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and the
Citizens Economic Research Foundation
Post Office Box 1147 ●
Marblehead, Massachusetts 01945 ●
(508)
915-3665
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
44 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
|
CLT UPDATE
Wednesday, May 23, 2018
Not much time before
overpaid government
workers bankrupt taxpayers
|
Be
afraid. Be very afraid. Unless, of course, you have plenty
of money and can afford hefty annual increases in your
property tax bill. A recent report in the Boston Herald
details how municipal employees' pay rose 40 percent in the
last decade.
That's almost twice the national average....
Indeed, as a reader from Peabody was fond of
saying, the day may come that the only people
able to afford to pay local taxes are those who
work in the public sector....
Years ago, rising property taxes fueled a taxpayer revolt
known as Proposition 2½. This week the organization
behind that campaign, Citizens for Limited Taxation,
came out with its legislative scorecard based on how state
representatives and senators voted on what it deemed
taxpayer-friendly (or unfriendly) measures in 2017....
The Salem News
Friday, May 18, 2018
A 'worrisome' trend
By Nelson Benton, editor emeritus
The Bay State’s soaring local government
employee pay has eclipsed the national average in what one
fiscal watchdog is calling a “warning sign” to city and town
leaders that taxpayers may not always be able to pick up the
tab.
In the past decade, wages for cops,
firefighters, teachers and City Hall employees went up
nearly 24 percent nationwide, according to the U.S. Bureau
of Labor Statistics.
In Massachusetts during the same period,
from 2007 to 2017, wages for those city and town employees
rose by 40 percent, the statistics show.
That rate was about 5 points higher in Essex
and Middlesex counties, where Lowell and Lawrence sit.
“This data is a warning sign,” said Greg
Sullivan, research director at the Pioneer Institute
nonprofit think tank. “Massachusetts far exceeds the rest of
the country in total wages.” ...
“Federal databases don’t lie,” said
Pioneer’s Sullivan. “The salary growth in the public sector
is why municipalities are tax-strapped. It’s all putting
pressure on the taxpayers.”
The Boston Herald
Wednesday, May 9, 2018
Massachusetts city, town employee wages grew 40 percent in
10 years
House and Senate negotiators agreed on $147
million [supplemental] budget bill Friday, and the House and
Senate on Monday adopted the agreement and sent it to the
desk of Gov. Charlie Baker, who immediately signed it.
The conference committee's report, signed by five of six
members, was filed with clerks at 7:14 p.m. Friday....
Meeting in informal sessions, where roll call votes are not
permitted, the House and Senate each accepted the conference
committee report (H 4514) on voice votes.
State House News Service
Monday, May 21, 2018
Dem negotiators drop early voting from $147 Mil spending
bill
The Senate on Tuesday rejected two tax
reform proposals that voters may have a chance to settle
later this year. Senators turned down a
proposal to grant Bay State shoppers a weekend free from the
sales tax this August, an idea that Beacon Hill lawmakers
have embraced in the past, and also rejected a budget
amendment to reduce the sales tax to 5 percent from 6.25
percent. The tax was raised from 5 percent in 2009.
Seven Democrats joined the seven-member Republican caucus in
support of Senate Minority Leader Bruce Tarr's sales tax
holiday amendment, which drew 14 votes in favor and 24 votes
against as budget deliberations kicked off.
The Retailers Association of Massachusetts this year is
advancing a proposed ballot question that would lower the
sales tax from 6.25 percent to 5 percent and create an
annual sales tax holiday. The measure could be dealt with,
however, in behind the scenes Beacon Hill talks over a
series of ballot questions.... State tax
revenues through April have poured in $809 million over
budgeted revenues for the year and $1.7 billion over the
same period last year. In 2015, the last time Massachusetts
held a sales-tax holiday, the Department of Revenue
estimated $25.5 million in foregone revenue from the
exercise.... Even when they do support a
sales tax holiday, legislative leaders usually try to foster
an element of surprise so that the holiday spurs new sales
instead of just encouraging consumers to delay their
purchases until the tax-free weekend. Formal sessions end
July 31 giving supporters of the holiday more than a month
to try to get it to the desk of Gov. Charlie Baker, who is a
supporter of both the sales tax holiday and a sales tax
reduction. The Democrats who voted Tuesday to
include a sales tax holiday provision in the fiscal 2019
budget were Paul Feeney, of Foxborough; Anne Gobi, of
Spencer; Adam Hinds, of Pittsfield; Michael Moore, of
Millbury; Michael Rush, of West Roxbury; Walter Timilty, of
Milton; and James Welch, of West Springfield.
