The MetroWest Daily News
Monday, May 13, 2002
In crunch, opposition to Prop 2½ grows
By Jon Brodkin
In the state formerly known as "Taxachusetts," debate on the
merits of Proposition 2½ are as heated as a Pedro Martinez fastball.
Many government officials think it's time to alter the law,
which prevents municipalities from raising property taxes more than 2½
percent in any given year without voters' approval of an override. Proposition
2½ also limits the local tax levy to 2½ percent of the total assessed value of property
in the community.
Some have suggested abolishing it, to the consternation of
the law's proponents, who say it promotes fiscal discipline.
The difficulty of changing the law, passed in 1980, may be
seen in how quickly state Rep. Deborah Blumer, D-Framingham, backtracked after proposing raising the limit slightly. Her
plan would have tied the limit to the price index for state and local government services,
which she said is less than 1 percent greater than 2.5.
Instead, she now proposes forming a commission to study the
"Proposition 2½ has been baked into the government and
political landscape for 20 years now," said Geoffrey Beckwith, executive director of the Massachusetts Municipal
Association. "It's highly unlikely that there would be any consideration of
radical change, or elimination of Proposition 2½. That's just not something that I think would have any critical
mass of consensus."
One proponent of the law guesses that Blumer was bombarded
with complaints from constituents after making her proposal.
"She seems to be doing some serious backpedaling," said Dick
Gooding, chairman of the Hopkinton Board of Selectmen. "I think she made an error in judgment and perhaps received
a good deal of backlash from her electorate."
Blumer could not be reached for comment.
Hopkinton is asking voters to approve two debt-exclusion
overrides to build a new senior center and police station. A debt-exclusion override is one which raises taxes for a limited
time, until a specific project is paid for. Potential overrides such as those are a sign that the
law is working, Gooding indicated.
"It's serving our interests quite well," he said. "Communities have mechanisms for dealing with
it and overriding it." The law forces officials into careful consideration of any
spending, he said.
While Prop. 2½ has forced communities to spend more
carefully, said one 2½ detractor, town meetings would prevent unreasonable tax increases even if the law was
abolished. With power over the budget, town meeting voters have virtual control over the tax rate, said Paul
McKinley, Natick's selectmen chairman.
"I definitely think it needs to be changed," he said of
Prop. 2½. McKinley supports either abolishing the law or tying the limit to an economic indicator such as the Consumer
Price Index. Even with a higher limit, he said, there would still be overrides because some costs,
such as health insurance, rise faster than inflation.
Southborough Town Administrator Janice Conlin isn't
convinced that town meetings provide a sufficient roadblock to excess government spending. Before Prop. 2½, if officials
wanted something they only had to convince 150 people or so of its necessity, she said. Now
residents have more input.
"I think we have to communicate better our needs to the
electorate in order to get something approved," she said. Conlin said she doesn't think the law will be changed and "I
don't know that it should."
Massachusetts is fortunate that Prop. 2½ hasn't had a
disastrous effect on city and town finances, but the luck could run out, said Beckwith. In the 1980s, declining school
enrollments prevented educational costs going up as much as usual. And low inflation rates in
the 1990s meant that while living under the constraints of Prop. 2½ was difficult, it
was not a fiscal disaster, he said.
But if inflation begins to accelerate and school enrollments
increase, "there will be a 'perfect storm' that would put major changes to Proposition 2½ on the front burner," he said.
If inflation rises, Blumer's original idea will get more
attention, he said.
Some officials, when discussing Prop. 2½, are torn
between what they see as two realities: One, that the law places a necessary limit on property taxes, and two, that the
limit is unrealistically low.
Finance committees scrutinize budgets more thoroughly than
they would if there were no cap on taxes, said Frank Foss, chairman of Natick's Finance Committee.
"But realistically, under what we've just lived through," he
said, "Proposition 2½ is extremely problematic." Unlike several other local communities, Natick did not bring an
override to a vote this year to meet growing expenses, but did institute a trash fee.
Foss supports tying the limit to an economic indicator.
"Why not use the same indicators that businesses are using?
What makes government different?" he said.
State Sen. David Magnani, D-Framingham, also supports
changing the limit. But he says it should be done in tandem with the state giving money to those who would have trouble
paying higher tax bills.
"Without sufficient state aid you can end up driving senior
citizens right out of their homes," he said.
