I have written a lot about the budget lately. Obviously, it is the most important document we pass each year as it sets not only the spending levels for each program run in state government, but also details our collective priorities for the upcoming year. It is important we take care of the things that people rely on in the Commonwealth and it is important that we balance our budget to be fiscally responsible.
Most budget discussions center around cuts in spending and revenues. There are a few other things we should consider. First we should take this opportunity to do a top to bottom review of how we conduct business. In 1989, several of us rolled out a plan to raise taxes and cut our budget. We proposed specific ways in which we felt we could better conduct the business of government. We proposed cuts in paperwork, consolidation of services, and we proposed the elimination of 6,000 jobs. That was ten percent of the work force at the time. Today we have grown from 66,000 workers to over 100,000. We need to do the same thing as we did I 1989. This isn’t easy, nor is it politically safe. In 1989, then Representatives Bob Havern and John Bartley, and I, the three proposers of our plan were harshly criticized by conservatives for wanting to raise taxes, and from liberals for wanting to cut our work force. At the end of the day, we enacted our tax plan and cut over $600 million out of government spending.
The other area we can’t ignore is job creation. I have spent time on this before and won’t repeat those posts, but it is important that we create more jobs, and by extension, more taxpayers and more revenue.
One final thought on the sales tax that everyone seems to be migrating to as a way to raise revenues. That would not be my first choice if indeed we have to raise taxes. However, these are the two logical places to look for increases in revenues. Tax policy is incredible arcane and complex. We shouldn’t be setting tax policy in the budget as these need to be thoroughly vetted before we make an informed choice.
Back to sales versus income tax. If we were to raise money, I would look to the income tax first. There are several advantages. First, it is more progressive than a sales tax. The sales tax drives people to the internet or to other states. People may avoid making a purchase of a larger item if sales tax increases makes it more expensive, but everybody take a pay raise even if they pay more in taxes. Most importantly, the average person would pay less if we enacted a slightly larger income tax vs. sales tax. According to the Mass. Taxpayers Foundation, a two penny rise in the sales tax would cost on average $230.00/per capita/yr. It would raise $1.45b.
A rate raise from 5.3% to 5.9% would raise the same amount, $1.45b. However, it would cost the average taxpayer $185.00/per capita/yr. That is a savings of $45.00/yr for the average taxpayer for a tax that is more progressive and is deductable on your federal income tax! This just makes sense to me.
One final final note: In 1989-90, people were very angry over the budget and the tax increases. We will see this again this year. Over the past twelve months, 102,000 people have been added to the unemployment rolls. That means that 1,000,000 people are fearful they will lose their jobs and that means they don’t think they can afford more taxes. When people are nervous about their bills, families, and jobs, it is a hard time to raise their taxes. More importantly, one top of that, we are asking them to pay more for less service. If we passed an income or sales tax increase, the best case scenario is that we restore about a third of the cuts that we are facing. And that is prior to the Senate deliberations that will probably have to base a budget on one half to a billion dollars less revenue than we are basing our budget on. People will be angry and we need to demonstrate responsibility and restrain.
Saturday, April 25, 2009
Monday, April 20, 2009
2010 Budget continued
One other thought on taxes. We are stuck in an old tax system that may not work as well as it should in the best of times. Our corporate taxes have decreased as a portion of revenues over the past decade and longer. We are arguing over increasing the gas tax as we look for alternative fuels and higher cafe (mileage) standards for cars. As we urge people not to smoke, we up the cigarette tax. All of this means that we need to recognize that these sources of taxation are diminishing over time and will not be able to carry our budget needs in the future. Add the sales tax to that. We are concerned over a higher sales tax sending more people to New Hampshire, or even elsewhere as the tax advantage on other borders is diminished or wiped out. We also know that more and more is being bought and sold over the internet and we don't tax that, which is already a disadvantage to local businesses. An increase in sales tax adds to that disadvantage. There is a diminished marginal utility to raising taxes in these areas.
Our reflex reaction seems to be to increase these taxes to make up the revenue shortfall, which further exacerbates the problem; or to "close loopholes", which leads to anti-competitiveness and further devolution of our tax base. We need a complete rethinking of how we tax and what we tax to bring it in line with a new economic paradigm. We no longer make widgets like we used to in Massachusetts, yet our tax policy is geared to that rather than finding new (and fair) revenue streams in new services or technologies. These don't necessarily have to be taxes. In the Life Science Bill, we included a portion that allowed us to take an equity position in new companies that we assist as start-ups. Perhaps other innovative ideas can be explored.