Baker has said he supports lowering the sales tax, but he
wants lawmakers to find a compromise that avoids a sales tax
question on the November ballot and also dispenses with
other proposed ballot questions, such as a bid to raise the
minimum wage and another to institute a paid family and
medical leave program in Massachusetts. The
Senate defeated Tarr's bid to lower the sales tax on a voice
vote Tuesday. State House News Service
Tuesday, May 22, 2018
Senate Democrats reject sales tax holiday, sales tax cut
Sen. Bruce Tarr used a top-of-mind sports
metaphor Tuesday to make his point that lawmakers need to
take a team approach to tame some of the biggest cost
drivers in the state budget.... A Republican
from Gloucester, Tarr then asserted that the state's ability
to build its rainy day reserves, which can preserve state
services in a recession and free up money to invest in
popular areas like education, local aid and mental health
services, is largely riding on the level of commitment and
cooperation (think help defense) lawmakers make to taming
growth in health care, pension and debt service spending.
From perenially underfunded accounts to spending nearly 40
percent of the budget on one program, MassHealth, Tarr said
state government needs to face up to the task of controlling
spending. He pointed to the budget's big-ticket items as
worth more consideration: a "staggering" $2.47 billion for
annual debt service payments and $2.61 billion for pension
payments, an increase over fiscal 2018 that Spilka estimated
at 8.9 percent. Tarr also highlighted another
wrinkle of life on Beacon Hill. While Democrats annually
proclaim the annual budget as balanced, they routinely
approve a series of midyear spending bills. Spilka said Gov.
Charlie Baker has filed five supplemental budgets this
fiscal year alone. He signed a $147 million spending bill
hours after it reached his desk Monday, and Spilka said
another supplemental spending bill will probably come up
before June 30.... While the House structured
its fiscal 2019 budget in a way that would enable the Senate
to propose a major tax increase, the Senate budget, like the
House, relies on only targeted new taxes associated with
short-term rentals, legal marijuana and corporate
repatriation authorized under a federal tax law.
The Senate also defended one of the state's revenue sources,
voting 24-14 to defeat an amendment authorizing a two-day
suspension of the state sales tax this summer....
[Senate Ways and Means Chairwoman Karen Spilka of Ashland]
highlighted an outside section in the Senate budget that
would create commission to review tax expenditures, also
known as tax breaks or loopholes, on a rolling basis and
determine if existing policies should be repealed, amended
or allowed to sunset. The Senate included the
same measure in its fiscal 2018 budget, but it did not
survive talks with the House. Spilka said
lawmakers do not even have the information they need to
judge which tax expenditures are benefiting the state and
its taxpayers and which they should reconsider....
State House News Service
Tuesday, May 22, 2018
Tarr: Teamwork needed to tame budget cost drivers|
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Chip Ford's CLT
Commentary
It's been a very long week for me, some 130
working-hours around the clock since last Tuesday when my
computer workstation crashed, but for a few hours naps each
day or night whenever I couldn't keep my eyes open.
I've reinstalled Windows along with many of the multitude of
programs I need and use, but I've still got a lot of work
ahead to get the system back to where it was. I've a
least finally gotten the system up and running enough to get
this out to you.
Massachusetts is the national leader of the
pack of states in another ignominious category: The
highest paid public employees ―
by 40 percent. And public employee pensions are based
on their highest earning years, so our state must lead the
pack in that distinction as well.
Since we taxpayers fund all public employee
salaries, health insurance, benefits, and pensions, it's
clear why our tax burden continues to go in only one
direction: Up, up, always up. Public employees
― aka, government employees
― are supported by multi-levels
of taxation: local, state, and federal. We pay
all of those.
