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Post Office Box 1147 ●
Marblehead, Massachusetts 01945 ●
(781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
45 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
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CLT UPDATE
Friday, January 25, 2019
Baker
opens the tax floodgates
Gov. Charlie Baker filed a $42.7 billion
budget on Thursday that features the biggest overhaul to
public education funding in decades and proposes new taxes
on electronic nicotine products and on pharmaceutical
manufacturers to help pay for opioid addiction services.
The education reform, which Baker teased in
his inaugural address earlier this month, proposes to spend
an additional $200 million on public education this year and
increases the baseline amount of money that school districts
must spend on education by $1.1 billion over the next seven
years.
The plan, according to the administration,
would "fully" implement the recommendations of a special
commission that three years ago found the state's education
funding formula insufficient to meet the growing costs of
health insurance, special education and services for English
language learners and low income students....
The budget would increase spending by 1.5
percent over the current fiscal year, according to the
administration, and includes $133 million in new revenue
from anticipated recreational marijuana sales, $28 million
from taxes on short-term housing rentals and $6 million from
an expansion of tobacco excises taxes to e-cigarettes and
vapor products....
The state already requires large online
retailers that sell directly to Massachusetts customers to
collect sales taxes, but the administration estimates that
the new application of the sales tax could generate $42
million in revenue, and help local retailers compete with
online shopping.
The governor has also put forward a revamped
proposal to accelerate the process for large retail
retailers to remit sales taxes to the state in a more timely
manner, shifting the monthly collection process earlier and
netting $306 million in fiscal 2020 in one-time additional
revenues that will be put toward school safety, scholarships
and school water deleading.
Baker's reliance on tax and fee increases to
help finance some of his investments early in his second
term has come as a surprise to some on Beacon Hill who have
heard the governor time and again tout his opposition to
broad-based tax increases.
"The bottom line is from the beginning we've
said, if we're leveling the playing field...or we're
creating new services that we believe, on a targeted basis,
are important, then we're going to propose those," Baker
said, when asked about the taxes.
State House News Service
Wednesday, January 23, 2019
Baker taxes help fuel $42.7 Billion budget bill
An old battle has been reignited by Gov.
Charlie Baker this week. Tuesday, the Baker-Polito
administration filed a bill that would allow police to pull
drivers over for not wearing their seat belts, ban drivers
from touching their phones and include other measures
intended to improve road safety....
In reality, the bill would allow police to
pull drivers over for myriad reasons. We do not need more
justifications for law enforcement to be inside our cars....
There is no need for more seat belt
legislation either, though proponents have been excitedly
pushing the cause for decades. “The primary seat belt law
has been a Triple-A top priority for many years,” AAA
spokeswoman Mary Maguire told the Herald. “These are
proposals that would save lives and prevent injuries and
what’s better than that?”
The fact is that more people are buckling up
on their own without an onerous law. In the past year, seat
belt use in Massachusetts rose by 8 percent, from 73.7
percent to 81.6 percent, according to a study by the
University of Massachusetts Traffic Safety Research Program.
That is the largest increase the state has ever seen,
officials said.
The trend is moving in the right direction
and though we agree that seat belts save lives, there are
already a slew of laws and regulations regarding seat belts,
child safety seats and the like....
As far as seat belts, it is not the
government’s place to protect us from ourselves. The
decision not to wear a seat belt solely affects the person
choosing not to wear it.
What most of these new rules would do
ultimately is force interactions between citizens and law
enforcement. Drivers will essentially be suspects by
default, pending the officer’s verification that they are in
compliance.
It is generally wise to use a seat belt and
almost always unwise to operate a cellphone while driving,
but clunky, overreaching laws are not the fix — they will
merely be an additional problem. Gov. Baker’s conservative
ideology should be calibrated to default to the right of the
individual. One wonders what other surprises 2019 will
bring.
A Boston Herald editorial
Thursday, January 23, 2019
No to Baker’s cellphone slippery slope
House Speaker Robert DeLeo, who for four
years has been an ally of Gov. Charlie Baker's on taxes,
said he was "having a little fun" with the Republican
governor on Thursday after Baker put out a budget this week
stuffed with targeted tax hikes, but the speaker did not
rule any of them out.
Baker, who explained that he's alright with
using taxes to "level the playing field" or regulate a new
industry, has proposed a real estate transfer tax increase
to pay for climate adaptation and a tax on opioid sales to
pay for addiction treatment.
He's proposed to extend the tobacco tax to
vaping products and the sales tax to third-party sales
through online marketplaces like Etsy. And after agreeing to
taxes on short-term rentals and retail marijuana sales, he's
now proposed to legalize and tax sport betting.
