CITIZENS   FOR  LIMITED  TAXATION
and the
Citizens Economic Research Foundation

CLT UPDATE
Saturday, October 21, 2006

With Deval, Clintonista word-parsing is resurrected


With property taxes returning yesterday as an issue in the race for governor, the state's leading fiscal watchdog said that none of the candidates has offered a proposal that would reduce taxes for all property owners.

Michael J. Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation, took issue with contention by the candidates that they can reduce property taxes broadly, including plans by independent Christy Mihos, Republican Kerry Healey, and Democrat Deval L. Patrick.

"It's unrealistic to say property taxes can be reduced in a broad-based way," Widmer said in an interview with the Globe. "Maybe they can slow the rate of growth or target certain categories of taxpayers for relief, but not across the board."

Widmer offered his analysis as Healey continued to press Patrick on his vow to cut property taxes, saying he has not been specific in telling voters how he would do it....

Mihos has proposed Proposition One, which would dramatically increase local aid overnight and freeze tax assessments until property is sold. Widmer called Mihos's plan "totally unrealistic."

Both he and Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said the Mihos proposal would require an amendment to the state constitution, a process that takes a minimum of four years, because the same class of property would be assessed different ways....

Yesterday, Healey charged that Patrick has failed to offer the specifics of how he would cut property taxes. She also released a letter to Patrick from antitax crusader Barbara Anderson, executive director of Citizens for Limited Taxation, striking similar themes and asking if he intends to tinker with Proposition 2, which the group launched.

Patrick denied that yesterday. "Proposition 2 is staying just as it is for as long as I am in charge," he said. "If somebody smarter than I comes up with a better way to moderate property tax, then I am open to that. But I have no interest and have made no proposal to do away with Proposition 2." ...

Widmer said Healey's pension reform proposal "is an idea that deserves serious consideration, but there are no guarantees that you would have those savings going forward."

The Boston Globe
Saturday, October 21, 2006
Candidates' tax plans called 'unrealistic'
Fiscal watchdog assesses proposals


Deval Patrick suffers from a "lack of any policy on how to reduce local taxes, property taxes," Republican Lt. Gov. Kerry Healey said Friday, trying to draw attention to the fact that the Democrat's campaign hasn't offered concrete details about his promise to lower property taxes.

Having hammered Democrats for months over opposition to lowering the income tax rate, Healey attacked a pillar of Patrick's fiscal policy, saying she would aid cities and towns financially through centralizing local plans under the state pension system and Group Insurance Commission....

Healey and running mate Reed Hillman were joined by Barbara Anderson, president of Citizens for Limited Taxation, who questioned whether Patrick understands the property tax and local aid system....

Anderson, a leading anti-tax activist for decades, said she thought Patrick didn't comprehend the complexities of the connection between state aid to cities and towns and taxes imposed on local property. The local aid funding formula, complicated by Prop. 2 overrides, render changing the structure difficult, she said.

"I don't think he understands all this," she said in an interview, "but I don't think he cares. He needed an answer to the question" of why he refused to comply with voters' [income tax rollback] mandate....

"He can't do anything about the local aid formula," Anderson said. "Who's going to give him the ability to unilaterally affect [their] town?"

State House News Service
Friday, October 20, 2006
Healey chases Patrick on property taxes,
one-on-one debate


Healey said the key to keeping property taxes down is to fight any effort to weaken Proposition 2.

"That's the only thing that has kept property taxes as low as they are today," she said. "The governor and I have been staunch defenders of Proposition 2, no matter what kind of proposals have come from Beacon Hill to try to weaken that."

Patrick said he had no intention of trying to weaken or tamper with Proposition 2.

Associated Press
Friday, October 20, 2006
Healey renews call to solely debate Patrick


Chip Ford's CLT Commentary

"Proposition 2 is staying just as it is for as long as I am in charge."

Patrick said he had no intention of trying to weaken or tamper with Proposition 2.

"If somebody smarter than I comes up with a better way to moderate property tax, then I am open to that."

