legislative leaders without approval of the governor to create new committees and hand out extra bonus pay to their chairmen and to lawmakers in other new and existing leadership positions.
Whether lawmakers could override a veto with the necessary two-thirds vote is questionable because the measure passed the House by a relatively slim margin in April.
The Senate is expected to enact the bill routinely tomorrow, after which it will go to the governor's desk, unless House leaders craft new legislation that is more limited.
Meanwhile, a potential Republican move to change the bill by making pay raises and committee reorganizations subject to two-thirds or four-fifths votes appears to have fizzled out.
Republican lawmakers, many of whom voted for the measure in the House originally, will wait for the governor to veto or change the bill, according to House Minority Leader George N. Peterson Jr. of Grafton.
Lawmakers' base pay is $53,381, with leadership stipends ranging from $7,500 for a typical committee chairman to $25,000 for chairman of the Ways and Means Committee.
About 50 members of the 160-person House already get bonuses. Nearly all of the 40 senators get extra pay.
The bill could lead to raises for Rep. Vincent A. Pedone, D-Worcester, and Sen. Stephen M. Brewer,
D-Barre, who have new posts this year that were identified for pay hikes by House Speaker Thomas M. Finneran and Senate President Robert E. Travaglini.
But Mr. Brewer, chairman of the new Senate Committee on Rules and Ethics, said Mr. Romney's threat to veto the bill appears to be political payback for the Senate's overwhelming rejection of his reorganization plan.
"It doesn't surprise me that it would be politically motivated," he said. "I believe the House should be able to manage its affairs and the Senate should be able to manage its affairs."
Despite the timing of the governor's veto threat on Friday, the day after the defeat of his so-called Article 87 restructuring, Ms. Feddeman said the governor's position on the issue has nothing to do with politics.
Ms. Feddeman noted that Mr. Romney had raised concerns about the pay provisions of the bill shortly after taking office in January.
Mr. Brewer's committee is the result of a merger between two formerly separate committees. He had been slated to received another $7,500 in bonus pay for running the new committee on top of the $7,500 chairman's pay he already receives.
Another senator, Stanley C. Rosenberg, D-Amherst, was supposed to get an extra $7,500 for his new post of president pro tempore of the Senate. He already gets a $7,500 bonus as vice chairman of the Taxation Committee.
In the House, Mr. Finneran originally wanted Mr. Pedone to get a $7,500 bonus in his new position of vice chairman of the Committee on Science and Technology, but pulled back after a burst of criticism in February.
Under the speaker's plan, stipends for the new chairmen of the Transportation and Health Care committees would be doubled to $15,000.
Also, the Homeland Security and Medicaid chairmen would get $7,500 bonuses, though Rep. Martin J. Walsh, D-Boston, has said he would not accept a bonus for running the Homeland Security committee.
Barbara C. Anderson, executive director of Citizens for Limited
Taxation, has been lobbying Mr. Romney to turn back the bill, positioning the issue as one of checking the political power of the Legislature.
"The speaker already controls a third of the House, now this gives him the potential to control another third," she said. "We should not allow one man, Tom Finneran, to spend taxpayer dollars on his favored legislators without getting approval from the other branch and the governor."
Rep. John J. Binienda, D-Worcester, who gets leadership pay as House chairman of the Energy Committee, said he does not expect lawmakers to be able to override a gubernatorial veto.
Mr. Binienda bemoaned the rather strained relations between the governor and lawmakers in recent months.
"Somewhere down the road, something has to give," he said. "One way for the governor to offer an olive branch is for him not to veto it."
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The Salem News
Tuesday, June 11, 2003
Essex rejects new school by 11 votes
By Jenni Glenn, Staff writer
Eleven votes defeated the proposal to build a $35.5 million Manchester Essex Regional High School.
Essex voters rejected the plan to construct a new high school-middle school complex on Lincoln Street in Manchester by a vote of 624 to 613 at yesterday's special election, which saw one of the town's largest voter turnouts. Manchester residents voted 1,085 to 624 to support the proposal yesterday.
The project needed a majority vote in both towns to go forward.
If six Essex voters had changed their votes from no to yes, the school proposal would have passed, said school district Building Subcommittee Chairman Joseph "Jody" Davis.
"That's as close as it gets," he said.
Davis anticipates the project's proponents will call for a recount of the Essex votes. An Essex resident must petition for a recount to take place, said Essex Town Clerk Sally Soucy.
Several Essex voters leaving the polls felt the cost of building a new school and upgrading town-owned athletic fields was too high. Residents already are obligated to pay taxes for the construction of a $27.2 million sewer system.
"I'm dead against it," said Essex voter Peter Wilson.