Asked about the governor's embrace of new
revenue streams in his budget proposal, DeLeo said, "I was
having a little fun with him on that actually, talking about
that."
DeLeo, in the past, spearheaded a major hike
in the state's sales tax, and has raised the cigarette and
gas taxes, but for the majority of his decade in the
speaker's office, the Winthrop Democrat said he's been
"basically opposed" to hiking broad-based taxes to pay for
services and programming.
That said, he's not ruling out adopting what
Baker has proposed, or going further to raise taxes....
"I have to take a look at all of the
provisions to really give an opinion as to the governor's
proposal but I will say this. I think what's good about it
is the fact that in this session we have the governor the
Senate president, myself .... all working together to get
something done," DeLeo said.
State House News Service
Thursday, January 24, 2019
Baker's evolution on taxes provides "a little fun" for DeLeo
There’s a growing consensus that the state’s
public schools need a funding boost — this year. And if
differences as minor as those between rival proposals to do
so can’t be bridged, it’d be a terrible outcome for students
and a disturbing indication of Beacon Hill’s ability to
reach compromises.
You might not know it from the rhetoric of
some critics, but the House, Senate, and Governor Charlie
Baker appear close to being on the same page. Baker and
legislators all want a funding increase north of $1 billion,
based on the findings of a 2015 state commission that
studied funding shortfalls.
The sticking points lie in the details:
exactly how much to spend, exactly how fast to phase it in,
and exactly how to assure that new money brings results....
Legislators took their best guess in 1993,
when they passed a trailblazing education reform law, but
the formulas they put in place underfunded some aspects,
like the cost of educating English language learners.
Lawmakers still don’t know precisely what the right amount
is. Even Chang-Diaz doesn’t have a specific dollar figure in
mind for what schools need. As in 1993, Beacon Hill will
have to make a political decision on a spending level.
A Boston Globe editorial
Friday, January 25, 2019
Getting to yes on Mass. school funding
Gov. Charlie Baker has unveiled his new
budget, which Democrats will cheer and Republicans should
fear. Taxes are a major theme in this proposal.
A “modest” increase in the excise tax on
real estate sales is included. The excise rate, which is
paid by the seller of a property, would jump from $2 per
$500 of value to $3, amounting to $137 million annually
toward the Global Warming Solutions Trust Fund. With the
extra revenue, Baker is proposing to spend $75 million on
climate adaption programs, which are meant to incentivize
cities and towns to invest in “climate-smart
infrastructure.”
Former Gov. Deval Patrick would have visions
of tax increases to combat global warming dancing in his
head but Baker, the Republican governor, is bent on making
this progressive dream come true....
The median price for a single-family home in
December in Massachusetts was $375,000, according to the
MAR, which would bring the tax from $1,710 to $2,565 on that
home under the proposed law.
That is real money for a lot of people, but
Gov. Baker has the climate on the mind....
In fact, we are meant to think of the tax
increase not as a penalty but an investment, something in
our own best interests. “This is an excise tax that’s
basically about property and the proposal we’re making here
is to protect property,” he said. “We think, in the long
run, the cost/benefit on this one is a good deal for
Massachusetts residents.”
In addition to the increase on excise tax
through property sales, Baker is proposing an expansion of
the cigarette excise tax to include e-cigarettes, which is
expected to bring in $6 million.
He’s also suggesting a sales tax on online
marketplaces like Amazon, eBay and Etsy for deliveries to
Massachusetts customers, which would bring in $42 million in
new revenue.
There was a time when Charlie Baker was
fundamentally opposed to most taxes but those days are over.
Unfortunately, so may be the days of the hard-working people
of Massachusetts keeping their own hard-earned money.
A Boston Herald editorial
Friday, January 25, 2019
Baker budget boasts bevy of taxes
Last week Governor Baker proposed increasing
the tax on real estate sales to generate about $1 billion
over a decade for a fund to invest in projects that protect
cities and towns from the impacts of climate change.
Baker’s proposal is an important first step
in recognizing the dire impacts of climate change and
planning for the investments in resilience needed to protect
life and property. The scale of the challenge, however, will
require more substantial resources alongside funding
mechanisms that spread the burden fairly and equitably,
while providing appropriate incentives....
Moving forward will require political will and courageous
leadership. There is no silver-bullet solution — we need
multiple funding sources and collaborations with the private
sector to generate the required resources, spread the burden
fairly, and promote market-oriented solutions. Raising taxes
is never popular, of course, but the billions needed for
climate adaptation also present a unique opportunity to
reshape our cities and renew our infrastructure in ways that
promote sustainable growth and equity for the communities of
the region.