We also don't account for the fact that companies are global in scale today. In fact, we inhibit this with new tax policy that gives us the opportunity to look at a multinational companies holdings as a way to increase our tax take here whether they actually do business in Massachusetts or make money here. At a tine when we are trying to increase our share of new technological companies, this is a huge inhibitor to increasing our job base in state.
Our reflex reaction seems to be to increase these taxes to make up the revenue shortfall, which further exacerbates the problem; or to "close loopholes", which leads to anti-competitiveness and further devolution of our tax base. We need a complete rethinking of how we tax and what we tax to bring it in line with a new economic paradigm. We no longer make widgets like we used to in Massachusetts, yet our tax policy is geared to that rather than finding new (and fair) revenue streams in new services or technologies. These don't necessarily have to be taxes. In the Life Science Bill, we included a portion that allowed us to take an equity position in new companies that we assist as start-ups. Perhaps other innovative ideas can be explored.
We also don't account for the fact that companies are global in scale today. In fact, we inhibit this with new tax policy that gives us the opportunity to look at a multinational companies holdings as a way to increase our tax take here whether they actually do business in Massachusetts or make money here. At a tine when we are trying to increase our share of new technological companies, this is a huge inhibitor to increasing our job base in state.
Saturday, April 18, 2009
2010 Budget
The FY 2010 budget was released this week and it is a grim document. The global recession has taken its toll on our revenues and this budget is much less than last year’s version. As a result of revenue declines, the Ways and Means Committee had a $3.6 billion deficit to cope with. They produced a budget that didn’t use any of the remaining stabilization funds nor did it increase taxes. The result was a stark budget reflective of the revenues available. Even for those who are well aware of the fiscal situation we face, seeing it in the budget document in black and white was very disheartening.
There are a lot of reactions to this. Some have praised it as an honest budget. Some have criticized it for not looking at raising revenues to fund the deficiencies created by the recession. Others have just slammed it without offering any suggestions. The truth is that there is not one answer to the budget crisis, but we need to work in a lot of different directions at one time. As one of the authors of the tax increase as well as the spending cuts in 1990, I have seen this situation before. That said, this is much worse than I have witnessed in 23 years as a state representative. This crisis is much deeper and is exacerbated by avoidance over the past decade of coming to grips with structural deficits in our state budget. We need to set aside politics as usual and work on a long term solution to this problem. It is important that we not only find a way to balance our budget this year, but we need to create a plan that will look out five or ten years to avoid this situation in the future. That is easier said than done as legislators run for office every two years and budget each year. That means that we tend to think in terms of one or two year tranches. Politics lately seems to lend itself to fixing the issues of the day rather than looking to long term solutions. That is not just found today in politics, but is a societal problem where we tend to look at instant gratification as an American right. We have instant communication on cell phones, can get credit at the cash register, and talk to anyone anywhere instantly over the internet. The world has shrunk to the point where we can go anywhere in a 24 hour period, and politicians tell us that we can painlessly avoid taxes while entertaining ourselves in order to balance our budget (casinos anyone?) .
How do we fix this problem? It is not easy and even a multiple solution approach is full of Hobson’s choices. I have learned that a lot of political decisions are made deliberatively and that means that by the time we make a decision, events narrow our decisions for us. Waiting on our problems today have lead to a lot of problems that have no easy answers. This is going to be difficult and we need to make people aware of that. In 1990, people were angry because we had to raise taxes and still cut the budget. Our constituent’s expectations were that if they had to suffer higher taxes, they would be provided with services. Yet we raised taxes and services were still cut. That led to anger and frustration. The same is true today. Look, we have a $3.6 billion deficit. We have cut health care programs, eliminated 55 line items completely, and cut discretionary local aid by 25%. In a best case scenario, we could raise one of two broad base taxes, sales or income. If we raise the sales tax by a penny, we will raise an additional $750 million. That means we still have to cut over $2.6 billion from a maintenance budget. If we were to raise the income tax by .6% to 5.9%, we would raise $1.6 billion. That means we still have to cut $2 billion! People would see higher taxes and they would still experience cuts in programs they have come to rely on.
