Officials in Wayland and Sudbury differ sharply regarding
Republican state Rep. Susan Pope's suggestion this week that Proposition
2½ should be abolished.
At a MetroWest Growth Management Committee meeting, Pope on
Wednesday said lawmakers should consider eliminating the state law that limits the growth on revenue from
property taxes in a municipality to no more than 2.5 percent over the previous
year.
Pope, who also serves as a Wayland selectman, on Friday
backed away from her initial comments, but said the voter-approved tax cap should still be examined, and perhaps
raised to 3 or 3 1/2 percent.
"Personally, I do not like Proposition 2½. But I do feel
that it needs to be studied before anything is done. I have not studied it enough to abolish it completely," said Pope. "After
the budget process is completed, I think that there will be some work done regarding
2½. I do not want to see taxes needlessly increase, but do feel it should be analyzed to
balance inflation."
Some other local officials believe Pope was on the money in
calling attention to a matter that many have been questioning themselves.
Sudbury Selectman Kirsten Roopenian thinks it may be time to
re-evaluate the measure that was passed in 1980.
"I think that (her) statement is quite bold," she said. "We
all have experienced some level of frustration in MetroWest communities that rely on state funding more and more. When we
have needed the state the most, they have walked away. I think that Proposition
2½ should be reexamined, especially for towns that have needed overrides back to back to back."
Sudbury voters last week passed a $3 million override with
46 percent of registered voters coming to the polls. A majority vote will be needed at Town Meeting tomorrow to solidify
the override.
"The reality is that there is not enough revenue to support
our level of services. Prop 2½ has been limited local property growth. With an inflation rate of 4 to 7 percent, it
is inevitable that it (Prop 2½) will need to be replaced with a better way to address the needs of
towns," said Sudbury Selectman Richard Robinson.
Wayland Selectman Linda Segal suggests an overhaul may be
necessary.
"In general, some may feel that the 2½ number is too
stringent. I feel that Prop 2½ has served us well as a state to exercise fiscal restraint. There is the notion that the
number may be a problem, with so many communities needing a override this year, and it may be timely to
look a slightly higher number," she said.
Wayland, which will be voting a $1.3 million override on
April 23, has seen its budget increase because of rising costs of special education, health care and having to fund an
adequate amount of free cash reserve.
But many voters, and some officials, do not embrace the idea
of raising the Proposition 2½ cap, or abolishing the law.
Wayland Selectman Brian O'Herlihy said he believes the
measure brings accountability to local government.
"I think that it actually holds town officials to practice
good fiscal discipline. At times it trails inflation, but especially after going through a budget process in Wayland, it
makes you wonder where the budget would have gone if there were no cap," said O'Herlihy. "I feel that
it is not a good idea to eliminate it."
Barbara Anderson, the executive director of Citizens for
Limited Taxation which spearheaded the Prop 2½ movement, believes most state voters are accustomed to limited
government spending. Under 2½, communities must approve any additional
taxation over a 2.5 percent cap by a majority vote.
"Ask 60 percent of the state, all those people who voted for
(Prop 2½), if it should be eliminated. It is part of Massachusetts politics and culture," said Anderson. "She (Pope)
could not have possibly understood how 2½ worked, or else she would have never made
a statement like that."
Anderson argues that Proposition 2½ should not be blamed
for the current fiscal crisis that many towns are facing. She says the process of cutting costs to balance budgets is
economically healthy.
"After years of spend and stash, it is healthy that towns
and cities are tightening their belts," she said.
"By revoking 2½, it's like a politician telling voters
that 'you voted for me at the peak of your intelligence and then all your decision-making capabilities dropped off.'
Officials must be held accountable to the voting public," said Anderson.
Other officials, like Sudbury Selectmen John Drobinski
believe that some services may be in jeopardy if the situation is not reconsidered soon.
"Her (Pope's) proposal is a great idea for many reasons. The
constraints that we are under have become so burdensome that schools, public safety and infrastructure can't provide the
services that we need," he said.