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The MetroWest Daily News
Monday, May 13, 2002
Remember who pays the bills
By Rob Meltzer
What is the role of town government? The answer is pretty
clear - to provide for public safety and to provide a certain level of mandated public education.
These items are the muscle and bone of government. The rest
of what the town pays for, whether we're talking libraries, parks and recreation, maintenance of surplus lands, parades,
town-owned vehicles, new doors for Nevins Hall, so-called school enrichment programs and
the army of managers, assistant managers, deputy assistant managers and executive assistants
to the deputy assistant managers that haunt the Memorial Building are, quite simply, fat.
So when the Framingham School Committee and the Framingham
Board of Selectmen and their bloated armies of bureaucrats tell us that there is no fat in the budget, they are lying to
the voters. When they base their calculation of the tax increase on an average house value of
$200,000, knowing full well that the mien value is $300,000, they are being dishonest. When
they tell the voters that the only alternative to budget override is to cut public safety and
schools, threatening to cut the bone and muscle instead of the fat, they are committing
extortion and political blackmail.
It shouldn't surprise us that our elected politicians treat
the voters with disdain and contempt. After all, it is logical to assume that the same people who buy the lies of the
candidate before the election will buy the lies of the professional politician after the election.
Even if we can't trust the selectmen and the School
Committee to tell the truth, we should be able to trust our supposedly-representative Town Meeting members to call our
elected boards onto the carpet. Alas, as we know from the current Town Meeting sessions, there is
no sight as despicable as the vision of 184 lemmings, bleeding from self-inflicted
wounds, as they fight among themselves to be the first to fling themselves off the override cliff at the
request of our politicians.
The root of the fiscal crisis is that we assume that current
levels of spending are necessary, and then try to match revenues to those levels. Is that how we should budget, by
looking at what we've become accustomed to paying for?
We can invert the process. We can start by asking, what are
our needs? Are certain services truly essential, or are they merely services that we've become accustomed to spending
money on during a good economy? Do we really need as many elementary schools as we
have? Do we really need to keep town-owned buildings that are not being utilized for town
purposes? Do we really need so many town employees, or can we eliminate some
middle management? These are the questions we should be asking before we look at raising more
This, of course, is how families budget. Yes, perhaps the
family has grown used to exotic family vacations while dad was earning big bonuses, but those vacations are not necessities
of life. The same kind of decisions can easily be made in examining the town budget and
looking at a huge array of useless jobs in our town government. As anyone who has ever
worked at a downsized company can attest, the remaining employees quickly realize that two
people were performing the job of one person, and that streamlined efficiency in tasks can
easily compensate for the missing warm bodies.
I realize that there are people in this town who have more
money than they need. That doesn't give them the right to assume that all town residents sit around in the evenings
tossing shredded greenbacks into the toilet. If you want to waste your money, fine, but don't assume
that we all share your mania for waste. Don't assume that we don't have better uses
for our money.
At a time when we are looking at increased revenues from
prior revenues, increased revenues from new state taxes and a decrease in tax credits and deductions, it is imperative
that our town government consider the notion of fiscal responsibility, remembering who pays
the bills. My sense is that we have a town surplus, not a deficit, and we should be
making this analysis before we talk about overrides.
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The Boston Herald
Monday, May 13, 2002
A Boston Herald editorial
State spending limit always a good idea
The glee on Beacon Hill that greeted passage of $1 billion
in tax increases by the House shows why Massachusetts needs a real restraint on spending. Politicians will never do it on
their own, even when revenues fall - their self-esteem depends on satisfying the demands of
Actually the commonwealth does have a spending restraint -
which never did its job. In 1986 voters approved a law to limit the amount of tax revenue that may be spent, and to limit the
annual growth in that amount to the average growth in wages and salaries in the state over the
preceding three years. Through a quirk in the formula, it applied only in 1987. This year's tax
collections would have to be 16 percent larger than they are for the limit to apply.
To avoid more tax reductions during the boom of the late
1990s, the Legislature resorted to gimmicks like making capital expenditures out of the operating budget and accelerated
retirement of the state's unfunded pension liability. Spending grew - and when the recession
hit, couldn't be cut enough because of the psychology of the politician. We're in trouble
now because spending grew too fast then.
A simple correction of the 1986 flaw sponsored by Rep.
Joseph Sullivan (D-Braintree), House chairman of the Transportation Committee, could do the job. Acting Gov. Jane
Swift made the same proposal last year, to no avail. The Massachusetts High Technology Council
has asked lawmakers to support Sullivan's amendment. A group of Republicans has
sponsored a very similar measure.