One final note on taxes: People seem to be leaning towards a sales tax increase, should there be a tax increase. However, they should add up all the sales tax they pay in a week. I did. If we are talking about an average increase of $2.00 each week, that is $104 per year in increased sales tax in order to achieve a state budget increase in $750 million in revenues. If we were to increase the income tax by .6%, the average family in Massachusetts would see a $120 increase for the year. That’s a little more than the sales tax, but it raises an additional $1.6 billion in revenues for the Commonwealth. That is over two times as much for a very small increase over the sales tax. And the income tax is more progressive in that people in higher income brackets will pay more while a penny on the sales tax is a penny regardless of income. I fail to see the reticence with the income tax if indeed we need to raise taxes.
However, and it is a big however, there are other considerations before we raise taxes. First, we need to understand how people feel about raising taxes in a recession. We have lost over 102,000 jobs in the state over the last twelve months. (Actually, we may have lost more than that, but unemployment claims are up that amount in the last twelve months.) First, if 102,000 people have lost their jobs, then 1.2 million think their jobs are in jeopardy. That means people resist paying more taxes as they don’t think they will be able to afford an increase if they lose their jobs, and people are angry and uncertain about the future. We need to be mindful of this. Additionally, people don’t think we have cut the budget enough and feel we should “economize” before we look for more revenues. I agree, to a certain extent, although I don’t think there are huge savings, or savings enough to avoid some revenue adjustment if we are to maintain core services.
In 1990, the “three amigo” stabilization plan, as our plan came to be known, called for an increase in taxes, but also called for deep cuts in our budget. We suggested that we cut our workforce by 6,600 jobs. At the time, our workforce was approximately 66,000 employees. So we were looking at a downsizing of ten percent. More than that, we needed to find new ways to continue services with less people in a more productive manner. I am not suggesting that we cut “waste, fraud, and abuse”, as that is a catch phrase that simply is not true on any sizable scale in state government regardless of the press highlighting a few cases. I am suggesting that we find new ways to deliver services that save us money and that we examine every mid-level manager in our system. Let’s use some common sense rather than create departments for each new initiative. Again, we need to demonstrate that each dollar we raise goes to delivery of services that people need or expect from state government. Unions need to sit down and be part of the solution and they have to be reasonable over how we deliver services. And government can’t arbitrarily take benefits away such as health payments at a time when we are going to ask them to do more with less people and with no increase in pay. We need to find ways to cut our costs such as utilities and paperwork. Let’s put some common sense in delivery of services. Finally, let’s combine services such as pension and health systems. Let’s let the cities and towns do more to manage their costs with minimal interference.
One last point; there is a third course of action we have to undertake. I know that all of this is not easy. It is clear that we can’t cut our way to a balanced budget without cutting into essential services. We also can’t tax our way to solvency. We need to increase the number of people paying taxes in Massachusetts. That means we need to increase our job base as much as possible. The federal stimulus bill gives us a few years to plan for a long term economic strategy. We need to take that time to do what we can. People have said that we can’t impact the economy much on a state by state basis as we are restricted by the national and international economic trends. However, that doesn’t mean we can’t impact our economic future at all. We have programs that work very well. The technical assistance program run by the community development corporations around the state have been leveraging money at a 25-1 ratio. Recently our Banking Commissioner testified before federal officials that our $10 million investment in the capital access program has resulted in over $241 million in private investment and over $100 million in payroll taxes. I created that program in Chapter 19 of the Acts of 1993. In the same bill we created the EDIP program. That has incentivized over $7.4 billion in private investment in Massachusetts! My point is that with intelligent planning, we can create jobs and revenue in Massachusetts. I would much rather have more people paying taxes than paying more taxes individually.
None of this is easy and none is without pain. However, we have no choice but to try this approach. We are out of options at this point. We cannot be ideologues, nor can we be ostriches. We need to start today to resolve our problems in a manner that is honest, intelligent and keeps faith with our constituent’s expectations.
