Issues Paper prepared for the 1EM
First Essex/Middlesex Democratic Coalition
www.massdems1EM.org
August 24, 2006
Fair Taxation Talking Points—Prepared by Elizabeth Kilcoyne, Ipswich
Rolling back the state income tax from 5.3% to 5% would cost the Commonwealth $700m annually. Where would these funds be cut? Probably from Local Aid. How will these funds be replaced? Probably through increases in local property taxes.
There was no growth in Local Aid in the Commonwealth from 2002 to 2006. In 2007 the increase is $400m statewide. The following dollars have not been adjusted for inflation.
Statewide Local Aid (Cherry Sheet)
2002- $4.2b
2006- $4.2b
2007- $4.6b
1EM Local Aid (Cherry Sheet)
2002 2006 2007
Boxford $2.5m $2.1m $2.3m
Essex* $ 350k $314k $341k
Georgetown $4.2m $4.6m $5.5m
Gloucester $12.3m $10.8m $11.3m
Groveland* $783k $777k $1.0m
Hamilton* $830k $833k $1.0m
Ipswich $4.9m $4.8m $5.2m
Manchester* $334k $296k $333k
Middleton* $1.7m $1.7m $2.1m
Newbury* $616k $605k $805k
North Andover $7.5m $6.8m $7.7m
North Reading $5.6m $6.1m $7.4m
Rockport $2.0m $2.1m $2.4m
Rowley* $696k $655k $784k
Wenham* $565k $517k $573k
West Newbury* $361k $351k $455k
Wilmington $7.6m $6.5m $8.2m
*Regional School District—no Chapter 70 funds
In all cases, School Construction funds have been subtracted from 2002 because they do not appear on the 2006 or 2007 Cherry Sheets.
For more details, go to: (http://www.dls.state.ma.us/CHERRY/index.htm)
Each community Assessor’s Office has the average annual tax for a single-family residence. A phone call can retrieve these numbers. Statewide, property taxes have 1 increased by 35% since 2001. The average annual tax for single-family residence is quoted below for those communities that were reached:
2002 2006
Essex $3,536 $4,899
Gloucester $3,646 $4,367
Ipswich $3,085 $4,258
Middleton $3,969 $4,905
Newbury $3,653 $4,679
Rockport $3,661 $4,325
Rowley $3,314 $4,110
Wenham $5,689 $7,099
Wilmington $2,865 $3,657
We are relying more and more on local property tax, which has been rising yearly w/o regard to people’s ability to pay. Housing assessments have been rising while the elderly and others on fixed incomes struggle to pay increases. People who are working are better able to pay the state income tax.
The School Building Assistance program froze new requests this spring. They couldn’t fund the programs already in the queue.
FEES are TAXES too! The current administration says it has not increased taxes, but in 2003 the state increased hundreds of fees, making it more expensive to get a driver's license, to marry, or to buy a house. These increases equaled $260 million (MA Budget & Policy Center, October 2005).
MA state and local taxes are 28th out of the 50 states. This is a combination of sales tax which is 5% and 43rd in the country, property tax which is ranked 7th and state income tax at 5.3% which is on the low side. There is no ranking for state income tax because some states like MA have a flat rate and many others have a graduated tax.
Education Talking Points—Prepared by Pat Skibbee, West Newbury
Massachusetts’ greatest asset may be our educated population. Many people come here to attend our excellent private and public colleges and universities, and they stay. Therefore, companies for whom an educated workforce is essential, have located here and contributed tax revenue, jobs, economic viability, and quality of life to our state. Our current challenge is to maintain the high quality education system that supports this reputation.
We have one of the lower state income taxes (5.3%) in the country, and one of the highest(7th in the country) in property taxes. Because our local public schools are funded chiefly through property taxes, the burden on the local towns and local taxpayers is higher here than in many other states. Massachusetts does contribute to local public 2 school, mostly through what is called Chapter 70 funding. The amount of this funding is determined via an extremely complicated formula by the state Department of Education. Sometimes the date a district regionalized is a large factor in determining state funding, rather then simply need or per pupil costs. The formula needs to be replaced by a totally transparent one immediately.
Massachusetts ranks near the bottom for state funding for state colleges and universities, including community colleges. This has become more of a concern as private college costs are so high that those schools are out of the financial reach of many families with first-generation college attendees, and for whom public colleges represent the most important and accessible avenue to success in our state. In 2002 and 2005 Massachusetts ranked 48th in spending in support of public higher education as percent of personal income, and 45th as amount per capita spent funding public colleges. Making and keeping public higher education opportunities competitive with other states is vital in creating and retaining an educated population and workforce in Massachusetts.
