CLT
UPDATE
Monday, August 29, 2005
"Hamill Commission II" attacks Prop 2½
A task force formed by Massachusetts mayors wants the
state to consider boosting excise tax rates on cars and city taxes on
restaurant meals, and moving thousands of municipal retirees to
Medicare, according to the group's draft report....
The report comes as cities and towns across the state struggle with a
tax structure that leaves them heavily reliant on property taxes and
state aid to cover the rapidly increasing costs of employing teachers,
firefighters, and other public employees. Most alarming to local
officials has been the meteoric rise of healthcare costs in recent
years: A recent Massachusetts Taxpayers Foundation survey of 32
communities found that employee healthcare spending was up 63 percent
since 2001....
Task force member Michael Widmer, president of the
Massachusetts Taxpayers Foundation, said the report will provide the
Legislature with a clear picture of what towns and cities are facing.
"I think this will be a very important blueprint for municipal finance
for the next decade," Widmer said....
The task force's draft report urges lawmakers to look at aligning excise
tax rates more closely with the actual value of vehicles, thus keeping
tax bills higher longer. A change could mean big money: Excise taxes
contributed more than $600 million in fiscal 2004, according to the
draft report of the Municipal Finance Task Force....
Widmer said excise taxes were far higher until they were reduced as part
of tax-cutting efforts in the early 1980s.
"The notion of updating the auto excise tax 25 years later is hardly a
radical notion," he said.
The Boston Globe
Sunday, August 28, 2005
State may be asked to raise excise tax
Since we led the fight to cut the auto excise in
1980, let us be among the first to say "No" to increasing it....
The amount collected by all Massachusetts cities and
towns from the auto excise was $266 million in 1980. It dropped to $112
million after the rate cut, then rose to $534 million in 2000. Though
the rate was lower, the value of automobiles has increased to generate
plenty of revenue from what was originally another "temporary" tax....
This year, as we celebrate the 25th anniversary of
Proposition 2½, we intend to stop this new assault on Prop 2½ as well.
CLT NEWS RELEASE
Monday, August 29, 2005
Again to the "Hamill Commission" –
Hands off voters' Prop 2½!
Chip Ford's CLT Commentary
Can we at CLT call them or what?
In my commentary for the CLT Update of Aug. 24 ("'There
is nothing new under the sun' - New 'Hamill Commission' again to assault
Prop 2½?"), I noted how this is the second time the "Hamill
Commission" has been convened. It's signature "recommendation" in 1989
was to gut Proposition 2½ and, we suspected, this
new incarnation would likely do no less.
I expected that any such
commission would, of course, include Michael Widmer and his so-called
Massachusetts Taxpayers Foundation --
and again he and it are present to provide cover
and "respectability" as usual for another round of proposed tax hikes on
the common taxpayer. M. Robert Rose, executive vice president of
Sovereign Bank is a member of
MTF's Board of Trustees (an assemblage of Boston's and the state's
most powerful corporate elite),
commission Chairman John Hamill is the bank's retired president; how far
away could Widmer be?
Again the Hamill Commission's
signature recommendation is an attack on Proposition 2½.
Along with capping property tax increases, Prop 2½ reduced the annual
municipal auto excise from $66/$1,000 assessed value to $25/$1,000 -- a
savings of $41 per $1,000 value of a vehicle every year for each owner.
(E.g., if your car is valued at $5,000 then you save $205 every year
thanks to our Prop 2½; at $10,000 you save
$410 every year, etc.)
Yesterday's Boston Globe report
made no
mention of this latest assault on Prop 2½
-- Widmer referred only to the excise tax that was "reduced as
part of tax-cutting efforts in the early 1980s." He conveniently left
out "reduced" by whom (CLT and the voters), "reduced" how (by a ballot question), or
"reduced" why
(municipalities were taxing residents to death, so taxpayers revolted).
With the skyrocketing cost of gas, the steadily
mounting expense of owning and driving a car, can you
imagine such a preposterous recommendation?
Attacks on Proposition 2½ continue. The last assault on the auto excise
was defeated in 2002, just three years ago.
These current recommendations are obviously being
leaked piece by piece; trial balloons intended to gauge public reaction.
The final report could well include further assaults on Prop 2½. We must
remain vigilant; this commission must be defeated once again.
We have joined the debate, even though CLT again
wasn't invited to participate in a commission on municipal finances.
Were any of you taxpayers asked for your opinion?
Our news release
addressing this recent revelation was sent out to the media and
others statewide this morning.
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Chip Ford |
The Boston Globe
Sunday, August 28, 2005
State may be asked to raise excise tax
Car rate, state aid listed in report
By Scott Helman, Globe Staff
A task force formed by Massachusetts mayors wants the state to consider
boosting excise tax rates on cars and city taxes on restaurant meals,
and moving thousands of municipal retirees to Medicare, according to the
group's draft report.
