The Boston Herald
Saturday, March 30, 2002
A Boston Herald editorial
Reich puts finger on the real issue
Democratic gubernatorial hopeful Robert Reich deserves
praise for candor in offering a big-spending approach to the job, even though we respectfully disagree with it.
Reich is absolutely correct that a "highly productive
economy requires public investments. Public investments in education, health care, transportation and the environment are
complements to private investment. Business can't be productive unless their employees are
highly productive."
The shoe factories aren't coming back. And despite what
Reich tries to make us believe, no candidate is trying to bring them back.
But does Massachusetts require more public spending than it
is already doing? That is the key issue.
With too many in Reich's party, spending is never enough -
there are always "unmet needs," and armies of activists digging up more.
Reich's speech Thursday acknowledged that the state has to
get through its current budget crisis before it can begin new programs. But he offered practically no specifics and showed
absolutely no recognition of the fact that Massachusetts already spends huge amounts.
According to the Massachusetts Taxpayers Foundation, state and local taxes per capita
($3,606) are the fourth highest in the nation, a ranking that doesn't change much from year to
year. Residents of the commonwealth pay 10.85 cents of every dollar in personal income to
their community and the state, 26th among the states, a ranking that has been improving in
recent years.
We must be doing something right. From 1980 to 1999, per
capita income increased faster in Massachusetts than in any other state. And two recent studies concluded that
Massachusetts is well-positioned for the future.
In December, the Beacon Hill Institute said its study of
data from all the states put Massachusetts second only to Delaware in attractiveness as a place in which to live and do
business. On measures of human services, technology development and financial
sophistication Massachusetts led all states. In November, the Milken Institute gave
Massachusetts the top spot for the second year in a row on its New Economy Index,
concluding that the state led all others in potential "because of its vast research capability, its
highly educated population [first in college grads] and its many venture capital
investments."
Another Democrat, businessman Steve Grossman, already has
beaten Reich to the finish line to offer specifics, laying out tax proposals that would preserve the rollback in that
decade-old "temporary" income tax increase. This will be a productive campaign if other
candidates are equally candid.
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The MetroWest Daily News
Saturday, March 30, 2002
Editorial
Alternatives to Proposition 2½
Abolishing Proposition 2½ may not get much support from
the taxpayers who enacted it in 1980 or the bosses on Beacon Hill who have been scared to touch it. But state Rep. Susan
Pope (R-Wayland), who made the suggestion at a MetroWest Growth Management
Committee legislative conference this week, showed courage by putting a difficult and
complicated issue on the table.
Republicans are typically the strongest supporters of
limiting taxes, but what drives Pope's position isn't her party, but her other elected office. As a Wayland selectmen,
she knows how Proposition 2½ hobbles the ability of cities and towns to provide the services her
constituents demand and deserve.
She also knows what some Beacon Hill politicians try their
best to ignore: That cutting state taxes can be a losing proposition when it forces tax increases at the local level.
Since its enactment, Proposition 2½ has kept a needed
brake on property taxes. But even if taxes go up only 2.5 percent a year - and it has often been more than that, for a
variety of reasons - over 22 years the burden has increased substantially. That burden falls heaviest on
longtime residents whose income hasn't kept up with the rising market value of
their homes.
Proposition 2½ hasn't kept property taxes down all by
itself. Throughout the '90s, new development, which is exempted from the cap on the tax levy, and regular infusions of new
state aid have helped keep municipal governments solvent. This year, however, new
development has slowed and the state is facing a budget shortfall of up to $3 billion. Cities
and towns can expect a 10 percent decrease in state aid, Pope said, and
eliminating Proposition 2½ would help communities deal with the that lack of state funding.
Letting property taxes rise faster isn't the answer, because
property taxes are inherently regressive and unfair. Property tax bills pay no attention to the homeowner's ability to pay.
They don't tax current income or current spending. By encouraging development,
dependence on property taxes can lead to poor land use policies.
What cities and towns need are alternatives to property tax
increases. Suggestions at the MWGM conference included allowing municipalities to levy impact fees on developers, deed
transfer taxes, higher excise taxes, even a local sales tax.
Allow us to add another: If the state goes forward with
lowering the income tax to 5 percent, let cities and towns decide, by referendum vote, to raise it back to 6 percent. It
could be easily collected by the state Department of Revenue and funnelled back to the municipalities
without interference from the Legislature. The income tax is more progressive and
more fair than any of the alternatives now available to cities and towns. Let them collect some income
tax revenue - and reduce property taxes.
Acting Gov. Jane Swift's no-new-taxes pledge places too high
a hurdle before those working the revenue side of state and local balance sheets. Any new tax requires a two-thirds vote to
override her veto. She should follow the example of former Gov. William Weld, who drew a
distinction between taxes imposed by the state, and those levied at the local level by popular
vote.
Let the people decide whether to raise their local taxes.
But give them more choices than the property tax.
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The Boston Herald
Saturday, March 30, 2002
Hancock's chief collects $8.1M:
Pay rises as bonus shrinks
by Tom Walsh
David F. D'Alessandro, chairman and chief executive of John
Hancock Financial Services Inc., saw his compensation more than double last year to total $8.1 million in salary, bonus
and incentive awards, compared with $3.9 million in 2000, the company reported in a
regulatory filing yesterday.
D'Alessandro took home an 18 percent smaller bonus, at $1.6
million, compared with the $2 million he was awarded in 2000, Hancock said in its proxy statement, filed with the
Securities and Exchange Commission. But his salary bumped up to a cool $1
million from $916,000 in 2000. He was also paid $1.9 million in restricted stock awards and $3.6 million
in a long-term incentive payment.
In addition, D'Alessandro was granted options on 1.3 million
shares of stock, which the company estimated could be worth as much as $28 million when they expire in February
2006.
The filing also said D'Alessandro and other top executives
will be eligible to be paid three times their annual base salary, target annual bonus and long-term incentive awards if
they lose their jobs other than for cause after a sale of the company.
Industry observers expect Hancock to come under increasing
scrutiny from potential buyers this year.
When the company went public in 2000, certain restrictions
were placed on its being sold. Most run out this year, and all will expire by early 2003.
Compensation for other top Hancock executives:
Michael A. Bell, senior executive vice president, earned
$2.4 million and was granted options worth up to $11 million by their expiration in February 2006;
Thomas E. Maloney, chief financial officer, earned $3.7
million and was granted options worth up to $9.7 million by February 2006; and
Wayne A. Budd, general counsel and a former U.S. attorney
for Massachusetts, earned $2.7 million and was granted options worth up to $6 million by February 2006.
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