The Boston Globe
Friday, January 25, 2019
Baker’s climate plan is an important first step — but more
is needed
By David L. Levy
|
Chip Ford's CLT
Commentary
"There was a time when Charlie Baker was
fundamentally opposed to most taxes but those days
are over. Unfortunately, so may be the days of the
hard-working people of Massachusetts keeping their
own hard-earned money."
I considered stopping my commentary
right here. "What more can I add to that Herald
editorial?" I wondered. But then the previous
day's Boston Herald editorial's open question beckoned:
Gov. Baker’s conservative
ideology should be calibrated to default to the
right of the individual. One wonders what other
surprises 2019 will bring.
An op-ed column in today's Boston Globe
by a professor at the University of Massachusetts
Boston, David L. Levy, provided a preview.
Charlie Baker has opened the door, paved
the way – and the
insatiable Takers have enthusiastically snapped
up his invitation and raced through the gap.
If you ever needed further convincing
that More Is Never Enough (MINE) and never will be, this
column provides it in its title alone: "Baker’s
climate plan is an important first step
– but more is needed."
Let's next look at Gov. Baker's "biggest
overhaul to public education funding in decades."
The State House News Service reported:
"The
plan, according to the administration, would "fully"
implement the recommendations of a special
commission that three years ago found the state's
education funding formula insufficient to meet the
growing costs of health insurance, special education
and services for English language learners and low
income students...."
In its editorial today The Boston Globe
admitted:
Legislators took their best guess in 1993, when they
passed a trailblazing education reform law, but the
formulas they put in place underfunded some aspects,
like the cost of educating English language
learners. Lawmakers still don’t know precisely what
the right amount is.
There is no precise "right amount"
because it keeps growing, expanding. Remember the
December 19 State House News Service report, "Bay
State population growth tops in New England"?
It helps explain why funds are "insufficient to meet the
growing costs of ... special education and services for
English language learners and low income students."
"Population growth in Massachusetts is outpacing
that of other New England states, according to the
U.S. Census Bureau, and Secretary of State William
Galvin is now predicting that the state should be
able to hold on to all nine seats in Congress with
an accurate head count in 2020.
"New data released on Wednesday showed that the
population in Massachusetts grew by 38,903 people to
6.9 million between July 1, 2017 and July 1, 2018.
The 0.6 percent growth rate equaled the population
growth in the country, and ranked Massachusetts 22nd
among all other states and first in New England.
"Galvin said that while the state continues to lose
residents to other states, those loses are more than
offset by international immigration. 'These numbers
show how important it is that we ensure every person
in Massachusetts is counted in the 2020 Census,
whether or not they are United States citizens,'
Galvin said."
Productive taxpaying citizens are
bailing out of Massachusetts, but they are being more
than replaced by "international immigrants." Do
you suppose these immigrants are providing an offsetting
amount of revenue to the state, that they are not
instead making more demands on the state's
taxpayer-funded "safety net" than we emigrants ever did?
Such a demographic disruption creates unavoidable fiscal
consequences.
If you wonder why the exodus out of The
People's Democratic Republic of Taxachusetts, on
Wednesday the Washington, DC-based Tax Foundation
released its latest report, "How
High Are State and Local Tax Collections in Your State?"
I doubt it will surprise you to learn that Massachusetts
was rated the fifth-highest taxed per capita
state in the nation in "State and Local Tax Collections
per Capita, Fiscal Year 2016," behind only New York,
Connecticut, New Jersey and –
strangely – North Dakota
(which generates much of its tax revenue from severance
taxes on oil and natural gas, not by picking its
citizen' pockets). Massachusetts is followed by
Hawaii (#6), Minnesota (#7), and California (#8)
– Massachusetts taxpayers'
burden is heavier than even Californians'!
#1 |
New York |
$8,957 |
#2 |
Connecticut |
$7,220 |
#3 |
New Jersey |
$6,709 |
#4 |
*
North Dakota |
$6,630 |
#5 |
Massachusetts |
$6,469 |
#6 |
Hawaii |
$6,467 |
#7 |
Minnesota |
$6,090 |
#8 |
California |
$6,077 |
|
|
|
#38 |
Kentucky |
$3,823 |
|
|
|
* North
Dakota generates a substantial share of its
tax revenue from severance taxes on oil and
natural gas. |
My newly-adopted "sanctuary state" of
Kentucky scores at #38. Florida comes in at #46,
Alabama at #50.

