Tag Archives: Proposition 2½

Learning Massachusetts’ Lessons

6 Feb
Massachusetts coat of arms.png

We Could Learn a Thing or Two

This is an extraordinarily significant article. Massachusetts, a Northeast liberal bastion if ever there was one, taxes its people far, far less than New York. The Buffalo News’ Tom Precious likens the commonwealth’s Proposition 2 1/2 to Cuomo’s current tax-cap proposal.

How has that shaken things out in the 30 years since Massachusetts property taxes have been limited in growth?

“I can’t remember the last time I talked about anyone’s property taxes,” said Carl Bradford, a retired financial planner whose large colonial home sits a couple miles from the New York border. His property tax bill is at least a third less than that of a comparable home across the border.

Bradford looked a bit confused when asked if property taxes ever made him think about retiring elsewhere.

“It’s never occurred to me,” Bradford said as he cleaned snow off a neighbor’s car one recent day.

His house in western Massachusetts — a mostly rural area but a cultural mecca, especially in the summertime — is worth nearly $600,000. His tax bill is about $4,500.

Just 45 minutes away, in the Albany suburbs, the owner of a house worth half as much is likely to pay nearly twice as much in property taxes.

We can talk about our culturals, preservation of old buildings, and a sense of place all day and night, but the bottom line is that people won’t come here, participate in our economy, and enable us to do all of those wonderful things until and unless the political and taxation climate in New York is fundamentally altered.  Luckily, we’ve just elected a governor who not only promised to do that, but is actually doing so, and has the political capital to get it accomplished.

But how has Massachusetts compensated?  Have services been reduced to something resembling Alabama or New Hampshire?  Do they have a high sales tax?  Nope. They changed their culture.  They adapted.  They learned.

Critics say it reduced services, especially in the early years, in such areas as public education before the state stepped in during the early 1990s with more money for school districts.

But Massachusetts also has undergone a tax attitude change.

Soon after the limit was imposed, more fire agencies and schools merged. Some villages got rid of their local police departments. By the end of the 1990s, county governments — which cannot impose their own separate sales tax — were all but abolished, except for providing a few services such as running jails. Unlike New York, where property owners can receive separate bills for county, municipal and school taxes, Massachusetts residents receive a single bill.

The limit has affected other taxation.

In 1980, Massachusetts had the nation’s second highest state and local tax burden, only slightly behind New York.

By 2008, Massachusetts was number 23 — at $3,600 per capita.

By comparison, New York, at $4,850 per capita, ranked second and was waging a pitched battle against New Jersey for first place, according to U.S. Census data compiled by the Tax Foundation.

New York has the sixth highest sales taxes, while Massachusetts is number 31.

Let’s learn from others’ successes, not repeat our own failure.