 |
Post Office Box 1147
▪
Marblehead, Massachusetts 01945
▪ (781) 639-9709
“Every Tax is a Pay Cut ... A Tax Cut is a Pay Raise”
46 years as “The Voice of Massachusetts Taxpayers”
— and
their Institutional Memory — |
|
CLT UPDATE
Sunday, January 12, 2020
TCI hits
"further erosion," "a major setback," and
"appears to be on fumes"
Go directly
to CLT's Commentary on the News
|
The national average price of
regular gas stands at $2.65 per gallon, according to the AAA
Fuel Gauge Survey, which is 22 cents per gallon cheaper than
at this time last year. This good news for motorists comes
with some bad news, which is that powerful politicians are
now working to reverse the downward trajectory of gas prices
across a heavily-populated swath of the U.S.
The bad news for drivers
across northeastern and mid-Atlantic states is that
Massachusetts Governor Charlie Baker (R) is leading a
coalition of officials from his and 11 other states whose
goal is to institute a regional cap-and-trade program that
would apply to emissions from cars and trucks. This effort
is referred to as the Transportation Climate Initiative
(TCI).
If implemented in accordance
with the TCI framework released earlier this month, this cap
and trade scheme could raise the cost of gas for individuals
and families across Maine, New Hampshire, New Jersey, New
York, Pennsylvania, Rhode Island, Vermont, Virginia,
Connecticut, Delaware, Massachusetts, and Maryland....
Most states that are party to
the TCI are seeking legislative approval to enact this
regional cap-and-tax scheme, but Governor Baker is looking
to do it by executive order in the Bay State.
Forbes
October 31, 2019
Massachusetts Governor Charlie Baker Leads Regional
Initiative
That Would Raise Gas Prices Across A Dozen States
By Patrick Gleason
A 12-state climate compact
backed by Gov. Charlie Baker to hit greenhouse gas emissions
with a fee paid at the pump has suffered a major setback
with the governor of Connecticut saying such a “gas tax”
will punish drivers.
“One step at a time. Raising
the gas tax … is 100 percent paid for by Connecticut
residents and probably not the way to go,” Connecticut Gov.
Ned Lamont said Tuesday on the state’s public radio station.
“I’m doing everything I can
to promote public transportation and propel people to get
out of cars. Cars and trucks represent 40 percent of our
emissions,” Lamont added during his appearance on WNPR. He
said Connecticut is moving more toward federal grants and
tolls on trucks, rather than the Transportation Climate
Initiative....
In Vermont, a major union
called the initiative “regressive.”
“This is a class issue for
us,” President of the Vermont AFL-CIO David Van Deusen said
in late December. “This is a regressive funding move and the
Vermont AFL-CIO is against more regressive funding for
social or environmental programs. We don’t need workers
paying more to get to their job sites.”
Baker has indicated that he
would exercise his executive power to implement the TCI
compact, but he did say he would give the Legislature more
information about the pact.
MassFiscal Alliance spokesman
Paul Craney said Wednesday night having surrounding states
pull out TCI could put Massachusetts at an economic
disadvantage.
“This should be a warning for
Massachusetts that Connecticut is tapping the brakes,” said
Craney. “It could make us less economically competitive.”
The Boston Herald
Thursday, January 9, 2020
Connecticut governor knocks TCI gas fee compact in setback
for Gov. Baker
‘Raising the gas tax … probably not the way to go’
In a protest-interrupted
State of the State address Thursday, Vermont Gov. Phil Scott
cast a shadow on the prospects of him signing his state up
for a multi-state compact to reduce vehicle emissions.
Scott, who along with Gov.
Charlie Baker is one of two Republican governors in New
England, did not address the Transportation Climate
Initiative by name, but discussed at length ways Vermont has
been working to incentivize the purchase of electric
vehicles.
"It's incentives, not
penalties, which will help us transition more quickly,"
Scott said in his speech.
Vermont was one of the 12
original states to begin negotiations on a regional
cap-and-trade program that would seek to reduce carbon
pollution from cars and trucks and use revenue from the sale
of carbon allowances to fuel suppliers to invest in clean
transportation options.
New Hampshire has since
withdrawn from those talks after the coalitions estimated
that the proposals under consideration could add between 5
cents and 17 cents to the price of a gallon of gas....
"I simply cannot support
proposals that will make things more expensive for them,"
the governor said....
Connecticut Gov. Ned Lamont,
a Democrat, also said this week that he has concerns with
TCI.
"Raising the gas tax, which
frankly is what many Republican states have done to pay for
transportation, is 100 percent paid for by Connecticut
residents and probably not the way to go," Lamont said in a
WNPR radio interview on Tuesday when asked about the
initiative.
State House News Service
Thursday, January 9, 2020
Scott Remarks May Signal Further Erosion of TCI Coalition
Vermont Guv Can't Support Making it More Expensive for
Motorists
The multistate climate
compact backed by Gov. Charlie Baker appears to be on fumes,
with Vermont’s governor the latest New England state leader
to knock the deal saying a gas fee will penalize beleaguered
commuters.
Governors in New Hampshire
and Connecticut have already cast a shadow on the
Transportation Climate Initiative.
“It’s incentives, not
penalties, which will help us transition more quickly,”
Vermont Gov. Phil Scott said in his State of the State
address Thursday.
Scott touted various ways
Vermont has been working to incentivize people to buy
electric vehicles and noted that many residents in the Green
Mountain state can’t help their long commutes.
“I hear from Vermonters
across the state, like those traveling long distances for
work out of necessity not choice, and others, like our
seniors living on fixed incomes, who struggle to fill their
gas tanks and heat their homes,” Scott said. “I simply
cannot support proposals that will make things more
expensive for them.”
Scott’s criticism of TCI,
which would implement a gas fee to reduce carbon emissions,
comes a day after Connecticut Gov. Ned Lamont called the
measure a “gas tax” that will punish drivers....
Baker has indicated that he
would exercise his executive power to implement the TCI
compact, but he did say he would give the Legislature more
information about the pact. Some lawmakers have expressed
concern with being surreptitiously signed onto a regional
compact that would raise gas prices between 5 to 17 cents
per gallon in the first year....
The dozen participating
states are: Connecticut, Delaware, Maine, Maryland,
Massachusetts, New Hampshire, New Jersey, New York,
Pennsylvania, Rhode Island, Vermont, and Virginia.
The Boston Herald
Thursday, January 9, 2020
Vermont governor knocks TCI climate compact gas fee
“I simply cannot support proposals that will make things
more expensive for them”
With Massachusetts inching
toward a regional climate pact that could increase prices at
the gas pumps, lawmakers want more say in deciding whether
to move ahead with the plan.
A group of mostly Republican
legislators who oppose the so-called Transportation Climate
Initiative have filed a proposal that would require the
Legislature to approve the plan. They argue that the pact
amounts to a "backdoor tax" that must be approved by the
House of Representatives and Senate.
"Tax increases have always
gone through the Legislature, and this should be no
different," said state Rep. Lenny Mirra, R-West Newbury, who
opposes the initiative and backs the push for a vote on the
plan. "This is too big of a deal to be made with a
unilateral decision by the governor's office. We need
legislative input."
Gov. Charlie Baker, a
Republican, committed the state to joining the program in
2018 as part of an effort to reduce traffic congestion and
tackle climate change....
Under the plan, suppliers who
deliver fuel across state lines would be required to pay a
tax on excess carbon emissions based on limits that still
must be set.
