Editorial: Revenue options for cities, towns
Editors: MetroWest reference in 3rd graph can be changed to Mass.
As each year's municipal budget exercise makes more clear, the ever-increasing reliance on property taxes to provide services for Massachusetts cities and towns demands major surgery. Gov. Deval Patrick instead proposed a set of Band-aids, and even those have faced tough sledding in the state Legislature.
There are several components to Patrick's plan, and since they are being taken up separately, they face different fates in the Legislature:
- The House last week approved a bill allowing cities and towns to have employee health benefits handled through the Group Insurance Commission, which manages health insurance for state employees. Between fiscal 2001 and 2006, the GIC held state health insurances increases to nearly 48 percent, while MetroWest towns faced increases from 75 percent to 280 percent.
- Our only concern is that Patrick's bill requires local unions to approve of the switch by a vote of 70 percent. We'd prefer an easier path to implementation, but at the very least, the Senate should add its approval.
- The House is moving toward enacting Patrick's bill requiring under-performing municipal retirement funds be managed through the state pension board, which has racked up consistently better returns than many city and town boards. We wish this provision applied to more local boards, some of which are resisting even this justified impingement on their turf, but it is still worth enacting.
- Cities and towns would stand to gain $78 million from the only one of Patrick's corporate tax ``loophole'' closings still alive. The century-old exemption of some telecommunications companies from local property taxes is neither fair nor justifiable, and should be repealed. There has been some talk of a deal, taking away the loophole for its chief beneficiary, Verizon, but passing legislation pushed by Verizon to set up a statewide process for cable TV franchises. Since we remain unconvinced that any harm would come from making cable franchise agreements uniform statewide, it's a trade we'd gladly accept.
- A local option tax on meals and hotels could raise as much as $250 million for cities and towns, though, as with the other proposals, some communities would benefit far more than others. But there is great resistance, especially from House Speaker Sal DiMasi, whose North End district is heavy with tax-averse restaurateurs.
Making the tax hikes a local option should make the vote less of a risk for state legislators who daily toil in fear that someone will blame them for raising taxes. For years, they have pretended skyrocketing property tax rates were someone else's responsibility. But property taxes always go up when state aid goes down, and the Legislature's failure to provide alternate means for raising municipal revenue only exacerbate the problem.
Even if approved, Patrick's proposals will, at best, allow some municipalities to put the brakes on property tax increases. If the Legislature denies even this modest relief, it will have done nothing about property taxes except to force them to go ever higher.