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Local Aid and Finance Local leaders speak out on Question 1
Municipal leaders across the state are talking about the potentially devastating impact that a repeal of the state income tax could have on municipal governments.
If approved by voters statewide on Nov. 4, Question 1 would halve the state income tax rate on Jan. 1, 2009 – from 5.3 percent to 2.65 percent – and eliminate it on Jan. 1, 2010, resulting in a 40 percent cut in state revenues.
A similar proposal in 2002 – also sponsored by Libertarian Carla Howell and the Committee for Small Government – gained 45 percent of the vote statewide.
Voter approval of this year’s ballot proposal would push the state into a deep fiscal crisis and could slice local aid by more than $3 billion statewide, according to an MMA analysis released last month.
Westwood Town Administrator Michael Jaillet told the Walpole Times that the elimination of the state income tax “would be devastating on all local communities,” especially as communities already face escalating energy and health insurance costs.
Walpole Town Administrator Michael Boynton told the Times that his town could lose $8 million in local aid, citing an analysis prepared by the MMA. Last year the town received $11 million from sources such as Chapter 70 and Lottery proceeds, Boynton said.
“I don’t believe any department would be spared the effects of such a massive cut,” he said. “That’s just mind-boggling to contemplate.”
Boynton believes Question 1 arises from voter frustration with governmental operations “primarily at the state level” and not the local level.
“You can understand that people get frustrated,” he said, but media reports about state spending “are not indicative of what happens here in Walpole at the local level.”
Jaillet said local leaders “always have to be sympathetic” to voter concern about whether taxes are being spent responsibly. He pointed out, however, that Proposition 2 ½ already forces town governments to be “efficient, thoughtful and creative.” He said repealing the income tax would be “like taking an ax to things when (they) only need a little trimming.”
Boynton said it would be “irresponsible” to not do his best to provide as much information as possible about the potential local impact of Question 1.
The Franklin County Selectmen’s Association recently voted overwhelmingly to oppose Question 1. The vote followed a presentation by Massachusetts Taxpayers Foundation President Michael Widmer, who discussed a financial analysis of the proposal and warned local leaders of possible cuts of 40 percent or more in local aid accounts.
He said local aid cuts could even reach 50 to 60 percent, due to state obligations for debt payments, the Massachusetts Bay Transportation Authority, and the school building assistance program, according to the Greenfield Recorder.
“It would be devastating to the towns,” Northfield Finance Committee Chair Lois Stearns told the Recorder. “It would push everything back onto the property tax, which bears too much of a burden now. … Local government is bare bones.”
Of the nine states without an income tax, four or five have “strategic assets” to help compensate, Widmer said, such as heavy tourism in Florida, oil revenues in Alaska, gas and oil revenues in Texas, mineral revenues in Wyoming, and gaming in Nevada. New Hampshire, meanwhile, has the third highest property tax in the country, and Washington State has the nation’s highest sales tax, along with high service taxes and high local taxes. Tennessee has the nation’s second highest sales tax, he said.
Of the 45 states with a sales tax, Massachusetts has the lowest, according to Widmer.
The independent, nonpartisan Massachusetts Taxpayers Foundation plans to release its final Question 1 analysis later in the month.
The local No on One organizing team held a rally on the City Hall steps in Northampton on Sept. 17.
Northampton Mayor Mary Clare Higgins called the income tax question “a reckless proposal that will have severe and immediate consequences for all of us … driving up local property taxes and leading to drastic cuts in services.”
“Our communities will suffer sweeping education cuts, steep reductions in public safety personnel, and further deterioration of roads and bridges,” she said. “Times are hard enough. Let’s not make them worse.”
Linda Dunlavy, executive director of the Franklin Regional Council of Governments, told the county’s selectmen that lower- and middle-income residents would bear the brunt of the effects of Question 1 because the income tax is progressive, unlike other taxes that might have to be raised to replace the lost revenue.