Its costs could ultimately be
passed on to motorists, resulting in a 5- to
17-cent-per-gallon increase in the price of gas, according
to the coalition.
What's more, New Hampshire
Gov. Chris Sununu, a Republican, has said his state won't be
joining the pact. Vermont Gov. Phil Scott, also a
Republican, has vowed to veto any carbon tax....
Rep. Brad Hill, R-Ipswich,
said he supports requiring a legislative vote but doesn't
want to derail a regional pact to reduce emissions, which he
supports.
"I support the intent of what
we are trying to do, which is to clean the air," he said.
"But a lot of us have differences of opinion about how we
will pay for it."
Hill is working on a proposal
with House Minority Leader Brad Jones, R-North Reading, that
would require any agreement between Massachusetts and other
states to come before the Legislature for a vote.
The proposal would be modeled
on Article 87 of the state Constitution, which authorizes
the reorganization of the executive branch without direct
input from the Legislature but gives lawmakers an up or down
vote on the changes. Their proposal calls for any
multi-state pact to be put to a vote within a set period of
time, or the agreement would become law without legislative
approval....
A recent survey by MassINC
Polling found two-thirds of respondents in Massachusetts and
seven other states support the regional approach. But the
survey of nearly 7,000 voters was conducted before cost
estimates were released and didn't ask about new taxes and
fees to implement the program.
The Salem News
Monday, January 6, 2019
Lawmakers want vote on climate pact
GOP balks at new taxes, regional initiative
On December 17 the Georgetown
Law Center revealed its long-awaited Transportation and
Climate Initiative (TCI) draft Memorandum of Understanding (MOU).
It will be open for on-line comments until February 28. At
some point after that Gov. Scott will be asked to sign
Vermont into TCI. Presumably the legislature would have to
enact some provisions to make it enforceable on Vermont fuel
dealers.
Here are twelve questions and
answers that will explain what TCI is and expects to do. . .
.
Ethan Allen Institute
Montpelier, Vermont
What You Need to Know About TCI
By John McClaughry
House leaders have offered
few details about what they plan to include in a
transportation revenue package targeted for release this
month, but two advocates said Wednesday that toll increases
and expansions should be a critical of the strategy.
In a WGBH panel discussion on
transportation funding, A Better City CEO Rick Dimino said
the state could raise more than half of the $50 billion in
new revenue his organization believes is needed for
transportation by adding tolls to roads that currently do
not have them, increasing the existing tolls and imposing
tolls at the state's borders....
Key House legislators have
not ruled any new revenue other than a public transit fare
hike off the table for the upcoming debate, and they hinted
an increase to the state's 24-cents-per-gallon gasoline tax
is likely to be a piece of the solution.
State House News Service
Wednesday, January 8, 2020
Higher and More Tolls Should Be Part of Revenue Bill,
Advocates Argue
Massachusetts cities and
towns would have new options for funding local affordable
housing under a proposal rolled out Wednesday -- a fee of up
to 2 percent on real estate sales above the statewide median
sales price, and a higher fee on certain "speculative"
property sales.
Progressive lawmakers joined
advocates and a handful of local officials at the State
House to promote the plan, calling it another tool for
municipalities seeking to fight back against the high rents
and mortgages, displacement and evictions that the state's
housing crisis is bringing to their residents.
The proposal -- touted as a
"compromise" agreed to by the sponsors of various local
option transfer tax bills and the filers of home rule
petitions for transfer taxes in specific communities --
would allow municipalities to impose a fee of between 0.5
percent and 2 percent on real estate transactions above the
statewide median sale price for single-family homes.
The Massachusetts Association
of Realtors reported Wednesday that the median sale price
for pending single-family homes hit $415,000 in December, a
more than 10 percent increase from the $375,000 in December
2018.
It would also authorize
municipalities to charge a fee of up to 6 percent for
"speculative sales" -- property sold for more than three
times the state median within one year of purchase, unless
the sale is because of a need to relocate for work or family
reasons.
Money generated by the
transfer fee would be deposited into the community's
affordable housing trust fund. Cities and towns would have
the ability to decide if the fee would be paid by the buyer
or seller, or split between the two, and local officials
could also set exemptions from the fee and establish a
sunset provision.
Rep. Dylan Fernandes, who
filed a bill last year that would allow a transfer fee on
sales over $1 million, said the group drafted its plan with
high-priced real estate in mind, but chose the state median
as a threshold so the option would be available to
communities that like the idea but don't have many
million-dollar homes. He said he expects interested
municipalities would set higher thresholds, like the $2
million proposed in Boston.
State House News Service
Wednesday, January 8, 2020
Property Transfer Fees Eyed for Affordable Housing
Local Option Fee Could Apply to Higher Priced Sales
More freedom, fewer taxes and
cheaper property keep drawing more Bay Staters across the
border, demographic researchers and New Hampshire residents
tell the Herald — as Massachusetts pushes a gas fee that
could accelerate the process and the Granite State launches
online betting ahead of schedule.
“Without the taxes, traffic
and bureaucracy that impact people’s quality of life, it’s
no wonder Bay Staters are making the Granite State their
home,” N.H. Gov. Chris Sununu, who recently rejected the
gas-price raising Transportation Climate Initiative, said in
a statement.
More than 20,000
Massachusetts residents last year moved to New Hampshire,
compared to about 11,000 Granite Staters moving to the Bay
State — a 9,000 net increase for the northern state,
according to state-to-state migration flow data from the
U.S. Census Bureau.
Overall from 2000 to 2016,
New Hampshire saw a net migration of 86,799 more individuals
moving to New Hampshire from Massachusetts. That breaks down
to 225,605 people moving from Massachusetts to New
Hampshire, while only 138,806 people moved south, according
to the N.H. governor’s office.
“New Hampshire remains the
best state in the nation to live, work, and raise a family,”
Sununu added. “We are ranked the best in the northeast for
private business and the best for a younger workforce.
That’s a recipe for success.” ...
Sal Rauseo, 69, used to live
in Massachusetts but moved to the Granite State 12 years
ago.
“I would never go back,” the
Sandown resident said at MaryAnn’s Restaurant in Derry.
“You’re less intruded upon here.”
He cited lower taxes and
fewer regulations in New Hampshire, including the lack of
gun restrictions.
“You don’t have to worry
about your guns getting taken away,” Rauseo said.
Jerry Halloran, 67, who also
used to live in Massachusetts, noted the cheaper property in
New Hampshire. The median listing home price in New
Hampshire last year was $299,000 compared to $450,000 in
Massachusetts, according to state comparison data from the
New Hampshire Division of Economic Development website.
“You get way more land up
here,” said Halloran, of Londonderry. “You can sell your
house in Massachusetts, and with that money buy a palace up
here and put the rest in retirement.”
New Hampshire’s overall tax
rank was 6th in the country in the 2020 State Business Tax
Climate Index from the Tax Foundation, an independent tax
policy nonprofit. Massachusetts’ tax rank was 36th.
Unlike Massachusetts, New
Hampshire does not have a sales tax — and does not tax wages
and salaries. The state government tax collections per
capita for New Hampshire in 2017 was $1,870 compared to
$4,033 in Massachusetts, according to the New Hampshire
Division of Economic Development.
The Boston Herald
Wednesday, December 25, 2019
Bay Staters shipping up to the Granite State
More than 20,000 Massachusetts residents moved to New
Hampshire last year
The U.S. population grew last
year at the slowest rate since World War I as the birth rate
and immigration declined, the Census Bureau reported last
week. Slowing population growth will have significant
economic and social implications for the country, but
especially for high-tax states.
