Friday, October 26, 2007
Regional officials seek new funding sources
Despite a rich menu of possible discussion topics, including affordable housing, school resources, transportation, the Community Preservation Act and tax reform, at the October 22 breakfast meeting of the Minuteman Advisory Group on Interlocal Coordination (MAGIC) legislators and local officials were repeatedly drawn to the problem of funding these and other governmental activities.
At the Monday morning meeting in Bedford, there was solid agreement between area legislators and town representatives both in defining the issues that need attention and in isolating the funding mechanisms critical for meeting those needs.
Richard Canale, a planner from Lexington, summed up the situation facing area towns: "Our reliance is on real estate taxes; until we look at enhancing revenues from other sources we won't get relief from the real estate tax." Another source of revenue discussed was a gas tax that could contribute to the state's transportation maintenance needs. Infrastructure maintenance estimates range up to $19 billion dollars, according to the transportation finance committee report.
Sarah Mattes spoke of the magnitude of the funding deficit. That magnitude is emphasized by Metropolitan Planning Office member Gordon Feltman's statement that a proposed increase in the gas tax would "merely replace money we have lost to inflation." He added that it will take 50 years to meet transportation needs if funds are based on the currently proposed taxes.
Tom Conroy, a representative from the 13th Massachusetts District, said Massachusetts "shouldn't expect much in transportation [funds from the federal government] in the next decade," because of the enormous amount of federal dollars recently invested in the Boston Big Dig project.
A sales tax is, apart from the property tax, a main source of government funding and the one endorsed by the Massachusetts Taxpayers' Association. This is the mechanism used by most other states. The yields can be large: a one penny increase in the sales tax, would yield $800 million dollars annually, according to one estimate.
Cutting government services was mentioned, but the consensus was that because of the size of the shortfall, cuts alone would not provide a solution.
The vigorous discussion of funding needs and alternatives concluded with an impromptu straw vote suggested by Representative Cory Atkins, who asked for a show of hands in favor of a gas tax and a separate hand vote for a sales tax. The result was overwhelmingly, if not unanimously, in favor of both.
Governor Deval Patrick's proposal for casinos as a revenue source was essentially dismissed by the MAGIC group as "a major distraction" in an effort to address major infrastructure needs. State Representative Jay Kaufman, from Lexington, said casinos are "awfully tempting; it will take us a while to learn to say no". The consensus was that casinos do not address the basic issue, which is tax reform. State Senator Susan Fargo said the casino issue will have to come off the table before serious change in the tax structure can be effected; she also said she thought that no casino legislation would occur before the first of the year.
State CPA funding
Participants discussed a legislative effort underway to revise the Community Preservation Act, under which the state provides matching grants to communities that raise money through a real estate tax surcharge for the purposes of open space or historical preservation or for the creation of affordable housing or public recreation facilities.
State Senator Pam Resor expressed concern that state matching grants from CPA will decrease, partially because more towns are participating, increasing demand for CPA funding. Another reason mentioned is because as housing sales have decreased there is less money going into the state fund that is shared among the towns. Carlisle Selectman Doug Stevenson asked about the number of new towns in CPA this year and found there were about 15 new towns, and this year's 100% reimbursement rate is expected to drop in the future to the range of 40%-50%. (See related article, page 1.)
MAGIC involves a subregion of the Metropolitan Area Plannning Committee (MAPC) and includes the municipalities of Acton, Bedford, Bolton, Boxborough, Carlisle, Concord, Hudson, Lexington, Lincoln, Littleton, Maynard, Stow,and Sudbury. MAPC is the regional planning agency for 101 towns and cities in the Boston area.
The proposed legislation would allow hotel and meals tax revenue to be counted along with the amount collected by the CPA surcharge towards determining the size of a community's state matching grant. This change would be expected to benefit large urban areas and lower the amount available for suburban and rural towns. Another change proposed would set up alternative funding for the state grants to peg the minimum matching grant rate at 75%.
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