Wednesday, December 31, 2008

More on Raising Taxes (Give towns options!)

The Globe posted about Patrick's plans to cut another billion off the budget this year. I posted my thoughts yesterday: we can't just cut ourselves out of this mess. We live in one of the most expensive states in the country, yet pay taxes below the national average. Something's gotta give - and that's the income tax. There's a few more important points to make.
  • First, there's a reason why mid-year cuts to local aid is so nefarious. I was going to post them, but Pablo did it for me. Suffice it to say, not only does it screw over students who are taking classes when their teachers are suddenly laid off, but mid-year cuts mean way more layoffs, because you can't cut through teacher attrition (retirements or people moving on), or through cutting textbooks and supplies, money long since spent. What would be maybe 2-3 layoffs at the beginning of the year, with the same spending cuts, become 5 or 6 layoffs midway through, because now you're paying for unemployment. It's the worst kind of policy, the incredibly stupid kind.
  • It's not the state's only option. What ever happened to allowing a local option meals and hotel tax? The state can't cut local aid without giving cities and towns options. They continue to dump every problem on cities and towns and don't give them any of the tools to deal with them. If the state allowed a meals and hotel tax, many cities and towns wouldn't feel the state cuts at all. The state needs to grow up and at least do that much for cities and towns. A local option isn't that much to ask!
  • Bottom line: We went through cutting $1.4 billion of painful midyear cuts a few months ago. We can't cut another billion on top of that. The damage is too great. Raising the income tax by .3% is a no brainer: it would only cost the average worker $126/year (42k x .003), or about $5.50 a paycheck, assuming 23 paychecks a year. That creates about $900 million in new revenue. Crisis averted.


Anonymous said...

If you have followed California, the budget shortfalls have been discussed for ages. Cuts were made prior to budget approval, so for us to pretend this was a surprise might be the real stupidity.
We might also take a lesson from the solutions of California. They're doing furloughs, shortening weeks and not just laying off workers.
Rather than laying employees off and loosing their skills and experience, maybe the furloughs make more sense.
Instead of cutting teachers, close the schools for a week at a time.
Shouldn't each of the unions step up to the plate with solutions?
It's either loose jobs permanently or help us get through these tough times.

Ryan said...

Furloughs isn't a bad temporary situation - do what we can to get us by for the rest of the year. Some towns have talked about shutting down an extra day a week. That's not a bad way to save revenue, closing Fridays. Taking that to certain agencies where that could work at the state level isn't a bad idea, especially since there are some people out there (couples, people with kids, etc) who wouldn't mind only working 4 days a week, even at a reduced paycheck.

There are some interesting things to look at that can be a part of the solution, especially temporary solution. That said, at some point we need to come to realize that our current tax rate isn't and has never worked out, since Celluci got it through. We need to raise it another .2-.3% and most of our problems would go away - and that's a small enough number that very few people would even notice it were missing from their paycheck, yet they would notice massive cuts to the state budget if the state doesn't raise taxes.

Peter Porcupine said...

Ryan - will you take advantage of the checkoff box on the Form One this year and pay 5.95% in income tax?

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