The Census Bureau and IRS
last week also released state population growth and income
migration data for 2018 that show the exodus from high-tax
to low-tax states is accelerating. Four states have lost
population since 2010 including West Virginia (-3.3%),
Illinois (-1.2%), Vermont (-0.3%) and Connecticut (-0.2%),
but 10 experienced declines last year. New York was the
biggest loser as a net 180,000 people left for better
climes. Over the last decade New York has lost more of its
population to other states (7.2%) than any other save Alaska
(8%), followed by Illinois (6.8%), Connecticut (5.6%) and
New Jersey (5.5%).
Hmmm, what do these states
have in common? Large tax burdens and politically powerful
public unions. Illinois’s property tax rates are the second
highest in the country after New Jersey. The state lost $5.6
billion in adjusted gross income last year to other states,
about twice as much as in 2012. Notably, income outflow
hasn’t increased from Michigan or Wisconsin....
Since 2010, California, New
York and Illinois have experienced the largest population
declines among people under age 18, though New Jersey and
Connecticut also rank high. Fewer young workers will make it
harder to keep state economies growing to pay for government
entitlements and pensions.
Where are high-tax state
exiles going? Zero income tax Florida drew $16.5 billion in
adjusted gross income last year. Many have also fled to
Arizona ($3.5 billion), Texas ($3.5 billion), North Carolina
($3 billion), Nevada ($2.3 billion), Colorado ($2.1
billion), Washington ($1.7 billion) and Idaho ($1.1
billion). Texas, Nevada and Washington don’t have income
taxes....
All of this explains why
Democrats are nervous about the 2020 Census, which will
decide apportionment of House seats and electoral votes for
the next decade. California, Illinois and New York are each
projected to lose a seat while Texas is forecast to pick up
three, Florida two and Arizona one.
We know progressives believe
in redistribution, and it’s kind of Democrats to spread
their wealth and political power to other states.
The Wall Street Journal
Tuesday, January 7, 2020
Opinion | Review & Outlook
Blue State Redistribution
High-tax states are losing people, money and seats in
Congress.
|
|
Chip Ford's CLT
Commentary
Last October
Forbes reported:
The bad
news for drivers across northeastern and
mid-Atlantic states is that Massachusetts Governor
Charlie Baker (R) is leading a coalition of
officials from his and 11 other states whose goal is
to institute a regional cap-and-trade program that
would apply to emissions from cars and trucks. This
effort is referred to as the Transportation Climate
Initiative (TCI).
During our
conference call on Monday, Anti-TCI coalition partner
Marc Fitch of the
Yankee Institute for Public Policy in Hartford,
Connecticut told us he expected Gov. Ned Lamont would be
reluctant to jump on the Baker's Boondoggle bandwagon.
Democrat Lamont, Marc told us, has been focused on
adding and increasing tolls on Connecticut highways for
years and this would only complicate his plans.
Rob Roper, our
Anti-TCI coalition partner of the
Ethan Allen Institute
in Montpelier, Vermont relayed how Republican Gov. Phil
Scott had campaigned for election on his opposition to a
Carbon Tax and wasn't expected to jump on Baker's
Boondoggle bandwagon either, a carbon tax by another
name.
It didn't take
long for both our partners to be proven insightful.
By mid-week the governors of both The Constitution State
and The Green Mountain State were putting distance
between themselves and Charlie Baker's Boondoggle.
Along with Republican New Hampshire Gov. Chris Sununu's
immediate rejection of TCI last week, news reports began
describing the Transportation Climate Initiative scheme
with terms like "further erosion," "suffered a major
setback," and "appears to be on fumes."
A group of
Massachusetts legislators, mostly Republicans but some
Democrats as well, are pushing back, The Salem News
reported. They "have filed a proposal that would
require the Legislature to approve the plan. They
argue that the pact amounts to a 'backdoor tax' that
must be approved by the House of Representatives and
Senate."
State Rep.
David DeCoste (R-Norwell) has filed
HD4711, "An Act Prohibiting The Commonwealth from
Participating in The Transportation Climate Initiative,"
which would prohibit the state from entering into TCI or
any similar program without the specific approval of the
Legislature. The bipartisan bill currently has
thirteen sponsors. Twenty-one members of the House
and four senators have announced their opposition to
TCI. Rep. Lenny Mirra (R-West Newbury) asserted:
"Tax increases have always gone through the
Legislature, and this should be no different.
This is too big of a deal to be made with a
unilateral decision by the governor's office.
We need legislative input."
Meanwhile
even more schemes are surfacing to further burden
taxpayers and motorist. The State House News
Service reported:
A
Better City CEO Rick Dimino said the state could
raise more than half of the $50 billion in new
revenue his organization believes is needed for
transportation by adding tolls to roads that
currently do not have them, increasing the existing
tolls and imposing tolls at the state's borders.
Rick Dimino
was the Boston Transportation Commissioner during The
Big Dig and a big advocate of it. Does
anything more need to be said?
But beyond
jacking up the cost of being a motorist in
Massachusetts, everyone else on Beacon Hill is looking
for their cut of taxpayers' largesse at taxpayers'
cost. The State House News Service reported:
Massachusetts cities and towns would have new
options for funding local affordable housing under a
proposal rolled out Wednesday — a fee of up to 2
percent on real estate sales above the statewide
median sales price, and a higher fee on certain
"speculative" property sales.
Progressive lawmakers joined advocates and a handful
of local officials at the State House to promote the
plan, calling it another tool for municipalities
seeking to fight back against the high rents and
mortgages, displacement and evictions that the
state's housing crisis is bringing to their
residents....
Money
generated by the transfer fee would be deposited
into the community's affordable housing trust fund.
Cities and towns would have the ability to decide if
the fee would be paid by the buyer or seller, or
split between the two, and local officials could
also set exemptions from the fee and establish a
sunset provision.
Is there
really any wonder why so many productive longtime
Massachusetts residents are fleeing the Commonwealth
while they still have shirts on their backs?
The Boston
Herald reported:
More freedom, fewer taxes and
cheaper property keep drawing more Bay Staters
across the border, demographic researchers and New
Hampshire residents tell the Herald — as
Massachusetts pushes a gas fee that could accelerate
the process and the Granite State launches online
betting ahead of schedule.
“Without the taxes, traffic and
bureaucracy that impact people’s quality of life,
it’s no wonder Bay Staters are making the Granite
State their home,” N.H. Gov. Chris Sununu, who
recently rejected the gas-price raising
Transportation Climate Initiative, said in a
statement.
More than 20,000 Massachusetts
residents last year moved to New Hampshire, compared
to about 11,000 Granite Staters moving to the Bay
State — a 9,000 net increase for the northern state,
according to state-to-state migration flow data from
the U.S. Census Bureau.
Overall from 2000 to 2016, New
Hampshire saw a net migration of 86,799 more
individuals moving to New Hampshire from
Massachusetts. That breaks down to 225,605 people
moving from Massachusetts to New Hampshire, while
only 138,806 people moved south, according to the
N.H. governor’s office.
One refugee
from Massachusetts said: “I would never go back.
You’re less intruded upon here.” He cited lower
taxes and fewer regulations in New Hampshire, including
the lack of gun restrictions. “You don’t have to
worry about your guns getting taken away.”
