CLT
UPDATE
Wednesday, August 24, 2005
“There is nothing new under the sun”
New “Hamill
Commission”
again to assault Prop 2½?
Under the leadership of a retired bank president who
played a similar role in the late 1980s, a group of about two dozen city
officials and financial specialists has been working on a plan to help
financially strapped cities and towns in Massachusetts.
The group's report, to be unveiled next month when legislators reconvene
on Beacon Hill, is likely to include new ways of funneling state dollars
to cities and towns and more flexibility for local leaders grappling
with high healthcare costs. The specific proposals are a closely guarded
secret, however.
Former Sovereign Bank president John P. Hamill, who chaired a similar
panel in 1989, is leading the effort, which was launched by the
Metropolitan Mayors Coalition....
The 1989 panel proposed that cities and towns be allowed to exceed the
state's property tax limit in years of high inflation and that they be
guaranteed 26 percent of the state's revenues every year.
The Boston Globe
Tuesday, August 16, 2005
Panel studies municipal aid plan
Report expected in September
A CLT Blast from the Past
A panel of business and local government leaders appointed by
Gov. Dukakis formally unveiled its proposal taking aim at Proposition 2½
yesterday, but the state’s champion of the popular tax limitation law predicted
the recommendations would go the way of past attempts to tinker with 2½ – swift
and certain defeat.
“I don’t think the Legislature is that stupid,” said Barbara Anderson,
director of Citizens for Limited Taxation, responding to the changes
recommended by the Governor’s Task Force on Financing Local Government.
As reported yesterday, the 15-member special commission, with Shawmut Bank
president John P. Hamill as its chairman, is recommending that property taxes be
allowed to rise each year at the rate of inflation, instead of the 2.5 percent
rate established under Proposition 2½.
The Boston Globe
December 15, 1989
Panel’s report on Prop. 2½ hits a nerve
Dukakis is attempting to resurrect the recommendations of a
task force headed by Shawmut Bank President John Hamill, which was convened last
year to look into issues of local finances. The Hamill Commission’s report was
discounted almost as soon as it was issued. Deservedly so. When all was said and
done, its main suggestion was to dismantle Prop 2½ and make it easier for local
officials to raise taxes.
Dukakis, who opposed the historic tax reform from its inception, thinks that
would be a good idea. It wouldn’t.
Proposition 2½ works just fine. It has not emasculated the treasuries of the
state’s cities and towns. Since its enactment a decade ago, property tax
revenues have risen by an average of around 5.5 percent a year – faster than
inflation. In Boston, property tax collections have increased by as much as 9
percent a year....
The one thing that’s working – the one protection property owners can still rely
on – is Proposition 2½. Gutting it now would be senseless.
A Boston Herald editorial
April 19, 1990
Proposition 2½ ain’t broke and doesn’t need fixing
Chip Ford's CLT Commentary
“What has been will be again, what has been
done will be done again; there is nothing new under the sun.”
-- Ecclesiastes 1:9
“The more things change, the more they stay the
same.”
French writer Alphonse Karr, Les Guepes (1849)
“Those who cannot remember the past are
condemned to repeat it.”
George Santayana, The Life of Reason, Volume 1, 1905
Sixteen years later now-retired banker John Hamill is back heading up
another "commission" to examine municipal finances and how
they can be fortified. His last foray into
this arena brought a recommendation to gut Proposition 2½ -- changing
the formula from tax increases of not more than 2.5 percent annually
under our law adopted by the voters in 1980, to an
increase instead adjusted to the rate of inflation each year.
Will he and his new contemporaries and their
similarly-constructed commission regurgitate his last commission's
recommendations and again attempt to gut Prop 2½, or has he learned a
lesson from his and Michael Dukakis' dismal failure in 1990?
"I don’t think the Legislature is that stupid,"
Barbara accurately predicted in 1989. But is that still the case in
2005, after last year's election despite a near-full slate of good
opposition candidates, when the Republican Party actually lost seats in
the body?
Have you noticed how we have to keep fighting the
same battles, over and over again? When we finally win one, the big
government tax-and-spenders just wait a few years then return and
throw the same stuff at us.
"Eternal vigilance is the price of liberty," Thomas
Jefferson warned ("There is nothing new under the sun" I'm afraid), and
is that ever the case here in Massachusetts. This is why it's so
important that CLT is still here, still able to speak for taxpayers --
has the "institutional memory" to recall how the state got here, and
why.
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Chip Ford |
Barbara Anderson's Addendum
Chip Faulkner and I both remember it well. The Hamill
Report was presented in late 1989, right after the Dukakis "temporary"
income tax hike and just before the next Dukakis income tax hike in
1990. We attended the news conference at the State House and there are
Boston Globe and Boston Herald photos of me sitting in the audience and
a determined Dukakis standing behind and above me, hands on hips,
glaring down. John Hamill stated that some provisions of Prop 2½ "are no
longer appropriate" and made his recommendations, that the levy limit be
adjusted for inflation, and that long-term capital improvement debt be
excluded from it. The commission also wanted to allow cities and towns
to impose special excise taxes on meals, admissions and parking, and to
increase licensing fees for cable television. Not to mention "adjusting"
the auto excise tax. (Prop 2½ lowered it annually from $66 to $25
per/$1000 book value.)