This is yet another demonstration of why
"More Is Never Enough!" and never will be.
Citizens for Limited Taxation has been
sounding the alarm, exposing this mounting crisis, for two
decades (The
Ticking Time Bomb; Public Employee Benefits).
Still our elected alleged-representatives at all levels of
government choose to whistle past the graveyard, hoping to
be beyond caring or reach when the inevitable collapse
arrives.
The State House News Service reported:
"[Senate
Minority Leader Bruce
Tarr, R. Gloucester] also highlighted another wrinkle of life on
Beacon Hill. While Democrats annually proclaim
the annual budget as balanced, they routinely
approve a series of midyear spending bills. Spilka said Gov. Charlie Baker has filed five
supplemental budgets this fiscal year alone. He
signed a $147 million spending bill hours after
it reached his desk Monday, and Spilka said
another supplemental spending bill will probably
come up before June 30."
This is a bit more than a "wrinkle of life
on Beacon Hill." It is how the Legislature plans these
annual budgets. Every year they look at predictably
inaccurate "revenue projections" to determine how much they
can get away with spending on a wink-and-nod. They
underfund known costs, such as snow removal every year
― an expected and justifiable
cost to the rest of us New Englanders
― so that money can be budgeted and spent on boondoggles and
pet projects. Then they come back with any number of
"supplemental budgets" over the course of the fiscal year to
fund those basic operating costs that can hardly be called
unexpected.
And note how much more
often the Legislature has come to use "voice" votes, instead
of roll call votes where the votes are recorded and
individual legislators can be held accountable for how they
voted. Finding enough roll call votes last year that
affect taxpayers that we could include in CLT's Legislative
Rating was the most difficult ever ― a trend that has been
increasing year over year. Not only are major
decisions made by the leadership then passed down to
rank-and-file legislators done in the dark behind closed
doors, but more frequently we never can learn how our state
representative and senator even voted.
But why not since they
can get away with it? They continue being re-elected
by an uninformed, apathetic electorate.
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Chip Ford
Executive Director |
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The Salem News
Friday, May 18, 2018
A 'worrisome' trend
By Nelson Benton, editor emeritus
Be afraid. Be very afraid. Unless, of course,
you have plenty of money and can afford hefty
annual increases in your property tax bill.
A recent report in the Boston Herald details how
municipal employees' pay rose 40 percent in the
last decade.
That's almost twice the national average.
Furthermore, the U.S. Bureau of Labor Statistics
reports, the rate of increase was five points
higher here in Essex County.
Certainly it's more than the average
private-sector employee received over the same
period (2007-2017).
Greg Sullivan of the Pioneer Institute calls the
trend "worrisome," especially when you add in
the cost of generous health and retirement
benefits.
"Federal databases don't lie," Sullivan told the
Herald. "The salary growth in the public sector
is why municipalities are tax-strapped. It's all
putting pressure on the taxpayers."
Indeed, as a reader from Peabody was fond of
saying, the day may come that the only people
able to afford to pay local taxes are those who
work in the public sector.
xxx
Years ago, rising property taxes fueled a
taxpayer revolt known as Proposition 2½.
This week the organization behind that campaign,
Citizens for Limited Taxation, came out
with its legislative scorecard based on how
state representatives and senators voted on what
it deemed taxpayer-friendly (or unfriendly)
measures in 2017.
Not surprisingly, among North Shore legislators
only Sen. Bruce Tarr of Gloucester and Rep. Brad
Hill of Ipswich, both Republicans, earned. a 100
percent approval rating. On the other hand,
Democratic Reps. Lori Ehrlich of Marblehead,
Jerry Parisella of Beverly, Ted Speliotis of
Danvers, Paul Tucker of Salem and Tom Walsh of
Peabody, all scored a perfect zero. The only
lawmaker not at either end of the spectrum was
Sen. Joan Lovely, D-Salem, who voted CLT's way
20 percent of the time.
