CLT UPDATE
Saturday, October 30 2010
Thank you Prop 2½ on its 30th
Anniversary
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Thirty years ago, Massachusetts voters overwhelmingly passed
Proposition 2½, the ballot initiative to cut an unthinkable $1.5
billion from local property (and auto excise) taxes — almost 20
percent of all state and local revenues at the time. A riled-up
populace voted itself this colossal tax cut by a margin of 17
points, ignoring the dire warnings of slashed services by
pickle-faced politicians.
As Barbara Anderson, leader of the citizens’ movement behind Prop.
2½, put it on election night: “We supporters were pushing the joy of
sex, and the opponents were trying to sell the fear of pregnancy.’’
Now that the yowling infant is a respectable adult, most people feel
fondly toward the tax-cap measure. Indeed, some supporters of
Question 3, the sales-tax rollback on this year’s ballot, cite the
success of Prop. 2½ to defend their views.
The Boston Globe
Saturday, October 30, 2010
Tax cuts then and now
By Renée Loth
Much as I'd love to take credit for the delightful "joy of sex .
. . fear of pregnancy" statement, it was actually Dick Morris who
said that. Campaign trivia: relatively unknown in 1980, Morris had
been hired by the Massachusetts High Tech Council to create our
pro-Prop 2½ ads.
A stimulating campaign, at a time when the voters were paying close
attention and decided to fight back. BTW, the Massachusetts
Taxpayers Foundation opposed Prop 2½ just as it opposes Question 3.
Citizens for Limited Taxation, the grassroots activism behind Prop
2½, did not initiative Question 3 but supports it as one way to
repeal last year's 25% sales tax hike. The local aid we fought for
back then has been used to create extraordinary public employee
pension and health insurance benefits and if it's cut, we can and
should say No to overrides of Prop 2½.
We urge voters to defeat the incumbents who voted for the sales tax
increase: you'll find their names, and the names of their
challengers, at www.cltg.org. Don't forget to also defeat Deval
Patrick, who ran on a promise of more "property tax relief", and
instead raised our sales tax from 5% tp 6.25%.
A little revolution, every 20 years, is a good thing.
Barbara's Boston Globe online response
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Chip Ford's CLT
Commentary
Wow, until Renée Loth at
the Boston Globe called and reminded us, we've been so busy with
Revolution 2010 to even realize -- never mind recognize and celebrate --
that our Proposition 2½ hits its 30th birthday celebration later this
week!
Thank you, Renée.
I wonder why CLT is
financially almost going under again -- with it saving so much money, so many
billions, for so many for so long?
What will happen if and
when CLT is gone?
Will Prop 2½ be eroded --
like it
almost was earlier this year, rescinded, even repealed without CLT to defend it?
Will motorists go back to paying
$66/$1,000 assessed
value for their annual auto excise on every vehicle, instead of the
$25/$1,000 -- more than double
what it is today before our Prop 2½ reduced it? That's just one
small facet of Proposition 2½ that too often goes unrecognized.
How much does that just
that one small facet of our tax limitation law save you every
year?
Who will safeguard and enforce Prop
2½ if and when CLT is gone? Who would be the taxpayers' watchdog
without CLT?
Wow . . . it would be
"pennywise and pound foolish" to lose this taxpayers organization.
But then, as the old
country/western song goes, "How can I
miss you if you never go away."
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Chip Ford |
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The Boston Globe
Saturday, October 30, 2010
Tax cuts then and now
By Renée Loth
Thirty years ago, Massachusetts voters overwhelmingly passed
Proposition 2½, the ballot initiative to cut an unthinkable $1.5
billion from local property (and auto excise) taxes — almost 20
percent of all state and local revenues at the time. A riled-up
populace voted itself this colossal tax cut by a margin of 17
points, ignoring the dire warnings of slashed services by
pickle-faced politicians.
As Barbara Anderson, leader of the citizens’ movement behind Prop.
2½, put it on election night: “We supporters were pushing the joy of
sex, and the opponents were trying to sell the fear of pregnancy.’’
Now that the yowling infant is a respectable adult, most people feel
fondly toward the tax-cap measure. Indeed, some supporters of
Question 3, the sales-tax rollback on this year’s ballot, cite the
success of Prop. 2½ to defend their views.
But such voters forget the immediate aftermath of Prop. 2½. There
was panic in local government. Wall Street lowered or suspended bond
ratings for dozens of cities and towns. Boston, cut to below
investment grade, considered closing City Hospital. Unions and
others marched, calling for repeal.
It was only massive infusions of local aid that stabilized
municipalities and made 2½ worked. After some initial hostility,
local officials teamed up with Anderson and legislative leaders to
vastly increase state aid to the cities and towns. Aid amounts grew
from $866 million in fiscal year 1981 (when 2½ passed) to $1.6
billion in 1985, according to the Department of Revenue. By the 1989
fiscal year, local aid had tripled.
This had the effect of shifting the tax burden from local
governments to the state. “The concept was the state sharing our
broad-based tax revenues with the cities and towns,’’ Anderson said
recently. James Segal, director of the Massachusetts Municipal
Association at the time, agrees. “It was the state taking up an
increased share, especially in education.’’
That kind of luxury doesn’t exist now. In the early 1980s state
revenues grew an average of 12 percent a year; hardly parallel to
today, when the state faces a $2 billion deficit. “There are very
obvious differences,’’ said Michael Widmer of the business-backed
Massachusetts Taxpayers Foundation, which opposes Question 3. “We’re
in the middle of a fiscal crisis.’’
Many who initially decried Prop. 2½ (and I was one) now concede it
helped bring accountability to local government. And, because the
property tax is the most regressive of all levies, shifting to state
(sales, income, and corporate) revenues did have the effect of
making the overall tax burden in Massachusetts fairer.
The trouble with Question 3 — which would slice the sales tax from
6.25 to 3 percent — is that the additional billions in lost state
revenue will inevitably put pressure back on the property tax,
shifting the balance again to the most unfair burden of all. Besides
its other baneful effects, Question 3 would undercut much of the
good
Prop. 2½ accomplished. That hardly seems a proper birthday gift.
Anderson is concerned about the rollback forcing a proliferation of
Prop. 2½ override attempts, though she generally supports a yes vote
on Question 3. “If the people don’t send a message, the little
brains on Beacon Hill interpret that as ‘people just love taxes,’ ’’
she said. But Anderson would prefer a sales tax of 5 percent. “If
I’m doing perfect tax policy, the sales tax isn’t what I’m going
after.’’
As in their unsuccessful campaign to eliminate the income tax in
2008, the sponsors of Question 3 rely on some fuzzy math. Carla
Howell, who chairs the Vote Yes on 3 campaign, says it would save
the average family $900 a year; but to save that much the family
would have to spend $30,000 just on taxable items (not food, most
clothing, housing, healthcare, or utilities), which is a lot more
consumption than most ordinary folks indulge in.
Since 1980, the state has taken over a bigger share of
responsibility for local budgets, including the schools and county
courts. Question 3 would make that continued commitment
unsustainable. “You can’t cut revenue in half without some sort of
alternative,’’ said Segal. “With 2½, the alternative was to get
state monies.’’
And if state monies are severely cut, it seems clear what the
alternative will be.
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Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
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