Wayland Superintendent Gary Burton also believes cities and
towns would benefit from reconsideration of Proposition 2½.
"We have been living within an artificial constraint. Prop
2½ sometimes places us in the awkward position. A community must educate, we must have a fire department and police
services.
"We are not able to simply say that we can't afford those
things. There is a great reluctance to take this restriction off - maybe because of a belief that officials will run amok,"
Burton said.
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The Boston Globe
Sunday, March 31, 2002
Leaders broaden tax hike options
State lawmakers eye business levies
By Rick Klein
Globe Staff
When revenues started to fall this year, lawmakers started
talking about tax increases.
They discussed raising the income tax, cigarette and
gasoline taxes, or reducing the personal exemption - all moves that primarily affect the middle class and working poor.
Missing from the list was any serious reconsideration of the generous tax cuts during the last decade that
largely benefited the rich and businesses, such as banks, investment companies,
and the insurance industry.
Now, facing mounting criticism, Beacon Hill leaders are
adjusting their focus. Top House leaders, who were slammed for circulating a list of 16 potential tax increases that virtually
ignored corporate taxes, say that all types of revenue sources will be on the table when the
House debates taxes in April.
Senate leaders, meanwhile, are promising to resist efforts
to reduce the personal exemption. The exemption was doubled to $4,400 for single filers in 1998 in what's been billed as the
largest tax cut for the middle class in the state's history.
"I would hope that we could avoid burdening those who are
least able to afford it," Senate President Thomas F. Birmingham said.
The Senate is also seriously considering taxing all capital
gains at the same rate as other income - now 5.3 percent - which would undo a cherished corporate plum that businesses
say helps them attract top-notch employees to Massachusetts and encourages long-term
investments.
Big corporate tax breaks, including those won by Raytheon
Co. and Fidelity Investments in the 1990s, could also be reconsidered, said Senate Ways and Means chairman Mark C.
Montigny.
"They all have to be on the table," he said.
Business groups have launched a preemptive lobbying strike
to preserve the tax breaks. Richard Lord, president of Associated Industries of Massachusetts, said that the state's
strides in making Massachusetts a friendlier business environment should not be sacrificed.
"Massachusetts had a terrible reputation in the '80s as a
place to do business," Lord said. "We no longer penalize companies for doing business here. What we want to do is get
the economy going in high gear again. Undoing those things [the cuts of the 1990s] would be
exactly the wrong thing to do."
Lord said the tax cuts cannot be measured solely by the
revenue loss to the state, because they helped create jobs.
"Individuals of all income levels benefited from those tax
changes," he said.
The state faces a shortfall of about $500 million this
fiscal year and $2 billion next year - a situation that some are blaming on excessive tax cuts, since the 42 tax cuts
instituted since 1990 are draining about $4 billion from state coffers this year.
According to a study by the Tax Equity Alliance for
Massachusetts. two-thirds of that cash has flowed to the richest 20 percent of taxpayers.
"The tax code has yielded to special interests," said Harris
Gruman, Massachusetts director of Neighbor to Neighbor, a political organization that advocates for urban working
families. "Now I'm hearing from these industry lobbies, 'We would not accept the smallest change.'
The irony is the wealthy could much more easily absorb these tax increases than the
poor."
Though Acting Governor Jane Swift is vowing to veto any tax
hike, legislative leaders say that a mix of spending cuts and tax increases is needed to solve the fiscal crisis. It's still
not clear which taxes will be pursued, but early lists have noticeably excluded the major
corporate tax breaks.
The list of 16 potential tax increases - totalling $2
billion in revenue - that was circulated last month by House Ways and Means Chairman John H. Rogers included a halving of
the personal deduction, reduced exemptions for rent and tuition payments, and the elimination of
a tax credit designed to help senior citizens who pay high property taxes.
The Massachusetts Taxpayers Foundation, a nonpartisan fiscal
analysis group with far-reaching clout on Beacon Hill, is calling for at least a freeze of the voter-approved income
tax rollback and is suggesting that it could be coupled with a cut in the personal deduction.