State mandated Special Needs (SPED) education in Massachusetts has been an area of concern in recent years, because an average of 15% of the student body has been classified as SPED, therefore requiring special services and increasing school budgets. Many people feel that the state should share much more in the often huge budget increases necessary to serve the SPED population.
Very recently, the escalating cost of fuel has put more strain on city’s and town’s school budgets: transportation costs have increased due the increase in gasoline prices, and heating and cooling bills at schools have increased sharply. Also, the cost of health care insurance has increased dramatically in recent years.
All these costs are borne chiefly by the property taxpayers in cities and towns. Many people feel that the state should contribute much more to the support of public education, as is the case in many other states.
One issue that has arisen because of current difficulty in funding public education is the introducetion of user fees for students participating in sports and other extra curricular activities. These can be as high as $300-$700 depending on the sport or activity. Some towns cap a family’s fees at $1,000. In some school districts, students now have to pay to ride the school bus.
It seems clear that, in Massachusetts, our public education system is in a funding crisis. If the income tax is lowered, this would probably further erode the ability of the state to help to fund public schools. A new, fairer system of state funding for schools that alleviates some of the tax burden on property owners is needed.
The Commonwealth requires the education of the people as the safeguard of order and liberty. Inscription on the Boston Public Library
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Jobs Talking Points
The number of jobs remains 150,000 below the 2001 peak (Mass Taxpayers Foundation). Massachusetts must match the efforts of other states to recruit and retain businesses. According to our Secretary of Economic Affairs, North Carolina has more economic development analysts contacting MA companies to recruit them south than Massachusetts has following up with our companies to keep them here! We are just not competing.
Less reliance on property taxes would be another step in recruiting and retaining companies and their employees. Maintaining our infrastructure would also attract and retain more business. “Talk” by the current administration has provided few results.
Environmental Talking Points—Prepared by MaryJane Morrin, Middleton
Background
Among the many responsibilities entrusted to the Executive Office of Environmental Affairs are:
_ assuring the safety of the air we breathe and the water we drink
_ maintaining the parks and forests that nurture our spirits
_ and certifying the safety of the dams that protect us.
Facts
In spite of these tremendous responsibilities,
_ Massachusetts spends only 0.78% (about ¾ of 1%) of its budget on the environment.
_ Adjusted for inflation, Massachusetts is currently spending 28% less on the environment than it did in 2001.
_ In 2003, Massachusetts ranked 49th in the nation in per capita environmental spending.[1]
_ In 2005, Governing magazine ranked Massachusetts last in the nation for its spending on parks and recreation. In November 2005, newly appointed Department of Conservation and Recreation (DCR) Commissioner Stephen Burrington quipped to the Globe that he was the proud owner of a half-million-acre fixer upper! [2]
But not all numbers are falling. My local Conservation Agent tells me that the filing permit that cost $13 in 2001 will now cost $75! And the time it will take to process the permit is also increasing.
Consequences
A few examples:
_ One of the many DRC responsibilities is direct management of 338 dams and regulation of 2,966 other public and private dams. For this daunting task DCR has only three assigned staff members. Last October’s near collapse of the 173-year-old Whitenton Pond Dam in Taunton has prompted the legislature to allocate $1,045,000 for the Office of Dam Safety up from last year’s allocation of $0.00!
 | Since 2003, DCR has lost 13% of its workforce. This has resulted in state parks being understaffed and under maintained, which makes them subject to vandalism and brush fires.[3] |
| Since 2003, the Hazardous Waste Clean-up program has suffered a 21% budget cut, forcing DEP to limit its activities to reacting to problems rather than actively seeking out hazardous waste sites. DEP cannot offer adequate technical support to cities and towns, who must now rely on the private sector for assurances that their activities are not polluting the environment with toxic materials.1 |
According to the Centers for Disease Control and Prevention, 9.5 percent of Massachusetts adults reported that they suffered from asthma, more than 2 percent above the national average.[4]
(Ask your health or conservation agent or a local environmental activist for some specific examples of something in your own town that is not going right or shouldn't have happened because of a lack of state services, funding etc.)
Conclusions
Finally, two events come to mind which sum up the attitude of our Republican administrations toward environmental concerns.
Soon after entering office in 2003, Governor Romney stood in front of TV cameras and pointed across Salem Harbor to the notorious coal burning Salem Power Plant. Loudly he cried “That plant kills!” promising action without regard to the economic impact on the City of Salem.