Another noted
the cheaper property in New Hampshire. The median
listing home price in New Hampshire last year was
$299,000 compared to $450,000 in Massachusetts.
She noted: “You get way more land up here.
You can sell your house in Massachusetts, and with that
money buy a palace up here and put the rest in
retirement.”
Another
observed: “No sales tax and no income tax, that’s
pretty nice.”
That's just
20,000 former Massachusetts residents who have fled the
state last year for New Hampshire. How many
others fled to other destinations that offer
lower costs, less government and more freedom
— Kentucky for example?
Holding back
the tidal wave of insatiable "progressivism" is
exhausting, perhaps even futile. I predict that
this diaspora of estranged Bay State residents will
continue to build as a counter-wave, becoming a riptide.
The Wall
Street Journal explained one reason for the increasing
exodus in its editorial on Tuesday:
The Census Bureau and IRS last
week also released state population growth and
income migration data for 2018 that show the exodus
from high-tax to low-tax states is accelerating....
Hmmm, what do these states have
in common? Large tax burdens and politically
powerful public unions. Illinois’s property tax
rates are the second highest in the country after
New Jersey. The state lost $5.6 billion in adjusted
gross income last year to other states, about twice
as much as in 2012....
Where are high-tax state exiles
going? Zero income tax Florida drew $16.5 billion in
adjusted gross income last year. Many have also fled
to Arizona ($3.5 billion), Texas ($3.5 billion),
North Carolina ($3 billion), Nevada ($2.3 billion),
Colorado ($2.1 billion), Washington ($1.7 billion)
and Idaho ($1.1 billion). Texas, Nevada and
Washington don’t have income taxes.
This trend
should be alarming to those remaining taxpayers.
States like Massachusetts cannot sustain the policies
their leaders have chosen to pursue for so long.
When the Associated Press
reported in 2018 that Secretary of State Bill Galvin
was gleeful over Massachusetts' population growing
despite the exodus of productive, taxpaying Bay Staters,
that "the driving factor behind Massachusetts'
population growth appears to be international
immigration," I realized the future is not promising.
He said
while Massachusetts continues to lose population by
residents moving to other states, the loss is offset
by twice that number of people moving to the state
from other countries.
The law of
diminishing returns states that in all productive
processes, adding more of one factor, while holding all
others constant, will at some point yield lower returns.
Massachusetts
is not even "holding all others constant."
Productive taxpayers are clearly a diminishing
population, and those bailing out are taking with them
their collective wealth and previous contribution to the
Massachusetts treasury. Adding "one factor"
immigrants at twice the number of that diminished
population, with the higher maintenance cost of
supporting the new arrivals, can only end badly.
The question is, how long will it take before remaining
taxpayers reach their toleration breaking point?
|
 |
 |
|
Chip Ford
Executive Director |
|
|
|
|
|
Forbes
October 31, 2019
Massachusetts Governor Charlie Baker Leads
Regional Initiative
That Would Raise Gas Prices Across A Dozen
States
By Patrick Gleason
The national average price of regular gas stands
at $2.65 per gallon, according to the AAA Fuel
Gauge Survey, which is 22 cents per gallon
cheaper than at this time last year. This good
news for motorists comes with some bad news,
which is that powerful politicians are now
working to reverse the downward trajectory of
gas prices across a heavily-populated swath of
the U.S.
The bad news for drivers across northeastern and
mid-Atlantic states is that Massachusetts
Governor Charlie Baker (R) is leading a
coalition of officials from his and 11 other
states whose goal is to institute a regional
cap-and-trade program that would apply to
emissions from cars and trucks. This effort is
referred to as the Transportation Climate
Initiative (TCI).
If implemented in accordance with the TCI
framework released earlier this month, this cap
and trade scheme could raise the cost of gas for
individuals and families across Maine, New
Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, Vermont, Virginia, Connecticut,
Delaware, Massachusetts, and Maryland.
According to Paul Craney, spokesman for the
Massachusetts Fiscal Alliance, the
Transportation Climate Initiative would impose
what is effectively a regressive tax increase on
drivers:
“The Transportation Climate Initiative (TCI) is
the latest attempt by Beacon Hill politicians to
rebrand an increase in the state gas tax,”
Craney wrote in an October 15 op-ed.
“Remember...T-C-I is nothing more than political
doublespeak for T-A-X. It’s a backdoor attempt
to institute a carbon tax without a vote by our
lawmakers.”
Most states that are party to the TCI are
seeking legislative approval to enact this
regional cap-and-tax scheme, but Governor Baker
is looking to do it by executive order in the
Bay State.
“According to the Massachusetts state
constitution, all state taxes must originate
from the House,” Craney writes. “Governor Baker
does not have authority to unilaterally raise
taxes. Even if the Governor doesn’t want to
describe the TCI as a tax, in order to justify
bypassing legislative approval, the Governor
would be wise to take this before the State
House and Senate...such an important piece of
the legislation should require buy in by the
elected representatives of our state
government.”
Others think implementation of the TCI via
executive order will pass legal muster in
Massachusetts, but that does not mean that the
net effect on consumers is different from that
of a statutory tax hike requiring statehouse
authorization.
“Gov. Charlie Baker’s Transportation Climate
Initiative looks a lot like a tax, but in legal
terms it’s not,” Commonwealth Magazine reported
this month. “The expectation of policymakers is
that the cost of the allowances will be passed
along to drivers at the gas pump, incentivizing
them to use less, and the allowance money will
be divvied up among the states and used to
support public transit and deal with climate
change.”
Some opponents of the TCI, such as small
businesses that would be harmed by the increased
energy costs, point to the adverse effects
produced by similar cap and trade programs in
other parts of the country.
“Reducing emissions is a laudable goal, but in
California, where a similar program was
launched, gas prices went up by 12 to 14 cents a
gallon and are over 4 dollars today,” said
Christopher Carlozzi, the Massachusetts director
for the National Federation of Independent
Businesses, a small business advocacy
association with thousands of members. “Small
businesses need their gas-powered vehicles to
travel to job sites, to respond to service
calls, and to make deliveries–it’s not like they
can use public transportation to do that.”
There are lawmakers who recognize that their
constituents are smart enough to recognize the
TCI for what it is, an effective gas tax hike.
Representative William Straus, co-chair of the
Massachusetts House Transportation Committee,
describe the TCI framework thusly:
“All states raise their gas tax the same amount
at the same time and agree not to call it a gas
tax, but I think the public is smarter than
that.”
Unlike gas tax revenue, which is supposed to be
used primarily for road funding but is too often
siphoned for non-road spending, the added costs
derived from imposition of the TCI would allow
politicians to take more money from the bank
accounts of drivers and funnel it to non-road
projects.
Gas tax hikes and carbon taxes have repeatedly
been rejected by voters in both blue and red
states, as well as other countries. This might
explain why Governor Baker wants to leave
elected officials out of this effort to raise
gas prices. While it’s unclear what actions TCI
states will take next to proceed with
implementation, it’s clear that this issue won’t
be going away any time soon.
— Patrick
Gleason is Vice President of State Affairs at
Americans for Tax Reform, a Washington-based
advocacy and policy research organization.
The Boston
Herald
Thursday, January 9, 2020
Connecticut governor knocks TCI gas fee compact
in setback for Gov. Baker
‘Raising the gas tax … probably not the way to
go’
By Joe Dwinell
A 12-state climate compact backed by Gov.