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Chip Ford
Executive Director |
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State House News
Service
Wednesday, January 23, 2019
Baker taxes help fuel $42.7 Billion budget bill
By Matt Murphy
Gov. Charlie Baker filed a $42.7 billion budget
on Thursday that features the biggest overhaul
to public education funding in decades and
proposes new taxes on electronic nicotine
products and on pharmaceutical manufacturers to
help pay for opioid addiction services.
The education reform, which Baker teased in his
inaugural address earlier this month, proposes
to spend an additional $200 million on public
education this year and increases the baseline
amount of money that school districts must spend
on education by $1.1 billion over the next seven
years.
The plan, according to the administration, would
"fully" implement the recommendations of a
special commission that three years ago found
the state's education funding formula
insufficient to meet the growing costs of health
insurance, special education and services for
English language learners and low income
students.
The budget and the companion education
legislation are highlights of what has been an
expansive early agenda for the Republican
governor in his second term. Baker has also put
forward proposals to legalize sports betting,
toughen seat belt law enforcement, ban hand-held
cell phone use while driving, address the
impacts of climate change, and enable judges to
consider someone's full criminal record when
deciding whether to release them before trial or
hold them as a danger to society.
The budget would increase spending by 1.5
percent over the current fiscal year, according
to the administration, and includes $133 million
in new revenue from anticipated recreational
marijuana sales, $28 million from taxes on
short-term housing rentals and $6 million from
an expansion of tobacco excises taxes to
e-cigarettes and vapor products.
The bill would increase funding for the MBTA by
at least $88 million to $1.3 billion, and the
governor also wants to boost funding for the
Department of Public Utilities' pipeline safety
division by $5.5 million to better ensure
utility compliance with safety regulations after
the Merrimack Valley natural gas disaster.
"It's fiscally responsible and increases
investments in our schools and our communities
and supports efforts to combat the opioid
epidemic, address the housing crisis, improve
our transportation infrastructure and protect
our state from the impacts of climate change,"
Baker said at a press conference.
In addition to his plan to raise the real estate
transfer tax to pay for climate change
mitigation, Baker is also proposing to force
online marketplaces like Amazon, Ebay and Etsy
that allow third-party vendors that sell through
their websites to collect and remit sales taxes
on those transactions with Massachusetts
customers.
The state already requires large online
retailers that sell directly to Massachusetts
customers to collect sales taxes, but the
administration estimates that the new
application of the sales tax could generate $42
million in revenue, and help local retailers
compete with online shopping.
The governor has also put forward a revamped
proposal to accelerate the process for large
retail retailers to remit sales taxes to the
state in a more timely manner, shifting the
monthly collection process earlier and netting
$306 million in fiscal 2020 in one-time
additional revenues that will be put toward
school safety, scholarships and school water
deleading.
Baker's reliance on tax and fee increases to
help finance some of his investments early in
his second term has come as a surprise to some
on Beacon Hill who have heard the governor time
and again tout his opposition to broad-based tax
increases.
"The bottom line is from the beginning we've
said, if we're leveling the playing field...or
we're creating new services that we believe, on
a targeted basis, are important, then we're
going to propose those," Baker said, when asked
about the taxes.
Some of those one-time sales tax revenues will
also become part of a $297 million deposit into
the state's stabilization account, which
officials said would boost the "rainy day" fund
to $2.8 billion by the end of fiscal 2020 as
economists warn about a slowdown and public
officials prepare for an eventual recession.
Baker expressed confidence in the experts that
have said the downturn in state revenue
collections in December that wiped out a
mid-year surplus was a "timing issue," but
Massachusetts Taxpayers Foundation President
Eileen McAnneny said she doesn't necessarily
share his optimism.
"I certainly don't want to be Henny Penny here,
but there are some pre-recession warning signs.
I think January revenues will be critically
important because if it is just a timing issue,
that's great. If it's not though we'd want to
understand what's causing the softness in those
numbers," McAnneny said.
After working in his first term to pass two
significant bills to fight back against the
opioid addiction epidemic, Baker's budget
includes $266 million for treatment and other
services, a $48 million increase over this year
that includes almost $50 million to expand
MassHealth addiction treatment services through
a federal Medicaid waiver.
To help pay for that investment, the governor is
proposing a 15 percent tax on opioid
manufacturers on gross receipts from the sale of
opioid products. The tax is expected to net $14
million.
Asked if he was worried about the tax being
passed on to consumers, Baker said, "It's
charged to the manufacturers. I can't do
anything about how they actually run their
books, but the manufacturers have a lot to do
with creating the crisis that we all are paying
for every day and creating a mechanism in which
they put something in to help pay for the
carnage they've created, I think, is important."