The task force of municipal officials and other specialists on local
government also recommends that Massachusetts set state aid to
communities at a fixed percentage of state tax receipts every year, so
the payments do not drop disproportionately during budget cutbacks,
according to a draft copy of the report obtained by the Globe.
The report comes as cities and towns across the state struggle with a
tax structure that leaves them heavily reliant on property taxes and
state aid to cover the rapidly increasing costs of employing teachers,
firefighters, and other public employees. Most alarming to local
officials has been the meteoric rise of healthcare costs in recent
years: A recent Massachusetts Taxpayers Foundation survey of 32
communities found that employee healthcare spending was up 63 percent
since 2001.
"Healthcare is huge," said Catherine Gover, a task force member and a
city councilor in Everett. "It's a challenge every year."
Gover, like other task force members interviewed, said she would not
address specific recommendations until the report was finalized and
released.
Andrea Hurwitz, a spokeswoman for the chairman of the Municipal Finance
Task Force, John Hamill, said the final recommendations might differ
from the draft report. The final version is expected to be released
early next month. The task force began its work in December.
The draft report asserts that the combination of stagnant state aid
levels, rising costs, and a lack of financial flexibility has resulted
in layoffs, significant reductions in services such as library hours and
police patrols, and property tax increases across the Commonwealth.
"This situation has created a serious strain on municipal budgets that,
without changes to state and local policies, will evolve to crisis
proportions," the draft said.
Task force member Michael Widmer, president of the Massachusetts
Taxpayers Foundation, said the report will provide the Legislature with
a clear picture of what towns and cities are facing.
"I think this will be a very important blueprint for municipal finance
for the next decade," Widmer said.
But some recommendations may stir opposition.
The proposal to raise automobile excise tax rates, for example, would
mean car owners in Massachusetts would face significantly higher bills.
Currently, if you buy a 2006 minivan for $25,000 in 2005, your excise
tax bill for 2005 would be around $300, because it is calculated as if
your car were worth only half the purchase price. The tax bill would
nearly double in the next year before dropping precipitously in
subsequent years.
The task force's draft report urges lawmakers to look at aligning excise
tax rates more closely with the actual value of vehicles, thus keeping
tax bills higher longer. A change could mean big money: Excise taxes
contributed more than $600 million in fiscal 2004, according to the
draft report of the Municipal Finance Task Force.
Representative Bradley H. Jones Jr. of North Reading, the House
Republican leader, said now is the wrong time to burden car owners. With
gas prices near record levels, he said, some lawmakers would be
reluctant to support raising the excise tax. (The Legislature would have
to approve most of the task force's proposals.)
"My guess is that will be met with the third rail," Jones said. "I think
legislators will be asking, 'Is this the time to be doing that?' "
Widmer said excise taxes were far higher until they were reduced as part
of tax-cutting efforts in the early 1980s.
"The notion of updating the auto excise tax 25 years later is hardly a
radical notion," he said.
Jones also said the idea of allowing communities to raise money through
a local meals tax could have trouble winning support on Beacon Hill. He
said he was open, though, to hearing the task force's recommendations.
"We are hopeful the Legislature will take them seriously," said Revere's
mayor, Thomas Ambrosino, a member of the task force.
The draft report mentions but does not advocate a position on several of
the more contentious topics under consideration by state and local
policy makers -- including the state income tax rate and whether to
repeal a tax break to telecommunications companies, estimated to be
worth as much as $140 million.
Senator Steven A. Tolman, who sits on the task force, said the group had
to tread carefully given the political sensitivity of those issues.
"Clearly, the task force doesn't want to make stringent recommendations,
because they know that the solutions lie within getting the majority in
both branches, and we don't know what there is support for and what
there isn't," said Tolman, a Brighton Democrat.
Some communities have already sought new ways of generating revenue
locally. Boston, for example, began charging boaters who dock in the
city and aggressively pursued residents who circumvented Boston taxes by
registering cars out of state. And Mayor Thomas M. Menino of Boston has
campaigned for a local meals-tax option and for the repeal of the tax
break for telecommunications companies.
Other recommendations of the task force include:
Overhauling the formulas the state uses to calculate how much aid to
send to communities.
Lifting the cap on state Lottery proceeds that can be sent to cities and
towns.
Considering whether to give cities and towns the flexibility to bargain
individually with unions on healthcare and making it easier for
communities to jointly purchase health plans.
The draft report cites the importance of listening to public employee
unions.
Catherine A. Boudreau, president of the Massachusetts Teachers
Association, said her union will look carefully at the details of the
Medicare proposal and other aspects of the task force's recommendations.
"We understand how important this debate is, and we are willing to
working with municipalities to help reduce costs," she said. "But not on
the backs of employees."
Hamill, the chairman of Sovereign Bank New England, led a similar panel
in the late 1980s.
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