As soon as the press conference was over, we attacked and that was the
end of it. Though most of the "business community" supported the
commission, our Massachusetts High Technology Council Prop 2½ partner
and some legislative allies joined with us and the report died before it
was even distributed. The recent news story about the new Hamill
Commission doesn’t mention the total failure of the last one and I
wonder if anyone but us remembers this!
Actually, along with the untenable Prop 2½ "adjustment," there were some
good ideas from the commission that are still floating around, like
giving communities more flexibility in public construction, special
education costs, and union negotiations. Unfortunately, we could not
afford to dilute our counter-attack by saying anything good about the
proposal, so those things died too. We can only hope that they are the
only suggestions resurrected by the new Hamill Commission.
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Barbara Anderson |
The Boston Globe
Tuesday, August 16, 2005
Panel studies municipal aid plan
Report expected in September
By Scott S. Greenberger, Globe Staff
Under the leadership of a retired bank president who played a similar
role in the late 1980s, a group of about two dozen city officials and
financial specialists has been working on a plan to help financially
strapped cities and towns in Massachusetts.
The group's report, to be unveiled next month when legislators reconvene
on Beacon Hill, is likely to include new ways of funneling state dollars
to cities and towns and more flexibility for local leaders grappling
with high healthcare costs. The specific proposals are a closely guarded
secret, however.
Former Sovereign Bank president John P. Hamill, who chaired a similar
panel in 1989, is leading the effort, which was launched by the
Metropolitan Mayors Coalition. The group began its work last December.
Even as the economy improves, state aid to cities and towns has not
returned to pre-recession levels and many communities are straining
under the fast-rising cost of health insurance. Many local leaders say
they have been forced to raise property taxes and have been unable to
rehire the teachers, police officers, and firefighters they had to lay
off during the downturn. Rising fees for trash pickup and school sports
have brought the problem home to many Bay State residents.
Mayor Thomas M. Menino, who has repeatedly asked the Legislature for
more revenue-raising power, yesterday said that "the cost of government
continues to go up" while help from the state and federal governments
declines. Representative Rachel Kaprielian, who cochairs the
Legislature's Municipalities and Regional Government Committee, said
momentum is building on Beacon Hill for action to help cities and towns.
"It's harder and harder to make the budgets balanced from the municipal
point of view -- there's just no question about that," said Kaprielian,
a Watertown Democrat who is working with the panel. "This affects
everybody. It's not the flashiest issue in the world, municipal finance.
But it really makes a difference in people's lives."
The 1989 panel proposed that cities and towns be allowed to exceed the
state's property tax limit in years of high inflation and that they be
guaranteed 26 percent of the state's revenues every year. Both of those
proposals foundered in the Legislature.
Julie Teer, a spokeswoman for Governor Mitt Romney, noted that the
governor has sent more state money to cities and towns but that "local
governments need to recognize that there is not a bottomless well of
money."
In the past, Romney has criticized local leaders for signing overly
generous contracts with municipal workers.
Return to top
A CLT Blast from the Past
The Boston Globe
December 15, 1989
Panel’s report on Prop. 2½ hits a nerve
By Renee Loth, Globe Staff
A panel of business and local government leaders appointed by Gov.
Dukakis formally unveiled its proposal taking aim at Proposition 2½
yesterday, but the state’s champion of the popular tax limitation law
predicted the recommendations would go the way of past attempts to
tinker with 2½ – swift and certain defeat.
“I don’t think the Legislature is that stupid,” said Barbara Anderson,
director of Citizens for Limited Taxation, responding to the
changes recommended by the Governor’s Task Force on Financing Local
Government.
As reported yesterday, the 15-member special commission, with Shawmut
Bank president John P. Hamill as its chairman, is recommending that
property taxes be allowed to rise each year at the rate of inflation,
instead of the 2.5 percent rate established under Proposition 2½.
It also recommends exempting interest on money borrowed for capital
improvements from the cap on increased spending.
Yesterday, Hamill explained that some provisions of Prop. 2½ “are no
longer appropriate” and that individual communities should be given more
flexibility to raise money at the local level.
Hamill stressed that the sections of the commission report dealing with
Prop. 2½ are only a small part of its package of recommended local
financing changes. A significant additional suggestion it that cities
and towns be guaranteed 26 percent of the state’s revenues every year,
in order to “get away from the uncertainty built into the system of
local aid.”
In 1982, as part of a campaign promise, Dukakis pledged that a “regular,
predictable” 40 percent of the state’s sales, income and corporate taxes
would be dedicated for local aid each year. But plummeting tax revenues
this year meant an actual decrease in local aid.