Charlie Baker to hit greenhouse gas emissions
with a fee paid at the pump has suffered a major
setback with the governor of Connecticut saying
such a “gas tax” will punish drivers.
“One step at a time. Raising the gas tax … is
100 percent paid for by Connecticut residents
and probably not the way to go,” Connecticut
Gov. Ned Lamont said Tuesday on the state’s
public radio station.
“I’m doing everything I can to promote public
transportation and propel people to get out of
cars. Cars and trucks represent 40 percent of
our emissions,” Lamont added during his
appearance on WNPR. He said Connecticut is
moving more toward federal grants and tolls on
trucks, rather than the Transportation Climate
Initiative.
“What I stand for is doing everything I can to
promote public transportation and get people out
of cars,” he said.
The TCI multistate compact would implement a gas
fee to reduce carbon emissions. The dozen
participating states are: Connecticut, Delaware,
Maine, Maryland, Massachusetts, New Hampshire,
New Jersey, New York, Pennsylvania, Rhode
Island, Vermont, and Virginia.
Lamont’s office Thursday said in an email the
governor is still “examining” the compact, but
has ruled out a gas tax.
A spokesman for Lamont said in an email to the
Herald: “The Lamont administration is still
examining the TCI, and the governor’s comments
reflect that. What the governor has ruled out is
a gas tax increase as the primary method to fund
infrastructure improvements, which would be
entirely funded by Connecticut residents. Gov.
Lamont remains committed to finding a solution
to solve Connecticut’s transportation funding
crisis, while also remaining focused on his
boldest-in-the-region goal of eliminating
greenhouse gas emissions by 2040. The passage of
his comprehensive transportation plan … will be
a major step toward achieving that goal.”
New Hampshire Gov. Chris Sununu has already
called the measure a “financial boondoggle” and
said in mid-December he would not “force Granite
Staters to pay more for their gas just to
subsidize other states’ crumbling
infrastructure.”
In Vermont, a major union called the initiative
“regressive.”
“This is a class issue for us,” President of the
Vermont AFL-CIO David Van Deusen said in late
December. “This is a regressive funding move and
the Vermont AFL-CIO is against more regressive
funding for social or environmental programs. We
don’t need workers paying more to get to their
job sites.”
Baker has indicated that he would exercise his
executive power to implement the TCI compact,
but he did say he would give the Legislature
more information about the pact.
MassFiscal Alliance spokesman Paul Craney said
Wednesday night having surrounding states pull
out TCI could put Massachusetts at an economic
disadvantage.
“This should be a warning for Massachusetts that
Connecticut is tapping the brakes,” said Craney.
“It could make us less economically
competitive.”
The TCI could raise prices at the pump by 17
cents in just the first year, according to
estimates by state officials, but it remains
unclear how high gas prices might go in
subsequent years. Officials also did not measure
how the economic impacts would change if any of
the 11 states or the District of Columbia
decided to back out.
Asked in December how many states would need to
back out before the measure becomes untenable,
Baker said, “I think we’re way too early to make
predictions about stuff like that.”
State House
News Service
Thursday, January 9, 2020
Scott Remarks May Signal Further Erosion of TCI
Coalition
Vermont Guv Can't Support Making it More
Expensive for Motorists
By Matt Murphy
In a protest-interrupted State of the State
address Thursday, Vermont Gov. Phil Scott cast a
shadow on the prospects of him signing his state
up for a multi-state compact to reduce vehicle
emissions.
Scott, who along with Gov. Charlie Baker is one
of two Republican governors in New England, did
not address the Transportation Climate
Initiative by name, but discussed at length ways
Vermont has been working to incentivize the
purchase of electric vehicles.
"It's incentives, not penalties, which will help
us transition more quickly," Scott said in his
speech.
Vermont was one of the 12 original states to
begin negotiations on a regional cap-and-trade
program that would seek to reduce carbon
pollution from cars and trucks and use revenue
from the sale of carbon allowances to fuel
suppliers to invest in clean transportation
options.
New Hampshire has since withdrawn from those
talks after the coalitions estimated that the
proposals under consideration could add between
5 cents and 17 cents to the price of a gallon of
gas.
Scott said many Vermonters have to travel long
distances to get to work out of necessity, not
choice.
"I simply cannot support proposals that will
make things more expensive for them," the
governor said.
The governor's speech was delivered at the
capitol in Montpelier after a lengthy delay when
climate protesters from Extinction Rebellion
disrupted the start of his remarks.
Scott listened for well over five minutes as the
protesters read off a call-and-response script
demanding action on the climate crisis and more
sustainable dairy farming practices, but
eventually had to ask capitol police to remove
them when they refused to quiet down.
"I'll try not to repeat anything you might have
just heard," Scott joked, as he resumed his
speech.
Massachusetts Energy Secretary Kathleen
Theoharides said after New Hampshire Gov. Chris
Sununu pulled out that TCI will require a
"critical mass" of states to remain in the deal
to be successful, but has not said how many
states the coalition thinks it can lose before
the initiative falls apart.
Connecticut Gov. Ned Lamont, a Democrat, also
said this week that he has concerns with TCI.
"Raising the gas tax, which frankly is what many
Republican states have done to pay for
transportation, is 100 percent paid for by
Connecticut residents and probably not the way
to go," Lamont said in a WNPR radio interview on
Tuesday when asked about the initiative.
Lamont's predecessor Dannel Malloy, another
Democrat, initially signed up Connecticut to
participate in TCI talks with other states.
Lamont is currently engaged in a political
struggle to push through a plan to raise tolls
on trucks to generate new revenue to fund his
transportation agenda, and said he was "solely
focused" on that effort at the moment.
"One step at a time," Lamont said.
Baker opposes raising the state gas tax but says
a regional approach is the best way for states
to reduce carbon emissions from the
transportation sector.
The Boston
Herald
Thursday, January 9, 2020
Vermont governor knocks TCI climate compact gas
fee
“I simply cannot support proposals that will
make things more expensive for them”
By Mary Markos
The multistate climate compact backed by Gov.
Charlie Baker appears to be on fumes, with
Vermont’s governor the latest New England state
leader to knock the deal saying a gas fee will
penalize beleaguered commuters.
Governors in New Hampshire and Connecticut have
already cast a shadow on the Transportation
Climate Initiative.
“It’s incentives, not penalties, which will help
us transition more quickly,” Vermont Gov. Phil
Scott said in his State of the State address
Thursday.
Scott touted various ways Vermont has been
working to incentivize people to buy electric
vehicles and noted that many residents in the
Green Mountain state can’t help their long
commutes.
“I hear from Vermonters across the state, like
those traveling long distances for work out of
necessity not choice, and others, like our
seniors living on fixed incomes, who struggle to
fill their gas tanks and heat their homes,”
Scott said. “I simply cannot support proposals
that will make things more expensive for them.”
Scott’s criticism of TCI, which would implement
a gas fee to reduce carbon emissions, comes a
day after Connecticut Gov. Ned Lamont called the
measure a “gas tax” that will punish drivers.
“One step at a time. Raising the gas tax … is
100 percent paid for by Connecticut residents
and probably not the way to go,” Lamont said
Tuesday on the state’s public radio station.
“I’m doing everything I can to promote public
transportation and propel people to get out of
cars. Cars and trucks represent 40 percent of
our emissions,” Lamont added during his
appearance on WNPR. He said Connecticut is
moving more toward federal grants and tolls on
trucks, rather than the climate initiative.