State Representative Peter J. Larkin, a Pittsfield Democrat
and a former cochairman of the Legislature's Taxation Committee, said the latter move is increasingly popular in the
House because it gives the state an extra $500 million without changing tax rates or repealing a
voter-approved law.
House Taxation Committee Chairman Paul C. Casey, cochairman
of the House working group on revenues, said he and his colleagues are recommending a wide range of tax
possibilities. The early attention to taxes that affect the poor and middle
class stems mostly from the fact that the savings potential in those areas is so large; taxes on everyone generally
produce far more revenues than narrow levies, and many members want to
take as few tough tax votes as possible, Casey said.
"If you're going to step up to the plate and pass a tax
increase, you at least want it to be sufficient," said Casey, a Winchester Democrat.
Corporate taxes will be considered, he said, but he
cautioned that few would produce significant revenue. A bank tax break approved in 1995, for example, is taking just $30
million a year from state coffers, and a tax cut for insurance companies enacted three years
later is costing the state $33 million. By contrast, reinstating an income tax of 5.6 percent
would generate $700 million, and a $1-per-pack cigarette tax increase could bring in as
much as $300 million a year.
With the support of two-thirds of House and Senate members
needed to override a gubernatorial veto, it's far from certain that the Legislature will have the stomach for multiple
new taxes of any variety.
"Trust me, our list is 30 pages longer," Casey said. "But
which of these will stick on the wall?"
Still, some of the cuts that benefit the rich do constitute
enormous sums of money. Taxing capital gains like regular income could generate $500 million, according to the state
Department of Revenue. A tax reform that mutual fund companies won in 1996 will cost the
state $130 million next year.
James R. St. George, executive director of the tax equity
group, argues that the tax cuts for individual taxpayers and businesses under the Weld and Cellucci administrations did much
to fatten the wallets of the rich but relatively little to help the poor.
If the income tax is kept at 5.3 percent this year in
accordance with the voter-approved rollback, the past decade's tax cuts will save the top 1 percent of earners in
Massachusetts $28,949 on average this year, St. George said. The bottom 20 percent will save just $48
each.
"High-income people, and especially the super-rich, really
got the bulk of the tax cuts," St. George said. "The package of tax increases has to be better balanced than anything has been
up to this point. It is unacceptable to ask working families and low-income people to pay
more in taxes while investors are getting off scot-free."
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The Boston Globe
Sunday, March 31, 2002
Leaders in House see budget worsening
By Rick Klein
Frustrated by what they see as slow and insufficient action by
the Swift administration, House leaders are preparing a major set of budget revisions that would tap new revenue sources
and make some mild cuts for the final three months of this fiscal year.
House Ways and Means chairman John H. Rogers said yesterday
that with March revenues falling $156 million behind last year, this year's budget gap has not been adequately
addressed. The gap is now likely to approach $950 million, and Acting Governor
Jane Swift has only decreased spending by $177 million, Rogers said.
"The administration is not facing reality here," said
Rogers, a Norwood Democrat. "Things are far worse than they're saying."
Rogers said the House recovery budget, scheduled to be filed
this week, will use a range of surplus and reserve funds - including a $144 million account designed to cover pay for
unexpected increases in welfare caseloads - to patch together this year's spending plan.
Rogers is also eyeing about $175 million in unspent money
earmarked for capital projects and is calling on Swift to offer all state workers modest, voluntary furloughs, for savings of
up to $10 million.
Rogers said he would like to limit extra spending out of the
state's "rainy day" fund to about $300 million - about $500 million less than Swift's budget plan could wind up costing.
The Swift administration contends that it has given the Legislature plenty of options to close the
budget gap, but that some of the major initiatives, like a restructuring of payments
to the state pension plan, have been ignored.
"They haven't introduced a single cut," said James
Borghesani, a Swift spokesman. "They've talked about taxes, but we haven't seen a single thing that they're going to do. All
we've seen is criticism."