The commission’s 26 percent “promise” would be more reliable, Hamill
said, because it would be based on the actual amount of revenue
collected in the complete fiscal year just past, rather than the often
fluctuating revenue estimates for the coming year.
New Bedford Mayor John Bullard, a commission member, said the 2.5
percent growth cap is an “arbitrary” figure. Since the rate of inflation
has been running about 2.5 percent for the past 10 years, Bullard said,
the limit has forced local governments to make cuts every year in order
to remain within the cap. “It was OK to make those cuts in the first 10
years,” he said. “Now it’s not rational.”
Bullard said that, although Prop. 2½ includes an override options, where
voters can allow their towns to exceed the limit through a local
referendum, the political difficulty of mounting an override drive has
prevented many local communities from making needed capital improvements
in schools and other public buildings.
The commission also recommended allowing municipalities to adopt local
excise taxes, limited to meals, parking, admission and hotel taxes.
In her response yesterday, Anderson said her group would also fight this
recommendation. “We oppose adding anything to the total tax burden,” she
said.
Sam Tyler, director of the Boston Municipal Research Bureau, estimated
yesterday that the commission’s four major recommendations could mean an
additions $38 million for Boston in the next fiscal year. Most of the
additional revenue – $23.4 million – would come from the guaranteed 26
percent share of state taxes for unrestricted local aid.
Increasing the tax ceiling from 2.5 percent to the inflation rate would
bring in an additional $10.9 million, Tyler said, and excluding capital
debt from the cap would save $3.5 million, based on the city’s average
bond issue of $65 million each year.
In addition, Tyler said, a hypothetical 15 percent parking excise tax,
one of the proposed local levies in the plan, could mean another $22
million for the city.
“As a complete package it makes a lot of sense,” Tyler said. “It’s very
thoughtful and should be considered seriously by the Legislature and the
governor.”
Although Hamill’s commission included a strong representation from the
business community, the more conservative High Technology Council
yesterday came out in opposition to the plan.
“This should be viewed as a full attack on all the benefits that
Proposition 2½ had provided over the past 10 years,” said Chris
Anderson, general counsel for the High Technology Council. “It’s a
direct snub at one of the few vehicles that the voter has been able to
rely on to control costs and allow local communities to establish their
own spending priorities.”
The CLT’s Anderson added that the Shawmut Bank and other “establishment”
leaders in the state’s business community were never behind Prop. 2½.
“They don’t know what it’s all about,” she said.
“Mr. Hamill can probably afford higher property taxes,” she said. “Most
CLT members can’t.”
Even if the Legislature is “stupid” enough to enact the changes in
Proposition 2½, Anderson said, there is an escape clause for the
taxpayers: an initiative referendum question that Citizens for Limited
Taxation has lined up for the 1990 ballot to roll back any tax or fee
increase adopted between now and Election Day.
Globe reporter Steve Marantz contributed to this story.
Return to top
The Boston Herald
April 19, 1990
A Boston Herald editorial
Proposition 2½ ain’t broke and doesn’t need fixing
The on-again, off-again assault on Proposition 2½ is on again. Last
Thursday, Gov. Michael Dukakis filed legislation intended to knock down
a central pillar of that law: the prohibition against unilaterally
increasing property tax levies by more than 2.5 percent a year.
Dukakis is attempting to resurrect the recommendations of a task force
headed by Shawmut Bank President John Hamill, which was convened last
year to look into issues of local finances. The Hamill Commission’s
report was discounted almost as soon as it was issued. Deservedly so.
When all was said and done, its main suggestion was to dismantle Prop 2½
and make it easier for local officials to raise taxes.
Dukakis, who opposed the historic tax reform from its inception, thinks
that would be a good idea. It wouldn’t.
Proposition 2½ works just fine. It has not emasculated the treasuries of
the state’s cities and towns. Since its enactment a decade ago, property
tax revenues have risen by an average of around 5.5 percent a year –
faster than inflation. In Boston, property tax collections have
increased by as much as 9 percent a year.
Nor has it blocked any city or town from increasing its tax levy at a
higher rate. All that Prop 2½ ever required was that local voters agree.
Over the years, voters across the state – from tiny towns like Florida
to bustling cities like Northampton – have approved hundreds of
overrides.
This year, reports Shiela Cheimets of the Massachusetts Municipal
Association, there are 740 override questions on local ballots. “That’s
got to make it clear that something is very wrong,” she says.
And she’s right: What’s very wrong is the state’s fiscal management, the
looming budget deficit (the state’s fourth in a row), the paralysis on
Beacon Hill, and the inability to reduce state spending to a level
commensurate with state revenue.
Allowing communities to levy a variety of new local option taxes, as the
governor’s bill would do, is a partial solution to the current local aid
crunch. It’s not a bade idea to give cities and towns such flexibility.
However, the linkage of those optional taxes to this attack on Prop 2½
is unfortunate.
The one thing that’s working – the one protection property owners can
still rely on – is Proposition 2½. Gutting it now would be senseless.
Return to top
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