There are a lot of reactions to this. Some have praised it as an honest budget. Some have criticized it for not looking at raising revenues to fund the deficiencies created by the recession. Others have just slammed it without offering any suggestions. The truth is that there is not one answer to the budget crisis, but we need to work in a lot of different directions at one time. As one of the authors of the tax increase as well as the spending cuts in 1990, I have seen this situation before. That said, this is much worse than I have witnessed in 23 years as a state representative. This crisis is much deeper and is exacerbated by avoidance over the past decade of coming to grips with structural deficits in our state budget. We need to set aside politics as usual and work on a long term solution to this problem. It is important that we not only find a way to balance our budget this year, but we need to create a plan that will look out five or ten years to avoid this situation in the future. That is easier said than done as legislators run for office every two years and budget each year. That means that we tend to think in terms of one or two year tranches. Politics lately seems to lend itself to fixing the issues of the day rather than looking to long term solutions. That is not just found today in politics, but is a societal problem where we tend to look at instant gratification as an American right. We have instant communication on cell phones, can get credit at the cash register, and talk to anyone anywhere instantly over the internet. The world has shrunk to the point where we can go anywhere in a 24 hour period, and politicians tell us that we can painlessly avoid taxes while entertaining ourselves in order to balance our budget (casinos anyone?) .
How do we fix this problem? It is not easy and even a multiple solution approach is full of Hobson’s choices. I have learned that a lot of political decisions are made deliberatively and that means that by the time we make a decision, events narrow our decisions for us. Waiting on our problems today have lead to a lot of problems that have no easy answers. This is going to be difficult and we need to make people aware of that. In 1990, people were angry because we had to raise taxes and still cut the budget. Our constituent’s expectations were that if they had to suffer higher taxes, they would be provided with services. Yet we raised taxes and services were still cut. That led to anger and frustration. The same is true today. Look, we have a $3.6 billion deficit. We have cut health care programs, eliminated 55 line items completely, and cut discretionary local aid by 25%. In a best case scenario, we could raise one of two broad base taxes, sales or income. If we raise the sales tax by a penny, we will raise an additional $750 million. That means we still have to cut over $2.6 billion from a maintenance budget. If we were to raise the income tax by .6% to 5.9%, we would raise $1.6 billion. That means we still have to cut $2 billion! People would see higher taxes and they would still experience cuts in programs they have come to rely on.
One final note on taxes: People seem to be leaning towards a sales tax increase, should there be a tax increase. However, they should add up all the sales tax they pay in a week. I did. If we are talking about an average increase of $2.00 each week, that is $104 per year in increased sales tax in order to achieve a state budget increase in $750 million in revenues. If we were to increase the income tax by .6%, the average family in Massachusetts would see a $120 increase for the year. That’s a little more than the sales tax, but it raises an additional $1.6 billion in revenues for the Commonwealth. That is over two times as much for a very small increase over the sales tax. And the income tax is more progressive in that people in higher income brackets will pay more while a penny on the sales tax is a penny regardless of income. I fail to see the reticence with the income tax if indeed we need to raise taxes.
However, and it is a big however, there are other considerations before we raise taxes. First, we need to understand how people feel about raising taxes in a recession. We have lost over 102,000 jobs in the state over the last twelve months. (Actually, we may have lost more than that, but unemployment claims are up that amount in the last twelve months.) First, if 102,000 people have lost their jobs, then 1.2 million think their jobs are in jeopardy. That means people resist paying more taxes as they don’t think they will be able to afford an increase if they lose their jobs, and people are angry and uncertain about the future. We need to be mindful of this. Additionally, people don’t think we have cut the budget enough and feel we should “economize” before we look for more revenues. I agree, to a certain extent, although I don’t think there are huge savings, or savings enough to avoid some revenue adjustment if we are to maintain core services.
In 1990, the “three amigo” stabilization plan, as our plan came to be known, called for an increase in taxes, but also called for deep cuts in our budget. We suggested that we cut our workforce by 6,600 jobs. At the time, our workforce was approximately 66,000 employees. So we were looking at a downsizing of ten percent. More than that, we needed to find new ways to continue services with less people in a more productive manner. I am not suggesting that we cut “waste, fraud, and abuse”, as that is a catch phrase that simply is not true on any sizable scale in state government regardless of the press highlighting a few cases. I am suggesting that we find new ways to deliver services that save us money and that we examine every mid-level manager in our system. Let’s use some common sense rather than create departments for each new initiative. Again, we need to demonstrate that each dollar we raise goes to delivery of services that people need or expect from state government. Unions need to sit down and be part of the solution and they have to be reasonable over how we deliver services. And government can’t arbitrarily take benefits away such as health payments at a time when we are going to ask them to do more with less people and with no increase in pay. We need to find ways to cut our costs such as utilities and paperwork. Let’s put some common sense in delivery of services. Finally, let’s combine services such as pension and health systems. Let’s let the cities and towns do more to manage their costs with minimal interference.