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The Boston Herald
Sunday, March 31, 2002
Taxes send hacks into the usual feeding frenzy
by Howie Carr
Taxpayers beware: The spirit of Mike Dukakis is again abroad in
the land.
The human-services industrial complex, as it was once
called, is up in arms. The sky is falling, they claim. In the wake of this alleged budget crisis produced by a three-month
recession, the leeches at the State House and City Hall want to do what they so love to do.
They want to cut your pay.
If you are a member of the working class, they want to rob
you to give more to the non-working class. Oh, the horror - some adults who don't work will actually be asked to
pay their own dental bills, just like the rest of us have to do.
The tax-and-spend crowd is not in this for themselves, of
course. They are doing it for the children. Their children, not yours or mine.
The problem is, the leeches control the terminology of this
debate. If they pick your pocket, it's economic justice. If you try to stop them, it's a hate crime.
Every day, it seems, the hacks float more tax-increase trial
balloons. Last week, they dared to dream about jacking up the auto-excise tax.
As if you already don't pay enough for the privilege of
driving to work every day: sales tax, gas tax, doubled tolls, car insurance, car-insurance surcharges, $10 fees on rental
cars in Suffolk County, parking tickets, Denver boots, neighborhood parking stickers, car
inspection, title, registration, license, license plates.
Now they demand an increase in the auto-excise tax. In 1982,
the cities and towns collected $112 million from it. In 2000, they grabbed $534 million. Quintupling the take in 18 years is
not enough, apparently. They're like drunks - one tax is too many, a thousand are not
enough.
The latest suggestion from the Chicken Little brigade is to
abolish Prop 2½. Good Lord, does anyone remember what it was like around here in 1980 before the voters took matters
into their own hands and capped property tax increases? Real-estate taxes were so high that
retirees on fixed incomes were losing their homes.
The voters already have the option of overriding Prop
2½. In the affluent towns they do it every year. What's the problem?
Well, OK, the hacks respond. Maybe jacking up the property
taxes isn't such a great idea. So why don't we "delay" the income-tax cut? The problem with that is that they'd already
"delayed" the promised cut for a decade before the voters had to do it themselves, again, in a
landslide vote.
Well, the hacks respond, so how about a local sales tax, or
maybe a local income tax? How about a commuter tax?
To which I respond, how about you bums cut your relatives
off the payroll first? Here are three stories from the hackerama.
There's a hack $112,000-a-year judge, Joe Trainor, a career
coatholder for Speaker Thomas Finneran. Needless to say he didn't defer his pay. Anyway, after a nationwide
search 18 months ago, his wife Eileen ended up on the RMV payroll, running the Lowell
branch, for $1,831.56 every two weeks.
Speaking of Finneran, I got three calls last week that in
this time of great austerity he has interred two of his hack relatives on the court payroll. Repeated calls to his office to
inquire about the new hires were not returned. I take that as a confirmation - one of his kinsmen is in
South Boston, the other in Pemberton Square. Both make $1,427 every two weeks.
One of Finneran's flunkies is Rep. Joe Wagner, who is
married to the lovely Deborah. By an incredible coincidence, there is a Deborah Wagner on the DOR payroll for $1,872.03
every two weeks. A call to Rep. Wagner was not returned.
Oh, budget crisis, where is thy sting?
Suppose your family income had more than doubled in the last
10 years. You hit one small rough patch and your annual take drops 5 percent. Would you panic? Probably not, because
you would understand you could ride out the downturn by cutting up a couple of credit cards
and canceling the trip to Disney World.
If you can tighten your belt, why can't the hacks? Where is
the law that says every last one of their worthless parasite relatives is entitled to a job where they have to show up for
work about as often as the Easter Bunny?
Let me guess, that'll be tomorrow's trial balloon at the
State House. The Easter Bunny Full Employment Act of 2002.
Howie Carr's radio show can be heard every weekday afternoon on
WRKO-AM (680), WHYN-AM (560), WGAN-AM (560), WXTK-FM (95.1) or online at howiecarr.org.
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