The Boston Herald
Wednesday, May 9, 2018
Massachusetts city, town employee wages grew 40
percent in 10 years
By Joe Dwinell
The Bay State’s soaring local government
employee pay has eclipsed the national average
in what one fiscal watchdog is calling a
“warning sign” to city and town leaders that
taxpayers may not always be able to pick up the
tab.
In the past decade, wages for cops,
firefighters, teachers and City Hall employees
went up nearly 24 percent nationwide, according
to the U.S. Bureau of Labor Statistics.
In Massachusetts during the same period, from
2007 to 2017, wages for those city and town
employees rose by 40 percent, the statistics
show.
That rate was about 5 points higher in Essex and
Middlesex counties, where Lowell and Lawrence
sit.
“This data is a warning sign,” said Greg
Sullivan, research director at the Pioneer
Institute nonprofit think tank. “Massachusetts
far exceeds the rest of the country in total
wages.”
He said the high cost of health insurance and
unfunded pension liabilities are also
“worrisome” as municipal leaders struggle to
balance the books.
“It’s a looming problem going forward,”
Sullivan, the state’s former inspector general,
added.
The public sector — including federal employees
— makes up more than 20 percent of the U.S.
economy, according to federal labor statistics.
In Massachusetts, those state and federal
employees make up about 13 percent of the
workforce, state economic officials say.
Job growth in the public sector remains mostly
flat — but it’s the bump in salaries that has
economists sounding caution.
Sullivan said county figures show steady growth
in public sector salaries, according to labor
statistics he studied:
• Essex County has seen local government
salaries grow by 145 percent in the past decade.
Yet the number of employees has kept about the
same at 30,000.
• Middlesex County pay has jumped by almost the
same percentage for its 62,000-plus municipal
hires.
• Suffolk County has seen fewer employees over
the past decade, but pay has grown for those
26,000-plus still on the books.
• Statewide, the number of local government
employees has climbed to 271,000 as their pay
has kept pace with others.
• In the private sector over the same decade
studied, job growth has climbed and pay as well,
but at a slightly slower rate at 134 percent.
This all comes as unemployment nationwide has
dipped to 3.9 percent as of April.
“Federal databases don’t lie,” said Pioneer’s
Sullivan. “The salary growth in the public
sector is why municipalities are tax-strapped.
It’s all putting pressure on the taxpayers.”
State House News Service
Monday, May 21, 2018
Dem negotiators drop early voting from $147 Mil
spending bill
By Michael P. Norton
House and Senate negotiators agreed on $147
million [supplemental] budget bill Friday, and
the House and Senate on Monday adopted the
agreement and sent it to the desk of Gov.
Charlie Baker, who immediately signed it.
The conference committee's report, signed by
five of six members, was filed with clerks at
7:14 p.m. Friday.
Negotiators dropped a Senate-approved plan to
allow early voting in this year's primary
elections. An aide to Sen. Barbara L'Italien
said the senator now hopes to add early voting
authorization and funding to the fiscal 2019
budget.
The approved budget bill includes $21 million
for county sheriffs, who run jails and houses of
correction. There's $25.6 million more for the
public assistance program known as TAFDC. And
emergency family shelters would receive $19.3
million under the bill.
The bill also allocates $4.45 million in
administrative funding for the Department of
Correction, $2.5 million for the charter school
reimbursement line item and $12.5 million for
special education, and $2.15 million for a
program that helps low-income families buy
health foods.
Meeting in informal sessions, where roll call
votes are not permitted, the House and Senate
each accepted the conference committee report (H
4514) on voice votes.
State House News Service
Tuesday, May 22, 2018
Senate Democrats reject sales tax holiday, sales
tax cut
By Andy Metzger
The Senate on Tuesday rejected two tax reform
proposals that voters may have a chance to
settle later this year.
Senators turned down a proposal to grant Bay
State shoppers a weekend free from the sales tax
this August, an idea that Beacon Hill lawmakers
have embraced in the past, and also rejected a
budget amendment to reduce the sales tax to 5
percent from 6.25 percent. The tax was raised
from 5 percent in 2009.