In January of 2006, that same Governor, with no cameras rolling, abandoned the groundbreaking New England Regional Greenhouse Gas Initiative after 2½ years of negotiations. He told the Boston Globe that "New England has the highest energy rates in the country, and [the pact] would cost us more.”[5] He even went one step further, proposing the weakening of the state's 2001 regulations limiting global warming pollution from the "Filthy Five" power plants (one of which is Salem Power Plant)[6].
[1] These statistics and most of the information in this paper come from the Environmental League of Massachusetts’ 2007 Green Budget, which is available at their website, www.environmentalleague.com. If you are interested in this subject, this is a must read!
[2] Boston Globe - State Lags On Upkeep Of Parks System November 28th 2005 4
[3] Boston Globe – State Parks Need Help July 14th 2006
[4] Boston Globe Asthma worst in Bay State, study finds 16 May 2003
[5] online Grist Magazine – January 28, 2006 5
[6] Conservation Law Foundation
Health Care Talking Points & more—Prepared by Paul Nelson, Georgetown
GIVEN:
THE US SPENDS 40% MORE ON HEALTHCARE THAN OTHER INDUSTRIALIZED NATIONS AND RANKS LOWER THAN THESE COUNTRIES IN OVERALL HEALTH CARE DELIVERED – Alternatives to current structure must be considered.
Overview of Massachusetts Universal Health Care Plan:
Mass Universal Healthcare is a polyglot of health plans sponsored by private care insurers designed to cover the 550,000 uninsured. These plans must meet some minimal standards, but beyond this they are essentially what the insurer would like to sell. Individuals who have difficulty in locating a plan for their needs and income would interface with a new bureaucracy called the Health Insurance Connector. Small businesses may also use the Connector’s services to find plans for employees.
Subsidies are available for families with the subsidy dependent on family size and income. For a family of 4 the subsidy would disappear with a family income of $60,000 and up. For 300,000 very low-income families and individuals, MassHealth (Medicaid) would be expanded for those at FPL (Federal Poverty Level) and Commonwealth Care
Health Insurance Program for those above FPL.
Businesses which do not spend at least $800 per employee and have over 10 employees are required to pay $295/year/employee.
The question is whether the plans can be both affordable and comprehensive.
Positives
- Coverage is projected to be 90% of the current uninsured in Massachusetts.
- Individuals and families can plan preventative health care around their new plans.
- Plans will be subsidized for those who meet certain maximum income levels to $60,000.
- Emergency rooms will/should become just that.
- Health care delivered in a planned manner, including preventive medicine, will result in a much healthier population; ultimately saving money for both individuals and providers.
- Insurance market reforms will allow grouping of non-and small-groups as well as
leniency in extending a minor’s ability to retain family coverage.
- Federal funds shift from hospital/ER support to subsidizing health plans for those without any or inadequate coverage. 6
- Providers who have been underpaid by the Medicaid system receive “rate relief.” This should increase doctors’ participation in the Medicaid program.
- Employers can offer pre-tax benefits such as day care to their employees.
Areas of Concern – questions we should be asking
- Funding is not in place beyond the first year – what is long term plan to keep the plan solvent?
- Participation has been made mandatory without full definition of program – is this fair?
- Plans have yet to be described and costs considered by providers – how can we make a set of nebulous plans “mandatory”?
- There is a penalty to individuals (loss of state tax deduction and other penalties) who do not purchase a plan, but no onus on the providers to create decent (comprehensive) plans – why is the plan set up so “one-sided”?
- A single-payer health plan would save the 30-35% overhead that is incurred by the private suppliers (Medicare’s overhead is 3-4%). Current plan appears to have been designed by lobbyists of the health industry.
- Overall structure is very complex – why not strive to create a single-payer system?
TALKING POINTS
ü Health care in the US is not as effective as it should be.
ü Health care in the US often does not reach Americans of limited resources
ü Americans of limited resources tend to use ERs as primary healthcare source
ü Massachusetts proposed version of universal health care would cover 90% of citizens and would be in effect by July, 2007
ü This is not a single plan but a complex set of patchwork plans created to
1) enhance Medicaid – Mass Health;
2) cover the slightly more affluent - Commonwealth Care Health Insurance Program;
3) cover the rest – various plans (TBD) offered by private industry
ü Funding for program must be put on a stable basis.
ü New private insurer policies must be defined quickly enough to allow proper scrutiny.
ü A logical ‘next step’ to proposed plan would be a Single-Payer Universal Health Plan
ü There is a proposed change to the Massachusetts Constitutional which posits:
“an amendment to the state constitution that would require the
state to make sure that every Massachusetts resident can get affordable, comprehensive, and equitably-financed health insurance coverage for all medically-necessary preventive, acute, and chronic health care and mental healthcare services, prescription drugs, and devices.”
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