revenue reform

The things that make Massachusetts a great place to live - good schools, clean water, safe streets - are only possible due to our shared, ongoing support. Unfortunately, a decade of tax cuts and subsequent years of declining revenue have left Massachusetts with a multi-billion dollar structural deficit – forcing our elected officials to make difficult decisions in order to balance our budget. The well-being of our communities depends on us. It is time to decide whether we want more cuts or more revenue!

In Yawu Miller’s blog, “Bad Breaks,” NoPolitician rightfully said:

“I think we owe it to the governor to, when people complain about cuts or taxes, to make them tell us what they would do instead. For example, if you don't like the candy/soda tax, then tell us what you would get rid of to save the $61.6 million that will be lost by eliminating it.”

Based on NoPolitician comment, I would like to share some talking points that the team at ONE Massachusetts put together that can be used when calling or meeting your state representative or state senator.

These talking points are prospective revenue proposals that would promote a more adequate tax system in Massachusetts that minimize cuts and increase funding for our programs and public structures. We, as a community, can not afford to lose more funding for our programs.

Urge your state representative and state senator to take a balanced approach to filling the budget gap by drawing on federal stimulus funds, wise use of rainy day funds, judicious cuts and closing costly tax loopholes:

This week parents with toddlers protested planned cuts in services, fee hikes at the State House. Last week the Environmental League of Massachusetts released a report that highlights the deep environmental spending cuts that have taken place in Massachusetts. While in the Environmental League of Massachusetts report environmental officials said that they understand that the current state fiscal crisis has forced spending cuts, both advocacy organizations evaded the tough question that legislators are facing today: cut these programs further, take money away from other programs to fund them or raise new revenues.  

“A healthy environment is the result of decisions we make together through our government through different policies, initiatives and decisions that keep our water clean and protect our green spaces.”

“Young children thrive when we support policies that create a network of support to help their families overcome their childrens’ health challenges.”

While everyone would agree with the above statements and would support funding these government initiatives, we cannot lose sight of the fact that there are many other worthy programs in our state that also contribute to the overall health of our community. In fact the State House corridors are packed everyday with hundred of single issue advocates lobbying for their worthy programs to be protected from cuts.

The public debate about these programs should not based on whether a program is more important than another one or which one is getting cut the most but on how we all as a community decide how to support all these structures by providing them with the necessary funding to keep them functioning and servicing our communities.

In good economic times we have cut taxes in the state to bring money back into “people’s pockets”. In bad economic times, we cut taxes to “re-active the economy and create jobs”. We can not have it both ways and expect to have the same level of services and programs.

We need to continue our one issue advocacy but add a revenue message to protect the entire range of important programs that we value in our communities.

As we look at the status of the Massachusetts budget, it is easy to forget that we are not alone in making some very important decisions about our state and our communities.

Not only can we learn from the consequences of our own state's historic budget and revenue decisions, we can learn from other states working through the same issues!

Sunday's Minneapolis-St. Paul Star Tribune Op-Ed, "The case for paying higher taxes, happily," laid out a scenario that was all too familiar - a state facing a structural deficit, another round of budget cuts, and advocates calling for even more tax cuts for big businesses. The authors, though push back, calling for a more balanced look at the effect of tax cuts:

What's good for General Mills usually is good for Minnesota. And despite the state's gigantic revenue shortage, some proposals at the Capitol to give further tax cuts and credits to businesses deserve a serious look.

But the assumption that more tax cuts are the only way to strengthen the state's economy is just plain wrong. It misses the truth on the flip side: What's good for the public also is vital for business in the long run.

The letter lays out a list of the ways those tax dollars would get spent that benefit large and small businesses as they do individuals throughout the state:

• ...Courts and the rule of law are essential not just for public safety but also for conflict resolution and contract enforcement for businesses.
• Delays and deteriorating roads -- due to the state's fast-growing congestion and crumbling transportation infrastructure -- build higher costs into the prices of products produced or sold here.
• Our public schools are being forced, in effect, to loan money to state government. Students at Minnesota's two-year colleges pay the third-highest tuition and fees of all 50 states. And Minnesota faces a growing achievement gap between white and nonwhite, and between affluent and poor households. These trends represent an erosion of Minnesota's educational advantage, the bedrock of our economic success.
  

The wellbeing of communities across the Commonwealth relies on our capacity to work together through our government to continue building and supporting our public structures that provide quality education, public health, stable legal systems, safe recreation, clean water, and much more. We work through our government to protect these services when we elect our representatives, become civically engaged in our communities, and pay our taxes.

In a Globe article dated February 14th, Jennifer Fenn Lefferts reported how Concord is considering creative ways to reform its revenues to make its tax system more equitable. With an average property tax bill of $10,128, Concord has had trouble retaining lower-income and elderly residents and working farms.

The proposal calls for lowering the property tax and imposing a 2 percent tax on income. This means that each person would contribute a more equitable share of his or her income to the local community, making the overall local tax system more progressive.

Some other cities and states in the country, including New York City, allow the implementation of local income taxes. The Massachusetts Legislature would have to amend the state constitution to allow cities and towns in the state to implement and collect this new source of revenue.