The governor also wants to give MassHealth,
which would see its total budget grow to $16.54
billion in fiscal 2020, the ability to negotiate
directly with drug manufacturers over pricing of
the costly pharmaceuticals. The reforms, the
administration estimates, will help save $80
million in a program for which the cost to the
state is expected to grow 4.3 percent in fiscal
2020.
The budget proposes to allow MassHealth to use a
public rate-setting process to determine what it
will pay for select high-cost drugs, and the
Health Policy Commission would be allowed to
require the disclosure of some pricing
information, or to refer a case to the attorney
general for review if the manufacture won't
issue rebates to meet the target price.
Massachusetts Association of Health Plan CEO
Lora Pellegrini said she was hopeful the
governor's proposal would lead to lower drug
spending, but MassBIO President Robert Coughlin,
who represents the life sciences industry,
blasted the idea.
"Governor Baker's proposal to force certain drug
manufacturers to pay additional, supplemental
rebates on incredibly effective drugs that
MassHealth deems too expensive sends a message
across the industry that government is going to
punish success and that only it can be the final
arbiter of drug pricing," Coughlin said, arguing
that MassHealth is "already paying significantly
less for the same drugs than private insurers."
Coughlin suggested that Baker, instead, target
pharmacy benefit managers and the practice of
"spread pricing" to generate savings at
MassHealth. Baker's budget does call for
pharmacy benefit managers to be more transparent
about pricing spreads and rebates in contracts
with managed care organizations and to limit
their margins.
The governor's budget filing is the first step
in a months-long process designed to culminate
over the summer in a new annual spending plan
for the fiscal year that starts on July 1. The
governor said he hopes the Legislature could
complete work on his education reform plan in
the same timeframe.
"The success of this legislative session will be
defined by our collective ability to take bold
action on critical issues such as climate change
and resilience, our transportation and housing
needs, and funding our education system. I am
encouraged to see so many of the Senate's shared
priorities included in the Governor's budget
proposal," Senate President Karen Spilka said in
a statement, which cited priorities like
prescription drug pricing, health care cost
reduction for low-income seniors and lifting a
cap on family welfare benefits.
Massachusetts Budget and Policy Center interim
President Marie-Frances Rivera, however, said
the governor's budget falls short in some areas.
"The Governor's proposal includes some new
initiatives, acknowledging the need for
additional resources, but it will be difficult
for state lawmakers to make important
investments without significant new revenue,"
Rivera said in a statement. "While additional
revenue is helpful for investing in essential
programs, most of these new revenue sources come
from sales taxes, use taxes, and other
consumption-related taxes that are not
progressive. They will not help turn our state's
upside-down tax system right-side up."
The budget includes 83 outside sections, many of
which pertain to implementing the new excise
taxes on vape and e-cigarette products. There
are also proposals to allow the hunting of deer
by bow and arrow on Sundays, and to limit the
accrual of unused sick time to 1,000 hours for
executive branch and public higher education
employees.
Another proposal would expand the allowable use
of money from the sale of carbon emission
credits through the Regional Greenhouse Gas
Initiative program to include greenhouse gas
mitigation and climate change adaptation.
The Boston Herald
Thursday, January 23, 2019
A Boston Herald editorial
No to Baker’s cellphone slippery slope
An old battle has been reignited by Gov. Charlie
Baker this week. Tuesday, the Baker-Polito
administration filed a bill that would allow
police to pull drivers over for not wearing
their seat belts, ban drivers from touching
their phones and include other measures intended
to improve road safety.
As the Herald’s Mary Markos reported, the
proposed legislation requires electronic devices
to be used in “hands-free” mode and would forbid
drivers to touch or hold an electronic device,
“except to perform a single tap or swipe to
activate, deactivate or initiate hands-free
mode.” The bill would allow talking, texting and
other tasks to be completed by voice commands.
In reality, the bill would allow police to pull
drivers over for myriad reasons. We do not need
more justifications for law enforcement to be
inside our cars.
Besides, cellphone laws are hard to enforce and
there are already distracted driving laws on the
books.
There is no need for more seat belt legislation
either, though proponents have been excitedly
pushing the cause for decades. “The primary seat
belt law has been a Triple-A top priority for
many years,” AAA spokeswoman Mary Maguire told
the Herald. “These are proposals that would save
lives and prevent injuries and what’s better
than that?”
The fact is that more people are buckling up on
their own without an onerous law. In the past
year, seat belt use in Massachusetts rose by 8
percent, from 73.7 percent to 81.6 percent,
according to a study by the University of
Massachusetts Traffic Safety Research Program.
That is the largest increase the state has ever
seen, officials said.