Had the Sullivan formula been in effect from 1986 on, the
budget gap for next year would be about $300 million instead of $2 billion.
The council estimates that the revised limit would not be
effective until 2005, by which time the economy should have recovered. Other things being equal, by 2009 the new formula
should hold spending to $1 billion less than available tax revenues. Current law requires the
excess to be returned to taxpayers via income tax credits.
This is a good formula, but others are possible. Amazingly,
House Speaker Tom Finneran, who engineered the tax increase bill, appears to agree with the concept of a limit: He has
sponsored an amendment to the budget to hold growth in annual spending to 4 percent after
1 percent of available revenue has been put in the rainy-day fund.
How realistic is this? Well, it would have worked in the
late 1990s. From 1996 to 2000, tax revenues increased by 6.8 percent per year despite various rate cuts.
There is no conflict with the income tax rate phase-down in
the House tax package (a laughably slow process that will take six years at best to reach the 5 percent rate the voters
approved in 1998 [sic - 2000]).
The cynic will ask: What's the use? Legislators surely will
evade, ignore or repeal another spending limit a nanosecond after it becomes inconvenient, will they not?
To which the reply is: Don't give up. After being hit by the
two-by-four often enough, the mule eventually gives you his attention.
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Friday, May 10, 2002
Senators want new approach to budget
By Jennifer D. Jordan
While the House this week debated casinos and how to spend
the $1 billion members hope to raise in new taxes, their Senate counterparts quietly talked among themselves about their
budget proposal due by month's end.
There was chatter about freezing the income tax rollback at
5.6 percent in order to raise more money and upping the sales tax from 5 percent to 6 percent.
Merrimack Valley lawmakers universally oppose the latter. In
fact, two local state senators think they have a better idea.
Sens. Steven A. Baddour, D-Methuen, and Bruce E. Tarr,
R-Gloucester, want to radically change the way state budgets are assembled and debated, and next week plan to file a bill
that will call for zero-based budgeting.
That means departments will have to justify their entire
budgets from the ground up -- just as local municipalities must do.
Currently, budget discussions begin with looking at what a
department received the previous year, then making adjustments, usually increases, such as fixed costs, raises and benefits.
The senators said they're frustrated by the budget process
and the deep cuts proposed this year to balance the budget for fiscal year 2003.
"This budget will be under more scrutiny than any other
budget in the past 10 years," Tarr said. "It gives us the opportunity to examine everything we do and the way we do it."
Baddour said the plan would also get more lawmakers involved
in the budget process.
"We need to start the budget early and get more people
involved," Baddour said. "It will give the committees more work and take some of the pressure off Ways and Means."
Their plan calls for a zero-based review of all departments
every four years and committees to analyze related departments. For example, the Education Committee would review
education budgets, and Health Care would review public and mental health
budgets, before referring them to Ways and Means, with whom the ultimate power would remain, Baddour
and Tarr said.
"Doing this every four years is a good increment of time and
it's concurrent with governors' terms," Tarr said. "There hasn't been this kind of check to make sure spending doesn't
get out of control, before (a fiscal crisis) necessitates drastic action that ends up hurting people."
Thirteen states now use some form of zero-based budgeting.
Another 37 use some form of zero-based budgeting or performance budgeting, including New Hampshire, said Pete Sepp
of the National Taxpayers Union in Washington, D.C., a nonpartisan taxpayer watchdog
Performance-based budgeting sets standards by which programs
and departments are judged during the budget process.
"We think a combination of zero-based and performance
budgeting is helpful, but not necessarily a cure-all," Sepp said.
Citizens for Limited Taxation supports the senators' plan
and Mass. Inc., a nonpartisan think-tank, said it's intrigued by the idea and supports performance-based budgeting.
It remains to be seen if House and Senate leaders will
support it, too. Critics of zero-based budgeting say it's overkill and excessive micro-managing to justify every line
item in every department.
Even if the bill is accepted as a late-file petition next
week, it faces a long road through legislative bureaucracy, Tarr and Baddour said.
Still, they hope their bipartisan effort will translate into
"It won't affect this year's budget, but it's a starting
point for discussion," Baddour said. "Our hope is that this will evolve and something will be in place for the next
administration. This isn't just about money; it's also about vision and thinking about what kind of programs we
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