Deval Patrick
Democrat candidate for governor
October 20, 2006
From news reports


Greetings activists and supporters:

Last evening, while Barbara and I reviewed Deval Patrick's response(s) to CLT's challenge of his "property tax relief plan," I reminded her of his close alliance and friendship with former president Bill Clinton, and America's need to carefully "parse" everything Clinton said  (e.g., "It all depends on what the definition of 'is' is."):  one is foolish to not carefully read between the lines with a magnifying glass when listening to a Clintonista speak.  To do otherwise is done at your own peril, shame on you.  (Always look for what I call "the weasley-words.")

When I heard that Patrick had "no intention" to attack Proposition 2, the bells-and-buzzers went off.  "No intention"?  For how long -- just right now, for the next two weeks before the election?  How long before an "intention" can be reversed?

As with most if not all of Patrick's positions, his so-called property tax relief plan needs clarification, at least some specifics, and obtaining them is like pulling teeth:  "If somebody smarter than I comes up with a better way to moderate property tax, then I am open to that."

I'll bet the state teachers union can, and most surely will.  After all, the Massachusetts Teachers Association only this week announced that it will spend "'well over $1 million' between now and the Nov. 7 election on 'issue ads' in support of the Patrick-Murray ticket"  ("Patrick gets help in ad battle with Healey"), according to Boston Globe reporter Brian C. Mooney, who also wrote today's Globe report (accompanied by a great color photo of Barbara with Kerry Healey at the news conference).  That's not an expenditure:  it's clearly an investment.  The MTA spent that much in its failed effort to defeat the voters' tax rollback ballot question.

The MTA campaigned against Prop 2 as one of its most strenuous, well-funded opponents back in 1980, and against the tax rollback from 1997-2000.  It has ceaselessly attempted to gut both ever since, despite the voters' mandates to the contrary.  "Well over $1 million" is chump change for its deep pockets if it can finally have its way over taxpayers and voters through back-room deals on Beacon Hill.

Earlier yesterday, Barbara participated in a news conference at the Healey/Hillman headquarters in Boston.  From the podium, she went over Proposition 2 and how it works in great detail, why it remains the homeowner's best defense against a return to unlimited property taxation.  Then she explained how Deval Patrick's "property tax relief plan" was simply smoke-and-mirrors.  She pointed out that his "plan" is just a lame and hollow response to the difficult question often posed to him:  why he feels he doesn't need to respect the voters' 2000 decision to roll back the "temporary" income tax rate.  She charged that he has consistently failed to provide any substance to his "plan," that it is merely a cynical dodge to avoid an honest answer, that he's making it up on the fly when he's forced to explain how it would work.  And she expressed her concern for the survival of Proposition 2 if he should be elected governor.

For photos and more information see:
Property Tax News Conference

Chip Ford


The Boston Globe
Saturday, October 21, 2006

Candidates' tax plans called 'unrealistic'
Fiscal watchdog assesses proposals
By Brian C. Mooney, Globe Staff


With property taxes returning yesterday as an issue in the race for governor, the state's leading fiscal watchdog said that none of the candidates has offered a proposal that would reduce taxes for all property owners.

Michael J. Widmer, president of the nonpartisan Massachusetts Taxpayers Foundation, took issue with contention by the candidates that they can reduce property taxes broadly, including plans by independent Christy Mihos, Republican Kerry Healey, and Democrat Deval L. Patrick.

"It's unrealistic to say property taxes can be reduced in a broad-based way," Widmer said in an interview with the Globe. "Maybe they can slow the rate of growth or target certain categories of taxpayers for relief, but not across the board."

Widmer offered his analysis as Healey continued to press Patrick on his vow to cut property taxes, saying he has not been specific in telling voters how he would do it.

Among several initiatives, Patrick has proposed that a portion of local aid be dedicated to "direct property tax relief." Widmer said he doubted that is feasible, given local control over how local aid is spent and other aspects of the budget process.

Healey, meanwhile, supports an immediate rollback of the state income tax rate, but Widmer said that will reduce local aid by removing almost $700 million in revenue from a state budget that is already projected to be out of balance.

Mihos has proposed Proposition One, which would dramatically increase local aid overnight and freeze tax assessments until property is sold. Widmer called Mihos's plan "totally unrealistic."

