Joint Committee on Revenue meeting report

The legislature's Joint Committee in Revenue was in Fall River on a listening tour last night. I attended the meeting at the UMass Dartmouth Advanced Technology Center along with about 25 others. Representative Rodrigues of Westport hosted the meeting. Representative Kaufman, Senator Downing, and Representative Barrows of the Joint Committee were there as well as Representative D'Amico.
The topic of the evening was property taxes but the Joint Committee allowed comments about any aspect of taxation.
Daphne Kenyon of the Lincoln Institute of Land Policy gave a presentation and took questions on property tax in Massachusetts in comparison to other states. Her data showed that Massachusetts property taxes are above the national average as a percentage of income but were the lowest in New England. She pointed out that all New England states have, so called, property tax circuit breaker laws that allow reductions for those whose payments exceed a certain percentage of their total household income. Only Massachusetts limits this tax break to those over 65 years old. Ms. Kenyon noted that the system in other states was more equitable as the age of the taxpayer is not considered. The representatives in attendance estimated that the current Massachusetts property tax circuit breaker costs about $30 million and that opening it up to all property tax payers would cost an additional $30 million. Ms. Kenyon noted that only about half those who are eligible typically apply for the relief.
Senator Downing then gave a presentation on the major sources of revenue and the major expenditures of the state and on the goals for tax policy. The Committee called upon and listened to comments from everyone in attendance if they chose to speak.
A majority of those in attendance were from the Coalition for Social Justice and spoke in favor of returning the income tax to 5.9% in order to bolster state revenue. The arguments were that the income tax was the most equitable, somewhat more stable than sales, excise or capital gains taxes, and that the state was failing to meet the needs of the citizens. Another suggestion was to increase the personal exemption to shift the tax burden away from low wage earners. The consensus of the legislators was that about $1 billion could be raised by a return to 5.9% rate.
When I spoke to the committee, I asked the Committee to consider different tax rates for commercial and industrial properties within the tax classification system. Currently, different rates are allowed between residential and commercial properties but not between different types of commercial properties. For instance, Walmart and CV Variety pay the same commercial property tax rate. I asked if the law could be changed to accommodate different rates within the commercial category although I haven't come up with a mechanism for differentiating the categories.
I also advocated for state tax increases (I prefer the income tax) so that towns are not burdened with increased costs and/or decreased revenues passed down from the Commonwealth. For example, the Commonwealth has discontinued payment for Quinn bill incentives to police officers. The town is left to pick up the state share. The Commonwealth has cut ...

... Chapter 70 school aid and other local aid. The municipalities have no means to increase their revenues in order to meet the added financial burdens even while the Commonwealth mandates our spending for schools, veterans and other expenses. Some small relief was provided by the meals and hotel local option taxes this year, but the property tax levy remains the main source of municipal revenue. Proposition 2-1/2 limits the ability of towns to increase the property tax, so in many cases the only alternative for towns is to cut services.
Mr. Roland Hebert of Southeastern Regional Planning and Economic Development District (SRPEDD) advocated for new fees for regional rail projects in the state, including the commuter rail line from Fall River and New Bedford to Boston. He proposed a greenhouse gas emission tax on motor vehicles to provide the necessary funds. Motor vehicles would be assessed a fee, based on their size and class, when they register with the RMV. The fee revenue could be used to build and maintain public transportation alternatives throughout the Commonwealth according to the information provided by Mr Hebert.
Mr. Yawu Miller of One Massachusetts added his voice to those calling for increased revenue via a return to the 5.9% rate and endorsed a higher personal exemption on the income tax.
Fall River city councilor and mayoral candidate, Ms. Cathy Ann Viveiros asked the legislators to provide tax incentives for market rate housing in urban areas. She noted that Fall River valuations are stagnant or falling and the city's valuations are among the lowest in the Commonwealth.