The trend is moving in the right direction and
though we agree that seat belts save lives,
there are already a slew of laws and regulations
regarding seat belts, child safety seats and the
like.
The bill also features a reasonable provision
aimed at curbing drunken driving. First-time
drunken-driving offenders who apply for hardship
licenses would be required to use a handheld
breath-alcohol monitoring device for six months,
which is electronically connected to a vehicle’s
ignition. The Registry of Motor Vehicles would
be able to penalize people who try to drive
drunk.
Fair enough. However, more cellphone and seat
belt laws are misguided. They will diminish
individual freedoms while dangling cash-grab
opportunities in front of municipalities. There
are already laws that pertain to cellphone use
on the books.
As far as seat belts, it is not the government’s
place to protect us from ourselves. The decision
not to wear a seat belt solely affects the
person choosing not to wear it.
What most of these new rules would do ultimately
is force interactions between citizens and law
enforcement. Drivers will essentially be
suspects by default, pending the officer’s
verification that they are in compliance.
It is generally wise to use a seat belt and
almost always unwise to operate a cellphone
while driving, but clunky, overreaching laws are
not the fix — they will merely be an additional
problem. Gov. Baker’s conservative ideology
should be calibrated to default to the right of
the individual. One wonders what other surprises
2019 will bring.
State House News
Service
Thursday, January 24, 2019
Baker's evolution on taxes provides "a little
fun" for DeLeo
By Matt Murphy
House Speaker Robert DeLeo, who for four years
has been an ally of Gov. Charlie Baker's on
taxes, said he was "having a little fun" with
the Republican governor on Thursday after Baker
put out a budget this week stuffed with targeted
tax hikes, but the speaker did not rule any of
them out.
Baker, who explained that he's alright with
using taxes to "level the playing field" or
regulate a new industry, has proposed a real
estate transfer tax increase to pay for climate
adaptation and a tax on opioid sales to pay for
addiction treatment.
He's proposed to extend the tobacco tax to
vaping products and the sales tax to third-party
sales through online marketplaces like Etsy. And
after agreeing to taxes on short-term rentals
and retail marijuana sales, he's now proposed to
legalize and tax sport betting.
Asked about the governor's embrace of new
revenue streams in his budget proposal, DeLeo
said, "I was having a little fun with him on
that actually, talking about that."
DeLeo, in the past, spearheaded a major hike in
the state's sales tax, and has raised the
cigarette and gas taxes, but for the majority of
his decade in the speaker's office, the Winthrop
Democrat said he's been "basically opposed" to
hiking broad-based taxes to pay for services and
programming.
That said, he's not ruling out adopting what
Baker has proposed, or going further to raise
taxes.
Before the Supreme Judicial Court knocked it off
the 2018 ballot, DeLeo supported a
constitutional amendment to impose a surtax on
millionaires to raise about $2 billion for
investments in areas like education and
transportation. Many Republican lawmakers
opposed the surtax while Baker did not take a
position on it.
"I would say that when you take a look in terms
of where that money would be going towards in
terms of climate change or housing or whatever,
again I think it's something for us to take a
close look at," DeLeo said of Baker's tax
proposals.
The speaker also said he was withholding
judgment on Baker's seven-year plan to increase
spending on public education by $1.1 billion by
2026, starting with $200 million more in state
school aid this year.
"I have to take a look at all of the provisions
to really give an opinion as to the governor's
proposal but I will say this. I think what's
good about it is the fact that in this session
we have the governor the Senate president,
myself .... all working together to get
something done," DeLeo said.
Rep. Alice Peisch co-chaired the Education
Committee last session, and was the lead
negotiator for the House on legislation to
update the funding formula, but those talks fell
apart in the final hours of formal session in
July.
Asked who would handle education for the House
this session, DeLeo said, "Probably the chairman
of education."
When it was then pointed out to him that he had
changed the gender of the chair, DeLeo corrected
himself. "Or chairwoman of education. Thank you.
Chairperson of education, which hopefully we'll
know in a relatively short period of time."
Peisch has been mentioned by Beacon Hill
insiders as a potential candidate to become the
next chair of the House Ways and Means
Committee. DeLeo said he'd like to make
committee assignments "within the next two or
three weeks."
The Boston Globe
Friday, January 25, 2019
A Boston Globe editorial
Getting to yes on Mass. school funding
There’s a growing consensus that the state’s
public schools need a funding boost — this year.
And if differences as minor as those between
rival proposals to do so can’t be bridged, it’d
be a terrible outcome for students and a
disturbing indication of Beacon Hill’s ability
to reach compromises.