Both he and Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said the Mihos proposal would require an amendment to the state constitution, a process that takes a minimum of four years, because the same class of property would be assessed different ways.

The reality faced by cities and towns across the Commonwealth is that local property taxes have increased every year since Proposition 2, the property tax limiting initiative, was fully implemented in 1983. Since 1990, local property taxes have risen on average more than 5 percent per year for single-family homeowners in the state to $3,801 in 2006, according to data compiled by the state Department of Revenue.

More significantly, Beckwith said, local governments have become increasingly reliant on the money raised by property taxes over the last four years. Property taxes now account for 53 percent of all local spending, the highest burden since Proposition 2 went into effect, he said.

That is up from 49 percent four years ago and a low of 46 percent in 1986-87, said Beckwith, whose organization represents the state's 351 cities and towns. Since 2002, the state's contribution to local spending statewide has dropped from 28 percent to 24 percent, he said.

Steep cuts in local aid during 2003-2004 have never been fully restored, Beckwith said, and nearly a third of the state's communities are receiving less from the state than they did in 2002.

Both the municipal association and the taxpayers foundation, which is funded by businesses, advocate a stable, predictable revenue-sharing program that guarantees that 40 percent of state revenue be distributed to cities and towns each year. Currently, about 36 percent of state revenue goes to the cities and towns, and the figure is even less if school building assistance is not included, according to Beckwith.

Widmer's group supports a 10-year phase-in to 40 percent; Beckwith's, a timetable of several years.

Healey is the only one of the major candidates who has not expressed support for at least the concept of steering a guaranteed figure to the municipalities, Widmer said. Mihos advocates an immediate shift to 40 percent, which Widmer said the state can't afford. Patrick favors a fixed percentage, as well, but has not committed to a specific figure. He has said 40 percent is a good goal.

Green-Rainbow Party candidate Grace Ross has called generally for an increase in taxes on wealthier taxpayers to alleviate the disproportionate burden shouldered by lower-income residents.

Patrick has said he would "cut the property tax" and also has complained that Healey's call to cut the state income tax rate would lead to increases in property taxes.

Yesterday, Healey charged that Patrick has failed to offer the specifics of how he would cut property taxes. She also released a letter to Patrick from antitax crusader Barbara Anderson, executive director of Citizens for Limited Taxation, striking similar themes and asking if he intends to tinker with Proposition 2, which the group launched.

Patrick denied that yesterday. "Proposition 2 is staying just as it is for as long as I am in charge," he said. "If somebody smarter than I comes up with a better way to moderate property tax, then I am open to that. But I have no interest and have made no proposal to do away with Proposition 2."

Patrick doesn't suggest that, but he often characterizes his local property tax plan in terms that suggest a broader-based approach. His specific proposals are much narrower.

Doug Rubin, a senior adviser to Patrick, acknowledged that the Democrat's proposals will not result in across-the-board relief for all property owners.

"You can quibble about whether the plan is enough or sufficient, but there is a clear, detailed plan put forth by Deval Patrick," Rubin said. Among the specifics, Patrick has proposed expanding the so-called "circuit breaker," which now provides income tax credits of up to $870 to elderly residents in certain income ranges whose property taxes or rent exceed 10 percent of their total annual income.

That program now costs the state about $40 million a year and benefits about 44,000 taxpayers. Patrick would expand it to about $100 million, making another 88,750 individuals eligible and extend it to lower-income residents regardless of age, Rubin said.

Patrick has also proposed giving communities $35 per student as an incentive to discontinue or not adopt fees for services such as school transportation or extracurricular activities. If every community took advantage, it would cost about $34 million. Mihos has said he would end local fees for school-related activities and services.

This year, the Legislature uncapped State Lottery profits, releasing an additional $159 million to cities and towns that in the past the state has kept in the state budget. Patrick proposes permanently uncapping the distributions to cities and towns. But Beckwith of the municipal association said those revenues "are flatlining" and not considered a probable source of additional aid in the near future.

Patrick has also proposed a local-option meals tax, similar to the local hotel-motel room tax that went into effect in the mid-1980s. About 160 communities charge 4 percent on top of the 5.7 percent state room tax. In 2005, that generated $75.5 million for those communities, with about a third of that figure collected by Boston, state figures show.