One last point; there is a third course of action we have to undertake. I know that all of this is not easy. It is clear that we can’t cut our way to a balanced budget without cutting into essential services. We also can’t tax our way to solvency. We need to increase the number of people paying taxes in Massachusetts. That means we need to increase our job base as much as possible. The federal stimulus bill gives us a few years to plan for a long term economic strategy. We need to take that time to do what we can. People have said that we can’t impact the economy much on a state by state basis as we are restricted by the national and international economic trends. However, that doesn’t mean we can’t impact our economic future at all. We have programs that work very well. The technical assistance program run by the community development corporations around the state have been leveraging money at a 25-1 ratio. Recently our Banking Commissioner testified before federal officials that our $10 million investment in the capital access program has resulted in over $241 million in private investment and over $100 million in payroll taxes. I created that program in Chapter 19 of the Acts of 1993. In the same bill we created the EDIP program. That has incentivized over $7.4 billion in private investment in Massachusetts! My point is that with intelligent planning, we can create jobs and revenue in Massachusetts. I would much rather have more people paying taxes than paying more taxes individually.
None of this is easy and none is without pain. However, we have no choice but to try this approach. We are out of options at this point. We cannot be ideologues, nor can we be ostriches. We need to start today to resolve our problems in a manner that is honest, intelligent and keeps faith with our constituent’s expectations.
Sunday, March 22, 2009
Some of the Family
I started a blog to talk about issues, but also to post pictures. It has been a long time since I have posted pics, so I decided to post a few of my animals. Banker is the Dalmation. He is two and is very active. He is my second Dalmation and they are intelligent, loyal, inquisitive, and very social. Here is Banker being precocious.
I also have two cats and this is Sasha. Can you tell that the scratching post is filled with catnip? One more time, This is my cat on drugs!!
Saturday, March 21, 2009
Best Places to Live in Massachusetts
The Boston Globe has a story in Sunday’s paper that gives us the best places to live in Massachusetts in quite a few categories. Of course, those of us from Western Massachusetts know that this means the best places in the eastern third of the state. Sure enough, not one Central or Western mass city or town is mentioned.
Of course we are used to this in the Berkshires. We are like a foreign country to the Globe. Unfortunately this has lead to a like mindset in the Greater Boston area. There are many examples of this. A story on WBZ-TV a few years ago detailed the plan to try to open a second large airport in Massachusetts in “Western Mass”. I was intrigued and turned on the story only to find that they were talking about Worcester!
A second example was the discussion of a broadband bill on Blue Mass Group. People were insulted that we wanted to spend state money on bringing high speed services to Western Massachusetts. Some people suggested that we shouldn’t spend money out here when more money was needed d for mass transportation in the Boston area. Never mind that 20% of all of our sales tax in western Mass goes to paying the MBTA now, they wanted more.
The third example would be the suggested 19 cent increase in gas tax. It would appear that a fair tax is one that someone else pays.
It is unfortunate that people have so little regard for Western Massachusetts. It contains a great deal of beauty; both natural and cultural. We have the highest peak in Massachusetts, Mt Greylock. We have the state’s leg of the Appalachian Trail. In our area, you can see bike paths, trails, lakes, and some of the best fly fishing on the East Coast. Want to raft? There are a number of places and services that can be utilized. If you would like to see 500 million year old bedrock marble quarries, you can visit the Natural Bridge State Park. Or maybe you would like to just relax and camp in a scenic park with a beautiful lake. Clarksburg State Park has been named as one of the top 100 small campgrounds in the US several times over the past few years. And on the Taconic Trail, you can actually stand in three states at one time while partaking of some spectacular scenic vistas. You can bike up Taconic, but if you prefer flat land, we have miles of bike paths.
Maybe history is more your thing. The Berkshires are filled with history and ties to some of the great movements, people, and thought that molded our American culture. It seems as if everyone stopped in the Berkshires at some point. You can see the site that used to be the North Adams Iron Works, where the steel plates were made for the first ironclad union vessel in the Civil War. You can visit the Susan B. Anthony House. Or how about the home of W.E.B. Dubois? Hancock Shaker Village combines history with out door activities, with culture, great furniture and a sense of immersion into a culture and way of life. There are many different sites that contribute to the history of our great nation.