Seven Democrats joined the seven-member
Republican caucus in support of Senate Minority
Leader Bruce Tarr's sales tax holiday amendment,
which drew 14 votes in favor and 24 votes
against as budget deliberations kicked off.
The Retailers Association of Massachusetts this
year is advancing a proposed ballot question
that would lower the sales tax from 6.25 percent
to 5 percent and create an annual sales tax
holiday. The measure could be dealt with,
however, in behind the scenes Beacon Hill talks
over a series of ballot questions.
More often than not over the past decade,
lawmakers have agreed to a two-day
sales-tax-free weekend in August, promoting the
twin goals of boosting retail activity during an
otherwise sleepy month and giving parents a
break on the costs of purchasing back-to-school
supplies.
Retailers Association of Massachusetts President
Jon Hurst said he was pleased that there was
"good bipartisan support for the concept" in the
budget debate and he was not disappointed that
it was not added to the annual spending bill.
"They never have done it during the budget
process," Hurst said.
The past two summers, lawmakers have cited
sluggish state revenues in declining to pass a
sales tax holiday. This year state coffers are
relatively flush, which might eventually make a
sales tax holiday seem more feasible to
lawmakers.
State tax revenues through April have poured in
$809 million over budgeted revenues for the year
and $1.7 billion over the same period last year.
In 2015, the last time Massachusetts held a
sales-tax holiday, the Department of Revenue
estimated $25.5 million in foregone revenue from
the exercise.
"Revenues are good. Consumer confidence is high.
The question is where do we want the consumers
to spend their money?" Hurst said, calling the
sales tax holiday a "vital tool" to keep sales
in state.
During Tuesday's debate, Jamaica Plain Democrat
Sen. Sonia Chang-Diaz said she would rather pay
a sales tax than see schools rely on parents for
donations of classroom supplies like crayons and
pencils.
Tarr countered that lawmakers should consider
the plight of brick-and-mortar retailers
competing against tax-free online sales and
tax-free stores in New Hampshire while also
seeking to hire workers in a tight labor market.
Even when they do support a sales tax holiday,
legislative leaders usually try to foster an
element of surprise so that the holiday spurs
new sales instead of just encouraging consumers
to delay their purchases until the tax-free
weekend. Formal sessions end July 31 giving
supporters of the holiday more than a month to
try to get it to the desk of Gov. Charlie Baker,
who is a supporter of both the sales tax holiday
and a sales tax reduction.
The Democrats who voted Tuesday to include a
sales tax holiday provision in the fiscal 2019
budget were Paul Feeney, of Foxborough; Anne
Gobi, of Spencer; Adam Hinds, of Pittsfield;
Michael Moore, of Millbury; Michael Rush, of
West Roxbury; Walter Timilty, of Milton; and
James Welch, of West Springfield.
Baker has said he supports lowering the sales
tax, but he wants lawmakers to find a compromise
that avoids a sales tax question on the November
ballot and also dispenses with other proposed
ballot questions, such as a bid to raise the
minimum wage and another to institute a paid
family and medical leave program in
Massachusetts.
The Senate defeated Tarr's bid to lower the
sales tax on a voice vote Tuesday.
―Sam Doran
contributed reporting
State House News Service
Tuesday, May 22, 2018
Tarr: Teamwork needed to tame budget cost
drivers
By Michael P. Norton and Katie Lannan
Sen. Bruce Tarr used a top-of-mind sports
metaphor Tuesday to make his point that
lawmakers need to take a team approach to tame
some of the biggest cost drivers in the state
budget.
During the first hour of debate on the Senates
$41.4 billion fiscal 2019 budget, Tarr asked
Senate Ways and Means Chairwoman Karen Spilka of
Ashland whether the "unstoppable" Lebron James
would be able to thwart the Boston Celtics, who
are trying to defeat the Cleveland Cavaliers and
reach the NBA Finals.
"I believe that a team working together can
overcome any one single person," Spilka
responded. "We all need to rally and support
them," she added.
It was just the answer Tarr hoped for. A
Republican from Gloucester, Tarr then asserted
that the state's ability to build its rainy day
reserves, which can preserve state services in a
recession and free up money to invest in popular
areas like education, local aid and mental
health services, is largely riding on the level
of commitment and cooperation (think help
defense) lawmakers make to taming growth in
health care, pension and debt service spending.
