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Advocacy Executive Director's Reports It's time to focus on what matters most
The economic storm clouds have finally rolled over Massachusetts, and the dismal forecast is for a multi-year recession that will bring us higher unemployment, declining wages, falling government revenues and larger budget deficits.
Gov. Deval Patrick and Lt. Gov. Timothy Murray have displayed strong and decisive leadership, announcing a $1.4 billion plan to keep this year’s state budget in balance. The administration is reducing state spending by $755 million and offering a wise combination of reserves, other revenues and shared savings to offset a massive mid-year decline in state tax collections.
Municipal leaders and the MMA very much appreciate the Patrick-Murray administration’s commitment to protect local aid as much as possible during this difficult time.
Protecting local aid is vital to our state’s long-term economic stability, as cities and towns deliver the services that are essential for our economic well-being. If local governments are forced to cut education, public safety, road and infrastructure maintenance, and core quality-of-life services, Massachusetts will lose even more business investment, jobs and families at the worst possible time. Further, if local governments are forced to rely even more on the property tax, we will move backward, essentially adopting a more regressive tax system that hurts working-class families and individuals.
Economists agree that protecting local aid and the fiscal health of communities will shorten the duration of the recession in Massachusetts.
Yet we all know that local aid is just part of the equation. Now more than ever, Massachusetts needs to take action to protect our state and our communities from the worst, and to position us for a swifter and more effective recovery.
For far too long, municipal officials have been seeking the full management authority and independence they need to maximize savings and efficiencies at the local level. Now is the time to give the highest priority to what matters most and enact the following reforms:
• Close the telecommunications property tax loophole. Our outdated state tax statute allows telephone companies to avoid an estimated $78 million in local property taxes and shifts this burden onto homeowners and other businesses. And the recent decision by the Appellate Tax Board confirms that Verizon and others owe taxes on all of their poles and wires, but these revenues will be tied up for years in delays and appeals unless legislation is passed now. The loophole that Verizon is using to avoid taxes on equipment should be closed as a part of this reform. (The governor has renewed his call for this reform in his emergency legislation to address the state’s fiscal crisis.)
• Provide local-option revenue capacity for cities and towns. A local sales tax on meals, which would raise an estimated $120 million statewide for each percent, and an expansion of the local lodging tax (raising an estimated $20 million or more), would provide significant property tax relief and revenue to fund vital services in many communities across the state.
• Give cities and towns the authority to set health insurance plan design without going through collective bargaining. This would simply give local governments the same power the state has to make health plan design decisions outside of collective bargaining, so municipalities could adjust their health plans to more realistic levels for co-pays and deductibles and use tiered networks to encourage and generate high-quality and lower-cost medical claims management experience. This important change would provide immediate and significant savings in the area of health insurance for every community. (This would also be a much broader, more effective, and more desirable reform than just allowing communities to opt into the Group Insurance Commission, as localities would be able to act more quickly and achieve millions in savings in fiscal 2010, while avoiding costs associated with transferring employees and retirees to the state, reducing the administrative burden and expense on the state, and in many cases softening cost shifts onto employees.)
• Allow cities and towns to enroll their future retirees in Medicare. Legislation should be passed to create a new Section 18A in Chapter 32B, the law governing local health insurance, to allow communities to enroll their future retirees in the federal Medicare program (without having to move their current non-Medicare retirees into the federal system), providing significant health insurance cost savings.
• Fix charter school funding flaws. The current funding scheme to finance charter schools is extraordinarily unfair to local school districts and the vast majority of children who remain in the traditional public school system. The problem is growing worse as each day passes, and with future funding levels for Chapter 70 threatened by the state’s fiscal crisis, this broken system must be fixed or the consequences will be devastating to school budgets.
• Don’t forget smaller reforms and tools that will help. It’s time to abolish the antiquated civil service system, amend the $1 micro-purchasing threshold, restore the successful Municipal Incentive Grant program, allow cities and towns to create regional public safety dispatch centers, allow cities and towns to combine municipal and school business functions, provide for local-option retirement incentives, allow localities to extend their pension schedules, eliminate and freeze unfunded state mandates, and much more.
Providing those essential tools now will enable cities and towns to weather the stormy days ahead and work in partnership with state government to build a brighter future for our residents and businesses.