Here in Berkshire County we have more cultural organizations, facilities, and activities per square foot than anywhere else in the US. We have museums such as the Berkshire Museum that has an innovation hall detailing Massachusetts contributions to American life. We have great art museums regardless of your tastes. For example, we have the quintessential American artist, Normand Rockwell at the Rockwell Museum in his home town. We have the eclectic teaching museum, the Williams College Museum of Art. And that is bracketed by the Clark Art Museum with impressionists and old masters; and the Massachusetts Museum of Contemporary Art (MassMoca), one of the largest museums in the country.
We have more acting troops in Berkshire County than almost anywhere else. They are lead by two of the oldest theaters in the US, the Berkshire Theater in Stockbridge and the Williamstown Theater. Each year, some of the top actors from Broadway, Hollywood, and around the country come to the Berkshires to ply their trade and enthrall visitors.
I love music and what better place to be than in the Berkshires in the summer. Tanglewood brings the Boston Symphony to the Berkshires.
Artisans, artists and Hancock furniture awaits the visitors who stay at out summer cottages, hotels, and bed and breakfasts in the summer. Skiing, both cross country and downhill await our winter travelers and of course, even the Globe must know about the spectacular foliage in the autumn.
As I just sat down and wrote this, I am sure that I have left out a ton of activities. There are malls and outlets stores for shoppers, antique stores, baseball in two locales, and outlet stores. There is a little something for every taste and you can make a week out of activities and site, or you can move here (median house price at last look was $203,000), breathe the fresh air and shop for local foods at farmer’s markets from local farms just down the road.
If you come out to visit, plan to spend a little time and please spend a little money. It’s good for the economy. And let’s not tell the Globe. We don’t need them angry about all the fun they are missing.
Of course we are used to this in the Berkshires. We are like a foreign country to the Globe. Unfortunately this has lead to a like mindset in the Greater Boston area. There are many examples of this. A story on WBZ-TV a few years ago detailed the plan to try to open a second large airport in Massachusetts in “Western Mass”. I was intrigued and turned on the story only to find that they were talking about Worcester!
A second example was the discussion of a broadband bill on Blue Mass Group. People were insulted that we wanted to spend state money on bringing high speed services to Western Massachusetts. Some people suggested that we shouldn’t spend money out here when more money was needed d for mass transportation in the Boston area. Never mind that 20% of all of our sales tax in western Mass goes to paying the MBTA now, they wanted more.
The third example would be the suggested 19 cent increase in gas tax. It would appear that a fair tax is one that someone else pays.
It is unfortunate that people have so little regard for Western Massachusetts. It contains a great deal of beauty; both natural and cultural. We have the highest peak in Massachusetts, Mt Greylock. We have the state’s leg of the Appalachian Trail. In our area, you can see bike paths, trails, lakes, and some of the best fly fishing on the East Coast. Want to raft? There are a number of places and services that can be utilized. If you would like to see 500 million year old bedrock marble quarries, you can visit the Natural Bridge State Park. Or maybe you would like to just relax and camp in a scenic park with a beautiful lake. Clarksburg State Park has been named as one of the top 100 small campgrounds in the US several times over the past few years. And on the Taconic Trail, you can actually stand in three states at one time while partaking of some spectacular scenic vistas. You can bike up Taconic, but if you prefer flat land, we have miles of bike paths.
Maybe history is more your thing. The Berkshires are filled with history and ties to some of the great movements, people, and thought that molded our American culture. It seems as if everyone stopped in the Berkshires at some point. You can see the site that used to be the North Adams Iron Works, where the steel plates were made for the first ironclad union vessel in the Civil War. You can visit the Susan B. Anthony House. Or how about the home of W.E.B. Dubois? Hancock Shaker Village combines history with out door activities, with culture, great furniture and a sense of immersion into a culture and way of life. There are many different sites that contribute to the history of our great nation.
Here in Berkshire County we have more cultural organizations, facilities, and activities per square foot than anywhere else in the US. We have museums such as the Berkshire Museum that has an innovation hall detailing Massachusetts contributions to American life. We have great art museums regardless of your tastes. For example, we have the quintessential American artist, Normand Rockwell at the Rockwell Museum in his home town. We have the eclectic teaching museum, the Williams College Museum of Art. And that is bracketed by the Clark Art Museum with impressionists and old masters; and the Massachusetts Museum of Contemporary Art (MassMoca), one of the largest museums in the country.