It is interesting to note that Concord is considering a progressive local tax proposal at a time when some elected officials say there is no interest for more taxes. In addition to statewide revenue reforms, like the five previous ballot attempts to build a more progressive tax structure, maybe it is time to help communities like Concord create a tax system that sufficiently funds the needs, programs, and structures we all value and rely on in our own communities. Through these local initiatives we can demonstrate to our elected officials that our state as a whole needs real solutions to address our budget gap and the lack of resources needed to maintain and rebuild our public structures.

Why We're Part of People First

By ONE Massachsuetts Guest Blogger Al Norman

The Mass Home Care Association represents 30 agencies whose mission it is to keep elders and individuals with disabilities living in the community, at their highest level of functioning. More than 55,000 people a month count on home care help to live independently. It is their civil right to avoid unjustifiable segregation in an institution.

The “People First” campaign is all about addressing the needs of these vulnerable people—first. The state budget is the expression of what our state Constitution refers to as a “social compact” to ensure all individuals with “the power of enjoying, in safety and tranquility, their natural rights and the blessings of life.”

The needs of our people to be safely housed, fed, and cared for is not diminished in a recession. In fact, it gets worse, as more people become eligible for public programs. The fortunes of the low-income do not rise and fall with the stock market. Government looks after these people because the Marketplace will not.  Greed in the Marketplace—not the need of our people--caused a precipitous drop in revenues to sustain our social compact. Despite these hard fiscal times, there are still people and corporations in this state who are doing very well financially. We need to turn to those who have, to help those who have not. [Keep Reading...]

As our community leaders and advocates look through the dramatic cuts being made to all manner of state structures and programs, we thought it would be good to look at one of our many success stories. This is just one example of a victory we can achieve if we work together to give it the proper support:

Drop in Smoking RatesState coverage for cessation programs hailed
Lower income Massachusetts smokers have dramatically abandoned their habit amid a major state campaign that vigorously promotes and pays for tobacco addiction treatment, according to a report scheduled to be released this morning.

Smoking rates among the poor plummeted 26 percent in the first two years of the ongoing state program, a striking result that is already drawing national attention to the effort. Officials targeted a population that historically had the highest smoking rates in Massachusetts. [Full Globe Article]

Although the study shows great success, including decreases in smoking-related health issues like  asthma and heart attacks - funding for Massachusetts smoking prevention and cessation programs has been decreased by budget and 9C cuts from over $12 Million spent in FY2009 to $4.5 Million for FY2010. [Funding Details]

For centuries, our state and local governments have been responsible to our communities for the creation and upkeep of our public structures. This has made us a competitive state, across our region and our nation.

Now, the combined effects of an era of tax cuts in Massachusetts and a suffering federal fiscal climate are limiting our ability to fulfill those responsibilities, and to ensure a healthy, vibrant state to all who live here.

This challenging time calls for wise and thoughtful measures. Our Governor, Legislature, and local governments have a difficult set of decisions to make in order to support our public structures. Just this weekend, a state sales tax increase went into effect, and a new set of revenue reforms - both increases and cuts - are already being discussed for the fall.

It is time that we, as a community, have some serious conversations about we value in our communities and how we should pay for it as ONE Massachusetts. If you have ideas about our best options as a state, and are interested in having a statewide discussion, please contact ONE Massachusetts today!

[Below the Fold: Revenue Reform Options]

We have all been learning a lot about our state budget recently. For one thing, like other U.S. States (but unlike our Federal government), Massachusetts is not allowed to run a run state deficit. This means we must raise additional revenues, make cuts, or do a combination of the two.

But we’re not alone in this process.

NPR aired an interesting piece a couple of weeks back on the revenue reforms taking place across out country, based on more detailed research by the National Conference of State Legislatures.

A few examples include:

• Connecticut - Lawmakers have proposed the institution of a graduated personal income tax
• Florida - Senate Finance Committee passed legislation what would repeal numerous sales tax exemptions, including the partial (50%) exemption for materials, tools, fuel, machinery and equipment used in manufacturing tangible personal property
• Illinois - Governor has proposed increasing the corporate income tax rate to 7.2% from 4.8%.
  

Lessons Learned from Question 1

One week ago, voters across the Commonwealth of Massachusetts voted overwhelmingly to preserve our schools and youth programs. They voted to safeguard our emergency and safety structures. They voted to protect our elderly parents and our sick neighbors.

Our neighbors voted against Question 1 - the repeal of our state income tax - in the face of a national economic downturn, while our country and state faced job losses, and amid a presidential campaign that witnessed both parties promising tax cuts to the middle class.

They voted 'no' because voters understand the direct connection between the health of our communities and the revenues that we use to support their public structures.

We all saw community activists working in a network across the state, having conversations with voters in neighborhood action groups, chambers of commerce, public and private employee unions, local town hall meetings, and nonprofit membership meetings. We began to learn what messages worked and what messages didn't work in different communities.

The ONE Massachusetts Network is about to begin a statewide debriefing project to learn more from our communities and organizational members:

Which public structures do you rely and place value on, and where do those structures need improvement?
What sort of changes need to be made to restore your faith that an increase in taxes would be spent wisely and collected fairly?

ONE Massachusetts' job is not to craft the content of a tax reform package, but to help our network of statewide and community-based organizations to develop a membership education program around tax and budget policy, and to empower them to participate in the upcoming public debate by declaring that their communities understand the need for additional revenues - as long as they are fairly collected and effectively used.

[Continued: Next Steps & Insider Budget Briefing Special Guests!]