Advocacy Executive Director's Reports It's time to focus on what matters most
It's time to focus on what matters most
The economic storm clouds have finally rolled over Massachusetts, and the dismal forecast is for a multi-year recession that will bring us higher unemployment, declining wages, falling government revenues and larger budget deficits.
Gov. Deval Patrick and Lt. Gov. Timothy Murray have displayed strong and decisive leadership, announcing a $1.4 billion plan to keep this year’s state budget in balance. The administration is reducing state spending by $755 million and offering a wise combination of reserves, other revenues and shared savings to offset a massive mid-year decline in state tax collections.
Municipal leaders and the MMA very much appreciate the Patrick-Murray administration’s commitment to protect local aid as much as possible during this difficult time.
Protecting local aid is vital to our state’s long-term economic stability, as cities and towns deliver the services that are essential for our economic well-being. If local governments are forced to cut education, public safety, road and infrastructure maintenance, and core quality-of-life services, Massachusetts will lose even more business investment, jobs and families at the worst possible time. Further, if local governments are forced to rely even more on the property tax, we will move backward, essentially adopting a more regressive tax system that hurts working-class families and individuals.
Economists agree that protecting local aid and the fiscal health of communities will shorten the duration of the recession in Massachusetts.
Yet we all know that local aid is just part of the equation. Now more than ever, Massachusetts needs to take action to protect our state and our communities from the worst, and to position us for a swifter and more effective recovery.
For far too long, municipal officials have been seeking the full management authority and independence they need to maximize savings and efficiencies at the local level. Now is the time to give the highest priority to what matters most and enact the following reforms:
• Close the telecommunications property tax loophole. Our outdated state tax statute allows telephone companies to avoid an estimated $78 million in local property taxes and shifts this burden onto homeowners and other businesses. And the recent decision by the Appellate Tax Board confirms that Verizon and others owe taxes on all of their poles and wires, but these revenues will be tied up for years in delays and appeals unless legislation is passed now. The loophole that Verizon is using to avoid taxes on equipment should be closed as a part of this reform. (The governor has renewed his call for this reform in his emergency legislation to address the state’s fiscal crisis.)
• Provide local-option revenue capacity for cities and towns. A local sales tax on meals, which would raise an estimated $120 million statewide for each percent, and an expansion of the local lodging tax (raising an estimated $20 million or more), would provide significant property tax relief and revenue to fund vital services in many communities across the state.
• Give cities and towns the authority to set health insurance plan design without going through collective bargaining. This would simply give local governments the same power the state has to make health plan design decisions outside of collective bargaining, so municipalities could adjust their health plans to more realistic levels for co-pays and deductibles and use tiered networks to encourage and generate high-quality and lower-cost medical claims management experience. This important change would provide immediate and significant savings in the area of health insurance for every community. (This would also be a much broader, more effective, and more desirable reform than just allowing communities to opt into the Group Insurance Commission, as localities would be able to act more quickly and achieve millions in savings in fiscal 2010, while avoiding costs associated with transferring employees and retirees to the state, reducing the administrative burden and expense on the state, and in many cases softening cost shifts onto employees.)
• Allow cities and towns to enroll their future retirees in Medicare. Legislation should be passed to create a new Section 18A in Chapter 32B, the law governing local health insurance, to allow communities to enroll their future retirees in the federal Medicare program (without having to move their current non-Medicare retirees into the federal system), providing significant health insurance cost savings.
• Fix charter school funding flaws. The current funding scheme to finance charter schools is extraordinarily unfair to local school districts and the vast majority of children who remain in the traditional public school system. The problem is growing worse as each day passes, and with future funding levels for Chapter 70 threatened by the state’s fiscal crisis, this broken system must be fixed or the consequences will be devastating to school budgets.
• Don’t forget smaller reforms and tools that will help. It’s time to abolish the antiquated civil service system, amend the $1 micro-purchasing threshold, restore the successful Municipal Incentive Grant program, allow cities and towns to create regional public safety dispatch centers, allow cities and towns to combine municipal and school business functions, provide for local-option retirement incentives, allow localities to extend their pension schedules, eliminate and freeze unfunded state mandates, and much more.
Providing those essential tools now will enable cities and towns to weather the stormy days ahead and work in partnership with state government to build a brighter future for our residents and businesses.
Written by MMA Executive Director Geoff Beckwith