You might not know it from the rhetoric of some
critics, but the House, Senate, and Governor
Charlie Baker appear close to being on the same
page. Baker and legislators all want a funding
increase north of $1 billion, based on the
findings of a 2015 state commission that studied
funding shortfalls.
The sticking points lie in the details: exactly
how much to spend, exactly how fast to phase it
in, and exactly how to assure that new money
brings results.
Those are important questions, but none of them
should be dealbreakers. Legislative leaders,
including Education Committee chairs, need to be
committed to getting to yes this session. Last
year ended with an impasse, and that’s not an
outcome that House Speaker Robert DeLeo and
Senate President Karen Spilka can allow to be
repeated.
Predictably, the biggest division is over
whether to attach strings to new state aid.
The notion offends teachers’ unions, some local
officials, and state Senator Sonia Chang-Diaz.
In their view, the state has been underfunding
districts — “owes” them money, as the emerging
talking point goes — and can’t put conditions on
repaying a debt.
That opposition didn’t fly with the House last
year, and it’s a nonstarter with Baker, whose
proposal released Wednesday plows money into
schools, but introduces some accountability
measures designed to ensure that the money is
spent on proven education strategies to close
the achievement gap. For instance, it sets up a
$50 million School Improvement Trust Fund aimed
at supporting programming in low-performing
schools.
Most controversially, it also gives the state
more power over schools deemed underperforming.
The state would be able to withhold
administrative funding from districts that have
failed to make improvements to those
underperforming schools.
The idea that the state “owes” districts might
make for an appealing political narrative, but
it’s not a helpful way to approach this debate.
Legislators took their best guess in 1993, when
they passed a trailblazing education reform law,
but the formulas they put in place underfunded
some aspects, like the cost of educating English
language learners. Lawmakers still don’t know
precisely what the right amount is. Even
Chang-Diaz doesn’t have a specific dollar figure
in mind for what schools need. As in 1993,
Beacon Hill will have to make a political
decision on a spending level.
Baker’s proposal needn’t be the last word. But
closing the achievement gap is an important aim
of this new round of funding, and some type of
accountability measures would be appropriate in
return for at least $262 million in new state
aid this year alone. The state doesn’t owe
districts a particular dollar figure, but it
does owe students a good education — and the
policies to make sure that state money goes
toward providing one.
The Boston Herald
Friday, January 25, 2019
A Boston Herald editorial
Baker budget boasts bevy of taxes
Gov. Charlie Baker has unveiled his new budget,
which Democrats will cheer and Republicans
should fear. Taxes are a major theme in this
proposal.
A “modest” increase in the excise tax on real
estate sales is included. The excise rate, which
is paid by the seller of a property, would jump
from $2 per $500 of value to $3, amounting to
$137 million annually toward the Global Warming
Solutions Trust Fund. With the extra revenue,
Baker is proposing to spend $75 million on
climate adaption programs, which are meant to
incentivize cities and towns to invest in
“climate-smart infrastructure.”
Former Gov. Deval Patrick would have visions of
tax increases to combat global warming dancing
in his head but Baker, the Republican governor,
is bent on making this progressive dream come
true.
“It’s pretty clear that climate change is
starting to have a very significant impact on
our communities, on our infrastructure, on
personal property, on real property and on
community property, and this is a way for us to
build a program that can generate about $1
billion over 10 years to invest in communities,
to invest in resiliency, to invest in
infrastructure, to protect people’s property and
to protect community property,” Baker said last
week.
As the Herald’s Mary Markos reported, some in
the real estate industry are less enthusiastic,
including Justin Davidson, general counsel and
director of government affairs with the
Massachusetts Association of Realtors.
“Our concern is that this could have one of two
effects on the market: It could drive up the
cost of housing even more in Massachusetts or
strip equity from homeowners,” Davidson said.
“It really comes down to a fairness issue.
Everyone benefits from a better climate and
everyone should contribute to a better solution.
It shouldn’t be something that’s just put on the
backs of homeowners and home-sellers.”
The median price for a single-family home in
December in Massachusetts was $375,000,
according to the MAR, which would bring the tax
from $1,710 to $2,565 on that home under the
proposed law.
That is real money for a lot of people, but Gov.
Baker has the climate on the mind.
“There is no program in Massachusetts that’s
going to put a billion dollars on the table to
put the kind of resiliency programming in place
that we’re going to need to deal with the
intensity and frequency of storms,” he said last
Friday.
In fact, we are meant to think of the tax
increase not as a penalty but an investment,
something in our own best interests. “This is an
excise tax that’s basically about property and
the proposal we’re making here is to protect
property,” he said. “We think, in the long run,
the cost/benefit on this one is a good deal for
Massachusetts residents.”