“What I stand for is doing everything I can to
promote public transportation and get people out
of cars,” he said.
New Hampshire Gov. Chris Sununu has already
called the measure a “financial boondoggle”and
said in mid-December he would not “force Granite
Staters to pay more for their gas just to
subsidize other states’ crumbling
infrastructure.”
Baker has indicated that he would exercise his
executive power to implement the TCI compact,
but he did say he would give the Legislature
more information about the pact. Some lawmakers
have expressed concern with being
surreptitiously signed onto a regional compact
that would raise gas prices between 5 to 17
cents per gallon in the first year.
“The Administration is pleased by the robust
participation by Northeast and Mid-Atlantic
states throughout the program’s ongoing
development process and by the broad coalition
of support from members of both the business and
environmental communities,” EEA Spokeswoman
Katie Gronendyke said.
The dozen participating states are: Connecticut,
Delaware, Maine, Maryland, Massachusetts, New
Hampshire, New Jersey, New York, Pennsylvania,
Rhode Island, Vermont, and Virginia.
The
Salem News
Monday, January 6, 2019
Lawmakers want vote on climate pact
GOP balks at new taxes, regional initiative
By Christian M. Wade, Statehouse Reporter
With Massachusetts inching toward a regional
climate pact that could increase prices at the
gas pumps, lawmakers want more say in deciding
whether to move ahead with the plan.
A group of mostly Republican legislators who
oppose the so-called Transportation Climate
Initiative have filed a proposal that would
require the Legislature to approve the plan.
They argue that the pact amounts to a "backdoor
tax" that must be approved by the House of
Representatives and Senate.
"Tax increases have always gone through the
Legislature, and this should be no different,"
said state Rep. Lenny Mirra, R-West Newbury, who
opposes the initiative and backs the push for a
vote on the plan. "This is too big of a deal to
be made with a unilateral decision by the
governor's office. We need legislative input."
Gov. Charlie Baker, a Republican, committed the
state to joining the program in 2018 as part of
an effort to reduce traffic congestion and
tackle climate change.
The initiative, put together by a dozen states
working on reducing pollution, targets gasoline
and diesel fuel consumption, which account for
more than 80% of regional carbon emissions that
scientists say is contributing to climate
change. The pact will lead to a new wholesale
tax on fossil fuel suppliers to pay for regional
transportation projects.
Under the plan, suppliers who deliver fuel
across state lines would be required to pay a
tax on excess carbon emissions based on limits
that still must be set.
Its costs could ultimately be passed on to
motorists, resulting in a 5- to
17-cent-per-gallon increase in the price of gas,
according to the coalition.
What's more, New Hampshire Gov. Chris Sununu, a
Republican, has said his state won't be joining
the pact. Vermont Gov. Phil Scott, also a
Republican, has vowed to veto any carbon tax.
That could affect North of Boston communities
that are already used to residents crossing over
into the low-tax Granite State to buy cheaper
gas.
Everyone pays
Christopher Carlozzi, Massachusetts state
director of the National Federation of
Independent Businesses, said the plan will hurt
businesses and others who can't afford higher
prices.
Because of that, he said, the Baker
administration should seek legislative approval
before moving ahead.
"This is going to increase costs for everyone in
the state, so there needs to be some sort of a
vote on it," Carlozzi said. "There needs to be
someone held responsible."
The Massachusetts Fiscal Alliance, a
conservative group co-founded by Pepperell
businessman Rick Green, argues that the process
violates the state Constitution. It's actively
trying to recruit lawmakers to sign onto the
legislation requiring a vote.
"Even if Gov. Baker believes he has the legal
authority to bypass the Legislature, which is in
dispute, he should still bring it before the
Legislature," said Paul Craney, the group's
spokesman. "The merits of TCI must be debated
out in the open, and be approved or rejected by
the Legislature."
Rep. Linda Campbell, D-Methuen, hasn't signed
onto the proposal to require legislative
approval but she said lawmakers need to exert
more oversight of the process.
"Legislators absolutely need to have a voice on
this," said Campbell, whose district sits along
the New Hampshire border. "Right now, it looks
like this proposal would disproportionately
affect large corporations and fuel providers. To
me, that is preferable to taxing the little guy
at the pump. But we need to see specific details
before moving ahead."
Put to a vote
Rep. Brad Hill, R-Ipswich, said he supports
requiring a legislative vote but doesn't want to
derail a regional pact to reduce emissions,
which he supports.
"I support the intent of what we are trying to
do, which is to clean the air," he said. "But a
lot of us have differences of opinion about how
we will pay for it."
Hill is working on a proposal with House
Minority Leader Brad Jones, R-North Reading,
that would require any agreement between
Massachusetts and other states to come before
the Legislature for a vote.
The proposal would be modeled on Article 87 of
the state Constitution, which authorizes the
reorganization of the executive branch without
direct input from the Legislature but gives
lawmakers an up or down vote on the changes.
Their proposal calls for any multi-state pact to
be put to a vote within a set period of time, or
the agreement would become law without
legislative approval.
Modeled on the Regional Greenhouse Gas
Initiative, which seeks to reduce emissions from
power plants, the Transportation Climate
Initiative creates a cap-and-invest program to
drive down emissions from cars and trucks. The
program would get underway in 2022.
Supporters of the plan, including environmental
groups and transit advocates, say it will help
the state meet dual goals of reducing emissions
and easing congestion.
Driving less
Proponents say the 2008 Global Warming Solutions
Act that sets carbon emission reduction gives
the governor's office the authority to pursue
the cap-and-trade program.
The plan's supporters expect higher gas prices
to encourage people to drive less often and turn
to public transit, thus reducing emissions.
Massachusetts drivers already pay 44.9 cents per
gallon in state and federal gas taxes, and other
fees, according to the American Petroleum
Institute.
Baker administration officials say Massachusetts
could generate up to $500 million a year for
clean transportation programs from the sale of
carbon allowances through the program.
A recent survey by MassINC Polling found
two-thirds of respondents in Massachusetts and
seven other states support the regional
approach. But the survey of nearly 7,000 voters
was conducted before cost estimates were
released and didn't ask about new taxes and fees
to implement the program.
State House
News Service
Wednesday, January 8, 2020
Higher and More Tolls Should Be Part of Revenue
Bill, Advocates Argue
By Chris Lisinski
House leaders have offered few details about
what they plan to include in a transportation
revenue package targeted for release this month,
but two advocates said Wednesday that toll
increases and expansions should be a critical of
the strategy.
In a WGBH panel discussion on transportation
funding, A Better City CEO Rick Dimino said the
state could raise more than half of the $50
billion in new revenue his organization believes
is needed for transportation by adding tolls to
roads that currently do not have them,
increasing the existing tolls and imposing tolls
at the state's borders.
The changes could also help improve equity
across the state by ensuring most drivers face
similar costs for their commutes, compared to
the current system where North Shore and
MetroWest motorists bear most of the tolls.
"Roadway pricing is a critical part of our
future as well as an important part of how we
deal with greenhouse gas emissions and how we
deal with congestion," Dimino said. "We hope
that's a piece of this legislation."
Fellow panelist Lizzi Weyant, director of
government affairs for the Metropolitan Area
Planning Council, said greater Boston is an
outlier compared to many other similar cities
with legacy public transit infrastructure who
have already implemented higher tolls or
congestion pricing systems, which change rates
based on time of day to incentivize off-peak
driving.