We have more acting troops in Berkshire County than almost anywhere else. They are lead by two of the oldest theaters in the US, the Berkshire Theater in Stockbridge and the Williamstown Theater. Each year, some of the top actors from Broadway, Hollywood, and around the country come to the Berkshires to ply their trade and enthrall visitors.
I love music and what better place to be than in the Berkshires in the summer. Tanglewood brings the Boston Symphony to the Berkshires.
Artisans, artists and Hancock furniture awaits the visitors who stay at out summer cottages, hotels, and bed and breakfasts in the summer. Skiing, both cross country and downhill await our winter travelers and of course, even the Globe must know about the spectacular foliage in the autumn.
As I just sat down and wrote this, I am sure that I have left out a ton of activities. There are malls and outlets stores for shoppers, antique stores, baseball in two locales, and outlet stores. There is a little something for every taste and you can make a week out of activities and site, or you can move here (median house price at last look was $203,000), breathe the fresh air and shop for local foods at farmer’s markets from local farms just down the road.
If you come out to visit, plan to spend a little time and please spend a little money. It’s good for the economy. And let’s not tell the Globe. We don’t need them angry about all the fun they are missing.
Saturday, March 14, 2009
Get a Receipt with that Doughnut!
The late comedian, Mitch Hedberg had a skit about getting a receipt for a doughnut. He would ask why he received a receipt for a doughnut and insisted that paper and ink should not come into this transaction. He said, “Why would you ever need the receipt as proof of purchase?” He would end by saying, “I have proof, no wait, its home in the file, under “D” for delicious.” We now know why he would need a receipt. He would need it if he lived in Massachusetts, where Governor Patrick has filed a “sugar” tax and where DOR is going after every penny in our couch cushions.
Governor Patrick has filed a “sin tax” to charge people sales tax on candy bars, soda, and other forms of sugar foods. So you may need a receipt if you are eating a candy bar walking down the street and an agent of the Department of Revenue (DOR) approaches demanding proof that you have, indeed, paid your tax.
Outrageous? Yes. However, in a recent conversation with a constituent who owns a business in my district, I was told a story that makes this seem not so farfetched. This struggling business man told me he had just gone through a DOR audit at his hotel. I have known this individual for 30 years and know him to be meticulous in his book keeping. I told him so and opined that he couldn’t have had any problems. He pointed to his fireplace and said he was hit on the fireplace and had to pay for that. Let me explain that his fireplace is in his outer dining room just off of the bar and is lit in the winter time for a little warmth, but more for ambiance than heat. The auditor told him that fireplaces are utilities just like gas and electricity and he needed to pay a sales tax on his cord wood! If we are hitting businesses up for their fireplace wood, we should just stop people and demand their pocket change as they walk down the street.
Is this an isolated incident? Sadly, no. Over the past few years, I have been called by store owners who sell herbs in their supermarket and the DOR is now differentiating as to how they are sold. As food, it is tax exempt, but if they believe they are being sold as vitamins, they reach back to tax the store owner. Got a coffee bar as well as sell food for take -out? Count your cookies! Cookies are tax exempt if taken out as food, but taxable on premises as a meal. Somehow DOR determines what you are selling and how.
And it is not just small business owners. The Department has determined that they are going to restructure the taxation of telecommunication services reaching into other states to look for taxes. While this may or may not be good policy, it doesn’t matter. The Department is supposed to enforce the law, not create it.
Large companies aside, we have to examine who we are taxing and why. In the Governor’s supplemental budget filing, he counts on over $100 million in tax case settlements with big companies and tax disputes. So let’s settle with the big guys, but we’d better count the candy in the little guy’s pockets.
The latest proposals for taxation hit the poorest taxpayers. Proposals to tax candy or sugar, gas, alcohol, telecommunications (phones and cable TV), as well as the recent increase in tobacco all fall disproportionately on the low income tax payers. How much can they afford to pay considering that 653,000 Americans filed for unemployment payments for the first time last week? 12 million Americans are unemployed and here in Massachusetts our unemployment rate is at 8.4% and rising.
Can we afford this? Ah what the heck, it only comes out to a large vat of coffee a week! So, be prepared to pay more for the simple things in life, and don’t forget, keep your doughnut receipt handy.