From perennially underfunded accounts to spending
nearly 40 percent of the budget on one program,
MassHealth, Tarr said state government needs to
face up to the task of controlling spending. He
pointed to the budget's big-ticket items as
worth more consideration: a "staggering" $2.47
billion for annual debt service payments and
$2.61 billion for pension payments, an increase
over fiscal 2018 that Spilka estimated at 8.9
percent.
Tarr also highlighted another wrinkle of life on
Beacon Hill. While Democrats annually proclaim
the annual budget as balanced, they routinely
approve a series of midyear spending bills.
Spilka said Gov. Charlie Baker has filed five
supplemental budgets this fiscal year alone. He
signed a $147 million spending bill hours after
it reached his desk Monday, and Spilka said
another supplemental spending bill will probably
come up before June 30.
Sen. Michael Brady, a Brockton Democrat who
co-chairs the Revenue Committee that reviews tax
legislation, turned to Twitter to seize on the
Celtics theme, but Brady appeared focused on
coming up with new revenue, rather than cost
savings.
"We need to work as a team to create revenue for
the Commonwealth to better provide for our
schools and communities," Brady tweeted,
accentuating his statement with a gif of a
towel-waving Larry Bird.
While the House structured its fiscal 2019
budget in a way that would enable the Senate to
propose a major tax increase, the Senate budget,
like the House, relies on only targeted new
taxes associated with short-term rentals, legal
marijuana and corporate repatriation authorized
under a federal tax law.
The Senate also defended one of the state's
revenue sources, voting 24-14 to defeat an
amendment authorizing a two-day suspension of
the state sales tax this summer.
Spilka did outline several areas where the
Senate is hoping to wring savings out of the
state budget, and said one-time revenues in the
state budget total about $100 million, a major
reduction from past years. "That is something we
have worked hard for," she said.
While the wait continues for a House health care
savings bill, Spilka said she hoped to
eventually get into a conference committee with
the House to hash out a bill this year. "We are
hoping that we can finalize one in conference
committee to continue to have cost savings for
the Commonwealth," she said.
In that same policy realm, Spilka said the
Senate budget eyes up to $80 million in savings
by allowing the health and human services
secretary to negotiate directly with
pharmaceutical manafacturers for better prices
and supplmental rebates and to demand increased
transparency. Drug prices, she said, are perhaps
the fastest growing element in the health care
system.
Spilka highlighted an outside section in the
Senate budget that would create commission to
review tax expenditures, also known as tax
breaks or loopholes, on a rolling basis and
determine if existing policies should be
repealed, amended or allowed to sunset.
The Senate included the same measure in its
fiscal 2018 budget, but it did not survive talks
with the House.
Spilka said lawmakers do not even have the
information they need to judge which tax
expenditures are benefiting the state and its
taxpayers and which they should reconsider.
As another effort to generate savings, Spilka
said the budget would create a commission to
study the costs of prisons and jails and
recommend appropriate funding levels for the
Department of Correction and sheriffs'
departments. A report released Monday by MassINC
found that the number of inmates in state and
county correctional facilities dropped 21
percent over the past eight years while
correctional budgets increased by nearly 25
percent.
Pointing to recent criminal justice reform
legislation aimed at reducing recidivism, Spilka
said it is important to look for ways to save
money "reasonably" and "efficiently" as
policymakers also work to bring down
incarceration rates.
The Senate budget also proposes pay increases
for public defenders and district attorneys.
Spilka said that added money will lead to
long-term savings by reducing turnover, creating
more stability, and driving down costs for
rehiring and training.
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NOTE: In accordance with Title 17 U.S.C. section 107, this
material is distributed without profit or payment to those who have expressed a prior
interest in receiving this information for non-profit research and educational purposes
only. For more information go to:
http://www.law.cornell.edu/uscode/17/107.shtml
Citizens for Limited Taxation ▪
PO Box 1147 ▪ Marblehead, MA 01945
▪ 508-915-3665
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