Last year, the 5 percent meals tax generated a total of $588 million for the state. That means that if every community adopted a local meals tax, it would bring in about $117 million for each additional 1 percent.

Healey has offered no specific plans for property tax relief, but has proposed initiatives that could save municipalities hundreds of millions of dollars, potentially lessening pressure to increase property taxes. If underperforming local pension boards joined the state's giant $43 billion pension fund, improved returns would also generate "more than $200 million in savings to cities and towns to cut property taxes." Allowing municipalites to join the state's Group Insurance Commission would result in "likely millions of dollars in annual cost savings" by increasing the state's buying power for employee health insurance coverage, her website states.

Widmer said Healey's pension reform proposal "is an idea that deserves serious consideration, but there are no guarantees that you would have those savings going forward."

Beckwith said Healey's proposals, if implemented, still wouldn't address the problem of fluctuating local aid levels. Moreover, if local governments did realize $200 million in savings from the pension plan, local aid totals, adjusted for inflation, would still be $500 million below what they were in 2002, he said.

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State House News Service
Friday, October 20, 2006

Healey chases Patrick on property taxes,
one-on-one debate
By Jim O'Sullivan and Gintautas Dumcius


Deval Patrick suffers from a "lack of any policy on how to reduce local taxes, property taxes," Republican Lt. Gov. Kerry Healey said Friday, trying to draw attention to the fact that the Democrat's campaign hasn't offered concrete details about his promise to lower property taxes.

Having hammered Democrats for months over opposition to lowering the income tax rate, Healey attacked a pillar of Patrick's fiscal policy, saying she would aid cities and towns financially through centralizing local plans under the state pension system and Group Insurance Commission.

Healey and running mate Reed Hillman were joined by Barbara Anderson, president of Citizens for Limited Taxation, who questioned whether Patrick understands the property tax and local aid system.

Healey also released a letter she sent to Patrick requesting a one-on-one debate, a proposal Patrick rejected when Healey issued it during Thursday night's debate.

Healey said it was clear that either she or Patrick would win the governorship, jabbing at independent Christy Mihos, who has failed to break double digits in recent public polls, and Green-Rainbow candidate Grace Ross, who consistently registers at 1 percent.

Patrick countered that Healey had previously supported the participation of all candidates in the debates, and aides distributed an April press release from Healey pushing for four post-primary debates with the entire ballot-qualified field.

He said, "There are four candidates in the race. There ought to be four participants in the debates."

After Healey used her closing statements in Thursday's debate to say she favored a head-to-head match-up, Patrick told reporters, "If it'd be just about who's ahead in the polls, I'd be the only one standing here."

At the press conference in Healey's campaign headquarters, Anderson said she viewed the Nov. 7 election as a referendum on Proposition 2, with a vote for Patrick constituting a vote against the state-imposed limit on yearly local tax increases.

Patrick has employed an unspecified plan to reduce property taxes as a response to Healey's well-worn criticism of his refusal to commit to cutting the income tax rate from 5.3 percent to 5 percent, as voters instructed the state in 2000. During Thursday's debate, Patrick said he would place conditions on municipalities: those who raised property taxes would receive less local aid.

Asked at a later press event to outline his property tax reduction plan Friday, Patrick again talked about expanding the circuit breaker for senior citizens to include middle to low income homeowners.

Regarding assertions that he would undermine Proposition 2, Patrick said, "Prop 2 and a half is staying as it is as long as I'm in charge."

If someone comes up with a better way to "moderate" property taxes, he'd be open to that, Patrick said during a press conference at the University of Massachusetts Club in Boston. The event was originally scheduled to be a twin billing with US Sen. Barack Obama, Democrat of Illinois, but Obama's flight was delayed, Democrats said.

Anderson, a leading anti-tax activist for decades, said she thought Patrick didn't comprehend the complexities of the connection between state aid to cities and towns and taxes imposed on local property. The local aid funding formula, complicated by Prop. 2 overrides, render changing the structure difficult, she said.