"MBTA fares have increased astronomically in the
same period of time that tolls haven't increased
very much at all," Weyant said. "MBTA riders
have been asked over and over and over again to
pay more for a system that hasn't actually given
them much in return, and there's sort of a
fundamental unfairness to that."
Key House legislators have not ruled any new
revenue other than a public transit fare hike
off the table for the upcoming debate, and they
hinted an increase to the state's
24-cents-per-gallon gasoline tax is likely to be
a piece of the solution.
State House
News Service
Wednesday, January 8, 2020
Property Transfer Fees Eyed for Affordable
Housing
Local Option Fee Could Apply to Higher Priced
Sales
By Katie Lannan
Massachusetts cities and towns would have new
options for funding local affordable housing
under a proposal rolled out Wednesday -- a fee
of up to 2 percent on real estate sales above
the statewide median sales price, and a higher
fee on certain "speculative" property sales.
Progressive lawmakers joined advocates and a
handful of local officials at the State House to
promote the plan, calling it another tool for
municipalities seeking to fight back against the
high rents and mortgages, displacement and
evictions that the state's housing crisis is
bringing to their residents.
The proposal -- touted as a "compromise" agreed
to by the sponsors of various local option
transfer tax bills and the filers of home rule
petitions for transfer taxes in specific
communities -- would allow municipalities to
impose a fee of between 0.5 percent and 2
percent on real estate transactions above the
statewide median sale price for single-family
homes.
The Massachusetts Association of Realtors
reported Wednesday that the median sale price
for pending single-family homes hit $415,000 in
December, a more than 10 percent increase from
the $375,000 in December 2018.
It would also authorize municipalities to charge
a fee of up to 6 percent for "speculative sales"
-- property sold for more than three times the
state median within one year of purchase, unless
the sale is because of a need to relocate for
work or family reasons.
Money generated by the transfer fee would be
deposited into the community's affordable
housing trust fund. Cities and towns would have
the ability to decide if the fee would be paid
by the buyer or seller, or split between the
two, and local officials could also set
exemptions from the fee and establish a sunset
provision.
Rep. Dylan Fernandes, who filed a bill last year
that would allow a transfer fee on sales over $1
million, said the group drafted its plan with
high-priced real estate in mind, but chose the
state median as a threshold so the option would
be available to communities that like the idea
but don't have many million-dollar homes. He
said he expects interested municipalities would
set higher thresholds, like the $2 million
proposed in Boston.
"We recognize that there's 351 very distinct
towns in the state," the Falmouth Democrat said
in an interview. "All of them for the most part
are in some sort of housing crunch, but they may
look very different in terms of where they are,
so we wanted to make sure that local communities
can tailor it in a way that fits their housing
market, so that's why we chose the median sales
price."
Along with Fernandes, the language is backed by
Reps. Liz Malia and Mike Connolly, Sen. Jo
Comerford, and home-rule petition filers Reps.
Sarah Peake, Christine Barber, Tami Gouveia,
Tommy Vitolo and Denise Provost. Sen. Julian Cyr
also spoke at Wednesday's press conference.
The Massachusetts Association of Realtors
generally opposes transfer taxes, its CEO
Theresa Hatton said. Hatton said a transfer tax
"is not good tax policy" because it is not
broad-based and asks one specific buyer or
seller "to take care of the common good."
Hatton said that a transfer tax that targets the
upper end of the housing market could ultimately
have a "greater impact on getting people into
the starter home market." She said a transfer
tax "puts this pressure on people who are in
these starter homes and want to move up, but
can't" because of the added cost.
The transfer fee plan comes as lawmakers, backed
by Boston Mayor Martin Walsh, are also weighing
proposals to generate new revenue for
transportation by allowing communities or
regions another local option - to pass binding
transportation project and financing ballot
questions.
Walsh and Somerville Mayor Joe Curtatone each
flagged their city's transfer tax proposals in
speeches this week.
In his annual State of the City Tuesday, Walsh
said a fee of up to 2 percent on sales above $2
million, is one avenue the city hopes to use to
fund an "unprecedented investment" of $500
million over five years to create new housing.
Curtatone, in an inaugural address Monday night,
mentioned the transfer fee that Somerville
officials passed as among the housing-related
ordinances the city is waiting for the state to
approve.
"We cannot wait for the state to approve each
community's request, one by one," Curtatone said
Wednesday. "Our residents are being priced out
now, and we need action now. We need the ability
to raise funds for affordable housing now and we
need that flexibility that the compromise local
option transfer fee legislation would give
communities to make policy that works for them."
Boston City Councilor Lydia Edwards said her
city's housing market has become like a stock
market, where "units are traded like commodities
today, and the residents are being displaced."
Home rule petitions for transfer taxes in
Nantucket (H 3637), Truro (H 4208), Provincetown
(H 3691) and Concord (S 2318) are all before the
Revenue Committee, as is the Somerville bill (H
2423). Brookline Town Meeting members in
December approved a transfer fee proposal that
noted neighboring communities are moving forward
with the concept.
Fernandes' office said that the communities
asking the Legislature to approve a transfer tax
are among the areas with the highest home costs.
The petitions take various approaches to the
fee. Nantucket's bill would have the seller pay
half of a percent, with the first $2 million of
the sale price exempt. In Concord, the buyer
would pay 1 percent of the portion of the
purchase price over $600,000.
Rep. Connolly said the language introduced
Wednesday is a set of "common principles" that
lawmakers will use to try to find consensus
among their colleagues. He told the News Service
his "absolute goal" is to see it included in a
broader housing bill that also includes measures
like tenant protections.
"In my district, in Cambridge and Somerville,
there are sites, there are properties, where the
value has doubled, tripled, maybe even
quadrupled, over a 10-year period and if an
owner or a developer is seeing the value of
their property skyrocket, I think most
reasonable people don't feel it's too much to
ask if we could just capture 2 percent or so of
these massive transactions to dedicate to local
affordable housing programs," Connolly said
during the press conference.
While activists and others have been clamoring
for years for passage of legislation addressing
the "housing crisis" in Massachusetts,
Democratic legislative leaders have been unable
to assemble and advance any major housing policy
changes to address the situation, or boost
housing production.
The Boston
Herald
Wednesday, December 25, 2019
Bay Staters shipping up to the Granite State
More than 20,000 Massachusetts residents moved
to New Hampshire last year
By Rick Sobey
More freedom, fewer taxes and cheaper property
keep drawing more Bay Staters across the border,
demographic researchers and New Hampshire
residents tell the Herald — as Massachusetts
pushes a gas fee that could accelerate the
process and the Granite State launches online
betting ahead of schedule.
“Without the taxes, traffic and bureaucracy that
impact people’s quality of life, it’s no wonder
Bay Staters are making the Granite State their
home,” N.H. Gov. Chris Sununu, who recently
rejected the gas-price raising Transportation
Climate Initiative, said in a statement.
More than 20,000 Massachusetts residents last
year moved to New Hampshire, compared to about
11,000 Granite Staters moving to the Bay State —
a 9,000 net increase for the northern state,
according to state-to-state migration flow data
from the U.S. Census Bureau.
Overall from 2000 to 2016, New Hampshire saw a
net migration of 86,799 more individuals moving
to New Hampshire from Massachusetts. That breaks
down to 225,605 people moving from Massachusetts
to New Hampshire, while only 138,806 people
moved south, according to the N.H. governor’s
office.