Governor Patrick has filed a “sin tax” to charge people sales tax on candy bars, soda, and other forms of sugar foods. So you may need a receipt if you are eating a candy bar walking down the street and an agent of the Department of Revenue (DOR) approaches demanding proof that you have, indeed, paid your tax.
Outrageous? Yes. However, in a recent conversation with a constituent who owns a business in my district, I was told a story that makes this seem not so farfetched. This struggling business man told me he had just gone through a DOR audit at his hotel. I have known this individual for 30 years and know him to be meticulous in his book keeping. I told him so and opined that he couldn’t have had any problems. He pointed to his fireplace and said he was hit on the fireplace and had to pay for that. Let me explain that his fireplace is in his outer dining room just off of the bar and is lit in the winter time for a little warmth, but more for ambiance than heat. The auditor told him that fireplaces are utilities just like gas and electricity and he needed to pay a sales tax on his cord wood! If we are hitting businesses up for their fireplace wood, we should just stop people and demand their pocket change as they walk down the street.
Is this an isolated incident? Sadly, no. Over the past few years, I have been called by store owners who sell herbs in their supermarket and the DOR is now differentiating as to how they are sold. As food, it is tax exempt, but if they believe they are being sold as vitamins, they reach back to tax the store owner. Got a coffee bar as well as sell food for take -out? Count your cookies! Cookies are tax exempt if taken out as food, but taxable on premises as a meal. Somehow DOR determines what you are selling and how.
And it is not just small business owners. The Department has determined that they are going to restructure the taxation of telecommunication services reaching into other states to look for taxes. While this may or may not be good policy, it doesn’t matter. The Department is supposed to enforce the law, not create it.
Large companies aside, we have to examine who we are taxing and why. In the Governor’s supplemental budget filing, he counts on over $100 million in tax case settlements with big companies and tax disputes. So let’s settle with the big guys, but we’d better count the candy in the little guy’s pockets.
The latest proposals for taxation hit the poorest taxpayers. Proposals to tax candy or sugar, gas, alcohol, telecommunications (phones and cable TV), as well as the recent increase in tobacco all fall disproportionately on the low income tax payers. How much can they afford to pay considering that 653,000 Americans filed for unemployment payments for the first time last week? 12 million Americans are unemployed and here in Massachusetts our unemployment rate is at 8.4% and rising.
Can we afford this? Ah what the heck, it only comes out to a large vat of coffee a week! So, be prepared to pay more for the simple things in life, and don’t forget, keep your doughnut receipt handy.
Friday, February 27, 2009
One More Gas Tax Comment
After a district meeting on Monday this week, I traveled back to Boston in the evening. As I was leaving town, I noticed at an area gas station that the price of a gallon of regular unleaded gas was $1.91. On my way to Boston, I stopped at a Shell Station in Templeton, just outside of Gardner. There, I filled my tank for $1.79/gal. Not only was it cheaper there, but I saw several stations in Cambridge with lower gas prices!
North Adams Mayor John Barrett has been complaining for the past year that gas prices are higher in the Berkshires than elsewhere in the state. I have made numerous phone calls to complain about the higher prices (and prices are even higher in South County). I have been told that transportation is the difference in price, but that makes no sense. The station at Templeton is at least as far away from gas distributors as is my district. And it doesn’t explain why prices invariably go up every week end.
That means that Berkshire County residents are expected to pay more per gallon than those areas that will actually see a benefit from this gas tax. Let me see; more per gallon, in an area where the rural nature means we use more gallons to travel and the weather and hilly terrain mean we actually need our SUVs and we don’t have the option of mass transit.
Just another reason to find a better way to pay for our transportation system.
North Adams Mayor John Barrett has been complaining for the past year that gas prices are higher in the Berkshires than elsewhere in the state. I have made numerous phone calls to complain about the higher prices (and prices are even higher in South County). I have been told that transportation is the difference in price, but that makes no sense. The station at Templeton is at least as far away from gas distributors as is my district. And it doesn’t explain why prices invariably go up every week end.
That means that Berkshire County residents are expected to pay more per gallon than those areas that will actually see a benefit from this gas tax. Let me see; more per gallon, in an area where the rural nature means we use more gallons to travel and the weather and hilly terrain mean we actually need our SUVs and we don’t have the option of mass transit.
Just another reason to find a better way to pay for our transportation system.
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