Wilson cannot afford to purchase a house in Essex. His mother owns a home in town, but he feared she would have to sell it in order to survive the proposed tax increase for the school.
"They're going to end up taking my mother's house for the school," he said.
But Manchester parent Suzanne Otterbein said even with the proposed tax increase, her tax bill would still be lower than when she lived in Charlestown a year ago. She moved to Manchester primarily for the quality school system, which she feels should be supported with new facilities. She thought the proposal, which could be eligible for 50 percent reimbursement of construction costs from the state, was a better alternative than funding an estimated $11 million in repairs needed for the current high school.
"If we vote yes today, then we get refunds from the state and we won't have to pay for repairs later," she said.
The arguments in favor of the new school didn't convince Essex resident Cheryl Toledano. She doesn't have children, and she said she didn't want to pay increased taxes.
"The taxes are high enough here," she said. "They just went up. I don't want them to go up again."
The school proposal, the lone question on yesterday's ballots, drew about 49 percent of registered voters in both towns to the polls. The Essex turnout was the highest in the last 14 years for a local election, Soucy said.
"I don't know when we've ever had a town election that high," she said.
Essex's close vote followed on the heels of last week's Town Meeting, where a margin of eight votes placed the school proposal on the ballot. Even before the polls closed, proponents like Manchester resident Grace Babikian, who held signs showing her support for the project outside the polling site at Manchester Memorial School, wondered what would happen if the proposal failed.
"The alternative of not doing this is very scary," she said. "It's been said why we need a new school. If this doesn't pass, where does that leave us?"
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The Worcester Telegram & Gazette
Wednesday, June 11, 2003
Towns split on school money
By Matthew Bruun
Voters in Ashburnham last night rejected Proposition 2½ overrides totaling almost $1.3 million that would have provided more money for schools and local government, deciding the issues by fewer than 50 votes.
Their counterparts in Westminster approved the increased school funding, but since the measure did not pass in both communities of the regional school district, the matter failed.
More than 27 positions are expected to be slashed because of the monetary shortfall, Ashburnham-Westminster Superintendent of Schools Charles F. Thibodeau Jr. has said.
School committee member Keith Glenny said the impact on the school system would be harsh, even though the doors would open and the lights would go on.
"It's going to be nothing but a warehouse," he said.
The defeat of the Ashburnham local government funding could mean the loss of one full-time firefighter, 19 call firefighters and two full-time police officers. The positions can be restored if state aid is higher than town officials have estimated.
Ashburnham voters did OK a new ambulance and road repairs, however.
"We've got a new ambulance but no one to drive it, and roads but no buses to go on it," said Ashburnham Fire Chief Paul J. Zbikowski, describing the results to voters who showed up at the John R. Briggs Elementary School last night to see the outcome of the day's voting.
Chief Zbikowski said the money in his budget would not last the year, and the cuts in personnel could have tragic consequences.
"There may be days that ambulance or that firetruck doesn't leave the station," he said.
In the wake of the school money defeat, the Ashburnham-Westminster Regional School Committee is to meet tonight at the Overlook Middle School.
The school measure, seeking $844,953 in Ashburnham, failed by a vote of 837-790. Westminster voters, faced with a school override seeking $473,194, gave their approval by 1,007 votes to 717.
Ashburnham voters turned down the $421,796 request for governmental services 834-786.
Ashburnham voters did approve a debt exclusion seeking $130,000 for the repair and rebuilding of town roads by a vote of 875-745. They also gave their approval to a $120,000 debt exclusion to buy a new ambulance for the Fire Department, 832-783.
With 1,630 votes cast, the turnout was less than half the town's 3,581 registered voters. In Westminster, where 1,725 ballots were cast out of 4,865 registered voters, turnout was about 35 percent, Town Clerk Denise MacAloney said.
For the cash-strapped school department, it was the fourth failed override in three years. A community effort was organized seeking support for the override, the loss of which will mean an impact of $1.77 million, according to school officials.
"We really tried to be careful to stay away from scare tactics and negative propaganda," said school committee member Nancy Bakanowsky. She said the combined failure of the overrides would have a huge ripple effect on the whole town.
She declined to speculate what the school committee would elect to do next.
"The wound is going to be fresh, and we really need to take a step back and take a look at what's going on," she said.
"It's disappointing," Mr. Glenny said of the school committee. "It was close. I don't know how to interpret it. There are options. We'll have to discuss options and see what happens next."
An issue of contention in the school system was the recent teachers' contract, which included 6 percent annual pay raises. That contract expires this year, school committee member David Christianson said.
"We knew it would be close," Mr. Christianson said, referring to the school override. He said he was surprised by the voters' rejection of the municipal budget override. "I thought if something was going to pass it was going to be the town."
Correspondent Betsy Haley-Cormier contributed to this report.
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