“New Hampshire remains the best state in the
nation to live, work, and raise a family,”
Sununu added. “We are ranked the best in the
northeast for private business and the best for
a younger workforce. That’s a recipe for
success.”
Gov. Charlie Baker is pushing the Transportation
Climate Initiative, a regional plan to jack up
fuel prices by as much as 17 cents a gallon in
just the first year. Sununu has rejected it —
and TCI critics say that raises the prospect of
people and business driving north to avoid the
fees. Monday, DraftKings is launching an online
sports betting app that only works in in New
Hampshire, while Massachusetts lags an estimated
six months behind — another development that
could push Bay State dollars north.
Sal Rauseo, 69, used to live in Massachusetts
but moved to the Granite State 12 years ago.
“I would never go back,” the Sandown resident
said at MaryAnn’s Restaurant in Derry. “You’re
less intruded upon here.”
He cited lower taxes and fewer regulations in
New Hampshire, including the lack of gun
restrictions.
“You don’t have to worry about your guns getting
taken away,” Rauseo said.
Jerry Halloran, 67, who also used to live in
Massachusetts, noted the cheaper property in New
Hampshire. The median listing home price in New
Hampshire last year was $299,000 compared to
$450,000 in Massachusetts, according to state
comparison data from the New Hampshire Division
of Economic Development website.
“You get way more land up here,” said Halloran,
of Londonderry. “You can sell your house in
Massachusetts, and with that money buy a palace
up here and put the rest in retirement.”
New Hampshire’s overall tax rank was 6th in the
country in the 2020 State Business Tax Climate
Index from the Tax Foundation, an independent
tax policy nonprofit. Massachusetts’ tax rank
was 36th.
Unlike Massachusetts, New Hampshire does not
have a sales tax — and does not tax wages and
salaries. The state government tax collections
per capita for New Hampshire in 2017 was $1,870
compared to $4,033 in Massachusetts, according
to the New Hampshire Division of Economic
Development.
“No sales tax and no income tax, that’s pretty
nice,” said Elias Hantzis, 26, of Derry.
But he did cite the higher property taxes in New
Hampshire. According to the Tax Foundation, New
Hampshire’s property tax collections per capita
was $3,115 versus $2,357 in Massachusetts. That
property tax breaks down to 5.45% of personal
income in New Hampshire, compared to 3.62% in
Massachusetts.
Average annual pay is significantly less in New
Hampshire — $55,848 compared to $70,657 in
Massachusetts in 2017, per the New Hampshire
Division of Economic Development.
But people save boatloads of money by purchasing
a home in New Hampshire, said Kenneth Johnson, a
demographer at University of New Hampshire’s
Carsey School of Public Policy.
“Families in their 30s and 40s might choose to
live in New Hampshire because they can get
bigger houses for significantly less,” he said.
“A fair amount of them commute into
Massachusetts for work.”
The Wall
Street Journal
Tuesday, January 7, 2020
Opinion | Review & Outlook
Blue State Redistribution
High-tax states are losing people, money and
seats in Congress.
The U.S. population grew last year at the
slowest rate since World War I as the birth rate
and immigration declined, the Census Bureau
reported last week. Slowing population growth
will have significant economic and social
implications for the country, but especially for
high-tax states.
The Census Bureau and IRS last week also
released state population growth and income
migration data for 2018 that show the exodus
from high-tax to low-tax states is accelerating.
Four states have lost population since 2010
including West Virginia (-3.3%), Illinois
(-1.2%), Vermont (-0.3%) and Connecticut
(-0.2%), but 10 experienced declines last year.
New York was the biggest loser as a net 180,000
people left for better climes. Over the last
decade New York has lost more of its population
to other states (7.2%) than any other save
Alaska (8%), followed by Illinois (6.8%),
Connecticut (5.6%) and New Jersey (5.5%).
Hmmm, what do these states have in common? Large
tax burdens and politically powerful public
unions. Illinois’s property tax rates are the
second highest in the country after New Jersey.
The state lost $5.6 billion in adjusted gross
income last year to other states, about twice as
much as in 2012. Notably, income outflow hasn’t
increased from Michigan or Wisconsin.
Illinois’s 4.95% flat income tax is lower than
many of its neighbors, but Democrats are pushing
a state constitutional amendment on the November
ballot for a progressive income tax. Voters
should look how that’s turned out for other
high-tax states.
New York’s 12.7% top marginal rate is the second
highest in the U.S. In the last two years New
York has lost a net $18 billion in adjusted
gross income. The wealth exodus is reducing
revenue and making it harder to fund programs
like Medicaid. As Gov. Andrew Cuomo groused last
year, “Tax the rich, tax the rich, tax the rich.
We did that. God forbid the rich leave.”
Connecticut was a tax haven in the Northeast
before it adopted an income tax in 1991, and
Democrats have raised the rate again and again.
The 6.99% top rate, which hits individuals
making more than $500,000, is now higher than
Massachusetts’s 5.1% [sic - now 5%] flat tax and
not much of a bargain on New Jersey’s 8.97%
“millionaire tax.”
That was New Jersey’s top rate on income of more
than $500,000 before Democrats in 2018 imposed a
10.75% surtax on folks making more than $5
million. But the state is still short on revenue
to pay government pensions, so Democratic Gov.
Phil Murphy wants to extend the 10.75% top rate
to income above $1 million.
Then there’s California, where the 13.3% top
rate on individuals making more than $1 million
is the nation’s highest. Democrats in the Golden
State have long proclaimed that raising taxes on
the rich won’t make them leave and they flog old
data showing that more high earners moved into
the state than left.
No more. The exodus of high earners has
accelerated since voters approved a referendum
in 2012 raising the top rate on income above
$250,000. The ratio of tax returns over $200,000
moving into and out of the state was then about
equal. Now the ratio is about three to two and
is higher than for middle and lower earners.
Last year California lost $8 billion in adjusted
gross income to other states, up from about $135
million in 2012. Much of this is higher
capital-gains income earned by the affluent.
High housing costs, diminished economic
opportunities and lousy public schools in
California and other liberal states have also
sent young workers and middle-class families
packing.
Since 2010, California, New York and Illinois
have experienced the largest population declines
among people under age 18, though New Jersey and
Connecticut also rank high. Fewer young workers
will make it harder to keep state economies
growing to pay for government entitlements and
pensions.
Where are high-tax state exiles going? Zero
income tax Florida drew $16.5 billion in
adjusted gross income last year. Many have also
fled to Arizona ($3.5 billion), Texas ($3.5
billion), North Carolina ($3 billion), Nevada
($2.3 billion), Colorado ($2.1 billion),
Washington ($1.7 billion) and Idaho ($1.1
billion). Texas, Nevada and Washington don’t
have income taxes.
Democrats in high-tax states blame the 2017 tax
reform, which limited the federal deduction for
state and local taxes to $10,000 and thus
increased the effective federal tax rate for the
well-to-do. The cap took effect in 2018, but
most taxpayers would not have felt the pain
until they paid their taxes last year. Taxpayer
flight may accelerate even more now.
All of this explains why Democrats are nervous
about the 2020 Census, which will decide
apportionment of House seats and electoral votes
for the next decade. California, Illinois and
New York are each projected to lose a seat while
Texas is forecast to pick up three, Florida two
and Arizona one.
We know progressives believe in redistribution,
and it’s kind of Democrats to spread their
wealth and political power to other states.
|
| |
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
▪ (781) 639-9709
BACK TO CLT
HOMEPAGE
|