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Local Aid and Finance Local leaders speak out on Question 1
Local leaders speak out on Question 1
Municipal leaders across the state are talking about the potentially devastating impact that a repeal of the state income tax could have on municipal governments.
If approved by voters statewide on Nov. 4, Question 1 would halve the state income tax rate on Jan. 1, 2009 – from 5.3 percent to 2.65 percent – and eliminate it on Jan. 1, 2010, resulting in a 40 percent cut in state revenues.
A similar proposal in 2002 – also sponsored by Libertarian Carla Howell and the Committee for Small Government – gained 45 percent of the vote statewide.
Voter approval of this year’s ballot proposal would push the state into a deep fiscal crisis and could slice local aid by more than $3 billion statewide, according to an MMA analysis released last month.
Westwood Town Administrator Michael Jaillet told the Walpole Times that the elimination of the state income tax “would be devastating on all local communities,” especially as communities already face escalating energy and health insurance costs.
Walpole Town Administrator Michael Boynton told the Times that his town could lose $8 million in local aid, citing an analysis prepared by the MMA. Last year the town received $11 million from sources such as Chapter 70 and Lottery proceeds, Boynton said.
“I don’t believe any department would be spared the effects of such a massive cut,” he said. “That’s just mind-boggling to contemplate.”
Boynton believes Question 1 arises from voter frustration with governmental operations “primarily at the state level” and not the local level.
“You can understand that people get frustrated,” he said, but media reports about state spending “are not indicative of what happens here in Walpole at the local level.”
Jaillet said local leaders “always have to be sympathetic” to voter concern about whether taxes are being spent responsibly. He pointed out, however, that Proposition 2 ½ already forces town governments to be “efficient, thoughtful and creative.” He said repealing the income tax would be “like taking an ax to things when (they) only need a little trimming.”
Boynton said it would be “irresponsible” to not do his best to provide as much information as possible about the potential local impact of Question 1.
The Franklin County Selectmen’s Association recently voted overwhelmingly to oppose Question 1. The vote followed a presentation by Massachusetts Taxpayers Foundation President Michael Widmer, who discussed a financial analysis of the proposal and warned local leaders of possible cuts of 40 percent or more in local aid accounts.
He said local aid cuts could even reach 50 to 60 percent, due to state obligations for debt payments, the Massachusetts Bay Transportation Authority, and the school building assistance program, according to the Greenfield Recorder.
“It would be devastating to the towns,” Northfield Finance Committee Chair Lois Stearns told the Recorder. “It would push everything back onto the property tax, which bears too much of a burden now. … Local government is bare bones.”
Of the nine states without an income tax, four or five have “strategic assets” to help compensate, Widmer said, such as heavy tourism in Florida, oil revenues in Alaska, gas and oil revenues in Texas, mineral revenues in Wyoming, and gaming in Nevada. New Hampshire, meanwhile, has the third highest property tax in the country, and Washington State has the nation’s highest sales tax, along with high service taxes and high local taxes. Tennessee has the nation’s second highest sales tax, he said.
Of the 45 states with a sales tax, Massachusetts has the lowest, according to Widmer.
The independent, nonpartisan Massachusetts Taxpayers Foundation plans to release its final Question 1 analysis later in the month.
The local No on One organizing team held a rally on the City Hall steps in Northampton on Sept. 17.
Northampton Mayor Mary Clare Higgins called the income tax question “a reckless proposal that will have severe and immediate consequences for all of us … driving up local property taxes and leading to drastic cuts in services.”
“Our communities will suffer sweeping education cuts, steep reductions in public safety personnel, and further deterioration of roads and bridges,” she said. “Times are hard enough. Let’s not make them worse.”
Linda Dunlavy, executive director of the Franklin Regional Council of Governments, told the county’s selectmen that lower- and middle-income residents would bear the brunt of the effects of Question 1 because the income tax is progressive, unlike other taxes that might have to be raised to replace the lost revenue.
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Written by MMA Senior Legislative Analyst Tom Philbin