"I don't think he understands all this," she said in an interview, "but I don't think he cares. He needed an answer to the question" of why he refused to comply with voters' mandate.

Linking property taxes to local aid would prove difficult with legislators reluctant to return to their districts explaining to municipal officials why aid, long tied to a politician's perceived clout on Beacon Hill, had dwindled.

"He can't do anything about the local aid formula," Anderson said. "Who's going to give him the ability to unilaterally affect [their] town?"

The push for a head-to-head debate between the two leading candidates has gained currency in the media recently, and Healey said during Thursday night's debate that such a confrontation would be "wonderful." In the letter, Healey wrote, "with four candidates on stage and limited time, a wide-ranging policy discussion had been largely crowded out."

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Associated Press
Friday, October 20, 2006

Healey renews call to solely debate Patrick
By Steve LeBlanc


Kerry Healey, trailing in the polls and running out of time before election day, sought to shake up the race for governor yesterday, renewing her push for a one-on-one prime time debate with Democratic rival Deval Patrick.

Just hours after the third of five debates featuring all four candidates, the Republican lieutenant governor and candidate for governor, fired off a letter to Patrick calling for a debate between the two major party candidates.

"You have never struck me as someone who has backed down from a challenge, so I'd be surprised if you chose to stand on the sidelines now," Healey wrote. "With four candidates on stage and limited time, a wide-ranging policy discussion has been largely crowded out."

Healey, who has been trailing Patrick in most polls, made a similar challenge during Thursday night's debate.

During the debates, Healey has sought to engage directly with Patrick, but has often found herself at the receiving end of pointed criticism not only from Patrick, but from independent candidate Christy Mihos and Grace Ross of the Green-Rainbow Party.

Patrick quickly rejected the idea of a one-on-one debate with Healey, saying voters have the right to hear from all the candidates.

"There are four candidates in the race, four choices for the voters, four voices ought to be heard at the debates," he said. "That's the same position she had back in the spring. It's the position I have had consistently through the whole campaign."

Healey's requests appeared to be a change from her position earlier in the campaign. In April, Healey proposed four general election debates and challenged all the candidates, including Mihos and Ross and the two other Democratic primary contenders to participate. Patrick agreed.

"I urge Tom Reilly, Chris Gabrieli, Christy Mihos and Grace Ross to make the same commitment as Deval Patrick and accept my debate challenge," Healey said at the time.

Healey's campaign manager, Tim O'Brien, said Healey wasn't changing her position. He said she challenged all the candidates to four debates and there are five debates scheduled with all of the candidates invited.

"What we called for today is an additional debate with Deval Patrick," he said.

Mihos and Ross objected to the idea of being excluded from any debate.

"To her we are a distraction because we are pointing out the pathetic failed record of the Romney-Healey administration," Mihos said. "With the amount of money she's spending on this campaign she should buy an hour on television and invite Deval for a debate and if he shows, he shows."

Ross said Healey has no one to blame for her sagging poll numbers than herself and excluding candidates isn't the answer. If she and Mihos can make their case to voters in the four-way format, Healey should too, Ross said.

"She's created such a high negativity rating that she can't win and now she wants to mess with the Democratic process," Ross said. "She's boxed herself in. She's losing this one herself."

On Friday, Healey again said she was the only candidate in the race who would protect taxpayers, pointing out that she and running mate Reed Hillman had signed a no-new-taxes pledge. None of the other candidates have taken the same pledge.

She also tried to undercut one of Patrick's key arguments -- the need to rein in property taxes. Healey said the best weapon against higher property taxes is Proposition 2, which limits how much local cities and towns can raise property taxes each year.

Patrick has repeatedly said that Healey's push to lower the state income tax rate from 5.3 percent to 5 percent is a "shell game" because lower income taxes put pressure on communities to raise property taxes.

Healey said the key to keeping property taxes down is to fight any effort to weaken Proposition 2.

"That's the only thing that has kept property taxes as low as they are today," she said. "The governor and I have been staunch defenders of Proposition 2, no matter what kind of proposals have come from Beacon Hill to try to weaken that."

Patrick said he had no intention of trying to weaken or tamper with Proposition 2.

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