In addition to the increase on excise tax
through property sales, Baker is proposing an
expansion of the cigarette excise tax to include
e-cigarettes, which is expected to bring in $6
million.
He’s also suggesting a sales tax on online
marketplaces like Amazon, eBay and Etsy for
deliveries to Massachusetts customers, which
would bring in $42 million in new revenue.
There was a time when Charlie Baker was
fundamentally opposed to most taxes but those
days are over. Unfortunately, so may be the days
of the hard-working people of Massachusetts
keeping their own hard-earned money.
The Boston Globe
Friday, January 25, 2019
Baker’s climate plan is an important first step
— but more is needed
By David L. Levy
Last week Governor Baker proposed increasing the
tax on real estate sales to generate about $1
billion over a decade for a fund to invest in
projects that protect cities and towns from the
impacts of climate change.
Baker’s proposal is an important first step in
recognizing the dire impacts of climate change
and planning for the investments in resilience
needed to protect life and property. The scale
of the challenge, however, will require more
substantial resources alongside funding
mechanisms that spread the burden fairly and
equitably, while providing appropriate
incentives.
Last April, the Sustainable Solutions Lab at
UMass Boston released a report, funded by the
Barr Foundation, that examined options for
financing projects to protect Boston from rising
sea levels and more severe storms. The cost to
the city could reach $2.5 billion over the next
decade for public works such as seawalls and
elevated roads. With constraints on municipal
financing and ballooning federal deficits, our
report suggested that the state might need to
provide around one-third of this. Baker’s
proposed $1 billion represents only a small down
payment on statewide needs.
These costs are substantial, but the cost of
doing nothing is far higher. Recent reports on
climate adaptation in East and South Boston show
that resilience investments pay high dividends
in the form of avoiding damage to buildings and
infrastructure and associated economic
disruption.
Baker’s proposal envisages increasing the excise
tax on real estate transfers by 50 percent, from
$2 to $3 per $500 of property value. With the
median price of homes in Boston at $600,000,
this would increase the tax by $1,200 in a
market that is already slowing. Although a
property-based tax is broadly progressive, a
transfer tax is narrow and arbitrary, since it
only falls on those selling property. It also
throws grit in the workings of the housing
market because it raises the cost of moving, for
example, for a new job. Moreover, cities will
likely need to raise property taxes to pay their
share of resiliency costs, adding to the overall
tax burden on property.
There are better ways to raise the money. A
statewide carbon tax would generate substantial
revenues, spread the burden broadly, and provide
an incentive to reduce carbon emissions. Several
bills in the Legislature would recycle most of
the revenues to taxpayers but also dedicate a
portion to green infrastructure and clean
energy.
Alternatively, raising the state gasoline tax by
just 5 cents would generate an extra $150
million a year. The Massachusetts rate, at 26.5
cents per gallon, is among the lowest in the
Northeast and mid-Atlantic: Rhode Island’s gas
tax is 34 cents, Connecticut’s is 43.8 cents,
and New York’s is 45.8 cents. This would also
encourage consumers to consider more efficient
cars and hybrid-electrics. Another option is a
small “resilience fee” on water and sewer bills,
similar to the one on electricity that pays for
clean energy programs. One advantage is that
everyone pays, unlike property taxes, from which
many institutions are exempt.
Our report also examined other creative
solutions that help markets price climate risks
more accurately. For example, a New York state
proposal envisages a small surcharge on all
property and casualty insurance policies,
raising several billion dollars over 10 years.
This would align the cost burden with risk
exposure and provide an incentive for property
owners to reduce those risks.
These market-based approaches won’t eliminate
the need for public infrastructure spending, but
are a valuable complement that would reduce the
strain on the public purse. Insurance companies
are waking up to the idea. The Insurance
Institute for Business and Home Safety FORTIFIED
program has developed resilience standards for
residential and commercial properties, and
several southern states have developed programs
that offer insurance discounts to property
owners who meet the standards.
The future prosperity and security of the
region’s businesses and communities demand
large-scale investments to reduce the risk of
major disruptions. Moving forward will require
political will and courageous leadership. There
is no silver-bullet solution — we need multiple
funding sources and collaborations with the
private sector to generate the required
resources, spread the burden fairly, and promote
market-oriented solutions. Raising taxes is
never popular, of course, but the billions
needed for climate adaptation also present a
unique opportunity to reshape our cities and
renew our infrastructure in ways that promote
sustainable growth and equity for the
communities of the region.
David L. Levy is a professor at the
University of Massachusetts Boston and academic
codirector of the Sustainable Solutions Lab. |
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